Federal Trade Commission Received Documents Jan 16 1996 B18354900033 Secretary The following pages are the comments of Harvey A. Moon, Chrm. BUY AMERICAN-UNION LABEL COMMITTEE, Retired Workers Council, Region I-A, UAW 9650 S. Telegraph Rd., Taylor Michigan 48180 "Made in USA Policy Comment" FTC File No. P894219 I. Consumer Perception of Made in USA Claims and the New Global Economy A. Direct Evidence of Consumer Perception The benefits of an "all or virtually all" threshold for "Made in USA" claims make it clear to those consumers who practice buying U.S. made products whenever possible. Any small varying content percentage that by the nature of the item should be considered in a light of "honest intent" to judge whether an item has the right to carry the label "Made in USA" To subvert by any other criteria or percentages the use of "Made in USA" label would erode the inherent value of the label. Many well known Brand Name products that are now foreign made, and recognizable by their registered American logos indirectly imply that their product is made in USA. My experience with direct consumer interviews are that when purchases are examined at a later time and they find the American "Brand Name" is foreign made, they are quite angry, they feel they have been lied to by implication. The FTC ruling "all or virtually all" content to earn the right to use the "Made in USA" label is abundantly clear by its honesty and simplicity. B. The Impact of Increased Globalization of Production on Consumer Perception. Let us face the facts, the label "Made in USA" is of great value and in order to keep this value we must be vigilant to preserve this American legacy by making sure that it means honestly what the label implies. "Made in USA" signifies not only quality of product, but that the product was made by American labor that by and large is protected by basic working conditions, human rights and minimum wages under U.S. labor laws. To be able to compile and present circumstantial evidence in defense of having a strong criteria for the right to use "Made in USA" label would be a huge and costly undertaking to say the least. Globalization of production and trade is still only a theory that it would improve the welfare of all involved. With the media uncovering almost daily, the exploitation of workers in foreign nations under deplorable conditions, it would be sacrilege to allow any part of any product to be condoned or sanctioned by the "Made in USA" label. Simplicity and honesty should be the order of the day in protecting the good and welfare of both the consumer and American industry. II. The Costs and Benefits of an "All or Virtually All" Standard compared to other Standards. A. Impact on Domestic Commerce Circumspect are the labels "Made in America", "Assembled in USA", "packaged in USA", "Printed in USA" instructions, the list goes on. It is clear that advertising with such labels is a subversive attempt implying that the products involved are made in the U.S. The costs to Domestic Commerce should be minimal if the present standard is maintained and the benefits positive as complete trust and honesty is conferred to the label "Made in USA" B. Impact on International Trade The nit picking strategies including International Trade reasons, of any factions to subvert the present standard of the FTC "All or Virtually All Domestic Content" Made in USA label should be given no consideration. It is obvious they are driven by a profit motive and have no regard for the excellence and meaning of Yankee ingenuity that has evolved with a "Made in USA" label. C. The Costs and Benefits of Adopting the Country-of-Origin Rules of Other U.S. Government Agencies. If the U.S. Customs Service enforces The Tariff Act in the matter of Country-of-Origin, let this agency handle the standards of labelling as well as handling any tariff. We should not go too far afield to settle the question at hand. III. Issues Regarding the Computation of Domestic Content A. A Proposed Formula for Measuring Domestic Content. Labor hours would seem to be the fairest way to compute the proportional content of any item. Overhead, advertising, financing at any point should not be considered as a proportional part of any item or product. The One or Two Steps Back in production determination for a content formula seems to be murky at best. A simple content determination formula must be the ideal to strive for and agree upon. IV. Form of Guidance. The "all or virtually all rule," "substantial domestic content rule" or a "bright line percentage threshold rule" are all worthy of consideration for adoption as long as it is stringent enough to maintain the trust that the "Made in USA" label has garnered over the years. V. Summation of Comments In order for United States to maintain leadership in world commerce, we must take a stance of honesty and decency in our dealings the world over. To give credence to producers for the USA locale by letting them use "Made in USA" label, without enforced conditions and rules would be extreme folly. I believe that the "Made in USA" label is an adjunct to the U.S. flag as it is usually displayed along with this label and easy use is tantamount to permission to use the flag itself. In all sincerity I wonder how many producers are applying for permission to use the following labels because of varying content: "Made in China" - "Made in Korea"- "Made in Mexico" - "Made in Bangladesh" - " Made in Japan" etc ! etc ! Let foreign nations earn their own laurels in respect to product quality and expertise. Again I say, "MADE IN USA" label is something of great value and integrity, earned by Yankee ingenuity over the years, and we must make every effort to preserve the consumers trust that the label implies. Harvey A. Moon, 1-3-96 Fax No. 1-313-427-8496 ham/l/3/96