President Obama’s big push for trade legislation that he says will boost American exports hits the road Thursday to Portland, Ore., en route to a multibillion-dollar sportswear giant that exports next to nothing.
Nike made $12.4 billion in profits last year, thanks in large part to 1 million subcontracted workers at factories primarily in low-wage countries in Asia. For years, the company has faced allegations that a number of those factories use sweatshop conditions and illegally low wages to produce sneakers and clothes that Nike then sells in much wealthier countries.
And according to a 2014 filing with the Securities and Exchange Commission, the only things Nike manufactures in the United States are “Air-Sole” cushion components and “small amounts” of other plastic products it sells to other manufacturers.
The company is located in the home state of Democratic Sen. Ron Wyden, a free-trade advocate and Obama’s lead advocate in the Senate for his trade agenda. But whether an appearance at an enormous multinational with a checkered labor history will help Obama sell the plan to a skeptical party base remains unclear. Wyden himself, citing Senate business, is not even planning to be there.
“Nike really epitomizes offshoring jobs to countries with horrible environmental and labor practices,” said Elizabeth Swager of the Oregon Fair Trade Campaign. She is planning to take a busload of protesters to the company’s headquarters when Obama’s there. “I’m kind of surprised they picked Nike.”
So why Nike? The White House has been coy—and fielding an increasing number of questions as the trip approaches.
White House press secretary Josh Earnest on Wednesday hinted that the choice would make more sense after Obama’s visit to the gleaming 270-acre campus in Beaverton, just outside Portland: “It will become much clearer to all of you why this is a useful illustration of the significant “¦ economic benefits for the American people.”
He later added: “On Friday, when the president appears at Nike, we will have a more specific, robust discussion about why exactly the president is there.”
Earnest said that the company’s 2013 decision to donate $50 million to first lady Michelle Obama’s “Let’s Move” fitness campaign did not play a role in the White House’s choice.
As to the company’s less-than-stellar reputation, Earnest said those questions were best handled by Nike itself.
“I’m confident “¦ they would be happy to explain their record to you on those issues,” Earnest said. “There is, you know, an office somewhere, probably in Beaverton, Oregon, with very well compensated, extremely skilled communications professionals who can say all kinds of nice things about Nike.”
Earnest’s suggestion notwithstanding, Nike did not respond to queries from National Journal.
In recent weeks, Obama personally has been talking up both a “fast-track” trade-promotion bill currently before Congress and the Trans-Pacific Partnership trade deal still under negotiation among the United States and 11 other Pacific Rim nations on four continents. The trade-promotion bill would limit Congress’ input in trade agreements to a simple up-or-down vote. Most presidents have enjoyed that negotiating freedom, but the last trade-promotion law expired in 2007.
“We will make the case on the merits as to why it will open up markets for American goods, American exports, and create American jobs,” Obama said at a recent news conference.
But the actual shoes and clothing Nike markets come from companies that run factories in developing countries. In 2014, according to the SEC filing, 96 percent of all Nike footwear came from Vietnam, China, and Indonesia. The lower manufacturing costs in those countries helped the company to a 45 percent profit margin.
“Workers there are paid less than 60 cents an hour,” Swager said. “Those are workers who can’t even afford the products they are making.”
Nike has 48,000 direct employees worldwide, mainly in management, research and design, and distribution. About 8,500 of those work at the Beaverton headquarters Obama will visit.
It’s not that Obama doesn’t have other options in Oregon.
Portland itself has actual exporters, from makers of electronic equipment and bicycle parts to Douglas Krahmer, who grows blueberries on 500 acres on three tracts outside the city. He supports Obama’s trade package if it would lower tariffs his berries face in Asian markets.
“The leveler the playing field, the better it would be,” Krahmer said. Of the 4 million pounds of blueberries he harvests each year, about a third currently are exported. “We have a lot more blueberries here than we can consume domestically. A new trade agreement would certainly be helpful.”
Krahmer said he was invited to attend the president’s event at Nike but was not asked to host it at his farm. “I have productive things to do. So I’m good. I don’t feel a bit left out,” he said.
Nike originally came under fire a decade ago for contracting with factories employing child labor, paying wages below local minimums, and hiring supervisors who used both verbal and physical abuse. More problems surfaced two years ago with subcontractors in Indonesia.
In response, Nike on its website now explains its goals regarding its labor “Code of Conduct,” which includes promises to pay wages promptly, not require excessive overtime, and not use child laborers under 16 years of age. A report on the site said that 93 percent of its factories had not reported incidents of excessive overtime.
At the end of 2013, however, nearly a third of Nike’s contracted factories still had not met its lowest “bronze” standard, although that figure represents an improvement from 2011, when only half of the factories met that rating.
“In a perverse way, the president going to Nike to promote trade emphasizes everything that is wrong about this trade agreement,” said Lori Wallach of Public Citizen, a liberal group founded by activist Ralph Nader. “The firm, and its founder, created the model of low-cost, offshore production that has eviscerated the United States manufacturing base.”