FTC abandons plan to weaken 'Made in the USA' label rules Regulation

December 02, 1997|By BLOOMBERG NEWS

WASHINGTON -- Bowing to intense opposition, the Federal Trade Commission yesterday abandoned a plan to weaken its "Made in the USA" rules.

The U.S. consumer protection agency said it will keep strict rules that permit made-in-America marketing claims only for products constructed almost entirely with American parts and labor. The FTC voted 4-0 in favor of keeping the old standard.

The decision is a setback for companies who say the standard is unfair to firms that assemble products in the United States but must use some imported parts.

"The American manufacturers are going to be at something of a competitive disadvantage because of this," said Mitchell Cooper, counsel for the Rubber and Plastic Manufacturers Association.

Consumer groups, unions and members of Congress bombarded the FTC with criticism after the agency earlier this year proposed a new standard that would have set the domestic content threshold at 75 percent. The plan would have changed a decades-old rule that permits Made-in-USA claims only when "all or virtually all" of a product is American-made.

After that proposal drew fire, the FTC floated a compromise that effectively would have let companies market their products as American-made as long as they had at least 90 percent domestic parts and labor.

The middle ground still didn't satisfy critics, who lined up a majority of the U.S. House in support of the old standard and barraged the FTC with mail. The FTC said marketers still will be able to make qualified claims -- such as "80% Made in USA," "Made in USA of US and imported parts" or "Assembled in USA" -- as long as the companies can back them up.

Pub Date: 12/02/97

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