AAFA urges clearer FTC ‘Made in USA’ labeling standards

The American Apparel & Footwear Association has called on the Federal Trade Commission to clarify apparent ambiguity in the commission’s rules on the labeling of goods sold in the United States and to provide a clearer definition of “materials.”    The Federal Trade Commission (FTC) should clarify the ambiguous “all or virtually all” Made in USA standard as U.S. manufacturing is resurging, the American Apparel & Footwear Association (AAFA) said in a Feb. 23 letter to the FTC.
   As import penetration has remained high for a prolonged period of time, portions of the manufacturing supply chain for inputs for clothes, shoes and travel goods don’t exist in the U.S., and the nation’s manufacturers have had to supplement U.S.-made materials with imported materials, the AAFA said.
   The current FTC “two-step” back rule enables some U.S. apparel production to be labeled with an unqualified “Made in USA” label—including language akin to, “Made in USA with imported materials,” if certain specific inputs are also manufactured domestically, but no such rule exists for footwear and travel goods, the AAFA said.
   “Those industries have had to figure out how to comply with the Made in USA standard using their best judgment,” the letter reads. “Some have decided that even if their shoe is 90-95 percent U.S.-made, they must still use a qualified Made in USA label, while others have decided that when the majority (over half) of the shoe or travel goods is American-made, it meets the requirements for an unqualified Made in USA label. And then others don’t use the Made in USA label at all because of the ambiguity of the standard and concern that the might violate it.”
   The AAFA also called for the FTC to clarify its definition of “materials,” including qualification of the amount of materials that must be made in the U.S. for an item to carry a qualified Made in USA label.
   The organization pointed to World Customs Organization (WCO) labeling requirements as a better model.
   U.S. Customs and Border Protection employs WCO’s standard that uses an “assembly” requirement to determine required country of origin markings on imports.
   For instance, if a shoe is assembled in Vietnam with all imported materials, and CBP sees a “Made in Vietnam” label, CBP determines if these shoes, and other goods assembled/labeled in the same fashion, qualify for U.S. trade preference programs, the AAFA said.
   “Establishing a Made in USA standard that is transparent, clear, measurable and enforceable will provide the consumer with confidence that the shoe, backpack or handbag they are buying meets both the letter and the spirit of the Made in USA label,” the letter says. “Therefore, we propose that the FTC use this opportunity to reevaluate its current Made in USA standard and offer a standard that we believe will work for consumers, for manufacturers, and for all other stakeholders. To use an unqualified ‘Made in USA’ label, we propose that the FTC adopt a requirement of substantial transformation +51 percent value added.”