FTC: Made In The USA Comments Concerning Douglass C. Horstman--P894219
August 8, 1997
Office of the Secretary
RE: FTC File No. P894219
"Made in USA" Policy Comment
Maytag Corporation (Maytag) submits its comments on the Federal Trade Commissions (FTC) proposed Guides for the use of U.S. origin or "Made in USA" claims. Maytag is a leading manufacturer of major home appliances, floor care products and vending equipment. Its principal brands include Maytag, Hoover, Jenn-Air, Magic Chef and Admiral.
In earlier comments filed on the existing "Made in USA" policy, some parties commented that the Preference Rules In Chapter Four of the North American Free Trade Agreement (NAFTA Rules) are a logical alternative to the current all or virtually all policy for a claim that a product is made in the USA. Maytag agrees with these comments and believes that the NAFTA Rules are a more reasonable means of determining product origin.
Pursuant to the NAFTA Rules, a product originates in the USA if over fifty percent of the product is of domestic origin using the net cost method, or more than sixty percent of domestic origin using the transactional value method. The NAFTA Rules also require certain components of particular products be produced in a NAFTA country for the finished product to qualify as being North American in origin. Maytag believes it is reasonable to apply these same means of determining origin to the FTC "Made in USA" guidelines.
While the proposed guidelines do not adopt the NAFTA method of determining product origin, the FTC's acceptance of the position that a product that is substantially all made in the US can make an unqualified "Made in USA" claim is a positive move that recognizes the current global marketplace and increasing consumer sophistication. Studies cited by the FTC confirm that consumers are generally interested as to whether a product is "Made in the USA," but that rarely signifies to those same consumers that the product is "all or virtually all" composed of U.S. parts and assembled in the U.S. Thus, it appears the "all or virtually all" standard is no longer necessary to protect the consumer. Furthermore, the revised "substantially all" standard will encourage manufacturers to strive to maintain or increase domestic content in their products in order to make the "Made in USA" claim, whereas that claim may have been considered unattainable under the "all or virtually all" standard.
Maytag is appreciative of the opportunity to comment on this issue. We believe the proposed guidelines are an important step in striking the appropriate balance between consumer protection and manufacturers' need to compete in the global economy. We encourage the FTC to continue to examine the guidelines to ensure that they reflect the realities of the changing marketplace.
Douglass C. Horstman
Douglass C. Horstman