Newspaper article THE JOURNAL RECORD

Proposed Rules Would Ease "Made in U.S.A." Standards

Newspaper article THE JOURNAL RECORD

Proposed Rules Would Ease "Made in U.S.A." Standards

Article excerpt

WASHINGTON -- It'll be easier for American companies to wave the flag in their advertising after the Federal Trade Commission eases long-standing rules about what it takes to tout a product as "Made in the USA"

The agency Monday proposed new regulations that would permit made- in-America advertising claims as long as 75 percent of a product's manufacturing cost is incurred in the United States, or if imported raw materials are "substantially transformed" into a new product at a U.S. factory.

Those standards would replace stricter rules that have been in place for decades. The FTC, which polices federal false-advertising laws, has previously insisted that "all or substantially all" of a product had to be made in America -- a standard that many industries complained was almost impossible for most products to meet in today's age of global commerce. The new FTC guidelines, which govern the agency's decisions about when to bring false-advertising cases, generally track a separate set of U.S. Customs Service regulations about labeling of imported products. The proposed rules were released by the agency Monday. They'll be open to public comment until Aug. 11. After reviewing those comments, the FTC will issue new guidelines in final form. Jodie Bernstein, director of the FTC's Bureau of Consumer Protection, said the agency tried "to strike a balance" between the "recognition that our policies must keep up with changes in the global economy" and the need to "ensure that consumers are not deceived." The new regulations grew from a controversy that started in September 1994, when the FTC filed false-advertising charges against Hyde Athletic Industries Inc. and New Balance Athletic Shoe Inc., two New England shoemakers that had proudly promoted American-made products. The FTC's complaints centered on the fact that Hyde's Saucony shoes and New Balance products used some imported components, even if the finished shoes were assembled in the U.S. The charges touched off a firestorm of protest from companies and trade groups who complained that the FTC's rules were so rigid they'd lead to the extinction of the Made-in-U.S.A label. Trade groups and companies representing manufacturers of cars, bicycles, candy, furniture, luggage, footwear and other products all said that a vast array of U.S. products today include at least some imported parts or ingredients. Far more than bragging rights were at stake in the long brouhaha. Polls and surveys publicized during the fight said many consumers in the U.S. and abroad see the Made-in-U.S.A. label as a sign of quality, and many Americans say they try to buy domestic products to protect American jobs. "The claim that a product is `Made in USA' is important to many consumers as they make purchasing decisions," Bernstein said. Faced with an avalanche of criticism from business groups, the FTC in July 1995 announced that it would rethink its strict standard and postpone action against Hyde and New Balance. …

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