Made in the USA has its limits

These days as much as ever manufacturers want to put "made in the USA" on products not only out of a sense of pride of country, but because it appeals to purchasers, potentially enhancing the product's value. But as any manufacturer knows, where a product is made is not as simple as it might seem.

Virtually all products have more than one part, more than one raw material, and often, more than one place of assembly. Because of that and truth in advertising laws, the Federal Trade Commission requires that manufacturers comply with certain rules.

The FTC's Made in USA Policy is centered on a basic rule: the product advertised must be "all or virtually all" made in the United States or its territories. The all-or-virtually-all standard applies to all claims on marketing and labeling. Even things as simple as a U.S. flag image or a statement of "American quality" may be required to comply with the rule.

Unfortunately, the FTC will not pre-approve claims, but some of the highlights for basic guidance include:

n Manufacturers and marketers should not indicate, either expressly or implicitly, that a whole product line is of U.S. origin ("Our products are made in USA") when only some products in the product line are made in the U.S. according to the "all or virtually all" standard.

n "All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content. Processing and parts are not a percentage-only consideration. For example, if the foreign part of the processing seems minor in cost or time, but it accounts for a central component of what makes the product, then the claim may not stand. Or if a product claims "real gold," is assembled here, but the raw material/gold itself came from a foreign source, "made in the USA" may not stand. Although "assembled in the USA" may be accurate.

n The product's final assembly or processing must take place in the U.S.

If final assembly is here, other factors are considered next, such as how much of the product's total manufacturing costs can be assigned to U.S. parts (most of the cost?), which parts (the major ones?), and how far removed any foreign content is from the finished product.

Qualified claims are an alternative, when a full claim is not possible. Examples include "65 percent U.S. content," "Made in USA of U.S. and imported parts," and "Tiffany lampshade assembled in USA from Italian glass."

The keys are honesty and specificity. Generally speaking, manufacturers can also rely on geographic representations made by parts suppliers, as long as the reliance is in good faith and not deliberate ignorance.

Sholeh Patrick is an attorney and freelance writer.