Author Urges ‘Countries of Origin’ Label On American Products
Tuesday, March 6, 2012
Dan Seiver, Finance Professor, SDSU
The U.S. trade deficit hit a six-month high in December, thanks in part to a strengthening economy, which brought bigger gains in imports than exports.
That deficit—the U.S. now buys $48.8 billion more than it sells— is concerning to many, including San Diego businessman Alan Uke. His new book, "Buying Back America," suggests placing “Country of Origin” labels on products.
These labels would act like nutrition labels on food, he said, breaking down the percentage each country contributed to the product.
“You can see on a label of food, the detail of what’s in it,” Uke told KPBS Television’s “Evening Edition.” “So you can make a decision about, do I want to buy this versus this one, because I like the content of this one better than that one.”
Uke also wants to include trade ratios on the labels, so consumers can see for each U.S. dollar spent in a country, how much that country spends on U.S. products in return.
He said China has a 25 percent trade ratio, meaning for every dollar the U.S. spends in China, China spends 25 cents here. Korea has a 79 percent trade ratio and Taiwan has 72 percent, he said.
Uke also said consumers want to know where their products come from because of quality differences.
“If you see something that’s got components made in countries that make higher quality things, like you see it’s got German parts or Japanese parts, or things we associate with developed societies that have very high standards, you’re probably going to get something that lasts longer,” he said.
He said in other countries, including Japan, Korea and Germany, consumers evaluate products based on where they come from.
“The U.S. isn’t like that, so we have a disadvantage,” he said. “It’s like a football game where they tackle and you don’t.”
He added that Chinese people try to not buy anything made in the U.S.
Dan Seiver, a finance professor at San Diego State University, challenged Uke about his idea to restrict trade to those who are good trade partners.
“More trade is a good thing,” Seiver said on KPBS Midday Edition. “And trying to judge a country by the ratio of its exports to its imports of any country is misleading and I don’t think it’s particularly helpful.”
Sevier said restricting where people buy products is dangerous.
“You create the environment for a trade war,” he said. “And more trade restrictions that reduce trade around the world tends to make everybody worse. I speak for most economists when I say we are very leery of any government-led decision like this.”
Seiver also doesn't disagree with Uke's mission to label items.
“I think providing consumers with more information about anything is good, but I think the underlying agenda is to get consumers to change their behavior and I don’t, as most economists, I don’t agree with that,” he said. “My feeling is that if you pick a product because you think it’s best for you, then you go ahead and buy it and I don’t think you should feel like you have to pay more for another product because it comes from a country with higher standards.”
Uke is also a business owner, and his business, Underwater Kinetics, buys parts made in China. However, he said, because the majority of his products are made in the U.S., they are labeled “Made in U.S.A.”
He said his labeling idea would work against his own business, but said “it’s only fair.”
Uke's book will be released April 12.
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