Footwear to see "significant" gains from TPP
Sports and athletic footwear are among Vietnam's main footwear exports to the US
Footwear is expected to be one of the clear winners when it comes to the Trans-Pacific Partnership (TPP) trade agreement, with significant gains seen in both US imports and exports.
Viewed against a baseline forecast for 2032, the trade deal would likely result in a $1.6bn or 23.4% hike in US imports of footwear from all TPP nations, according to an investigation by the US International Trade Commission (USITC).
Most of this increase would come from imports of footwear from Vietnam, the second-largest supplier overall and the biggest TPP supplier of footwear to the US market – and would also be at the expense of China, whose imports are seen slipping by $400.4m or 1.3% once the trade pact comes into force.
However, these imports are not expected to compete with or negatively affect US production, the report notes.
Indeed, in contrast to the apparel sector, where US exports are seen rising by just 0.3% or $10m under TPP, the agreement would provide a $135.0m or 23.6% uplift to US footwear shipments.
Most of the US export growth would come from a $125.0m or 76.5% hike in part shipped to Vietnam where they would be used to assemble footwear for the US market.
In contrast, US footwear exports to NAFTA partners would fall by $4.1m or 1.6%, the model predicts.
According to the report, US industry sources have stated that they expect no immediate significant increase in US footwear production as a result of the TPP, and the Commission's model results show a small 0.5% increase in footwear output as compared to the 2032 baseline.
US footwear exports
During 2013-15, US exports of footwear to the world grew 7.2%, rising from $788.9m to $845.9m.
During the same period, total US footwear exports to TPP countries increased even faster – by 22.4% to $400.5m. The TPP parties accounted for almost half or 47.3% of US footwear exports in 2015, up from 41.4% or $327.3m in 2013.
Of the top non-FTA TPP partners, US exports of mainly footwear parts to Vietnam increased by 72.5%, from $60.1m in 2013 to $103.7m in 2015. At the same time, US footwear exports to Japan, another TPP nation, fell by 3.9%, fluctuating from $56.2m in 2013 to $54.0m in 2015.
The main footwear products that the US exports to TPP countries include leather shoes, footwear parts, and branded athletic footwear.
US footwear imports
The US is a major world importer of footwear, rising $2.6bn or 10.7% to $27.2bn between 2013 and 2015.
During the same period, imports from the TPP countries grew by $1.4bn or 40% to $4.9bn, with the TPP countries accounting for 18% of total US footwear imports in 2015. Last year 87% of these imports from TPP countries were dutiable.
Of the TPP countries, Vietnam is the largest footwear supplier to the US market, accounting for 88% of shipments from these nations.
After China, it is the second leading footwear supplier to the US market, and over the past two years US footwear imports from Vietnam have risen by almost 50%, growing from $2.9bn in 2013 to $4.3bn in 2015.
Sports and athletic footwear, certain footwear containing rubber and plastic outer soles and leather uppers, including work shoes, and various men's and women's leather boots were among the main types of footwear imported from Vietnam in 2015.
The average US tariff on footwear imports from Vietnam – which accounted for 99.5% of the dutiable value of US footwear imports from TPP countries – is 12.5%, whereas the US average rate of duty on footwear imports from all TPP countries is 10.8%.
According to the report, industry sources say Vietnam's footwear industry expects to boost its footwear exports by 20% in 2016 because of the TPP and other new FTAs.
Click on the following links for more findings from the report 'Trans-Pacific Partnership Agreement: Likely Impact on the US Economy and on Specific Industry Sectors':
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