Trade associations and chambers of commerce: WASSCE Commerce

One small trader complaining about a new levy is easy to ignore; an association speaking for thousands of traders is not. Businesses in the same line of trade join together to protect their interests, set standards and speak to government with one voice. This lesson covers trade associations, chambers of commerce and employers' associations.

Learning objectives

By the end of this lesson you should be able to:

define a trade association and state its functions
describe a chamber of commerce and its functions
describe employers' associations and how they differ from trade unions
explain the benefits and limitations of trade associations

Trade associations

Definition

A trade association is a voluntary organisation of firms in the same trade or industry, formed to promote and protect their common interests.

Examples include associations of importers, transport owners, pharmacists, hoteliers, petroleum dealers, bakers and market traders.

Functions of trade associations:

Represent members in discussions with government on taxes, levies, licences and new laws.
Set and maintain standards of quality, conduct and training in the trade.
Provide information to members on markets, prices, new laws and technology.
Settle disputes between members, and between members and customers.
Joint advertising and promotion of the trade's products.
Training and research for members' staff.
Collective bargaining with suppliers and with workers' unions.
Protect members against unfair competition, dumping and unqualified operators.

In Sierra Leone

In Sierra Leone, associations of market women, petty traders, bike riders, transport owners and importers regularly negotiate with city councils and the government over market dues, transport fares, road levies and import procedures. A single trader could not achieve what the association achieves together.

Chambers of commerce

Definition

A chamber of commerce is an association of businesses of all kinds (traders, manufacturers, bankers, insurers) in a town, region or country, formed to promote and protect commerce and industry generally.

Unlike a trade association, which serves one trade, a chamber of commerce represents many trades. Sierra Leone's national body is the Sierra Leone Chamber of Commerce, Industry and Agriculture (SLCCIA).

Functions of a chamber of commerce:

Advises government on trade policy and represents business opinion.
Issues certificates of origin for exports, confirming where goods were made.
Provides information on local and foreign markets, trade laws and opportunities.
Organises trade fairs, exhibitions and trade missions abroad.
Arbitrates in disputes between businesses.
Promotes investment and links local firms with foreign partners.
Offers training and seminars for members.

Employers' associations

An employers' association is a body of employers in an industry or country formed mainly to deal with labour matters: wages, working conditions and relations with trade unions. Sierra Leone has a national Employers' Federation that represents employers in national wage discussions.

Employers' association	Trade union
Members are employers (firms)	Members are workers
Protects employers' interests in labour matters	Protects workers' wages and conditions
Bargains with trade unions	Bargains with employers

Functions: collective bargaining with unions; advice to members on labour law; representation in national wage discussions; settling industrial disputes; training of managers.

Benefits and limitations

Benefits	Limitations
A strong, united voice to government	Membership is voluntary; some firms stay out
Higher standards and better reputation for the trade	May act in members' interests against consumers (for example fixing prices)
Shared information, training and research	Small firms may be dominated by large members
Fewer costly disputes	Limited funds and staff in many associations
Joint promotion is cheaper for each firm	Decisions are not legally binding on non-members

Common mistake

A trade association (firms) is not a trade union (workers). In answers, make clear who the members are.

Key points

A trade association is a voluntary body of firms in one trade, protecting their common interests.
A chamber of commerce represents many trades, advises government, issues certificates of origin and organises trade fairs.
Employers' associations deal with labour matters and bargain with trade unions.
Associations give firms a united voice, standards and information, but may sometimes act against consumers.

WASSCE examination focus

WAEC tests this

Expect to state the functions of a trade association or chamber of commerce, to distinguish a trade association from a chamber of commerce or a trade union, and to explain their benefits to members and to the economy. Mention the SLCCIA as an example.

Quick check

How does a chamber of commerce differ from a trade association?
Give three functions of a chamber of commerce.
Who are the members of an employers' association?
Give one limitation of trade associations.

Answers: 1. A chamber of commerce represents businesses of many kinds; a trade association represents firms in one trade. 2. Any three: advising government, issuing certificates of origin, providing information, organising trade fairs and missions, arbitrating disputes, promoting investment, training. 3. Employers (firms). 4. Any one: voluntary membership, may act against consumers, dominance by large firms, limited funds, decisions not binding on non-members.

Trade associations and chambers of commerce