Nike: 10,000 Jobs From The TPP?

Good news! Nike is promising to create ten thousand jobs in the United States if America ratifies the Trade Promotion Authority and the Trans-Pacific Partnership. But do you believe it?

The TPA / TPP is the proposed free trade agreement that will integrate the Western Hemisphere economies of the United States, Canada, Chile, Mexico, and Peru with seven nations in the Asian-Australian Pacific region. Similar to NAFTA, the North American Free Trade Agreement that links the United States to its northern and southern neighbors, proponents claim that its establishment will lead to regional prosperity.

President Obama has been urgently supporting its ratification as a key component of his vaunted “pivot to Asia” global strategy. In advance of his visit to Nike headquarters last week, Nike executives issued its bold job creation promise.

In the two decades since NAFTA was first ratified, though, its overall effect on the American economy remains unclear. Although many economists believe that its benefits outweigh its drawbacks, others charge that that the removal of trade barriers with Mexico has decimated many American and Canadian industries.

Nevertheless, today President Obama is declaring that the TPA / TPP will support the American economy. Do you believe his claim? And do you believe Nike’s promise of 10,000 new American jobs?

One reason for skepticism about the job claim is that Nike hasn’t explained where it will actually find those new positions. Will they transfer manufacturing jobs back to America from Asia? Or will they create new positions to manufacture products for export to TPA / TPP member nations? Nike hasn’t answered such questions, which leads one to suspect that the firm can’t (or won’t) guarantee its own job creation promise.

Another reason for skepticism is that New Balance, the only American athletic footwear firm that is still operating significant manufacturing facilities in the United States, is not fully supporting the agreement. Instead, it has continued to advocate for trade tariffs on Vietnam, as well as for similar legislation that contradicts principles of free trade.

In other words, a major American manufacturer with virtually no remaining factories in the United States is supporting this free trade agreement. And its rival American manufacturer, one with significant domestic factories, is lining up against the agreement. Are these positions consistent with the presumption that the TPA / TPP will boost America’s economy?

It is always possible, of course, that the benefits of such an agreement will ultimately outweigh its costs and risks. Nevertheless, it would certainly be reasonable to be skeptical about any claims that a failure to ratify the TPA / TPP would necessarily be “catastrophic for our country and for the world.”