Trade and Business Policy
OIA’s Trade Program represents the diversity of our membership, including outdoor companies whose products are conceived, designed and produced in America and those companies that utilize global value chains to bring their products to retail markets. From some of the largest companies in the world to small, family-owned businesses, we work to ensure that U.S. federal trade policy fosters and promotes a stable, predictable and cost-saving environment for all.
Trans-Pacific Partnership Negotiations and the Outdoor Industry
International trade benefits U.S. importers and domestic manufacturers alike, creates new jobs, lowers consumer prices and opens new markets to U.S. exports. For its part, OIA pursues a balanced trade policy, meaning that we only seek tariff eliminations on outdoor products that have no commercially viable domestic production. For those products that are made in America, we promote federal policies that support U.S. manufacturers and help them transition to competition in a global economy.
As such, the Trans-Pacific Partnership (TPP) negotiations present a tremendous opportunity for the outdoor industry. Outdoor products sourced from abroad are among the most highly taxed when entering the United States, despite the fact that they face no domestic competition; the average bound tariff rate on imported goods is less than 3 percent, but duties on outdoor products average 14 percent or higher, with some as high as 40 percent. The duty savings from eliminating these disproportionally high tariffs will help lower costs for consumers, fuel innovation, and create jobs across the U.S.
Likewise, a TPP agreement can help U.S. outdoor manufacturers create new jobs and break into new markets by eliminating high tariffs on U.S. exports and eliminating other non-tariff barriers in the TPP region.
The outdoor industry understands the challenges of negotiating an agreement that balances the needs of U.S. manufacturers and brands that conduct their research, development and innovation at home but must manufacture their products abroad.
In that regard, OIA has offered the United States Trade Representative (USTR) specific suggestions on how that balance can be accomplished in the key areas of apparel and footwear. Products that have no commercially meaningful domestic competition should receive liberal rules of origin and immediate duty-free access to the U.S. market upon enactment of the TPP agreement. For outdoor products made in the U.S., OIA has proposed strict rules of origin and lengthy duty phase-outs. A one-size-fits-all approach for apparel and footwear will only lead to an agreement that appeals to the lowest common denominator, resulting in tremendous lost opportunity for American workers and American innovation.
Industry Values: Protecting the Environment and Enforcing Fair Labor Standards
OIA’s proposals on outdoor apparel and footwear in the TPP will help the administration bridge the gap among this diverse group of stakeholders and conclude a commercially meaningful, 21st century trade agreement. With the appropriate definition of products, rules of origin and market access terms can be designed in a manner that does not diminish the transitions needed for U.S.-made products.
In addition, a TPP agreement is an opportunity to promote the outdoor industry’s values on protecting the environment and labor rights. Any TPP agreement should include tough provisions in these areas that match the highest international standards and are fully enforceable under the terms of the agreement. Outdoor recreation companies are at the forefront of developing sustainable supply chains that protect the environment and ensure fair labor practices. Many of our trading partners do not share these values.
The final TPP agreement should incorporate these standards:
- Require all parties to adopt and maintain internationally recognized core labor standards and the provisions of multilateral environmental agreements (MEAs)
- Provisions should be subject to the same dispute settlement procedures as other enforceable obligations
In other words, if our trading partners do not live up to their commitments on labor and the environment, they should not receive the commercial benefits of the agreement.
What is Trade Promotion Authority (TPA)?
In order to conclude the TPP negotiations and other trade agreements, OIA understands that the administration must have Trade Promotion Authority (TPA). TPA puts the administration in the best position to secure trade agreements that could have substantial benefits for the outdoor industry by eliminating tariffs and non-tariff barriers and expanding access to global markets. Our trading partners are unlikely to make their best offer if they think Congress will alter the final agreement.
The TPA bill is also a key opportunity to advance the U.S. OUTDOOR Act, OIA’s signature piece of trade legislation. This bill will create specific definitions and separate classifications within the U.S. Harmonized Tariff Schedule (HTS) for “recreational performance outerwear” and eliminate duties on those products. The Senate bill also includes the Sustainable Textile and Apparel Research (STAR) Fund that will support the domestic research and development of sustainable textile and apparel supply chains.
Recreational performance outerwear, particularly jackets and pants, require high-tech fabrics, designs and construction to endure outdoor recreation activities in challenging conditions. These products are innovative and unique, compared to other apparel items currently imported under the same HTS lines. To qualify as “recreational performance outerwear,” the jackets or pants must have critically sealed seams and either be water- resistant, visibly coated or both.
According to a 2007 study by the International Trade Commission (ITC), there is no commercially viable domestic production of recreational performance outerwear. Yet these products face disproportionately high import duties that protect no domestic industry and are not a significant source of revenue for the government. Eliminating duties on recreational performance outerwear will therefore be non-controversial and help lower prices, fuel innovation and create jobs in the outdoor industry. It should be included in any trade package.
2015: Advances in a Balanced Trade Agenda Leading Us Onward
In conclusion, 2015 promises to be a significant year for the outdoor industry, its balanced trade agenda and its commitment to the environment and labor rights. With the right provisions on apparel and footwear in the TPP and passage of the U.S. OUTDOOR Act, outdoor companies, both those who manufacture in the U.S. and those who utilize the global value chain, will be able to lower costs, fuel innovation, create jobs and attract more outdoor consumers from around the world. We will see the outdoor industry’s standards on the environment and labor become truly global standards. It is an exciting time, but one that requires the consistent, high-level engagement of the outdoor industry with Congress and the Obama administration.