Attention Colorado gear heads: That backpack you've been eyeing might soon get a little cheaper.
We repeat: might.
Some outdoor gear companies based in Colorado say the new, 12-nation trade deal struck earlier this month could lead to millions in savings that could be passed to retailers and consumers -- and could bolster their bottom lines too.
Thing is, they don't know that yet for sure. Terms of the Trans-Pacific Partnership are secret, as they have been for the five years its been negotiated between Asian and American countries. The Boulder-based Outdoor Industry Association has been advocating for apparel and gear makers in its discussions with U.S. negotiators for years.
Fifty-five such companies are based in Colorado, including Big Agnes, Lowe Alpine and Osprey. A 2012 OIA report says the state's overall outdoor recreation industry, from ski resorts to REI locations to campgrounds, is responsible for 125,000 jobs, $4.2 billion in wages and salaries, and $994 million in state and local tax revenue.
But the OIA doesn't have access to what's on the table, meaning they place a lot of trust in negotiators. Alex Boian, the OIA's senior director of government affairs, said his organization has pushed for duty relief on imports and protections on domestically made products. He's confident the TPP will be beneficial.
“In general, the overwhelming response of the industry has been positive," Boian said.
And there's good reason for that, especially among apparel and pack makers. Much of the industry shifted production to Asian countries in the last 20 years to cut costs and ramp up production.
Osprey Takes Flight
Osprey Packs, which has called Cortez, Colorado home since 1987, moved its manufacturing to southeast Asia in 2003. CEO Tom Barney said the move allowed them to grow into an industry leader that still has a large presence in southwest Colorado.
He's hopeful the TPP will reduce the 17 percent duty his company pays on every pack it imports from its contracted factories in Vietnam.
"For every $10 of factory cost there’s an additional $1.70 added on that’s paid to the government," Barney said. "I can tell you that that is many, many millions of dollars over the years."
The OIA says duties on outdoor products average 14 percent or higher, with some reaching 40 percent.
Barney couldn't say where exactly such savings would go just yet, but said they could trickle down to retailers and consumers.
Boutique Outfit Doubles Down On Local
While companies with operations overseas stand to gain, smaller outfits seem more apathetic to the deal. One of those is Voormi, an outerwear maker in the southern Colorado city of Pagosa Springs that employs 10 people.
Chief marking officer Timm Smith said the industry's focus on growth has led big companies to move production overseas and abandon the small towns they once anchored. Chaco left Paonia in 2009, for example.
“We know we could’ve gone and done that," Smith said. “We made a commitment that as we grow as a company, each progressive horizon, we re-invest back into more localized manufacturing.”
Since it started in 2010, Voormi has built a network of rural manufacturers around the country. Wool is harvested in the Rocky Mountain region. Then it's cleaned and spun into yarn on the East Coast. Finally, it's cut and sewn in facilities in Pagosa Springs, Rifle, the Front Range and the West Coast. In addition to supporting local economies that otherwise depend on tourism dollars, Smith said it makes for good business too.
“We can keep a keen eye on what’s selling, what’s working, and what’s not," he said, adding that he hopes bigger players imitate their model. “We’re the microbrew of apparel, hoping to become the regional craft brew of apparel.”
But will the next generation of backpackers, kayakers and skiiers continue to pay a premium for a such a product? Much like the terms of the TPP, we'll have to wait to find out.
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