FTC: Made In The USA Comments Concerning Thomas L. Eisele--P894219
Made in USA Policy Comment,"
Office of the Secretary, Federal Trade Commission,
August 11, 1997
Re:"Made in the USA" Public Comment
To Whom it May Concern:
NIBCO INC. (NIBCO"), a manufacturer of flow control devices respectfully submits the following comment regarding the proposed changes to Made in the USA":
NIBCO is a world leader in its field of providing quality flow control products for the residential, commercial, industrial, environmental protection, and irrigation markets. NIBCO has 14 manufacturing facilities, all but 2 of those facilities arc located in the United States. As a manufacturer of valves, NIBCO sources certain components from off-shore, but maintains the primary assembly and production functions within the United States. Despite the fact that American workers do the assembly, and despite the fact that a majority of the valve parts are manufactured in the United States, NIBCO is unable to advertise these products as "Made in the USA". The result is that NIBCO cannot obtain a competitive advantage over valves wholly manufactured off-shore by underpaid foreign labor.
The proposed regulations governing product label claims of United States origin evince more rational and contemporary notions of product manufacture. The former guidelines mandated that in order for a product to make a claim of United States origin, the product had to be of 100% US origin or virtually 100%. This threshold was very to difficult to meet for companies that regularly engage in international commerce. Over the past few decades more and more companies are entering the international arena. One result of this process is that. companies increasingly source much of their product from many nations. By allowing qualified claims of US origin, the FTC will encourage companies to keep a significant-percentage of their finishing process manufacture here in the United States. This is in part because the new regulations reflect attainable standards by companies that are currently competitive in the international arena to market items that are substantially made or transformed in the US as reflecting that particular status. Thus companies are able to reap the benefit of having a significant pad of their product made within the United States.
The proposed regulations facilitate accuracy in product labeling. The prior regulations did not reward a company's effort to manufacture a substantial percentage of its product -in the United States unless it was wholly manufactured in the US of virtually 100% US parts. Any substantiated and accurate claim reflecting the amount of US labor and production involved in the product would have been, under the old rules, misleading. The proposed regulations provide a marketing incentive to companies to substantially manufacture their goods in the US. At the, very least, the qualified claims provisions of the proposed regulations encourage businesses to have as much of the product as possible made or finished in the United States. Whereas, under the 100% US product provisions of the previous regulations, if for competitive reasons more than a de minimis portion of the product was made outside of the United States, the company could no longer make any accurate claim reflecting the portion of the product that was made in the United States and consequently deprived companies the entire benefit of accurately marketing the portion of the product that was made in the United States.
The proposed regulations also provide a much needed link to current Custom's regulations. For years businesses have had to understand why "substantial transformation" was sufficient to prevent improper origin markings, but not to accurately label their products, The confusion caused by the differing regulations may well have led businesses down a path of legal violations. Unsophisticated businesses, with good and honest intentions may have understood the "substantial transformation" definition within the Custom's regulation to allow them to claim US origin. While attorneys understand very well the differing reasons behind the Custom's and Trade Commission's differing regulations, ordinary individuals trying to remain competitive in an international marketplace may not have. Thus the proposed safe harbors within the draft regulations will insure that honest businesses are not punished for honest mistakes.
Additionally the proposed guidelines make intuitive sense. The contemporary American consumer often will express a preference for goods that are made in the United States. The contemporary consumer is also aware, however, that in order for a company to be successful it must compete in international markets and against international companies. Therefore, when a manufacturer is able to label a product that accurately reflects its US content the consumer is better able to appreciate and evaluate products than previously when any foreign content in a product prevented any accurate claim as to its origin from being made. Therefore, previously consumers were left to choose between products that could have been substantially made in the US but not labeled as such, and a product that was of complete foreign manufacture. This old system denied to the consumer accurate information regarding an important aspect of the product. Prior regulations were counter to current business conditions and deprived consumers of important information. Further, the old regulations underestimated the ability of the consumer to understand the gradations of US manufacture involved in a product, A consumer can make a more informed choice if allowed to choose between a substantially made American product, and a wholly foreign made competitor, In fact, the regulations will eliminate the competitive advantage of those unscrupulous companies who sell product as American made when if fact it is not, Honest companies can now tell the truth about their product's origin, and reap the benefits of producing quality products within the United States- The proposed regulations will give the consumer better information, and allow them to make true, informed choices.
The new regulations allow accuracy, flexibility and are easy to apply. The rules arc rational and by not having purely formalistic requirements allow relatively easy application through a short narrative description in the case of a qualified US origin claim or throughout the application of a formula for a "Made in America" claim. Further, the new regulations are in line with current Customs Regulations and allow a more uniform treatment of imported and domestic product. It is time to stop punishing American companies for having to compete in a world wide economy. It is time to reward companies for keeping their manufacturing base within the United States. It is time to recognize the intellect and discerning taste of consumers, and to give them true choices. NIBCO urges the FTC to formally adopt its proposed regulations on this issue.
Thomas L. Eisele