Defense bills include New Balance provisions

The House and Senate versions of the annual defense authorization bill contain identical made-in-America language on athletic footwear pushed by Massachusetts-based shoemaker New Balance and its congressional allies after the company's break with the Obama administration over the Trans-Pacific Partnership trade deal, Inside U.S. Trade reports this week.

The White House has already announced the president would veto the House version of the bill due to its inclusion of the footwear provision, among other reasons.

Section 808 of the House bill says the Defense Department must outfit military recruits with U.S.-made athletic shoes, as opposed to the current practice of issuing one-time vouchers (worth $75 to $90) that recruits can use to buy shoes at military exchanges.

The House provision was pushed by Rep. Niki Tsongas (D-MA), while the Senate provision was promoted by Sen. Angus King (I-ME), who on May 12 secured language in the bill identical to that contained in the House version during a Senate Armed Services Committee markup, according to a Senate aide.

The provision would make athletic footwear subject to the Berry Amendment, which requires military uniforms and certain other items procured by the DOD to be made entirely in the United States. DOD does not apply the Berry Amendment to athletic footwear because it does not consider it to be a uniform item.

In a May 16 statement of administration policy, President Obama's senior advisers said they would recommend he veto the House bill if presented with it. The statement explicitly takes issue with Section 808 because it would advantage an unspecified footwear company more than others and could increase the rate of injury among recruits due to a lack of variety of available athletic shoes.

“Because it is likely that only one company could benefit disproportionately from such DOD purchasing requirements, this provision essentially serves as preferential arrangement for a particular company,” the statement reads. New Balance produces athletic shoes several types of one running shoe designed to meet the 100 percent U.S. content required by the Berry Amendment.

“Mandating that a specific article of clothing be provided to new recruits is unprecedented and, in the case of athletic shoes, runs counter to research that indicates a strong correlation between the variety of athletic shoes available, fit, and comfort, and reduced injury rates,” the White House statement says. “Forcing DOD into a 'one size fits all' approach to athletic footwear may contribute to a higher incidence of injury to new recruits during one of the most critical times in a member's military training.”

New Balance's push to ensure that DOD buys U.S.-made athletic shoes has become linked to its position on TPP, which would lower tariffs on imported athletic shoes from Vietnam. New Balance produces shoes in the U.S. as well as Vietnam and China, but had long expressed worries that increased imports under TPP would hurt its factories in Massachusetts and Maine.

New Balance had agreed to remain neutral on TPP after the administration took into account its demands for long tariff phaseouts on athletic shoes from Vietnam, and senior U.S. trade officials said they would work to ensure the company got a "fair hearing" at DOD on its bid to require recruits to buy U.S.-made shoes.

But in mid-April, the footwear company came out against TPP in response to what it perceived as the DOD's unwillingness to move forward despite its production of several types of one running shoe that were designed to meet the department's specifications.

Two types ultimately met DOD's durability test, but not its cost requirements, according to a Defense official. A senior New Balance official last month said the company would to talk to anyone it can and do everything it can to get TPP defeated and to get DOD to buy U.S.-made athletic shoes.