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The words “Made in the USA” conjure up patriotic pride for America’s unparalleled history of invention and industry. To many, it also signals superior quality and craftsmanship that a consumer can rely upon. But are the strict legal requirements for the right to use the prized “Made in the USA” label becoming out of touch with reality in the face of burgeoning globalism? Today, many would be surprised to learn that America is still No. 1 in manufacturing because it seems that almost everything is now “Made in China.” Scores of Americans have suffered factory shutdowns and layoffs, only to see their jobs move to Mexico or overseas. Decimated towns lay in the wake. Perhaps that’s why Americans are clinging more than ever to “Made in the USA.” It has in fact become a pop phenomenon. There is a Made in the USA reality television show (USA Networks), where inventor-contestants vie for a one-year contract to sell their self-made products on the Home Shopping Network. There is John Ratzenberger’s Made in America (Travel Channel), where the actor who played the Cheers postal carrier travels from factory to factory across America, emphasizing the pride of making an “American” product. Many would be shocked to learn, however, that most of the products proudly displayed on TV contain at least some-if not all-foreign content, from internal mechanics to packaging. Sadly, American factories increasingly do more “assembly” than actual “manufacturing.” So what’s the standard? Can you call a product “Made in the USA” just because it was invented by an American, or simply because it was assembled by American workers on American soil? No. The Federal Trade Commission (FTC) holds that “all or substantially all” of a product must originate from, and be made (not just assembled), in the United States; that generally means 97% or more of all material parts and components. Thus, a U.S. factory could assemble 100% of a product here in the United States, and even have 80% of the product “made” here-but if any significant percentage, or component, of a product is from another country, it’s not “Made in the USA.” Think of major brands like Ford, Maytag and Harley-Davidson. Despite having U.S.-based operations, none can lawfully claim “Made in the USA,” due to foreign content in their products. There’s no creative semantic means around this strict standard: Companies cannot get away with variations such as, “Produced in America” or “Manufactured in U.S. Factories”-unless that’s virtually 100% true. The FTC has even gone after companies for using pictures of the American flag or the Statue of Liberty on packaging, because such images falsely suggested the product was “Made in the USA.” Instead, companies (if they so desire) have to use a drawn-out designation that fits their specific circumstances, such as, “Made and assembled in the U.S. from foreign and domestic parts,” or “Swedish engineered, assembled in the United States and Sweden from Swedish and global parts.” Is the standard unattainable? The ultimate question now is whether the “Made in the USA” standard has become unattainable in the face of high technology and globalism. Products today are more complex than ever, with myriad components. American companies have trouble finding U.S.-based suppliers of needed parts, since many suppliers have gone under or moved operations overseas. In fact, many family-owned U.S. companies that have proudly labeled products “Made in the USA” for generations are being forced to source parts from overseas just to survive. “Made in the USA” has become an increasingly rarified badge of honor. In this “new world order” of manufacturing, can anything but the simplest of products, like a hammer, attain the coveted label? Even with a product as simple as a hammer, if the rubber around the handle is from Brazil, you’ve just lost your “Made in the USA” status. The “Made in the USA” mark has obvious benefits for consumers and American producers, but another factor to consider is incentives for investing in the United States. Foreign companies would be more apt to build factories here if they could claim some form of being U.S.-made. In addition, companies that have invested hundreds of millions to build U.S.-based factories and provide thousands of jobs are irked to find out that they can’t make any “Made in the USA” claim if their products have any key component or percentage of foreign material. The resentment over a lack of reward for having built U.S. factories often steers future investment away from the United States. Perhaps the FTC could consider an additional designation, one that would provide consumers with the information they want, while also providing companies with an incentive to build factories in the United States. The designation could be restricted to companies that have invested a certain level of capital in building a factory, have a certain minimum number of salaried employees and have products with a majority percentage of American-sourced and -made content. The label could be as simple as “Built in USA Factories.” Or there could be a certification process, providing the right to state something like “[factory's town and state]-Certified USA Factory.” Bottom line: America needs to create incentives for building factories and creating (and keeping) jobs in the United States. Any form of a “Made in the USA” label has significant marketing value. The FTC should thus consider allowing companies (whether foreign or domestic) to claim some form of U.S. factory designation in recognition and reward for major investments on American soil. Michael Baroni is general counsel for BSH Home Appliances Corp. in Huntington Beach, Calif.

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