Sunday, August 10, 2014

Historic Trade Associations

You are a small retailer, importer, exporter or a manufacturer you will always benefit from the support and services of a Trade Association. Simply in every field of trade and industry in every country you will find regional, national and international Trade Associations. It is estimated that there are more than 90,000 Associations around the world.

By looking at the numbers, you see their popularity but what are Trade Associations and why they are so important?

In this article you will learn more about Associations and their role in the modern business world.

First Let's Explain What They Are:

A Trade Association is a member based organization which is funded by a group of people or businesses in a specific industry to facilitate collaboration between companies. They defend their members' interests by advertising, producing standards for industry, lobbying, publishing magazines or newsletters, producing exhibitions or conferences, networking, finding new customers or potential suppliers for member businesses by arranging trips and meetings and last but not least education by offering educational materials or courses. Trade Associations are governed by bylaws and managed by officers who usually are members.

Now let's talk about the history of Trade Associations and review their evolution throughout history.

The first Society, the Academia Secretorum of Naples was born in 1560. During the next century other societies spread throughout Europe in London, Paris and Italy.

In 16th century, United Kingdom's first associations were born by name Guild, to protect interests of merchants and craftsmen. The well-known Royal Society of London, which was founded in 1662, is one of the examples. They set rules for wages and work hours and they also offered education by training skills. In 1800s, Guilds were working closely with local governments. 

The first Association which remains in existence was formed in 1768 by 20 merchants in New York and they named it Chamber of Commerce of the State of New York. Another example is American Seed Trade Association which was founded in 1883. After this time more regional associations came into existence around the country but most of them were local Associations. After the civil war and the vast expansion of the country's industrial capabilities, many local and national Associations were formed in order that manufactures could find new markets and expand their businesses. By 1900 almost 100 national and state
Associations were active across United States to ensure their competitiveness in the market.

Although the Trade Associations services were helping businesses to stay competitive in the market, with growing demands for products, soon they decided to take advantage of the situation and use it to create monopolies and price fixings. This matter changed with the introduction of antitrust laws and the decision of US Supreme Court, ruling on the openness of pricing exchange information. 
World Wars I and II drastically increased the number of Associations and they became a valuable resource by providing industry statistics to the government.

Today Trade Associations continue to maintain their essential role as intermediaries between government and businesses and also in helping businesses to expand by finding new markets while improving products' quality by setting standards. 

1 comment:

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