'Buy American' campaign raises thorny questions

THE BALTIMORE SUN

Just ask Peter Torino.

Mr. Torino, a television advertising salesman in Rapid City, S.D., wanted to buy an American word processor. He spotted one made by Brother. It had an American flag on the box bearing the words "Made in the USA."

He bought it. Ironically, he needed it to type his own idea for "flagging" all consumer goods. Each product, he wrote, should carry three flags showing the nationality of the owner, the place of manufacture and the origin of most of the components.

He sent his idea to Brother, believing it would put the Stars and Stripes on the company's boxes three times. To his surprise, the reply was that the corporation was Japanese-owned and, although the word processor he had bought was made in the United States, its components were mainly Japanese.

"Is this crazy or what?" he said. "Here I am making an 11-page thesis on how to identify American products, and I buy a Japanese one to type it. It's about time we knew something about [the background of] products that are just as meaningful as how much sugar, salt or fat food contains."

His idea for flags on products has been unanimously endorsed by the South Dakota Legislature, which has forwarded it to Congress.

It is only one of the initiatives contributing to a national "buy American" surge that has provoked confusion among consumers and conflict among governments. The core problem is: Just what is American? In an increasingly global and multinational marketplace, the answer is frequently fuzzy.

Autos, with their worldwide supply lines and commercial cross-breeding, offer the classic example of the trials of targeted buying.

Is an American-built Nissan more or less American than a Japanese-built Dodge? Is a Honda built in Canada with an engine assembled in Ohio from parts made in Japan a North American car?

The conscientious consumer also must ponder: Should an American job be supported at the cost of sending profits overseas? Does an overseas paymaster devalue an American wage? Is assembling a car less valuable than making its parts?

"There are a zillion possibilities," said Robert Easton, special assistant with the Federal Trade Commission's consumer protection enforce ment bureau.

"It's like Alice in Wonderland and the Cheshire Cat, who said 'I can define things to mean what I want them to mean.' I would be willing to bet the proper label for most vehicles would be 'Made in the USA from component parts from Japan, Korea and the U.S.' "

He might also have added Canada. U.S.-Canadian relations are souring over the question of how North American the Hondas are that are built in Ontario with engines assembled in Ohio.

U.S. Customs officials recently decided that because the Ohio-built engine contained Japanese parts, the car failed to have a sufficiently high North American content to qualify it for duty-free entry into the United States. Consequently, the United States has demanded $17 million in back taxes on 90,000 Civics shipped from Canada in 1989 and 1990. The issue is headed for arbitration.

Canadian Prime Minister Brian Mulroney told the Financial Times of London the Honda decision, and 14.5 percent levy imposed by the United States on Canadian soft wood because it was subsidized by cheap cutting rates in provincial forests, reflected a mood of protectionism and isolation in the United States this election year.

"This has nothing to do with trade policy," he said. "It has everything to do with politics."

The Japanese also cried politics when Mr. Bush arrived in Tokyo in January with a phalanx of auto executives to demand greater access for U.S. goods to the Japanese market. The result: more bilateral tension, with the Japanese impugning the education and work ethic of the American worker and increasing Japan-bashing in the United States.

Given all the furor, it is surprising that of the $220 billion worth of goods imported into the United States in 1991 -- 13 percent of the total of the nation's $1.7 trillion consumption of goods -- only textiles were required to be clearly labeled as to origin and place of manufacture. That was mandated by a l984 aimed at saving the textile industry from extinction by imports.

In this recession-dominated election year, with the emphasis again on "jobs, jobs, jobs," the notion of doing for other industries what was done almost a decade ago for textiles suddenly has political appeal.

Sen. Barbara A. Mikulski has introduced a bill seeking labeling every car sold in the country with the percentage of U.S. parts and labor. It is one of several labeling bills.

The Maryland Democrat's bill awaits a hearing in the Commerce Committee. It would require only the percentage of U.S. parts and labor to be identified. Foreign input would not be detailed. An auto sticker might read "Parts, 60 percent USA. Labor, 70 percent USA."

"People who want to buy American' don't know how to do it. They hear that some Mercurys are built in Mexico. . . . Some Mitsubishis are built in Illinois," Ms. Mikulski said.

The federal government has long operated under the 1933 Buy American Act, but so many waivers have been given over the years to so many countries -- including Japan -- that it affects only a small percentage of federal purchases.

States have taken more recent initiatives. "There is a great movement in the legislatures right now to implement buy American practices," said Adnee Hamilton of the National Association of State Purchasing Officials in Lexington, Ky. "It's frankly an anti-Japanese movement and has a lot to do with vehicles."

The National Automotive Dealers Association and the United Autoworkers union are watching the recent initiatives with mixed feelings.

"It's a sticky issue. Our members are all over the place on this issue," said Ted Orme, director of public relations for the 19,000-member dealers association, more than half of whose members sell foreign cars.

"It would be very difficult to find any car that is 100 percent pure [American] these days," he said, adding that his organization opposes "anything that limits the car market or favors one brand over another, regardless of the country of origin.

"This is an international market now, whether any one likes it or not. The consensus is for free trade, also fair trade. Certainly we are not anti-American. Everyone heaves for the home team, but we think the place to settle the battle is in the market place, not by setting up another trade war," he said.

"If American workers are involved, that's what we care about," said Steve Beckman of the UAW. "We aren't in any way concerned about the name that happens to be on the vehicle."

Brian Flood, executive director of the Made in the USA Foundation, an organization based in Bethesda, is drafting legislation to cover domestic-content labeling of all products without imposing a major burden on industry. He expects little trouble in finding sponsors in Congress.

"We have got to have a standard that clearly delineates the product and component for the American consumer," he said. "We just want a fair shake. It's an overused term -- the level playing field -- but we believe American corporations and the quality of their products can compete nationally and internationally."

The "buy American" surge has not been lost on retailers. Sales of goods prominently labeled "Made in the USA" increased 50 percent and 28 percent at test outlets in Cincinnati and Nashville, Tenn.

Robert Swift of the New York-based Crafted With Pride in the USA Council, who organized the sales tests, said they indicated "a sentiment change" among U.S. consumers.

"Nobody else is doing anything to help us. We are trying to help ourselves," he said.

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