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Vol. 24 No. 10 © Made in the USA Foundation October, 2012

Made in the USA Reports


A Publication of the Made in the USA Foundation


Vol. 24 No. 10  © Made in the USA Foundation October, 2012

MADE IN USA FOUNDATION PUBLISHES ALL AMERICAN HOLIDAY GIFT GUIDE


The new and expanded All-American Holiday Gift Guide shows you how to buy American-made Christmas and Hanukkah gifts, ornaments and cards. The Guide has special sections for children, toys, men and women.  It includes flowers, jewelry, teddy bears, wines and spirits, games, scientific toys, wooden toys and puzzles.


The Made in the USA guide, co-published with Made in USA Certified, includes foodie gifts, from chocolates to blenders and stoves.  The Foundation publishes a guide to holiday gifts annually.  This year the book is larger than last year, 115 pages crammed with hundreds of gifts and many ways to buy them.


The book is 6 x 9 inches, and comes in paperback or in an electronic version. The paperback costs $9.95 and is available at bookstores, Amazon.com and via the Foundation’s website, http://madeusafdn.org/products-page/books/american-holiday-buyers-guide/. The electronic book sells for $2.99 at Amazon and on the Foundation’s website, http://madeusafdn.org/products-page/books/american-holiday-buyers-guide-e-bo/


The Made in the USA Foundation was formed in 1989. The Foundation has drafted and supported the Country of Origin Labeling Act (COOL), the American Automobile Labeling Act and many other country-of-origin laws. Now the Foundation is actively promoting American-made products with buying guides and at trade shows.  Joel D. Joseph, Chairman of the Foundation, said, “Companies are coming back to the United States.  Consumers are demanding American-made products, and U.S. companies are more competitive than ever in making high-quality consumer goods.”  The Foundation created the Made in the USA Hall of Fame to represent the best American companies.  One of the awards this year was the “Welcome Back” award.  Master Lock won the award for moving production from China back to the United States.


Made in USA Certified® is the only Registered “Made in USA Certified” Word Mark with the U.S. Patent and Trademark Office.  Since 2009, Made in USA Certified, Inc., based in Boca Raton, Florida, is the nation’s leading independent “Made in USA” certification source.  When we say it’s “Made in USA”, you can count on it.  Any company bearing one of our USA-C™ Seals has gone through a rigorous supply chain audit to ensure that the product and process originates in the United States of America.


Trade Issues on Center Stage at Debate and On 60 Minutes


Manipulating the Yuan


During the last presidential debate, Mitt Romney labeled China “a currency manipulator,” when speaking about foreign policy and how to improve the manufacturing atmosphere in America.  Is China a currency manipulator?  The short and simple answer is “Yes.”


The Peterson Institute for International Economics estimates that the Yuan, China’s currency, is undervalued by between 20 and 40 percent. Twice a year, by law, Treasury must issue a report identifying nations that “manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.” The law’s intent is clear: the report should make a factual determination, not a policy statement. In practice, however, Treasury has been both unwilling to take action on the yuan and appears unwilling to do what the law requires, to explain to Congress why it isn’t taking action. Instead, it has spent the past eight years pretending not to see the obvious.


China’s Yuan is in a “controlled peg” relative to a basket of currencies.  China controls the exchange rate of their currency by purchasing the currencies of other countries, including the US Dollar. This would allow China to produce (and sell) products cheaper as exports.  By manipulation its currency China is unfairly taking manufacturing jobs from the United States by attracting companies with cheaper costs than would otherwise be available under freer market circumstances.


60 Minutes Takes on Two Foreign Unfair Competitors


On October 7, 2012, CBS’s 60 Minutes spent two-thirds of its show on Made in the USA issues.  First, it investigated Italy’s Luxottica eyewear company.  Then it turned its attention to China’s Huawei cellphone company.  Both of these companies have used illegal techniques to dominate their markets.


Eyewear


Luxottica is the largest manufacturer of eyeglasses in the world, and is also the largest retailer of eyewear in the United States.  Luxottica owns Lenscrafters, Pearl Vision, Sunglass Hut, Oliver Peoples and operates the optical stores at Sears and Target.  Luxottica manufactures frames under the Burberry, Ralph Lauren, Versace, Channel, Dolce Gabbana, Versace, Tiffany and Bulgari. It recently bought Oakley and Ray Ban, the last two large American manufacturers of eyewear.

The Foundation filed a complaint with the Federal Trade Commission challenging these two Luxottica’s purchases of two American companies, but the FTC declined to take action.  How much more of a monopoly could Luxottica be?  But finally, 60 Minutes has taken notice and maybe something will be done about it.

Cellphones


60 Minutes said, “If you’re concerned about the decline of American economic power and the rise of China, then there is no better case study than Huawei. Chances are you’ve never heard of this Chinese technology giant, but in the space of 25 years it’s become the largest manufacturer of telecommunications equipment in the world; everything from smart phones to switchers and routers that form the backbone of the global communications network. It’s an industry the U.S. invented and once dominated, but no more.”

60 Minutes continued, “Republican Congressman Mike Rogers and the ranking Democrat on the House Intelligence Committee, Dutch Ruppersberger, believe that letting a Chinese company build and maintain critical communication infrastructure here would be a serious mistake.”

“Their overriding concern is this: that the Chinese government could exploit Huawei’s presence on U.S. networks to intercept high level communications, gather intelligence, wage cyber war, and shut down or disrupt critical services in times of national emergency.”

Jim Lewis, senior fellow at the Center for Strategic and International Studies, agreed that we should not allow China to control our cellular network for two reasons: First, [Huawei receives] steady, extensive support from the Chinese government. If you’re willing to funnel hundreds of millions, maybe even billions of dollars to a company, they’re going to be able to grow. The second reason is industrial espionage. And Huawei was famous in their developing years for taking other people’s technology.”  Steve Croft of CBS asked if he meant that Huawei stole American technology.  Lewis replied that yes, Huwaii is guilty of theft of American technology and cannot be trusted.

Economic Patriotism


By Joel D. Joseph, Chairman, Made in the USA Foundation.  Chairman@Madeusafdn.org. 310 –MADE-USA.


President Obama has used the phrase “economic patriotism” in campaign ads but has not defined it.  Economic patriotism to me is helping your country by buying American, by keeping jobs here and by paying a fair share of taxes.  Government, manufacturers, consumers and all taxpayers can be economic patriots.

Warren Buffett is an economic patriot because he advocates increasing his own income taxes to help the U.S. government balance the budget.  New Balance Shoe Company is an economic patriot because it manufactures athletic shoes in the United States even though it could make all of its shoes in China for less money.  Consumers who pay a premium for American-made products are economic patriots.


Government


The government should lead the way, and be the economic patriot in chief, but sadly, it is not.   Few people realize that the U.S. military, through the Army and Air Force Exchange Service (AAFES), is one of the largest retailers in the world. AAFES,  an agency of the Department of Defense, operates 1,423 retail stores on U.S. military bases around the world, employing 50,000 people and serving 10 million customers.  AAFES has annual sales $9 billion.  The Navy also operates 460 PXs, known as Nexcom, with $2.5 billion in annual sales.


The shocking fact is that these U.S. government-owned stores look like Wal-Marts, with most of their products imported from China and other countries.  The clothing, including AAFES in-house brands Royal Manor, Ponytails and Passports, are all imported from sweatshops in China, Jordan, Bangladesh and Central America. Workers at these sweatshops are paid as little as 19 cents an hour to toil 60 plus hours a week.

With the stroke of a pen, by executive order, the President can order the Army, Air Force and Naval Exchanges to buy only American-made goods.  This act would improve the U.S. balance of payments by $5 billion at a minimum, and create more than 100,000 new jobs.  President Obama could then become the economic patriot in chief.


Most T-shirts, sweatshirts, mugs and souvenirs sold at U.S. national parks are imported.   As the owner of these stores, the National Parks Service can require that these vendors sell only products that are made in the USA.  Who wants a Yosemite sweatshirt that is made in Pakistan?  The President can direct the National Parks to buy American-made products for sale at stores on U.S. property.


Cities and states can also become economic patriots.  For example, Beverly Hills, California buys German-made BMW motorcycles for its police force.  Beverly Hills could stop buying German motorcycles and switch to American-made motorcycles from Harley Davidson or Zero Motorcycles.  Zero Motorcycles, an electric, high-performance bike, surpasses BMW in acceleration and does not use gasoline.


Outsourcing


Many U.S.-based companies outsource manufacturing to China and other cheap- labor countries.  Nike has led the outsourcing charge and manufactures virtually nothing in the United States.  Similarly, Accenture, the consulting company formerly known as Arthur Anderson, prides itself on outsourcing.  Accenture not only helps American companies outsource overseas, it has outsourced itself.  In order to avoid paying U.S. income taxes, Accenture is headquartered in a mailbox in Bermuda.  Nike and Accenture are so far from being economic patriots that they can be rightfully called economic traitors.


Bain Capital, founded by Mitt Romney, took control of Sensata Technologies in 2006.  Sensata, a manufacturer of automotive sensors, is very profitable.  Bain announced earlier this year that it would close the Sensata plant in Freeport, Illinois, layoff 165 workers and move production to China.  This is an example of economic treason.


Overseas Tax Havens


Accenture’s Bermuda “headquarters” location was chosen to avoid paying U.S. taxes.  General Electric doesn’t pay any U.S. taxes either, through a variety of federal tax loopholes.  And Presidential candidate Mitt Romney has invested in Bermuda, the Grand Caymans and Swiss companies in order to keep his income tax rate low.  If Governor Romney would release all of his income tax documents, it would likely reveal a complete picture about how he avoided paying his fair share of federal income taxes.


I call upon both presidential candidates to become true economic patriots.  President Obama has the power to put more than 100,000 Americans to work by ordering the Department of Defense and the National Park Service to buy American-made products for their retail stores.  Governor Romney can withdraw his investments from overseas and put his dollars to work investing in the United States.  He can also pressure Bain to stop outsourcing to China.


Lead by example!  Both presidential candidate need to show the American people how they are economic patriots and how they will create jobs in the United States.

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