A group representing US apparel and footwear brands and importers has called on the Federal Trade Commission (FTC) to provide greater clarity and more realistic ‘Made in USA’ labelling requirements to support domestic manufacturing.
Referring to a recent FTC investigation that alleged US firm Bollman Hat Co deceived consumers with ‘Made in USA’ claims for its hats and third-party products, the American Apparel & Footwear Association (AAFA) said the case highlights the “underlying ambiguity” in the FTC’s “all or virtually all” ‘Made in USA’ standard.
“At a time when US manufacturing is on the resurgent, we believe the case presents a renewed opportunity for the FTC to clarify the meaning of the “all or virtually all” standard,” says AAFA president and CEO, Rick Helfenbein,
In an open letter to the FTC dated 23 February, he points out that with such high import penetration for such a prolonged period of time, much of the manufacturing supply chain for inputs for clothes, shoes, and travel goods no longer exists in the US. Consequently, he says US manufacturers have been forced to supplement American-made materials with imported materials.
“For apparel, FTC rules have long accommodated this reality through a creative “two-step” back rule,” he adds. “This enables some US apparel production to be labelled with an unqualified ‘Made in USA’ label provided certain specific input items are also manufactured in the US.”
The AAFA wants to see the establishment of a ‘Made in USA’ standard that is “transparent, clear, measurable and enforceable,” and will provide consumers with confidence that products meet both the letter and the spirit of the ‘Made in USA’ label.
“We propose the FTC use this opportunity to re-evaluate its current ‘Made in USA’ standard and offer a standard we believe will work for consumers, for manufacturers, and for all other stakeholders.”
To use an unqualified ‘Made in USA’ label, the AAFA proposes the FTC adopt a requirement of substantial transformation plus 51% value-added. Similarly, it urges the FTC to define the meaning of “materials” and provide similar percentages to remove the ambiguity surrounding use of “qualified” ‘Made in USA’ labels.
“Again, we believe this case provides a great opportunity to provide much-needed clarity the ‘Made in USA’ standard. Creating a clear, enforceable standard will promote US manufacturing and give consumers more, not less, certainty that the product they are buying is truly made in the USA,” he concluded.