Nike Promises Obama Jobs, But Trade Deal is No Slam Dunk

President Obama to tout trade deals in Oregon.

Shanghai residents pass by a Nike store on the Nanjing Road shopping street on April 17, 2010 in Shanghai, China. 
National Journal
S.V. Dáte
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S.V. Dáte
May 8, 2015, 2 a.m.

PORT­LAND, Ore­gon—The ques­tion of “Why Nike?” that Pres­id­ent Obama’s White House has been swat­ting away for days as it pre­viewed a road trip to sell his trade pack­age now has an an­swer: 10,000 new man­u­fac­tur­ing jobs.

That’s how many the glob­al sportswear gi­ant said it would be able to cre­ate in the United States—but only if “fast-track” au­thor­ity for trade agree­ments and the still-in-the-works Trans-Pa­cific Part­ner­ship are ap­proved.

That Pa­cific trade deal, Nike said, would re­duce tar­iffs suf­fi­ciently to make new “ad­vanced man­u­fac­tur­ing meth­ods” in this coun­try fin­an­cially at­tract­ive. Mak­ing things do­mest­ic­ally would let Nike bring them to mar­ket faster, the com­pany said.

The form­al an­nounce­ment is to come Fri­day morn­ing at Obama’s ap­pear­ance at Nike headquar­ters in Beaver­ton, just out­side Port­land.

Nike has been fight­ing a repu­ta­tion since the 1990s for us­ing factor­ies with sweat­shop con­di­tions in low-wage coun­tries. Obama has been fa­cing cri­ti­cism for show­cas­ing Nike since he an­nounced the vis­it to the Ore­gon-based com­pany late last month.

The ad­min­is­tra­tion has been push­ing trade le­gis­la­tion for years. So­li­cit­ing in­put from busi­nesses that both im­port and ex­port has been a com­pon­ent of that, which is how Nike came to share its plan to make shoes in this coun­try if the trade pack­age came to fruition. It was that spe­cificity in job num­bers that led the White House to pro­pose a pres­id­en­tial vis­it, ac­cord­ing to a seni­or ad­min­is­tra­tion of­fi­cial.

Nike earned $12.4 bil­lion in profits last year, with a profit mar­gin of 45 per­cent, ac­cord­ing to its 2014 fil­ing with the Se­cur­it­ies and Ex­change Com­mis­sion. Des­pite this, it dir­ectly em­ploys only 48,000 people around the world, and 26,000 in the United States. An­oth­er mil­lion people work for com­pan­ies that con­tract with Nike to make its shoes and cloth­ing—96 per­cent of all Nike shoes, for ex­ample, are made in Vi­et­nam, China, and In­done­sia.

Cur­rently, the only products Nike makes in the United States are “Air-Sole” cush­ions and some plastic com­pon­ents that it sells to oth­er man­u­fac­tur­ers.

The fast-track trade au­thor­ity Obama wants would lim­it Con­gress’s in­put on trade agree­ments to up-or-down votes. It’s something most pres­id­ents have en­joyed for dec­ades, but the last such law ex­pired in 2007. The Trans-Pa­cific Part­ner­ship, still be­ing ne­go­ti­ated among the United States and 11 oth­er Pa­cific Rim na­tions, would lower tar­iffs and oth­er trade bar­ri­ers among its sig­nat­or­ies.

Re­pub­lic­ans have his­tor­ic­ally sup­por­ted trade while Demo­crats have been wary, and the same is true with this pack­age. Obama needs about a dozen Demo­crats to pass the trade-pro­mo­tion bill in the Sen­ate and as many as sev­er­al dozen Demo­crats in the House. The Sen­ate could take its first floor vote on the pro­pos­al next week.

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