SW Legal Educational Publishing

FTC "Made in the USA" Label Standards Draw Political Fire
Description It is unclear what "Made in the USA" means when attached to a product. NAFTA holds that it means that at least 55 percent of the labor and components must be from Canada, Mexico, or the United States. The Department of Transportation holds that a vehicle must be 75 percent domestic to be "Made in the USA." Customs says 50 percent.
Topic Consumer Protection
Summary It is unclear what "Made in the USA" means when attached to a product. NAFTA holds that it means that at least 55 percent of the labor and components must be from Canada, Mexico, or the United States. The Department of Transportation holds that a vehicle must be 75 percent domestic to be "Made in the USA." Customs says 50 percent.

The FTC has said that the label should not be used "unless all, or virtually all, of the components and labor are of U.S. origin." This vague ruling became the center of a fight with New Balance Athletic Shoe, one of the few companies to assemble shoes in the U.S. The FTC said it was improper for New Balance to put "Made in the USA" on its shoes. New Balance noted that the shoes were assembled in the U.S., and that most components come from the U.S., but that rubber must be imported because rubber is not grown in the U.S.

The FTC backed off while pondering a more definitive rule. The Commission unanimously recommended that the "Made in the USA" label be allowed for products with 75 percent parts and labor. Labor unions and members of Congress from strong union states attacked the proposals. The FTC backed off, stating that maybe the rule would be 90 percent domestic. That too has been attacked, sending FTC officials back to the drawing board. Anything less than the old standard of "all, or virtually all" domestic origin is "a step in the wrong direction" says Michigan Senator Abraham.

Back to Consumer Protection Listings

©1997  South-Western, All Rights Reserved