Disparate labeling standards like this bug Machine Design reader John Horanzy, who recently wrote us asking for a story on country-of-origin label laws. He’s heard of pending product-classification changes and wants to know why it’s increasingly common to see consumer goods — particularly electronics — sporting prominent labels saying, “Designed and Engineered in America” with “Made in China” in fine print elsewhere on the item.
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Not to be confused with country-of-origin label laws, regulations that quantify U. S. manufacturing are changing. Within the next few years, the U. S. Census Bureau could reclassify “factoryless” companies such as Apple and Nike from wholesale traders to domestic manufacturers, in turn making their foreign-finished products no longer count as imports.
In contrast, most consumer-labeling regulations haven’t changed in years, though they do vary by product. That’s because the U. S. Customs and Border Protection agency of the Dept. of Homeland Security uses laws from an array of other government agencies to dictate the labels and certifications a product must have when an importer brings it into the U. S.
For example, the USDA Food Safety and Inspection Service and Agricultural Marketing Service dictate origin-labeling requirements on poultry, meat, and egg products. Acts of Congress (including the Textile Fiber Products Identification Act and Wool and Fur Products Labeling Acts) dictate labeling of clothes sold in the U.S., while the Consumer Product Safety Commission can require labeling if not outright bans on materials that easily catch fire. The American Automobile Labeling Act as enforced by the Highway Traffic Safety Administration requires that new cars bear labels disclosing where they’re assembled, what percentage of their parts originate from North America, and the engine and transmission countries of origin.
Beyond these kinds of regulations, the Federal Trade Commission (FTC) controls how manufacturers can word country-of-origin claims to “prevent deception and unfairness in the marketplace.” One of the FTC’s main tasks is policing “Made in the USA” statements, and the commission even takes manufacturers to court if they don’t make origin disclosures “sufficiently clear, prominent, and understandable.” That’s what the FTC did to E.K. Ekcessories Inc., Logan, Utah, last year when the maker of outdoor accessories overstated claims about its products being all-American.
Most FTC label rules date to 1998 and earlier, but globalization and China’s 2001 admission into the World Trade Organization have dramatically boosted the use of FTC-approved Qualified Claims. These statements on products explain they’re put together in two or more countries but with final assembly or manufacture completed in the U. S. — perhaps carrying a label saying, “Manufactured in U. S. with Indonesian materials,” for example.
So there you have it: While the U. S. Economic Classification Policy Committee wrestles over how bean counters will need to tally the effect of “factoryless” companies on U. S. manufacturing, the average person can rest easy knowing that the labels on consumer products — except for processed chicken — will clearly indicate where the items originate.