Trade ministers from the U.S. and 11 other countries along the Pacific Rim have finalized the terms of the Trans Pacific Partnership (TPP), an agreement that would eliminate import duties and other trade barriers between them over time. It would cover about 40 percent of the world's economic output. In addition to the U.S. and Vietnam, which is becoming a major alternative to China for footwear sourcing, the other members of the partnership are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.
Masterminded by U.S. President Barack Obama, the TPP excludes China, in a move apparently intended to serve as a check on its growing influence in world trade. China still accounts for about half of the shoes imported into the U.S.
The Footwear Distributors and Retailers of America (FDRA), which lobbied for the deal for more than five years, declared itself “extremely pleased and excited” by the announcement of the deal, noting that U.S. footwear importers paid $2.7 billion in duties last year, with more than $450 million of that related to TPP countries. For some types of footwear, import duties account for up to one-third of the price of a pair of shoes in the U.S.
Mexico is one of the countries that signed the TPP, yet the country's shoemakers were not pleased. The Chamber of Commerce of the shoe industry in the state of Guanajuato in Léon, has been lobbying against the deal because it will increase the competition from Vietnam for the big American market. Nearly one-third of the shoes imported into the U.S. come from Vietnam, where major brands have already started to rush to occupy additional manufacturing capacities in view of the TPP.
It will probably take several years for the TPP to be approved by all the member countries. The U.S. Congress will be given 60 days to approve or reject it, but it will not be able to amend its present format. Hilary Clinton, the leading contender for the Democratic presidential nomination, had already backed the TPP, but she is now warning that the current text of the TPP fails to meet her standards for protection American workers and the environment.