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Obama to Democrats on Asia trade pact: like Nike, 'just do it'

U.S. President Barack Obama waves as he arrives to deliver remarks on trade at Nike's corporate headquarters in Beaverton, Oregon May 8, 2015. REUTERS/Jonathan Ernst

By Jeff Mason

BEAVERTON, Oregon (Reuters) - President Barack Obama, co-opting Nike Inc's famous slogan, told Democrats on Friday to "just do it" and support a trade deal with Asian countries that the shoe company said would help it create up to 10,000 U.S. jobs over 10 years.

The setting - Nike's headquarters in Beaverton, Oregon - was an unusual one for a presidential trade pitch.

Nike has long faced criticism for using Asian sweat shops to produce its pricey footwear. But the company has worked to improve conditions overseas and said on Friday it would also boost investment in U.S. manufacturing if the 12-nation Trans Pacific Partnership (TPP) pact is approved.

Obama used that promise of new jobs to try to convince skeptical lawmakers from his own party to support TPP and join Republicans in granting him "fast-track" authority to finalize the deal.

Many Democrats are concerned the proposed pact would help companies move operations to cheaper offshore facilities.

"On trade, I actually think some of my dearest friends are wrong. They're just wrong," Obama said at Nike headquarters. "If we don't write the rules for trade around the world, guess what: China will."

He added, "Just do it, everybody."



SHOES FROM VIETNAM

Before the trip, White House aides had been coy about why Obama chose such a controversial backdrop for his speech. An administration official said Nike had approached the White House about the trade deal and that led to Obama's appearance there.

Labor and environmental groups protested Obama's appearance at Nike and said the company's job-creating claims were vague.

"We have heard similar promises from companies before, and very few have panned out," said Eric Hauser, a spokesman for the AFL-CIO, the nation's largest labor coalition.

Nike has 26,000 U.S. employees, but it counts on more than 1 million workers in contract factories worldwide to make its shoes, some of which sell for hundreds of dollars. A third of those factories are in Vietnam, a TPP participant.

Almost all footwear sold in the United States is made overseas and is subject to import tariffs that average 25 percent to 35 percent, according to the Footwear Distributors and Retailers of America, a shoe dealer's group.

For shoes imported from TPP countries, notably Vietnam, U.S. firms paid $400 million in tariffs in 2014, the group said.

Nike said relief from "antiquated" footwear tariffs in the TPP deal would allow it to invest more money at home. In addition to 10,000 U.S. manufacturing and engineering jobs, it promised as many as 40,000 additional jobs would pop up in its domestic supply chain if an agreement were reached.

"Free trade opens doors. It removes barriers. It creates jobs," Nike Chief Executive Mark Parker told the crowd ahead of Obama's speech in Beaverton, seven miles from Portland.

When asked, Nike offered few details on, for instance, whether it would build new plants, how soon new jobs could come on line, how much money workers might be paid, or what kind of shoes could be produced in the United States.

A Nike spokesman said in an email that it was "too early for us to say specifically where we will invest, but it will be a significant investment over the next decade."

The White House declined to provide additional details, referring questions to Nike.


MORE LOBBYING EXPENSE

In the past two years, Nike has ramped up its lobbying efforts as debate over the trade treaty has intensified.

The company nearly tripled its lobbying spending to more than $1.1 million in 2014 from $400,000 in 2012, according to data collected by the Center for Responsive Politics, a Washington campaign finance and lobbying research group.

Nike multibillionaire co-founder Philip Knight is Oregon’s richest person and leans Republican, though he has donated money over the years to both parties, including more than $85,000 to Republican congressional committees in 2013 and 2014, according to federal records analyzed by the center.

Knight has also given money to Democratic Senator Ron Wyden, a key supporter along with Republicans of giving Obama "fast-track" authority to negotiate the TPP deal.

Under the deal's terms, Obama said Vietnam is one country that would be forced to improve its labor standards, set a minimum wage, and protect workers' rights to unionize.

"It would be good for the workers in Vietnam even as it helps make sure that they're not undercutting competition here in the United States," he said.

The TPP would also help more companies move advanced manufacturing to the United States, Obama added.

But despite anecdotal evidence that some companies are shifting production back to the U.S., economic data suggest America's production lines rely more than ever on suppliers from low-wage countries.

"The data clearly show no sign of reshoring," said University of Munich economist Dalia Marin, in a detailed analysis published in November.

Lori Wallach of Public Citizen, a government watchdog group, said labor standards in the TPP were too weak, pointing to a U.S. Government Accountability Office study that found similar standards in trade deals with Peru, Colombia, Panama and Korea had failed to improve labor conditions in those countries.




(Additional reporting by Roberta Rampton, Howard Schneider, Jason Lange and Krista Hughes in Washington; Editing by Kevin Drawbaugh, Kieran Murray and Christian Plumb)