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A trade association, also known as an industry trade group, business association or sector association, 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 main focus is collaboration between companies, or standardization. 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.
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. This 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.
While direct contributions by PACs to candidates are required in the United States to be disclosed to the Federal Election Commission (or state and local election overseers) and are public information, and there are registration requirements for lobbyists, it can sometimes be difficult to trace the funding for issue and non-electoral campaigns.
Almost all trade associations are heavily involved in publishing activities, in print, and/or 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.
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.
Below are two different general types of generic advertising used by these groups.
These ads mention only the industries 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.
These are adverts targeted at specific issues. For example, in the USA in the early 2000s the MPAA began running advertisements before films that advocate against movie piracy over the Internet.
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.
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.
In September 2007, the German trade association for Fachverband Verbindungs- und Befestigungstechnik (VBT) and five fastener companies were fined 328 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, 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".
In the UK there are thought to be more than 1600 trade associations.
Note: the term "industry trade group" is used very little in British English. Alternative terms used in the UK include trade association and employer association.
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. There are also many trade associations at the state and local levels.
Sometimes the shorthand **AA is used to refer to both the RIAA and the MPAA.