Federal Trade Commission
Documents Received
Jan. 22, 1996
B18354900099

McDermott, Will & Emery
1850 K Street
Washington, D.C. 20006-2296
Facsimile 202-778-8087

                         January 22, 1996

Office of the Secretary
U.S. Federal Trade Commission
Room 159
Sixth Street & Pennsylvania Avenue, NW
Washington, DC  20580

     Re:  "Made In USA" Review - Comments and Request to
          Participate in Workshop; FTC File No. P894219  

Dear Mr. Secretary:

      Pursuant to the notices published by the Federal Trade
Commission ("Commission") on October 18 and December 19, 1995 (60
Fed. Reg. 53922; 60 Fed. Reg. 65327), the attached comments and
request to attend the Commission's workshop are submitted on
behalf of the International Electronics Manufacturers of America
("IEMCA").  IEMCA urges the Commission to revise its rule and
policy respecting use of "Made in USA" claims in product
advertising and labeling in accordance with the attached
comments, and IEMCA requests that the undersigned be invited to
participate on behalf of IEMCA in the workshop scheduled for
March 26-27, 1996.

Respectfully submitted,

Robert S. Schwartz
David J. Levine

McDermott, Will & Emery
1850 K Street, NW
Suite 450
Washington, DC 20006

Attachment
\17575\027\50CORDJL.001             INTERNATIONAL ELECTRONICS MANUFACTURERS
                     AND CONSUMERS OF AMERICA

         COMMENTS AND REQUEST TO PARTICIPATE IN WORKSHOP
          "MADE IN USA" REVIEW" - FTC FILE NO. P894219 

     The Federal Trade Commission ("Commission") announced in
notices published October 18 and December 19, 1995 (60 Fed. Reg.
53922; 60 Fed. Reg. 65327) that it is conducting a comprehensive
review of consumer perceptions and the Commission's rule and
policy respecting use of "Made in USA" claims in product
advertising and labeling.  The Commission also invited parties to
apply to attend a workshop on these issues to be held on March
26-27, 1996.  The deadline for submitting comments and requesting
to attend the workshop, originally set for January 16, 1996, was
extended to January 22, 1996.  These comments and request to
participate in the workshop are submitted on behalf of the
International Electronics Manufacturers of America ("IEMCA").  

     IEMCA is a U.S. trade association composed of 22 foreign-owned U.S. manufacturers and distributors of consumer and office
electronics products, computer products, and telecommunications
equipment.  IEMCA members also include U.S. retailers of the
products of IEMCA members.

     IEMCA members manufacture and sell a wide range of
electronics products in the United States and most markets
throughout the world.  Country of origin claims and labeling
issues are very important to these IEMCA members and their
customers.  As U.S. manufacturers and sellers, IEMCA members are
directly affected by the Commission's rules and policy respecting
origin claims and labeling.  As multinational companies, IEMCA
members must also abide by the rules of origin applied and
enforced by other U.S. agencies, such as the U.S. Customs Service
("U.S. Customs") and by customs authorities in other countries. 
IEMCA members must properly identify and mark their products (and
product packaging) wherever they are manufactured and wherever
they are distributed and sold.

     As discussed in its October 18, 1995, Federal Register
notice, the Commission's rule for allowing unqualified "Made in
USA" claims in product advertising or labeling has required that
such products be "wholly domestic in origin." In other words, the
Commission requires all parts and labor to be domestic in order
for a product or its packaging to be marked "Made in USA" for
sale in U.S. commerce.  60 Fed. Reg. at 53923.  

     IEMCA members firmly believe that this rule is outdated and
ill-advised.  They urge the Commission to revise its rule to
comport with market realities and to be consistent with the
origin and marking rules applied by U.S. Customs and the customs
authorities of other countries.  

     As the Commission is well aware, its rule for allowing "Made
in USA" claims or labels on products sold in U.S. commerce
differs significantly from the rules of origin applied by U.S.
Customs.  See item II.C. of the October 18 notice, 60 Fed. Reg.
53925.  U.S. Customs applies a "substantial transformation" rule
for determining a product's foreign country of origin.  U.S.
Customs applies its origin rules for purposes of quotas and
duties, as the Commission recognizes in its notice, and for
marking purposes.  Foreign customs authorities apply various
similar rules of origin for products entering their countries.

     The Commission should also be aware that an Agreement on
Rules of Origin was negotiated as part of the Uruguay Round of
multilateral trade negotiations, which resulted in the formation
of the World Trade Organization ("WTO") in 1994.  The United
States agreed to implement to Agreement on Rules of Origin in
section 132 of the Uruguay Round Agreements Act.  The primary
purpose of the Agreement on Rules of Origin is the international
harmonization of rules of origin.  As stated by the U.S.
International Trade Commission, the Agreement is designed to
harmonize and clarify nonpreferential rules of origin for goods
in trade on the basis of the substantial transformation test;
achieve discipline in the rules' administration; and provide a
framework for notification, review, consultation, and dispute
settlement.  These harmonized rules are intended to make country-or-origin determinations impartial, predictable, transparent,
consistent, and neutral, and to avoid restrictive or distortive
effects on international trade."  International Harmonization of
Customs Rules of Origin; Inv. No. 332-360, 60 Fed. Reg. 32339
(June 21, 1995).  The work program for accomplishing this goal is
well underway, under the auspices of the World Customs
Organization ("WCO", formerly the Customs Cooperation Council),
and the United States is an active participant.

     IEMCA members and all other firms that manufacture products
in the United States and sell those products in the United States
and abroad must contend with the rules of customs authorities and
with the Commission's inconsistent rule.  This creates the
burdensome and very expensive circumstances where a manufacturer
must apply different origin markings on identically U.S.-manufactured products, depending on whether the products are
destined for U.S. commerce or other markets.  Such circumstances
would be significantly eliminated if the Commission's rule of
origin were made consistent with the rules of origin applied by
customs authorities.

     Accordingly, IEMCA urges the Commission to revise its rule
and policy respecting use of "Made in USA" claims in product
advertising and labeling so as to be consistent with the
substantial transformation rules, as applied by U.S. Customs and
other customs authorities and as promoted in the WCO
negotiations.  Manufacturers, sellers, and consumers alike would
be well served if the Commission applied its "Made in USA" rule
in a manner that was consistent with the origin rules applied by
customs authorities, including U.S. Customs.

     IEMCA appreciates this opportunity to present its views, and
also requests the opportunity for its representative counsel to
attend the workshop scheduled for March 26-27, 1996.