government affairs blog
Intellectual property rights (IPR) theft is one of the many challenges AAIA members can face in the global marketplace. When counterfeiters sell products using our members’ brand names, they steal income from legitimate companies, cause consumers to question the reliability of aftermarket products and threaten consumer safety. They also threaten the flow of legitimate trade, as counterfeiting cases raise the level of scrutiny on aftermarket products, causing additional burdens and delays. Thus, although relatively small in scope when considering the size and importance of the aftermarket, IPR protection is an issue we must all be aware of and can play a role in addressing.
AAIA supports continued efforts by Congress and the administration to improve IP enforcement at home and abroad. As such, AAIA recently participated in an informal roundtable discussion hosted by the National IPR Coordination Center, in partnership with U.S. Customs and Border Protection’s (CBP) Automotive Center of Excellence (CEE). The discussion focused on the enhancement of substantive enforcement protocols for combating IP theft in the automotive industry. The small gathering presented a unique opportunity to meet with the Detroit based CBP-CEE leadership and other Intellectual Property Rights enforcement officials.
The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. The IPR Center works closely with CBP’s Automotive CEE, a central point of contact for inquiries and resolution of issues regarding automotive-related imports.
AAIA’s goal for participating in the discussion is to explore ways to enhance direct connectivity for AAIA members to these key groups. The IPR enforcement officials want to hear directly from industry so that they can more strategically target IPR infringers and ensure that legitimate trade flows freely and efficiently. With limited resources and expertise, their best weapon is the intelligence, feedback and guidance they receive from industry representatives. AAIA will continue to work with these government partners and keep its members updated on their initiatives.
AAIA encourages its members to become familiar with the resources the IPR Center and the CEE offer. Members interested in learning more should contact Andres Castrillon at email@example.com or by phone at 301-654-6664. Members can also visit the following websites for additional information:
Studious readers of AAIA’s weekly Capital Report may recall a story or two about a “simple” regulatory change by the New York Department of Environmental Conservation (NYDEC). In August 2012, the government affairs team was approached by several manufacturers of aftermarket catalytic converters (ACCs). They were concerned about NYDEC’s impending regulatory change that would adopt the California Air Resources Board (CARB) standards and approval process for certification of ACCs. The NYDEC had set an implementation date of June 1, 2013, for the new regulation, and the manufacturers’ experience in their current dealings with CARB and the California market had them worried about several practical matters, including availability of product, messaging to distributors, repair shops and consumers (significant increase in pricing), and the ability of CARB to adjust accordingly to the new demand for certification.
It should be noted here that the CARB certification process is extremely convoluted and involves assigning test vehicles for pre-determined applications, and is based not only on make, model and engine size, but also engine family designation. Once the precious metal loading in that ACC has been satisfactorily tested and approved, CARB grants an Executive Order (EO) for that particular application. Finally, the EO number must then appear on a metal plate attached to the body of the catalytic converter, available for verification (more on that later).
From the beginning, neither AAIA nor any of the manufacturers opposed the promulgation of new more effective ACC certification standards, but were concerned about the June 1 implementation date. Following a series of conference calls and meetings with the ACC manufacturers, the Retail Council of New York and the NYDEC, the state granted a delay, by means of issuing a letter that stated the regulation adopting the CARB standards for ACCs would not be enforced until Jan. 1, 2014.
As far outcomes go, this had to be considered very favorable, as the extra six months was, and continues to be, crucial to manufacturer inventory adjustments and communication with their distribution network. Additionally, the NYDEC agreed to the creation of a stake-holders workgroup to address messaging and outreach. However, real-world concerns about enforcement and the availability of CARB certified converters remain for the manufacturers, and the severity and complexity of the regulation’s impact on the installers and consumers will only be known as the date draws nearer.
But this issue does not begin and end with New York state. What is also of major concern to ACC manufacturers, and will be for many distributors and installers, is the reality that Massachusetts and Maine had previously adopted the CARB ACC standards, but have thankfully delayed implementation, with Maine declaring Jan. 1, 2015, as their new implementation date. AAIA is also aware of several other state environmental agencies that have acknowledged similar plans.
The reasons for all this regulatory activity around ACCs can be placed right at the door of the U.S. Environmental Protection Agency (EPA), as they have not promulgated new ACC standards since the regulation’s introduction in 1986. As most of you know, vehicle emissions technology has made tremendous progress since that time; and states attempting to reduce emissions in order to meet federal air quality standards have simply become frustrated with EPA’s lack of progress.
EPA claims that they lack the resources to adopt a new ACC certification standard, claiming that regulatory efforts to promulgate a Tier III Fuel Standards has demanded the attention of their now limited staff (sequestration, anyone?).
An adoption by states of a new federal standard that is more practical than the CARB program (which will be left in place for California) would still result in more effective emissions reductions, but would also streamline the certification requirements for ACCs, increasing the availability to consumers of lower cost converters to consumers, many of whom now are forced to purchase expensive OE catalytic converters when a CARB-certified ACC converter is unavailable.
AAIA has already formally written several states and EPA, explaining our position that this new standard would be the best possible path forward for our industry. We have also written and met with the Ozone Transport Commission (OTC), an organization of East Coast and Mid-Atlantic states created under the Clean Air Act, to advise EPA on development and implementation of regional solutions to ground-level ozone pollution.
Finally, AAIA’s government affairs staff has begun lobbying members of Congress, asking them to assist us in persuading the EPA to begin this initiative. As always, members of Congress like hearing from their constituents on any given issue, and if aftermarket catalytic converters are part of your business, please feel free to call or email us at AAIA and we’ll help you contact your representative.
The AAIA letters to the OTC and the EPA can be viewed here:
I want to congratulate the newest recipients of the AAIA Ambassador’s Award. Corey Bartlett from the Automotive Parts Headquarters and Tom Perry of MMM-Marketing LLC were both presented with the prestigious award during Fall Leadership Days last week in Dallas, Texas. The Ambassador’s Award is presented to AAIA members that have given more than $3,000 to the Automotive Aftermarket Political Action Committee (AAPAC) since its inception. Recipients of this award, and there are 20 of them, represent individuals that have shown a strong commitment to the AAPAC and the AAIA government affairs program.
I should also congratulate all of the supporters of AAPAC. With their help, the association has doubled the size of AAPAC since 2011. The commitment of our members to AAPAC has permitted us to support candidates for Congress that are either strong supporters of the automotive aftermarket or are in key positions of leadership. Having a strong PAC makes our legislative team more effective in moving the association’s legislative agenda, whether it’s passage of Right to Repair, tax reform or of e-fairness legislation.
I understand the difficulty that members of our industry experience in giving to the PAC. The money must come from the individual employee of an AAIA member and cannot be corporate funds. In today’s economy, that is not always easy. However, the fact that so many of the employees of our members and the AAIA staff give generously to the PAC indicate their strong commitment to the future of the association and our industry. The AAIA government affairs staff appreciates the support we have received from the membership, whether it’s a member of the 365 Club (a dollar a day) or someone who has given the legal maximum of $5,000. They are all important components in making our PAC a more powerful tool for our government affairs program.
However, we have to be realistic, and while AAPAC continues to grow, it has a long way to go to compare with the political action committees supported by our competitors on Capitol Hill. The National Automotive Dealers Association currently has a PAC that raised a whopping $4,736,578 in the last fundraising cycle, while AAPAC raised about $78,000. We may never reach the numbers generated by the dealers, but clearly our PAC still needs to grow if it is to gain some clout on Capitol Hill.
If you are interested in learning more about AAPAC, go to http://www.autocare.org/Government-Affairs/aapac/.
On Aug. 15, the National Association of Manufacturers (NAM), AAIA and 11 other organizations moved to intervene in a suit brought by the Sierra Club against the U.S. Environmental Protection Agency (EPA). The Sierra Club and other environmental groups are attempting to force EPA to complete its review and revision of the national ambient air quality standard (NAAQS) for ozone. The agency had tightened the standard to 75 parts per billion in March 2008 and the Sierra Club wants EPA to further lower the standard by September 2014. It is expected that EPA will attempt to reduce the standard to between 60 and 70 ppm as part of its next rulemaking. This reduction would come just as EPA is in the process of implementing the 2008 standard.
AAIA and NAM are intervening to prevent EPA from issuing a more stringent ozone standard without a thoughtful and thorough review of the evidence. As NAM stated when the motion was filed: “Forcing EPA to act hurriedly would frustrate the development of sound scientific support on the need for NAAQS revisions. The truncated timetable would further reduce the time that industry and the public will have to weigh-in on the new standard.”
The revision of the NAAQS is a big deal for our industry. Under the Clean Air Act, EPA must establish a standard for ozone and other pollutants that provides protection for public health. EPA is further required to review the standard every five years. However, enforcement of the NAAQS is up to the states, which are required to develop and obtain approval from EPA for State Implementation Plans (SIP). SIPs establish which measures a state will adopt in order to meet the NAAQS. The development and EPA approval process is extremely complex; in a nutshell, an area that fails to meet the NAAQS is deemed in non-attainment and must implement SIP-specified air pollution measures approved by EPA as sufficient for the area to achieve attainment. Therefore, if the NAAQS for ozone is lowered, it means that additional localities around the country could be put into non-attainment and forced to adopt control strategies that will result in a reduction of the emissions of pollutants that create ozone. Further, areas that are already in non-attainment could be forced to further regulate sources of emissions in order to meet the seemingly impossible task of an area achieving attainment of a lower standard.
The bottom line is that the new standard will force additional and costly control measures on industry. These control measures could mandate huge investments by companies in pollution abatement, as well as additional restrictions on automotive chemicals and appearance products that contain volatile organic compounds (VOC), which cause ozone.
The lawsuit by the environmental groups was filed in the U.S. District Court for Northern California, which will now rule on whether to permit us to intervene in the case, which is by no means a slam dunk. In addition, it is likely that EPA and the environmental groups will attempt to settle the lawsuit. Such settlement talks would occur behind closed doors and could establish a timetable for a NAAQS rulemaking that could have serious impacts on industry. If the court permits us to intervene, it will mean that industry will have a seat at the table for these negotiations.
Clearly, there is a lot riding on EPA’s NAAQS rulemaking and AAIA feels that it is critical that the process be transparent, and permit sufficient time for all of the pertinent data to be reviewed before a decision is made on a standard that could impose severe economic costs on our industry, as well as the U.S. economy.