The Rubber and Plastic Footwear Manufacturers Association (RPFMA) is the spokesman for manufacturers of most of the rubber-soled, fabric-upper footwear, waterproof footwear, and slippers made in this country. The names and addresses of the Association’s members are attached hereto.

Rubber footwear is a labor-intensive, import-sensitive industry: Labor constitutes more than 40 percent of total cost; imports of fabric-upper footwear and of slippers take more than ninety percent of the U.S. market and imports of waterproof footwear take more than fifty percent. These imports come from countries where wages are from one-fifteenth to one-twentieth of the level in the domestic industry.

The remaining companies in this industry represent the survival of the fittest. They are convinced that their state of the art production facilities, the quality of their products, and their name brand recognition will permit them to continue manufacturing in this country provided that there is no further tampering with the current level of tariffs on competing imports.

The rubber footwear industry recognizes that the health of our economy depends to a considerable degree on America’s ability to export its products to other countries. Unhappily, the ability of low-wage foreign producers to compete in the labor-intensive industry which produces rubber footwear presents an enormous obstacle in the path of this industry’s efforts to export its products. Accordingly, while we understand the desirability of ongoing and anticipated trade negotiations for the purpose of reducing barriers to trade, we urge that there be greater recognition that exceptions must be made for those few industries, such as rubber footwear and slippers, where a reduction in duties would clearly threaten the continued existence of what is left of domestic production.

A major concern of this industry with respect to trade objectives and initiatives is the distinction between our Government’s approach to such multilateral negotiations as the Kennedy, Tokyo, and Uruguay Rounds and its approach to bilateral free-trade agreements. The rules for multilateral negotiations have permitted careful scrutiny of whether cuts in tariffs on specific Harmonized System items are warranted. Thus, in recognition of the unique import sensitivity of rubber footwear and slippers, the duties on the core items of this industry remained untouched in the Kennedy, Tokyo, and Uruguay Rounds. On the other hand, in bilateral negotiations the only flexibility has been in the length of time over which all duties would go to zero.

When our government entered into a free trade agreement with Canada, this industry did not protest because of the relative comparability of Canadian and U.S. wage rates, and because we were assured that such an agreement was a natural consequence of the unique relationship between Canada and the United States and that it would not set a precedent. Before long, however, Mexico urged that a similar relationship existed between it, Canada and the United States, as a result of which we got NAFTA – with an assurance that NAFTA was based on special circumstances. It is true that rubber footwear was one of the very few industries to get a NAFTA phase-out of fifteen years, but nonetheless, at the halfway point of this phase-out, Mexico has become the second-largest exporter of rubber footwear and slippers to the United States.

Before long, the Caribbean countries claimed that NAFTA put them at a competitive disadvantage, and the rubber footwear industry soon found itself facing unreciprocated duty-free treatment from that part of the world. As a result, CBI countries which previously had posed no meaningful threat to the domestic rubber footwear industry soon saw their exports skyrocket from 200,000 pairs a year to over 5 million. Nonetheless, this CBI enhancement is now being cited as a precedent for a free trade agreement with Chile and for the expansion of the Andean Trade Preference Act.

Is it any wonder, with imports taking in excess of 90% of our market for fabric-upper footwear and slippers and in excess of 50% of our market for waterproof footwear, that what is left of this industry is concerned about any additional free trade agreements which do not permit exceptions in those cases where the continued existence of domestic production is truly threatened?

Because of the drift of our national trade policy in the direction of unfettered free trade and the enormous advantage in rubber footwear wages enjoyed by countries in the Pacific and in Latin America, this domestic industry is continuing to suffer severe blows. Within the last several months alone, the largest domestic producer of waterproof footwear, Lacrosse Footwear, closed its domestic operations in favor of imports, and the largest domestic producer of fabric-upper rubber-soled footwear, Converse, has now followed suit.

What is left of this domestic industry does have reason to believe that it can survive, provided, however, that our trade policy is modified so as to permit limited exceptions to duty-free treatment in bilateral and regional negotiations. The history of past negotiations demonstrates that there are very few domestic industries whose survival has been as threatened as that of rubber footwear and slipper manufacturers. Surely the benefits that would otherwise accrue from a free trade agreement would not be diminished by excluding this miniscule fraction of 1% of this country’s trade from duty-free treatment. We therefore urge that, if and when this Congress grants the President fast-track authority, it will insist that the standards for exceptions which have prevailed in multilateral negotiations should be made applicable to bilateral and regional negotiations.