Trade association

A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association participates in public relations activities such as advertising, education, political donations, lobbying and publishing, but its focus is collaboration between companies. Associations may offer other services, such as producing conferences, networking or charitable events or offering classes or educational materials. Many associations are non-profit organizations governed by bylaws and directed by officers who are also members.

In countries with a social market economy, the role of trade associations is often taken by employers' organizations, which also take a role in social dialogue.

Political influence

One of the primary purposes of trade groups, particularly in the United States and to a similar but lesser extent elsewhere, is to attempt to influence public policy in a direction favorable to the group's members. It can take the form of contributions to the campaigns of political candidates and parties through Political Action Committees (PACs); contributions to "issue" campaigns not tied to a candidate or party; and lobbying legislators to support or oppose particular legislation. In addition, trade groups attempt to influence the activities of regulatory bodies.

In the United States, direct contributions by PACs to candidates are required to be disclosed to the Federal Election Commission or state and local election overseers, are considered public information, and have registration requirements for lobbyists. Even so, it can sometimes be difficult to trace the funding for issue and non-electoral campaigns.

Publishing

Almost all trade associations are heavily involved in publishing activities in print and online. The main media published by trade associations are as follows:

The opportunity to be promoted in such media (whether by editorial or advertising) is often an important reason why companies join a trade association in the first place.

Examples of larger trade associations that publish a comprehensive range of media include European Wind Energy Association (EWEA), Association of British Travel Agents (ABTA) and the Confederation of British Industry (CBI).

Generic advertising

Industry trade groups sometimes produce advertisements, just as normal corporations do. However, whereas typical advertisements are for a specific corporate product, such as a specific brand of cheese or toilet paper, industry trade groups advertisements generally are targeted to promote the views of an entire industry.

Ads to improve industry image

These ads mention only the industry's products as a whole, painting them in a positive light in order to have the public form positive associations with that industry and its products. For example, in the USA the advertising campaign "Beef. It's what's for dinner" is used by the National Cattlemen's Beef Association to promote a positive image of beef in the public consciousness.

Ads to shape opinion on a specific issue

These are adverts targeted at specific issues. For example, in the USA in the early 2000s the Motion Picture Association of America (MPAA) began running advertisements before films that advocate against movie piracy over the Internet.

Controversy

A common criticism of trade associations is that, while they are not per se "profit-making" organizations that claim to do valuable work which is ultimately for the public benefit, they are in reality fronts for price-fixing cartels and other subtle anti-competitive activities that are not in the public interest.

Anti-competitive activity

Jon Leibowitz, commissioner at the Federal Trade Commission in the United States, outlined the potentially anti-competitive nature of some trade association activity in a speech to the American Bar Association in Washington, D.C. in March 2005 called “The Good, the Bad and the Ugly: Trade Associations and Antitrust”. For instance, he said, under the guise of "standard setting" trade associations representing the established players in an industry can set rules that make it harder for new companies to enter a market.[1]

Cartels

In September 2007, the German trade association for Fachverband Verbindungs- und Befestigungstechnik (VBT) and five fastener companies were fined 303 million euros by the European Commission for operating cartels in the markets for fasteners and attaching machines in Europe and worldwide. In one of the cartels, the YKK Group, Coats plc, the Prym group, the Scovill group, A. Raymond, Berning & Söhne agreed coordinated price increases in annual price rounds with respect to fasteners and their attaching machines, "in the framework of work circles organised by VBT".[2]

National and international trade associations

International

Africa

Canada

East Asia

Europe

India

United Kingdom

In the UK there are thought to be more than 1600 trade associations.[3] The term "industry trade group" is used very little in British English. Alternative terms used in the UK include trade association and employer association.

United States

There are over 7,600 national trade associations in the United States, with a large number (approximately 2,000) headquartered in the Washington, DC area.[4] There are also many trade associations at the state and local levels.

One of the oldest trade associations in the United States is the American Seed Trade Association (ASTA), founded in 1883.[5]

See also

References

  1. ↑ Leibowitz, Jon (March 30, 2005). "The Good, the Bad and the Ugly: Trade Associations and Antitrust (remarks to American Bar Association Antitrust Spring Meeting, Washington, DC)" (PDF). Federal Trade Commission. Retrieved 2012-06-03.
  2. ↑ "Antitrust: Commission fines members of fasteners cartels over €303 million" (Press release). Europa.eu. Retrieved 2012-06-03.
  3. ↑ Boléat, Mark (2003). Managing Trade Associations (PDF). Trade Association Forum. ISBN 1-85580-034-9. Retrieved 2012-06-03.
  4. ↑ National Trade and Professional Associations (2008), 43rd ed., ISBN 978-1-880873-56-4
  5. ↑ "First-the Seed". The American Seed Trade Association. Retrieved June 13, 2009.

Further reading

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