The Trans-Pacific Partnership: Benefits For The Outdoor Industry And Why OIA Supports It

June 12, 2015

OIA believes the Trans-Pacific Partnership (TPP) provides significant benefits to the outdoor industry. 

The debate on TPP is heating up, even before the negotiations in D.C. have officially concluded. Outdoor Industry Association has worked with the administration since the partnership was introduced, and we believe there will be substantial commercial benefits for outdoor product manufacturers and retailers. The TPP also promotes our industry’s commitment to protecting the environment and labor rights.

We believe there will be substantial commercial benefits for outdoor product manufacturers and retailers. The TPP also promotes our industry’s commitment to protecting the environment and labor rights.

However, the TPP has raised concerns in our industry and among some of our partners that TPP will provide minimal benefits while weakening our industry’s high environmental and labor standards. Here, we address those concerns and explain our position.

Concern: The TPP will provide minimal benefits for outdoor companies.

OIA’s Position: The TPP will lower the disproportionately high import taxes assessed on outdoor products not made in the U.S.

  • Outdoor products sourced from abroad—including from the Trans-Pacific region—are among the most-highly taxed goods entering the United States despite the fact that they face no domestic competition: The average inbound 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, resulting in higher costs for outdoor businesses and their customers.
  • The duty savings that will be realized when these tariffs are reduced will mean lower costs for manufacturers and consumers of outdoor apparel and footwear. Those savings will, in turn, fuel innovation when they’re reinvested in research and development, and they’ll encourage more people to get outdoors.

Concern: The TPP will do nothing for outdoor companies that manufacture in the U.S.

OIA’s Position: TPP will provide reciprocal market access for U.S. products, breaking down trade barriers and creating exciting new export markets in a region comprising 40 percent of global GDP.

  • Outdoor recreation is growing in the TPP region, where the “Made in the U.S.A.” label is a highly sought.
  • Outdoor companies that source some products from the TPP region can use duty savings to develop new products, new technologies and create new jobs in the U.S.
  • The TPP will eliminate the punitive Japanese Tariff Rate Quota (TRQ) on certain types of leather footwear, opening the world’s third-largest economy to U.S.-made products.
  • Most outdoor products will have strict “rules of origin” meaning U.S. textile firms and other suppliers will not only be protected, but could see an increase in demand.

Concern: The TPP will lower standards on labor rights.

OIA’s Position: Previous trade agreements such as NAFTA and CAFTA only required participating nations to enforce their own labor and environmental laws. The TPP will ensure that our trading partners meet the highest international standards that are fully enforceable under the terms of the agreement.

  • The TPP will incorporate the terms of the 2007 May 10th agreement (originally incorporated in the Korea, Panama and Columbia trade deals)—which required partner nations to adhere to the International Labor Organization’s fundamental labor rights, including:
    • freedom of association
    • right to collective bargaining
    • elimination of all forms of compulsory labor
    • abolition of child labor
    • elimination of discrimination in respect of employment and occupation,
  • It will also require parties to set and enforce laws on:
    • minimum wages
    • maximum work hours
    • occupational safety standards

The labor provisions will be fully enforceable under the same dispute settlement provisions as the commercial benefits of the agreement, and parties will not get the benefits of TPP until they come comply.

Concern: The TPP will weaken protections on the environment.

OIA’s Position: The TPP will ensure that our trading partners meet the highest international standards—including groundbreaking new provision on illegal fisheries, wildlife trafficking and illegal logging—that are fully enforceable under the terms of the agreement and subject to the same settlement process as the commercial provisions.

  • On the environment, as with labor, NAFTA and CAFTA simply required parties to enforce their own environmental laws. The TPP will incorporate the “May 10th agreement” and require parties to:
    • Adopt and maintain a specific list of multilateral international agreements (MEAs).
    • Effectively enforce domestic environmental laws, including those that implement the MEAs.
  • The TPP will also address:
    • wildlife trafficking
    • illegal logging
    • illegal fishing practices

This has been described as a consequential year for trade, and that’s certainly true for the outdoor industry. We have had a seat at the table and we are working with the administration to secure the best possible agreement for the industry. Clearly, our representatives seek and value our industry’s input. They respect our balanced trade agenda—which has successfully represented the interests of importers and domestic manufacturers—and our leadership in the field of sustainability. We believe that will be reflected in the final TPP agreement.

We have also heard and respect the views of our members and partners who have a different take on the TPP—our goal is to continue the dialogue and find common ground where we can.

We have heard and respect the views of our members and partners who have a different take on the TPP—our goal is to continue the dialogue and find common ground where we can.

In the end, we do believe TPP will be a commercially meaningful 21st-century agreement that will also be consistent with our values on environment and labor rights.

For more information on the TPP and other trade policy issues, contact:

Rich Harper
Policy Advisor (Trade)
rharper@outdoorindustry.org
202-817-2033

 

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