US: Imports more 'Made in USA' than label reveals
Apparel products contain more than 70% US value on average, according to the report
Imported products sold in the US, including clothing, contain a higher US-made content and value than consumers or policy makers realise, a new report suggests.
The report, titled 'Rethinking Made in America in the 21st Century,' was prepared for the National Retail Federation (NRF) by Laura Baughman, a Washington economist specialising in international trade and president of The Trade Partnership.
NRF president and CEO Matthew Shay says the research looks at retailers' worldwide sourcing of merchandise "not just as a global supply chain but as a global value chain".
"Even in a product that says 'Made in China', much of what goes into that product is 'Made in America,'" he stresses.
According to the report, apparel products on average contain more than 70% US value. In addition, of the $1.85trn in products imported in 2009, $464bn of the value was American, and 10m US jobs, or 11.2% of US employment, were sustained by global supply chains in 2008.
Product origin labels are "misleading", the report adds, because federal law allows an item to be labelled 'Made in USA' only if American manufacturing workers made it and "all or virtually all" of the value of significant parts and processing that go into it were made or done in the US.
Only direct manufacturing costs such as materials, labour and overhead are taken into account. Non-manufacturing costs such as research and development, product design and marketing are not considered, even if all of those activities took place in the US and were performed by American workers.
Policymakers should adopt trade policies that recognise the importance of US jobs tied to imported products, the report says.
It recommends US and foreign tariffs be eliminated and that non-tariff barriers, such as regulations that treat imported products differently, also be removed.
Trade facilitation measures affecting issues ranging from customs processing to transportation infrastructure are needed, the report emphasises, and trade agreements should "recognise 21st century global value chains".
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