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A government affairs-focused blog published weekly that covers a variety of issues and topics. Feel free to comment below or email us.

Exports Matter: A Closer Look at AAIA’s Trade Promotion Activities

by Andres Castrillon, director, international trade

Last month, U.S. Secretary of Commerce Penny Pritzker announced that U.S. exports supported more than 11.3 million jobs in 2013, up 1.6 million jobs since 2009. The data, released in a U.S. Department of Commerce report, reveals that exports now support more jobs than any time in the past 20 years.

The strong correlation between exports and U.S. jobs is one of the key reasons why AAIA is focused on helping member companies sell their goods and services all over the globe. But exports are also important for other key reasons. Exporting is good business. According to a study published by the Institute for International Economics, U.S. companies that export not only grow faster, but are nearly 8.5 percent less likely to go out of business than non-exporting companies. With more than 70 percent of the world’s purchasing power located outside of the United States, it’s important that AAIA members capture market share in the global marketplace to maintain future competitiveness.

Exports have been a strong area of growth for the U.S. auto care industry. According to data collected by the U.S. Census Bureau, U.S. exports of auto parts and accessories totaled $54.6 billion in 2013, up from $52.4 billion in 2012 and $47.6 billion in 2011. This upward trend must continue for AAIA member companies to continue to grow and create jobs. This is why we have increased efforts to make it possible for our members to reach new markets.

So what are we doing? To begin with, AAIA’s international segment, the Auto International Association (AIA), has broadened its focus and is now playing a key role in in the association’s export promotion efforts. These efforts include AAIA working with coalition partners to encourage members of Congress to push for renewal of Trade Promotion Authority (TPA). TPA allows for trade agreements to be presented in an up or down vote in Congress, without the threat of potentially deal-breaking amendments or filibusters. TPA is essential in securing congressional approval for major trade agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The auto care industry stands to gain significantly from the two pending free trade agreement negotiations as both will help eliminate tariff and non-tariff barriers to trade in key markets. You can read more about this issue and urge elected officials to support passage of TPA here.

We also realize that while many of our members are seeking new opportunities, they are also finding that conducting international business offers unique challenges. Therefore, we are working to help overcome these challenges and position our members for success. AAIA is collaborating with the U.S. Commercial Service and various international industry partners to establish a global network of contacts to help identify opportunities and help open doors for our members. In addition, we’re going global ourselves by hosting a member pavilion at the new Latin Auto Parts Expo in Panama, and participating in several international events to identify opportunities for and promote business with our members. Further, in response to member feedback, we are working on providing additional trade counseling resources and market intelligence as well.

As an association, we are committed to setting the conditions that promote trade in our industry; and we encourage you to reach out and discuss your international trade goals and challenges with us.

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The FTC and Magnuson-Moss: A Failure to Protect Consumers and Competition

by Aaron Lowe, vice president, government affairs

I remember back in my civics classes in middle school that one of the purposes of federal agencies was to enforce the laws enacted by Congress. However, while Congress provides oversight into whether the agencies are doing a good job at this task, often the reality is that the federal government can do as it pleases in determining what it enforces and what it decides to mostly ignore.

Such is the case with the Magnuson-Moss Warranty Act. Enacted by Congress in 1975, the Act does not require companies to offer warranties, but instead governs how the terms of a warranty must be disclosed to consumers if one is offered with a product. Of particular importance to the auto care industry, the Act prohibits the conditioning of warranties on the use of a manufacturer’s part or service in the maintenance of that product. For example, a car owner who had their oil changed at a independent service provider could not be denied a warranty claim for a failed engine simply because the oil change was not performed by the franchised dealer or was performed using a non-original equipment oil filter. The only exception is if it can be proven that the independent service facility or the use of that non-OE oil filter actually caused the engine failure. Most importantly, it is the responsibility of manufacturer or dealer, not the consumer, to prove that the failed non-OE part or service was the cause of the engine failure.

Unfortunately, this is not the scenario that plays out in the marketplace. We constantly here stories and sometimes receive phone calls from consumers who have been denied warranty coverage because they used a non-OE part and the dealer was saying that their warranty was voided. AAIA along with other auto care associations has filed at least four complaints with the FTC over the past several years regarding Honda, Mazda, BMW and Kia regarding advertising and bulletins that sought to instill fear in consumers regarding the impact on their warranty should they use a non-authorized part or service. BMW went so far in their owner’s manual to state that “Only MINI dealers are to perform oil changes”.

Back in August of 2011, the Federal Trade Commission issued a Federal Register notice announcing a review of the Magnuson-Moss Warranty Act and specifically the interpretations of the Act. AAIA and other groups jumped at the invitation from the FTC to comment on the implementation of the Act explaining the problems that are currently occurring in the marketplace which have placed consumers and the independent repair shops at the mercy of vehicle manufacturers and their franchised dealers regarding warranty issues related to use of a non-OE part or services. In its comments to the FTC, AAIA and others called for improved consumer notice regarding their rights under Magnuson-Moss. Specifically, we asked that consumers receive written notice with any denial of warranty coverage as to their rights under the Act. Further, we requested the prohibition on conditioning of warranties be better disclosed in owner’s manuals such that a car owners recognize the fact that they do not have to go back to the dealer in order to maintain their warranty.

However, after three years, the FTC has failed to take any action on any of our complaints or regarding their own notice regarding a review of Magnuson-Moss. Late last year, Rep. Marsha Blackburn (R-TN) sent a letter to the FTC requesting a status update on the Magnuson-Moss Warranty Act and the complaints filed by AAIA and other aftermarket groups. The FTC responded in January that the review was “ongoing” and that they expected the FTC would act on it in the “next several months”.

Obviously, despite the importance to protecting consumers and the businesses in the independent auto care industry, enforcing Magnuson-Moss and ensuring that consumers are protected from the anti-competitive actions of vehicle manufacturers and their dealers is not high on the commission’s agenda. AAIA is continuing to work with Congress to place pressure on the FTC to do their job by completing their review and to take action to ensure car companies and their dealers are not misleading consumers. However, we hope the FTC will take the message sent by Rep. Blackburn seriously and that they expedite action on its own to enforce Magnuson-Moss.

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Can We Talk…About Tax Reform?

by Paul Fiore, director, government affairs

Last week, House Ways and Means Committee Chairman Dave Camp, R-Mich., released his long-awaited draft of tax reform legislation. The Washington press corps almost immediately quoted Speaker of the House John Boehner, R-Ohio, saying, “For someone who's been a legislator here and the chairman of a committee, you understand that you can't move big pieces of legislation without a thorough discussion, a thorough understanding, and so, the conversation has started.” Using the words “discussion” and “conversation” is understood in Washington to mean that it is only a conversation, and that we have a long way to go before we will actually pass tax reform. For many AAIA members, this may actually be a good thing, but we’ll get to that in a minute.

The good news, according to Chairman Camp’s own Feb. 26 press release, is that the Tax Reform Act of 2014 will create up to 1.8 million jobs, allow approximately about 95 percent of tax filers to receive the lowest possible tax rate by simply claiming the standard deductions (no need to itemize) and increase gross domestic product by up to $3.4 trillion dollars. There is plenty more there, but the question on everyone’s mind is -- how does he get there?

First, let’s give credit where credit is due, as probably no one has worked harder in many years than the Chairman Camp on this quest. He formed 11 separate bipartisan working groups with specific issues to research, traveled the country holding tax reform town halls in numerous communities and encouraged the use of social media so that the average citizen had the opportunity to weigh in on this critical issue. So, although tax reform is unlikely to happen this year, the effort being undertaken by Chairman Camp and his staff is not frivolous and those affected need to start weighing in on its impact.

Back to the question of, “How does the chairman’s tax reform get to the bottom line benefits to the U.S. economy and to taxpayers?” It is no secret that during this effort, the operating phrase was “everything is on the table,” but which “sacred cows” did he sacrifice?

Many AAIA member companies will be interested to see that one of the proposals would repeal the last-in, first out method of inventory valuation (LIFO). The inclusion of the LIFO repeal came despite lobbying by AAIA and other industry groups that LIFO is not a tax loophole, but simply a 70 year-old accounting method. Apparently, the chairman thought otherwise, claiming in the summary, “When a taxpayer chooses the LIFO method of accounting, they accept that the deferred tax liability will have to be recognized at some point.”

However, the proposal does acknowledge that there is an inherent burden in LIFO repeal, and provides the following transition provision on the new liability:

  • A taxpayer would include its LIFO reserve in income over a four-year period starting with its first tax year beginning after 2018.
    • 10 percent included in the first year (2019);
    • 15 percent in the second year (2020);
    • 25 percent in the third year (2021); and
    • 50 percent in the fourth year (2022).
  • Taxpayers could elect to begin the four-year inclusion period in an earlier tax year.
  • Closely held entities – generally defined as having no more than 100 owners as of Feb. 26, 2014 (using rules similar to those used for S corporations and taking indirect ownership into account) – would be subject to a reduced 7 percent tax rate on their LIFO reserves.

Of course, beyond LIFO repeal there are other proposed changes that, depending on the size of the business you are own or are running, could provide benefits to AAIA member company bottom lines. Still, for a large part of our membership, even a 10 percent reduction in their effective tax rate will not make up the financial burden of the elimination of LIFO.

So, while we are grateful that the discussion over tax reform is finally moving past generalities, the devil is in the details. Attempting to balance tax reform on the backs of many small businesses is not the answer. Be assured that AAIA will continue to work with other groups in Washington to make sure that the Ways and Means Chair hears our message that LIFO repeal should not be on the table when the tax reform debate moves from discussion to action.

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Rebranding and Your Association’s Government Affairs Program

by Aaron Lowe, vice president, government affairs

Typically, when one of the AAIA government affairs team members visits a new legislator or their staff (no matter what the issue we are going in to talk about), the conversation usually goes like this:

AAIA staff: Thanks for seeing us. I represent the independent automotive aftermarket, which has nearly $300 billion in sales every year, contributes 2.1 percent to U.S. gross domestic product and employs more than 4 million people.

Member of Congress: The aftermarket? Are you guys the ones that make those cheap copies of car parts, or are you used car people?

We then spend the next five to 10 minutes explaining the types of businesses that comprise the industry, the quality of parts they produce and sell, and the importance of the aftermarket, not only to the U.S. economy, but also to the consumer that depends on the industry to keep their vehicle on the road. While the meeting takes a turn in the positive direction subsequent to the lengthy explanation, there is little time remaining (you only have about 20 minutes to make your point in a congressional meeting) to actually discuss the issue you went to see them about in the first place.

So, it is with this in mind that the government affairs department is looking forward to the upcoming change to the association’s name. Scheduled to be officially unveiled in April, the new name, “Auto Care Association,” better describes the role that our membership actually plays in the lives of U.S. consumers; and, at the same time, eliminates the negative connotation that the term “aftermarket” seems to elicit with consumers and with legislators. Hopefully, now our conversations with legislators and staff will begin from a more positive position.

The rebranding also provides a new opportunity to reintroduce ourselves, and to reemphasize to elected officials and regulators, the importance of the repair industry to the U.S. economy and the motoring public. This message cannot just come from your association’s lobbying team in Washington, D.C., but must be backed up by the involvement of our membership to ensure that it resonates. Legislators hear from lobbyists all of the time, but they clearly listen more to the lobbyists that represent sectors that are of economic and political importance to their legislative districts. And when it comes to economic and political impact, our industry should pack a wallop since we are located, employ people and provide services in every state and federal legislative district in the country. However, sometimes our image has gotten in the way of fully promoting our message to government officials.

Hopefully, the new name change to the Auto Care Association will bring about a new pride in our industry, and that pride will translate in to members of our association letting legislators know how important they are to the nation’s transportation infrastructure and to its economy.

Over the next several months, the government affairs department will be launching opportunities for members to get involved in helping to take our industry’s new brand to legislators. We hope that you will become part of these efforts, and that our new image will help bolster our industry’s presence in Washington and state capitals.

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Marketplace Fairness: Moving It Forward

by Sheila Andrews, manager, government affairs

The Marketplace Fairness Act (MFA) is a result of decades of dialogue, legislation and court cases over the collection of sales and use taxes for purchases made online. The work on this issue is as old as the Internet, and Congress finally has the opportunity to end the discussion. However, politics is keeping the MFA from moving forward to the detriment of many brick and mortar businesses, states and localities. The MFA needs to become law, but it needs the assistance of businesses, including those in the auto care industry, to do that.

The idea of collection of sales and use taxes on online sales seems like a given from the traditional retail model, because a sale is a sale. When Internet sales were originally regulated, however, Congress made the decision to allow for a moratorium on Internet sales tax collection, because it was in the business of helping what we now call e-commerce get on its feet. The intention was not to perpetually safeguard an industry from having to pay sales tax, but to help a new industry get traction in the marketplace.

There were arguments over that decision at the beginning of e-commerce, but it is time for those to subside and let parity step back into place by helping states collect the sales and use taxes they are already legally allowed to collect. That’s right, this is not a new tax -- sales tax is already to be collected on online purchases in 45 states. However, due to Supreme Court cases that only permit those taxes to be collected from businesses where they have a nexus in the state, the tax payment must come from the purchaser, which is nearly impossible to enforce.

The MFA requires a software system be provided to businesses selling online in order to integrate with current online ordering systems and automatically parse out amounts to be paid for tax purposes. The software costs about $300 and if you sell less than $1 million online annually, you aren’t required to participate. Notwithstanding these protections for small businesses, the arguments that it is bad for business and expensive to implement have unfortunately taken over in the politics of the House of Representatives.

In June of 2013 the Senate passed the MFA (S. 743), but the House has yet to do so, because the chairman of the House Judiciary Committee, Bob Goodlatte, R-Va., has been slow to move ahead with legislation. The chairman released principles he would like to see in a bill, like protecting small business and others, many of which we concur are good public policy; however, what hasn’t happened is the manifestation of those principles into a bill.

This slow-goes-it tactic is becoming increasingly threatening to the actual passage of the MFA, because there is only a limited number of legislative days to the remainder of this congressional session; and if it does not get done by the end of the year, we will need to start over again next year. We think this issue has come too far to turn back now. Chairman Goodlatte must hear from businesses that the time is now to introduce a bill, start the debate and hopefully obtain a positive vote that will make MFA law.

We are encouraging any business that supports the MFA to contact both Chairman Goodlatte and your elected representative to push the issue ahead. Email me at sheila.andrews@aftermarket.org to find out how you can help make MFA a reality.

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Have You Made a Personal Commitment to Your Industry Lately?

by Paul Fiore, director, government affairs

It’s been exactly one year since we last reached out to you through this blog about how the Automotive Aftermarket Political Action Committee (AAPAC) offers an opportunity to elevate your commitment to the industry. Trade association surveys consistently demonstrate that one of the most important functions of the association from a member’s point of view is legislative advocacy. However, few members realize that the success of a government affairs program by an association like AAIA is a team effort. Quite simply, the personal involvement of our membership enhances our engagement on Capitol Hill and makes us more effective in meeting the association’s objectives.

During the Right to Repair fight it became clear to us that our opponents had enormous PAC resources at their disposal, and AAIA recognized that our industry needed to dramatically grow our PAC in order to compete with them on the political playing field.

David Pinkham, associate, government affairs, has streamlined our government affairs website and made the AAPAC resources much more user-friendly. See for yourself at http://aaia.aristotle.com/Pages/AAPAC.aspx. We will be doing further updates to the site in the coming months.

The government affairs team is already hearing the buzz on Capitol Hill as the news of our association’s new name--the Auto Care Association--“leaks out.” With a new name and a new way of talking about the industry, now is an ideal time to step up to the plate and help us help you.

Thank you.

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Right to Repair MOU Celebrates a Victory and the Beginning of Effort to Address New Industry Challenges

by Aaron Lowe, vice president, government affairs

Yes, it is finally done. You have probably read by now that AAIA and the Coalition for Auto Repair Equality (CARE) announced that a memorandum of understanding (MOU) had been signed with the Alliance of Automobile Manufacturers and the Association of Global Automakers regarding the Motor Vehicle Owners’ Right to Repair Act. The MOU ends a more than 12-year battle between the aftermarket and the car companies over a law that would require car companies to provide our independent repair industry and consumers access to all of the tools, software and information needed to repair today’s and tomorrow’s computer controlled vehicles.

The MOU follows quickly on the passage by the Massachusetts legislature of Right to Repair legislation late in 2013; and the overwhelming approval by Massachusetts voters of a Right to Repair referendum in November 2012. The MOU means that the car companies have agreed to abide by the requirements encompassed by the Massachusetts Right to Repair legislation on a nationwide basis.

While this is a significant development for the independent aftermarket and a victory our industry should celebrate, it is by no means the end of the story. Vehicle technology is rapidly evolving and the technicians working in the independent aftermarket will need to be properly trained to provide the level of service demanded by their customers. Further, as I said last week, our industry must be able to access vehicle embedded telematic systems in order to be competitive with new car dealers who see these new systems as way to develop a relationship with the car owner long past when the new car warranty expires.

The following are a few points that the aftermarket take away from the recent Right to Repair victory in order to address these challenges.

  • The independent aftermarket is much stronger and more important to the nation’s infrastructure than it thinks it is. The passage of the Right to Repair referendum in Massachusetts by a whopping 85-15 percent margin demonstrates that the motoring public definitely sees our industry as an important part of their lives, voting to ensure that competition in the repair industry is preserved. This knowledge should bring about a sense of pride and the confidence to continue the battle for competition, as well a sense of responsibility to ensure that our technicians are ready to take on the challenges of repairing these high tech vehicles.
  • We must not back away from the future challenges posed by training and telematics. Both of these issues will either require cooperation from the car companies or another legislative battle. It is my hope that we have had enough of the latter and that the car companies will work with the independents as partners in addressing the needs of their customers and will seek to work with us to achieve a competitive level playing field.
  • Right to Repair was a team effort. The battle over access to service information was not really won over at the negotiating table, but from the strong efforts of members of our industry who gave of their time, energy and money to lobby for passage of Right to Repair legislation. Many of these were small businesses owners or technicians who were willing to give up their evenings and weekends and sometimes leave their busy shops to meet with legislators on this issue. This victory would not have happened without their commitment. Now, we are going to need additional help from the industry to help tackle these future challenges.

To those who say that the MOU does not go far enough: We agree, more needs to be done. However, the effort in Massachusetts and the MOU establish the fact that the consumer who purchased a vehicle also should have the right to have that vehicle repaired where they want and by whom. They further should have the right to determine where any information transmitted by that vehicle is sent. Hopefully, the industry buoyed by the Right to Repair victory, will now vow to move forward, together, to ensure its competitive future.

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Public Attention to Privacy Concerns Relative to Vehicle Telematics Might be a Good Thing for the Auto Care Industry

Much of the news out of the Consumer Electronics Show which took place in Las Vegas last week revolved around an agreement between several automakers and Google to provide telematic solutions for their motor vehicles.

As the Washington Post reported on Friday, Jan. 10, “The growing alliance between Silicon Valley and Detroit has executives in both places excited over the technological and money-making opportunities. But the fast-emerging trend also has raised questions about whether consumers will be able to control the massive trove of personal data that cars are expected to generate in the coming years.” The Post article, which, by the way, was on the front page, further stated: “U.S. laws are vague about who can harness all that information. Can law enforcement use the data to prove that a driver was speeding? Will hackers be able to get personal data from Web-connected cars? Can consumers stop Google from tracking them as it seeks to sell targeted ads?”

The good news is that the media is finally waking up to the fact that telematic systems poses important issues for car owners regarding how much control they have of the information being sent by their vehicle. AAIA and others have been concerned for some time that OE telematic systems will permit the car companies and their dealers to more directly communicate with motorists regarding the repair and maintenance needs of their motor vehicle. AAIA is further concerned that due to the direct contact that telematics provides, that car companies will use this connection to push motorists back to the dealer service bays long after the new car warranty expires. Further, these telematic systems will permit car companies to direct repair and diagnostic data from the vehicle to their dealer service bays before the vehicle has even entered the shop, allowing the dealer technician to better know what might be wrong with the car and order the repair information and parts they will need to fix the car faster and more efficiently than their independent counterparts?

AAIA has taken the position that the motorist needs to be better positioned to control the information being sent by vehicles. Do they want their information sent at all and if so, to the car dealer or the independent, or maybe both? As I have said in the past, there are two issues that are included in that question, one is policy the other is technical. Congress likely will need to look at the privacy issues on motor vehicle to decide how car owners should be empowered to control the information begin sent by their telematic systems; and second, if they choose to send their information to those outside of the car company sanctioned group, how technically can that happen?

AAIA and others in our industry are working on both a policy and a technical proposal that hopefully will ensure that the motorist can control access to their telematic systems and to ensure that entities outside of the car companies can have access to the vehicle’s telematic systems with permission by the car owner. You can read more about this effort in the latest issue of Insider. In the meantime, it is good news that the press is catching on that the new connected vehicle may have more implications than previously thought. Hopefully this attention will generate more discussion of this issue both in Congress and the state capitals over the coming year.

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Four Things I Learned About the Auto Care Industry in China

Last month I spent ten days in China. I spent a week in Shanghai attending the Automechanika show and meeting with international associations, AAIA member companies and market experts. I then visited Beijing to meet with U.S. Embassy staff to discuss opportunities in the Chinese market and how AAIA can work with the Embassy to help AAIA members take advantage of those opportunities. I also spent a day with the leaders from the China Automotive Maintenance and Repair Trade Association (CAMRTA) to understand their priorities and challenges in the market, and to determine whether they might be a good partner for any future AAIA China initiatives. Below are four things I learned during my trip.

1. Everything you’ve heard about the booming Chinese automotive market is true. The Chinese automotive market is booming. China’s automotive sector grew at a compound rate of 24 percent between 2005 and 2011 and, in 2010, overtook the United States as the largest single-country, new-car market. Growth is expected to slow down to an average of 8 percent between now and 2020, when sales are expected to reach $22 million, bigger than both the European and North American markets. New car sales in China are forecast to contribute to 35 percent of the world’s car-market growth through 2020. The people I spoke with on the ground report that car making joint ventures in China are concerned with insufficient capacity to meet demand.

2. Significant challenges remain. Market entry can be challenging, with rules and regulations that are difficult to identify and navigate, and which can often change. Intellectual property rights protection remains a very significant challenge to doing business in China, with counterfeiters becoming more sophisticated every day and with legal remedies difficult to enforce. Moreover, it can be difficult to identify reputable and legitimate business partners in China for joint ventures, agent representation, distribution or logistical and supply chain needs. Even in the association world, finding the right partners can be challenging as there are seemingly thousands of automotive “associations,” with very few being actual associations as we think of them.

3. There are many resources available to help overcome the challenges. Despite all of these challenges, many U.S. companies are on the ground and thriving in China. The U.S. Commercial Service in China offers valuable assistance to American businesses exporting goods and services to China. There are specialists focused on the automotive industry at each of the regional locations in China, including the U.S. Embassy in Beijing and four Consulates in Shanghai, Guangzhou, Chengdu and Shenyang. I met with the Beijing team and they are working to help identify trade opportunities and local potential trading partners within their perspective regions. They have developed a solid understanding of the opportunities and challenges in the automotive market and can help guide U.S. companies. Additionally, the U.S. embassy has another team of people focused on market access issues and helping bring down barriers to market entry. There are also many private sector resources available. For example, I met with an American attorney who has worked in Beijing for 20 years and specializes in helping U.S. companies overcome any regulatory hurdles to doing business in China.

4. The auto care industry in China is underdeveloped and not prepared for the aging car parc. The Chinese car parc is aging and the used-car market is growing, but there is currently no sophisticated infrastructure in place to service and repair these aging vehicles. China lacks sophisticated distribution networks for auto parts, as well as standards for cataloging and parts identification. There is also no organized consumer education effort, and there is very little preventative maintenance that is performed on cars in China. AAIA members can play a large role in helping overcome these challenges. Many large Chinese investors want to duplicate the U.S. auto care industry model and are looking for U.S. joint venture partners. There is also a large market for imports and American products are generally highly regarded in China.

AAIA is exploring areas where we can become more active in the Chinese market in order to better position AAIA members to be successful there. We welcome member input on the Chinese market and ways AAIA can be impactful in overcoming the many challenges that exist there.

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A Holiday Message to Congress: Do Something!

This is the final blog for 2013, and what a year it has been in the nation’s capital. The federal government was shut down for a couple of weeks, the government came close to defaulting on its debt payments, and the rollout of one of the most important government programs in decades was a total failure, as millions failed to be able to access government websites to purchase health insurance. And that was just during the fall of this year! What lies ahead for 2014?

A glimmer of hope this December was the passage last week by the House, despite strong opposition from some tea party legislators, of a modest two-year budget deal that was the bi-partisan work product of Senator Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis. The Senate vote is still not a sure thing, but as of this morning Senate leaders were optimistic that it will get done. No, this deal is not going to cure our nation’s bulging deficits, but hopefully it will keep the government funding issue out of crisis mode for a little while anyway.

My optimist side hopes that legislators will take the cooperation on the budget and decide to work together to attempt to take on some of the nation’s top issues such as entitlement reform, a long-term transportation infrastructure funding bill, and tax reform that levels the playing field for all businesses. The realist side of me knows that passage of most of these goals is not likely with a congressional election coming down the road. What is more likely is a more limited agenda where legislators seek to avoid negative publicity of a government shutdown, but avoid taking on issues or supporting compromises that might anger their political base. Thus we “kick the can down the road,” hoping that a future Congress will take on the difficult problems.

Unfortunately, in our current political system, “compromise” has become a dirty word as legislators up for election are fearful that supporting anything that does not stand up for conservative or liberal values will mean a primary challenge from someone further to the left or right. While standing up for your values is always an enviable trait, without practical compromises, no legislation ever moves forward. It seems that the only way that this trend will be broken is if voters and the business community support candidates that reflect the political tendencies of their constituents, but that also want to come to Washington to get things done. Unfortunately, with all of the hand wringing in Washington about the do-nothing Congress, it is hard to know whether the voters have had enough or whether we will see the parties further cement themselves in their positions over the next several years.

So my holiday wish is that legislators come back from their holiday break anxious to take on some of the big issues facing U.S. businesses and citizens by working with each other to find agreements that might not be perfect, but that moves the ball forward. Short of that, I guess I will just settle for peace on Earth… not sure which one may be more achievable.

Happy holidays to all AAIA members and their families from your government affairs staff. Here’s to a happy and healthy and productive New Year!

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