Federal Trade Commission Received Documents P894219 Nov 17 1995 B18354900007 Harold Tuchel 1040 Fleur Dr Waterloo, Iowa 50701 ht11081@cedarnet.org SUBJECT: FTC..COMMENTS REGARDING "MADE IN USA" This is written comment to the FTC regarding made in USA labeling subject to FTC rules. The writer of these comments is both a consumer and employed in manufacturing. My interest is to ensure that the label "Made in USA" remains an accurate guide to the consumer. If the "Made in USA label" continues to be an accurate guide to both the foreign and domestic consumer those that have a preference for American made goods will spur domestic job creation and employment. It is certain that parties both domestic and foreign will wish to dilute this signature of American production in order to sell products produced partially offshore or made in America with foreign parts. This multinational approach should be resisted firmly, since the interest of the FTC is and should be the interest of the American consumer and not of monied multinationals. The FTC commissioners seek quantitative data to questions asked for this comment subject. Although such studies could be financed and even skewed with clever survey questions, to citizens of the U.S. the answers should be intuitive if not actually obvious. Pride in American workmanship and the pride of being an American citizen and working for American citizens interests should bring about obvious answers! There still exist a great many American consumers who realize the worth in purchasing American goods if they can find them at competitive price and quality. In order to purchase such goods they will have to be assured that foreign goods or goods of predominantly foreign origin do not fall under such a label, or they will become cynical about purchasing U.S. goods. A. When consumers see "Made in USA" labels does this imply that the product was indeed made in the U.S. In my opinion consumers do expect that a made in the U.S. label indicates that the goods where produced fully in the U.S. A potential problem is that with the large U.S. multinationals purchasing foreign parts in great amounts the U.S. label will be used where foreign made parts are installed or predominate. The public is aware of this and is somewhat cynical on the made in U.S. label in electronics, computers, printers, and even automotives. I would disagree with commissioner R Stareks position on individual enforcement, I feel that if the situation was studied more carefully he would find that certain industries flagrantly violate the "Made in USA" label. I feel that whatever the industry the consumer has the right to expect 100% American manufactured goods in a product if the manufacture wants to apply a "made in USA" label. B. What are the costs and benefits of a virtually all threshold versus a 50% or lower threshold The cost of a lower threshold versus a virtually all threshold is threefold. The primary cost would be public skepticism of the made in USA label and cynicism resulting in a counterproductive image. This counterproductive image of the Made in USA image would result in less focused buying of U.S. products by those that choose to focus on U.S. goods. The consumer that purchases U.S. goods does so for a variety of reasons, employment in the U.S., confidence in U.S. goods, warranty reasons, and U.S. brand loyalty. The second cost of lowering the threshold of content could be U.S. jobs as manufactures actually purchase cheaper foreign parts to meet the content ceiling. Such purchase of foreign parts could be quit economical if perhaps a 50% threshold were established. This again could cost Americans jobs! The third cost of lowering rather than raising a threshold could be a new perception that the "made in USA label" does not indicate quality! The label now carries a connotation that the U.S. manufactured product is of a high quality. If parts of foreign manufacture are allowed under a higher threshold there could be the perception that products have been cheapened, so why not purchase the foreign made product anyway. This could be counterproductive to a "made in America " campaign or label! C. What do consumers understand the phrase "Assembled in the USA" to mean! I feel a study of this label would indicate that consumers are confused by the label and unless otherwise labeled do not understand what U.S. content is in the product. Since the term is ambiguous and may mean a variety of parts where used a manufacturer should be required to label the percentage of foreign parts used in the manufacture of the item! Where minimal assembly is required or the product is only packaged in the U.S. the manufacture should be required to label the country of origin and NOT brand the product with U.S. at all. The commission should note that a great many products are labeled in large letters "packaged in the USA" and have in very small letters on the reverse side the country of origin. This is an obvious ploy to confuse the consumer and gain false good will! D. How should the proportion of domestic content be measured The measure of content is the most difficult issue. The easy measure of content would be to use parts dollar value as a measure of content. This could be very deceptive because of exchange rates and cheap foreign parts or goods. By measuring by dollar value the actual content of a U.S. made device could easily be predominantly foreign. The overwhelming value of a single American part could falsely skew a predominantly foreign device as U.S. made. The best measure for assembled goods would be the percentage of parts in the complete product that where produced in America. The criteria for larger assembled device would not only have to be percentage of parts, but also value or function. Obviously an automobile with a foreign engine should be considered at least 50% foreign since the major and most important function is the engine, and the engine is one of the major value components. E. What guidance should the commission offer on enforcement It has not been well publicized that the commission has much enforcement authority and can penalize for misuse of the label. The general public is not aware of such enforcement, nor has congress or the commission seen fit to publicize this to the general public. If such notification was made to the public it did not reach Iowa, and this writer is not aware of it! The only agency that has publicized the "made in USA label" has been the Unionized Garment Workers to any great degree! The commission should be working with customs to ensure that goods branded made in America are not arriving from foreign shores. A case by case basis presumes that the average American is aware that he can petition the FTC for relief if an item was found to be predominantly foreign after purchase. This is exactly what industry would desire since the consumer is unaware that the commission has an enforcement power and a consumer can petition to the commission. It is my feeling that before the commission can presume to allow case by case enforcement it should be aware of deficiencies in two areas. The first area the commission should more closely follow is an industry by industry study. Although this study would not have to be of great detail or cost, it could quickly highlight any industry wide infractions. If there were any industries found were infractions are high remedial instruction could be provided to those industries prior to a penalty phase. The second area that the commission should follow more closely is the consumer. If the "made in U.S.A." label is to be viable and a positive goal the consumer needs to be made aware that the label can be trusted and that the consumer has enforcement petition options. If the consumer is not aware that enforcement is a possibility obviously such a label comes to mean very little, since the consumer may feel it is taken advantage of. The reason I have furnished these comments to the FTC is that such comment sessions usually are skewed by multinationals and big business. The made in USA label is not to promote either multinationals or big business, but a guide to consumers to buy American products. Since I am both a consumer and employed by an American Manufacturer I have a great interest in such rule- making. This label should so effectively promote American interests that it is both admired by foreign interests as an effective sales tool, and heavily and adamantly lobbied against in congress by the same foreign and multinational interests. When that situation occurs the "made in USA" label will rise to the same or higher stature as the made in Japan label. Respectfully Yours Harold Tuchel Industrial Electrician Manufacturing