Federal Trade Commission
Received Documents
Jan 22 1996
B18354900094
Secretary

UNITED                             Carrier Corporation
TECHNOLOGIES                       P.O. BOX 4808
CARRIER                            Carrier Parkway
                                   Syracuse, New York 13221
                                   315/432-6000

Via Airborne

January 22,1996

Office of the Secretary
Federal Trade Commission
Room 159
6th Street and Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Re:  Re:  Made in USA Policy-Comment
     FTC File No. P894219

In the October 18, 1995 Federal Register (Page 53922), the Federal Trade Commission requested
comments regarding "Made in U.S.A." clauses in Product Advertising and Labeling.  Our
suggested comments are as follows:

"Made in U.S.A. Policy Comment," FTC file No. P894219

Background:

Carrier Corporation is the world's largest manufacturer of commercial and residential heating,
ventilating, air conditioning and transport refrigeration equipment.  Headquartered in Farmington,
CT and operating in 147 countries, Carrier employs more than 30,000 employees and some
100,000 others in Carrier's extended network of distributors, dealers and suppliers, and is a
division of United Technologies Corporation.  Carrier's growth has averaged nearly 20% annually
over the last five years.  Carrier is a global company producing more than 10,000 products, with
40% of our production and over 50% of sales occurring outside of the United States.  Thus,
product labeling issues including "Made in U.S.A." are of great interest and concern to our
corporation.

Given the global nature of our corporation and the economic transformation occurring in our
nation and world, we believe the current "Made in U.S.A." (with 100% United States content)
labeling policy is no longer relevant.  In addition, Carrier has come to recognize the need to make
some sense of the multiple definitions of origin, manufacture and/or assembly.  In "Made in
U.S.A.", "Assembled in U.S.A." and "Buy American".

As a part of this procedure it is essential to establish ground rules and to have reasonable, finite,
uniform, published definitions.  With these definitions, it is important to avoid ambiguities that
may allow individuals, companies or countries to misunderstand or to circumvent the intent.

Consumers recognize that the globalization of production and assembly is so far advanced today,
that it is difficult to recognize any one particular country as parent to that product.  Consequently,
consumers realize that it is rare, and virtually impossible, for a product to be "100% Made in
U.S.A." Therefore, it could be misleading to say, "Made in U.S.A." when a growing percentage
of our product markets are in fact achieved by partnerships around the world.  Thus, we have
derived the following definitions:

Country of Origin [1] of a product should be the specific Country in which the product achieved
its functioning, recognizable form with 50% or more of its *cost of materials, components, labor,
overhead, and G & A, excluding selling expense, non-allowable interest and profit, originating in
that same country.  Examples: "Made in U.S.A.", "Made in Canada", etc.

Assembled in [1] should be the specific country in which the product achieved its functioning,
recognizable form with less than 50% of its *cost of materials, components, labor, overhead, and
G & A, excluding selling expense, non-allowable interest and profit, originating in that same
country.  Examples: "Assembled in U.S.A.", "Assembled in Mexico", etc.

Please note: We would like to have specific verbiage to hold "Made in America" or "Buy
American" as totally unacceptable terms.  North America consists of Canada, Mexico, and the
United States, and South America and Central America contain their countries.  Each country
could be considered as "America."  "Made in America" is ambiguous, and misleading, hence, we
suggest "Buy U.S.A." in lieu of "Buy American".

We could also support the Association of Home Appliance Manufacturers' (AHAM) suggestion
that the Commission adopt what the United States government has already agreed to within the
NAFTA rules of origin.  It is our belief, however, that our above stated definitions are more
readily understood.  Comparatively, we would ask the FTC to consider the definitions stated
above and apply them to its policy.

It is critical that the Federal Trade Commission address the global nature of U.S. businesses and
understand that so much has changed since the 1950's and 60's when manufacturing and economic
conditions were much different than they are today.

________________________
[1]  Origin of a product is currently determined by a number of factors depending on the need:
FTC for marking, U.S. Customs for entry and marking purposes, NAFTA for origin and duty
determination, Buy America Act for qualification or eligibility of an article, and a myriad of
others.

*  All calculations for costs should be done using the Generally Accepted Accounting Principles
(GAAP).
________________________

The FTC's current "100% United States content" policy unreasonably penalizes manufacturers
whose products are substantially made in the United States, and the current policy definitions are
confusing and bureaucratic.

In a recent Speech at the National Press Club, United Technologies Chairman George David
stated the following:

     The world is globalizing, whether we like it or not.  And we should like it because we are
     positioned to be big winners if only we embrace these forces and shape them to benefit
     both others and ourselves.

     But we must alter the character of our corporations and their employees as this
     transformation occurs.  We must change ourselves from entities that make things to
     entities that create things, and from organizations that make things to organizations that
     manage others who make things.

The FTC must recognize the power of our global economy and not set regulations which will
inhibit growth, trade and prosperity.  The U.S. policy should encourage globalization while
creating policy that will serve the public interest.  However, Carrier Corporation is appreciative of
this opportunity to present our views.  For additional information, contact Matthew Chadderdon,
Vice President Government Affairs at (315) 432-6625 or Gloria Scheuermann, Legislative
Assistant at (315) 433-4458.


Sincerely,

Matthew J. Chadderdon
VP, Government Relations & Public Affairs

GS\kp