FTC Considers Enforcement Related to “Made in the USA” Label Statements


FTC

On Sept. 26, 2019, the Federal Trade Commission (FTC) hosted a public workshop to further understand consumer perception of “Made in the USA” and other U.S.-origin claims, and to consider whether it can improve its “Made in USA” enforcement program.

While FTC has not issued regulations specifically covering “Made in USA” and other U.S.-origin claims, its 1997 Enforcement Policy Statement On U.S. Origin Claims (“Policy Statement”) provides guidance on how the commission applies Section 5 of the FTC Act, 15 U.S.C. § 45(a), to the use of such claims in advertising and labeling. Based on consumer research and thousands of public comments, the Policy Statement states that when a marketer makes a “Made in USA” claim, the marketer should, at the time of the representation, have a reasonable basis for asserting that “all or virtually all” of the product is, in fact, made in the United States. The Policy Statement also provides guidance to marketers on how to make appropriately qualified claims.

The workshop began by summarizing research on consumer perception of U.S.-origin claims, and included panels to discuss policy issues and appropriate enforcement measures and remedies. The panels included experts representing a wide range of perspectives, including industry representatives (large and small manufacturers, retailers, etc.) and consumer groups.

Key takeaways from the workshop, attended by ACA staff, are outlined below.

  • FTC is examining if its efforts (current guidance and enforcement) are enough to support the overall goal of increased manufacturing in the United States.
  • FTC suggested that its current policy is to go after companies that are not willing to work with FTC and assist others with compliance.
  • FTC heard comments from a broad range of panel guests, including representatives from Walmart, a jewelry manufacturer, a consumer goods manufacturer, a dishware manufacturer, a representative of the Alliance for American Manufacturing, a representative for the Apparel & Footwear Association, Consumer Reports, and Truthinadvertising.org.
  • Several of the manufacturers on the panel suggested that FTC should develop guidance and enforcement that is industry-specific – since each industry is a little different. FTC said that this would be difficult and, ultimately, FTC must gauge consumer perception of any labeling claims.
  • The industry panelists also suggested that they should be allowed to call a product “Made in America,” if the raw materials were sourced abroad but assembled in the United States while noting difficulty in identifying origin of many raw materials. FTC recognizes that some raw materials are not available in the United States.
  • FTC suggested that it is possible to make qualified claims that are accurate and substantiated under current requirements.
  • Some panelists mentioned other rules that apply including state rules (California’s seems to be the most stringent and was just changed); U.S. Customs Rules (for example, a company that exports from the United States can say 100% sourced in United States U.S. customs requirements, but may not be able to label the product “Made in the USA” according to FTC’s qualification requirements); U.S. Customs Rules of Origin, , and the federal government’s “Buy American” Policy in Executive Order 13788 of April 18, 2017 (Buy American and Hire American), and in Executive Order 13858 of January 31, 2019 (Strengthening Buy‑American Preferences for Infrastructure Projects).

FTC is seeking comment about evaluating and understanding consumer perception. More specifically, FTC poses 15 questions for comment, included here.

While FTC is accepting comments until Oct. 11, the agency will likely release a more formal request for comment in the future.

Contact ACA’s Riaz Zaman or David Darling for more information.