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Kevin Burke left no room for ambiguities or misconceptions.
This story first appeared in the October 13, 2011 issue of WWD. Subscribe Today.
“I’m a pure and unabashed free trader and a pure and unabashed government relations person,” said the president and chief executive officer of the American Apparel & Footwear Association at the Sept. 23 WWD Global Sourcing/Global Markets Forum. “I’m going to talk to you about free trade from the perspective of a trade association president and how we view trade as helping our member companies. We have a 20th century trade policy with a 21st century apparel and footwear industry. Other countries have figured a way to get around the morass of free trade policy. They figured out how not to get stuck in U.S. politics.”
Unfortunately, the same can’t be said for U.S. firms.
One of the AAFA’s jobs is to lobby Congress, but getting the legislators’ attention isn’t always easy. Why should they listen? Burke ticked off the volumes of six other industries to show why the apparel and footwear industry’s concerns should be heard. Video games does $20 billion in annual U.S. sales; toys, $20 billion; fast food, $75 billion; fresh food and vegetables, $100 billion; soft drinks, $130 billion; alcoholic beverages, $270 billion, and apparel and footwear $340 billion, Burke said. “We sell twice as much clothing as cars,” he said, noting that the auto industry racked up a mere $170 billion in sales last year. “The reason I put this up there is to show how important free trade is to the growth of the country and the growth of the economy,” he said.
“Since President Obama [was elected] there have been no new free trade agreements since 2009,” Burke said. “The only thing we’re working on now is the Trans-Pacific Partnership and that was started by the Bush Administration. [The U.S.-proposed free trade agreement so-called TPP countries include Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore and Vietnam. The AAFA is insisting that any agreement must be commercially meaningful for the U.S. apparel and footwear industries.] “A global economy like the U.S., and no free trade agreement since 2009? I mean, come on, we’re the largest global economy in the world.
“Why do we need to look abroad?” Burke said. “We represent one-quarter of global and apparel footwear sales, but only 5 percent of the world’s population. Why wouldn’t you want to be in China? We have great brands that ought to be sold around the world.”
The problem is barriers to entry. “We’re one of the most regulated industries on the planet,” Burke said. “Take Brazil. Everybody wants to sell there. The challenge with Brazil is unless you make the product there, you’re going to have to pay an enormous duty to get your product out. We have to convince Brazilians of reciprocity in trade. ‘You want to ship your products into the U.S. duty free and we want to ship our products into Brazil duty free.’ Brazil has a vibrant manufacturing base and they don’t want necessarily to be competing duty for duty against us.
“The challenge with China is that they want to make their own brands. We have to reduce burdensome regulations. Just because you make a great product doesn’t mean you’ll be able to sell it where you want to sell it.”