Apparel and Footwear Group Asks FTC to Loosen and Clarify the Made in USA Standard

The American Apparel & Footwear Association (AAFA) asked the Federal Trade Commission in a February 23, 2018 letter to clarify its “all or virtually all” Made in USA standard, and proposed a looser test for unqualified claims.

The problem AAFA described

AAFA said the FTC’s current “two-step” back rule lets some USA apparel production carry an unqualified Made in USA label if certain specific inputs are also made in the USA. AAFA said no such rule exists for footwear and travel goods, leaving companies to guess.

“Some have decided that even if their shoe is 90-95 percent U.S.-made, they must still use a qualified Made in USA label, while others have decided that when the majority (over half) of the shoe or travel goods is American-made, it meets the requirements for an unqualified Made in USA label,” the letter said. Others, it added, avoid the label altogether.

What AAFA proposed

• An unqualified Made in USA standard of “substantial transformation +51 percent value added.”
• A clearer definition of “materials,” including how much must be made in the USA for a qualified claim.
• Pointing to the World Customs Organization approach used by USA Customs and Border Protection as a better model.

WWD reported that AAFA CEO Rick Helfenbein wrote that only 2 percent of apparel and shoes and 1 percent of travel goods are made domestically, but that USA manufacturing of shoes and clothes had grown more than 60 percent since 2009. The FTC kept its “all or virtually all” standard; see the 2021 Made in USA Labeling Rule.

FAQ

What did AAFA ask for?

A clearer FTC Made in USA standard, proposing substantial transformation plus more than 51 percent USA value added for unqualified claims.

Why footwear and travel goods?

Apparel has a specific textile rule, but AAFA said no comparable rule exists for shoes and bags.

When was the letter sent?

February 23, 2018.