Domestic and international trade policy affects all businesses operating in international markets. Trade policy development is a complex process, involving dozens of players representing different interests. Some seek to improve their position in foreign markets. Others support trade policies that protect them from foreign competition. Some want to increase protection of intellectual property, while others fight to make sure that those efforts don’t add burdens on legitimate commerce. And, as the old adage goes in Washington, “If you’re not at the table, you’re on the menu.” Therefore, we must all be vigilant in protecting our trade interests in order to best position our industry to benefit from the ever-evolving global trading environment.
Here at AAIA, we work hard to identify and address trade policy developments that impact our members. We scour trade publications daily. We are in routine contact with relevant government agencies and congressional staff. We work closely with other foreign and domestic trade associations whose interests align with ours. But our best resource for information on trade developments that impact our members is information from the members themselves. No one is in a better position to know what issues really matter, how they impact the ability to conduct business globally and what positions AAIA should take to protect the industry.
So how can AAIA members better contribute to AAIA’s trade policy advocacy?
- Monitoring international trade developments. AAIA staff prepares two reports that summarize policy developments that have potential impact in members. First, the weekly Capital Report prepared by AAIA’s government affairs team includes key international trade developments. Second, AAIA’s international segment, the Auto International Association (AIA), distributes Talking Trade, a monthly summary of international trade developments impacting its membership. If you are not receiving this and would like to, please contact Andres Castrillon at email@example.com. Monitoring these reports is an easy way to keep up to date on trade developments on which you may want AAIA to take action. When you see something that may impact you, pick up the phone and let us know your thoughts.
- Ensuring leadership and responsibility for international trade issues. Is your company properly organized to identify trade concerns? Who within your company is monitoring international trade developments? Is that person/team receiving the relevant AAIA communications? AAIA members should identify a person or team responsible for oversight of international trade developments and make sure they are aware of AAIA and its resources.
- Participating actively in formal consultations on trade matters. U.S. trade agencies and congressional committees often request comments from the public on a host of international trade issues. Are you taking advantage of these opportunities? If not, you’re missing out on a great opportunity to shape the debate. AAIA announces these comment opportunities in the reports mentioned above and can help you prepare comments, either through the association or individually.
- Building relationships with your congressional representatives. Is your congressman/woman or senator on a committee that has responsibility for international trade? Are you building relationships with your representatives and educating them on your trade priorities? Do you have a good trade story to tell? Despite the political gridlock in Washington, trade is one of the few issues both sides are actively promoting and willing to pursue.
AAIA’s effectiveness as a leading policy advocate for the motor vehicle aftermarket is strengthened by active member participation and discourse. In the coming weeks, members will receive communications aimed at better identifying key contacts for international trade oversight. Your company, whether large or small, can play an important role in our trade advocacy efforts. We encourage you to get in contact with us to discuss how we can work together to protect your trade interests.
As we approach the August congressional recess, the attention of many Capitol Hill denizens is focused on tax reform. Much is at stake here as our congressional leaders have reached out to the public (businesses) at an unprecedented level, seeking real input, which in and of itself is a rare occurrence in Washington. Leadership in the Senate Finance and House Ways and Means Committees has made no secret of their desire to accomplish this task. This alone is significant, as most insiders agree that the opportunity appears to come along about once a generation. This possibility is given even more weight by the announced retirement of current Finance Chair, Senator Baucus, D-Mont., at the end of his term. Senator Baucus would clearly like tax reform to be one of his legacies once he leaves office next year.
Back in May of this year, the Congressional Research Service (CRS) released a report detailing current proposals in Congress, which at the time varied from the abolishment of most of the federal tax code and the adoption of a 23 percent national retail sales tax (H.R. 25/S. 122), to a flat tax where an individual is taxed on wages and businesses are taxed on cash flow (H.R. 1040). The report went on to detail the options available to Congress, and in its conclusion, outlined the challenges they will face in the process. It is here in this struggle within the Congress that as an association, we must stay focused on the possible outcomes that will have such far-reaching consequences for AAIA-member businesses.
Perhaps the most important aspect of tax reform for AAIA members is that it should be neutral among different types of businesses, so that businesses are not favored based on their form of legal entity (e.g., C-corp. vs. S-Corp. or pass-through). This goal was brought home several weeks ago when the small business lobbying community learned that the relevant committees were being heavily lobbied to bring down tax rates for C-corporations at the expense of all other businesses.
Convincingly, the CRS in the same report aptly described what is needed at this time - a tax policy [that] considers equity (or fairness), efficiency, and simplicity. Equity examines the distribution of the tax burden across different groups. This information can then be used to assess the “fairness” of the tax system. A tax system that is economically efficient generally provides neutral treatment, minimizing economic distortions and maximizing output. A tax system that is simple reduces administrative and compliance costs while also promoting transparency.
AAIA is committed to the establishment of a neutral tax system and to that effect, has decided to take an active role on the Steering Committee of the newly-formed Coalition for Fair Effective Tax Rates. The coalition currently consists of around 100 members, including the Retail Leaders Association, the National Federation of Independent Business and the National Association of Wholesalers-Distributors. Announced on July 23, the mission of the coalition is to educate Congress and key stakeholders that tax reform should be viewed through the lens of effective tax rates, the amount of taxes businesses actually pay. The hope is that effective-tax-rate comparisons will bolster legislation that broadens the tax base, while lowering rates for corporations as well as pass-through businesses.
The earlier-referenced “congressional leaders” are encouragingly bi-partisan at the committee level. Just last Tuesday, in response to President Obama’s own tax reform speech in Chattanooga, Chairman Camp, R-Mich. and Chairman Baucus released a joint statement stating, "We welcome the president’s recognition that our broken, outdated tax code is making it harder for U.S. companies to compete and American families to get ahead. Making the tax code simpler and fairer by closing loopholes and lowering rates for families and employers of all sizes will strengthen our economy, while creating more jobs and higher wages.” We couldn’t agree more, and we will continue our efforts through the coalition as the real work, defending against those who are fighting to protect the loopholes and special interests, is just beginning.