Federal Trade Commission
Received Documents
March 25, 1996
P894219
B18354900141



                      FAIR TRADE COMMISSION

                  CHUNGANG-DONG #1. KWACHON-SHI
              KYUNGGI-D0. 427-780. REPUBLIC Of KOREA

                                                  March 21, 1996


Mr. Jacques Feuillan
International Antitrust Division
Federal Trade Commission
601 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
USA


Dear Mr. Feuillan:

The KFTC has been informed by the Korean Embassy in the US that
there will be a FTC hearing on "Made in USA" advertisements
between March 26-27.

As the outcome of the hearing is expected to carry deep
significance for Korean enterprises operating in the US, the KFTC
has made a thorough review of the topics that will be discussed
at the hearing; moreover, it has gathered the comments of various
agencies and institutions.

What I have enclosed is a consolidation of all the comments
submitted to the KFTC for you to refer to during the hearing.

I hope they serve as practical reference to you.
With best wishes,


Sincerely,


Soon-Sik Ju
Director
International Affairs Division I
Korea Fair Trade Commission

        Comments of the Korea Fair Trade Commission (KFTC)

1. The need to change the standards of the FTC

     o The current requirement that "All or Virtually All of the        Parts are of US Origin" should be eased to a more           practical level.

       - Along with the increasing globalization of the economy,          a globalization of the production process is also taking
         place.  Under such conditions, using only locally        
   produced parts, is having less meaning in terms of     
strengthening the competitiveness of an enterprise.

               Also, with the increasing globalization of
               production, it is becoming very difficult to
               pinpoint a single place of origin of a final
               product.  Moreover, major international economic
               issues, such as those involving the WTO and the
               NAFTA, have brought about changes of perception
               among consumers.

          As was evident in the FTC Study of February 1991, few  
          consumers today think that "All or Virtually All of the
          Parts are of US Origin" when they view a "Made in USA"
          advertisement.

               Most of the consumers these days are able to give
               a flexible evaluation of the degree of truth of a
               "Made in USA" claim according to the
               characteristics of different industries.
2.   Gauging local content

     Rather than a universally applied standard such as a fixed
     formula, it would be more advisable to adopt a standard
     which can be flexibly applied taking into account the
     characteristics of different.

          Because of the difference in the degree of
          globalization in different industries, fulfillment of
          the standards differ according to different industries;
          for instance, light industry products can satisfy the
          present standards; on the other hand, automobiles
          seldom satisfy the "All or Virtually All" standard.

3.   Caution not to discriminate against foreign products in
     applying the standards.

o    Even if foreign products with brand names such as "HYUNDAI,"
     or "SAMSUNG" contain higher local content and are producing
     more added value in the US, they may be put at a competitive
     disadvantage compared with US products.

          Some US consumers have a tendency to believe that only
          the products made by made by enterprises headquartered
          in the US are "Made in USA." Thus, products with
          foreign brand names may be disadvantaged in terms of
          priority in consumer choice even if those products
          contain higher local content, produce higher added 
          value, and contribute more to the enhancement of
          welfare of the US Consumers than US brand products
          produced abroad.

          Thus, the FTC should establish an objective standard by
          eliminating any subjective elements such as the
          nationality of an enterprise, so That the foreign brand
          products are not disadvantaged.