US apparel industry calls for clearer rules on ‘Made in USA’ labelling
Against the backdrop of Louis Vuitton’s opening of a factory in Texas in mid-October and the US government’s decision to increase import duties, the US apparel industry is keen to clarify the rules of country-of-origin labelling. For a product to be labelled as ‘Made in USA’, the value-added activities on this product currently need to be “all or virtually all” carried out in the USA. A definition that the American Apparel & Footwear Association (AAFA) has asked the US Federal Trade Commission (FTC) to rethink, in order to apply the ‘made in America’ label only to items that have undergone a “substantial transformation” in the USA.
“We argue that consumers can’t know with certainty that the company’s interpretation of ‘virtually all’ aligns with their own interpretation of the phrase,” stated AAFA following a round-table debate organised by the FTC in Washington on September 26. “We think that this lack of definition can lead to consumers feeling misled, and it definitely leaves companies uncertain about whether the label they use on their product will be interpreted by the FTC as violating the ‘Made in USA’ standard,” added AAFA.
The issue has been raised by AAFA, an organisation that brings together apparel labels and retailers, because of the differential treatment reserved to the industry in terms of labelling, and the need for it to also comply with the ‘one step removed’ rule. This means that an item produced in the USA using fabrics produced abroad cannot be labelled as ‘Made in USA’. Instead, an item created in the USA with materials produced locally can be labelled as ‘Made in USA’, even if the yarns the fabrics are made of come from abroad.
The FTC also allows labelling like 'made in USA from imported parts' and also 'assembled in the USA', terms that AAFA, queried by the FTC, reckons are better understood by consumers than ‘Made in USA’. According to AAFA, consumers are accustomed to country-of-origin labelling. The association also underlined that a large quantity of apparel products bearing the ‘Made in China’ tag are devised, designed, developed and marketed in the US.
AAFA also highlighted how the notion of ‘made in’ changes depending on the country. “A garment made in Italy of imported fabric will bear a label that simply states, ‘Made in Italy’. If that same garment were made in the United States, then the label would say ‘Made in USA of imported fabric’,” according to AAFA, a fact which broadens the scale of the debate, introducing the question of whether a country-of-origin label has genuine value if other exporting countries adopt more permissive labelling regulations.
For example, in France, home from November 8 to 11 of the Made in France MIF Expo trade show, and of the Made in France Première Vision garment manufacturing event in April 2020, the national customs and excise duties authority (DGDDI) requires that, depending on the market, a certain percentage of any item's components are produced locally, and that certain transformation processes are carried out in France, for the item to be labelled ‘Made in France’.
The ‘France Terre Textile’ standard requires that at least 75% of the manufacturing steps are carried out in France, while the ‘Origine France Garantie’ standard asks for at least half of the value of an item’s unit retail price to be generated in France, where the item must also acquire its “essential features.”
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