The feasibility and worth of a World Trade Organization competition agreement

Journal of World Trade

Volumn 37, Issue 1, 2003, Pages 49-68

  Davidow, Joel ^a   Shapiro, Hal ^a  

^a Miller and Chevalier Chartered   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 36949021657     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.54648/trad2003010     Document Type: Article

References (151)

1. See, e.g., Speed Up Free Trade Action, Minister Says, Vancouver Sun (21 November 1993), p. D1;
2. Trade Superpowers Debate Top Issues for WTO Summit, Journal of Commerce (14 December 1995), p. 3A.
3. See Singapore Ministerial Declaration, Decision Item 20, WTO, WT/ WMIN(96)/DEC (13 December 1996).
4. See Doha WTO Ministerial 2001, WTO, WT/MIN(01)/DEC/1 (Nov. 14, 2001).
5. See Gary N. Horlick and Eleanor C. Shea, The World Trade Organization Antidumping Agreement, 7 Int'l Q. (1995), 685.
6. See, e.g., Jorge Miranda, Should Antidumping Laws be Dumped?, 29 George Washington J.I.L.E. (1996), 255.
7. See Agreement on Article VI, 15 April 1994, s. III, P 5, Agreement Establishing the World Trade Organization, Annex 1A at .
8. Marrakesh Agreement Establishing the World Trade Organization, Annex 1A: Agreement on Trade-Related Investment Measures, Article 9 (1994), at .
9. See Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1968, Article 2, GATT B.I.S.D. (15th Supp.), at 24-25, 651 U.N.T.S. (1968), 320.
10. Marrakesh Agreement Establishing the World Trade Organization, Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights, including Trade in Counterfeit Goods, 33 I.L.M. 44 (1994) (hereinafter TRIPs Agreement).
11. Agreement on Telecommunications Services (Fourth Protocol to the General Agreement on Trade in Services), 15 February 1997, 36 I.L.M. (1997), 354.
12. See Treaty Establishing the European Community, Articles 85-86, 7 February 1992, O.J. C224 1 (1992), [1992] C.M.L.R. 573, 627-632.
13. UNCTAD, Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, UN Doc. TD/RBP/CONF/10 (1980), reprinted in 19 I.L.M. (1980), 813 (hereinafter 1980 UNRBP Code).
14. OECD, Guidelines for Multinational Enterprises, Doc. C (76) (1976), 99, 15 I.L.M. (1976), 967, 969.
15. TRIPs Agreement, Article 40.2.
16. Id. at Article 41.1.
17. Id. at Article 41.2.
18. Id. at Article 41.3.
19. Id. at Article 41.4.
20. Id. at Article 44.1.
21. Id. at Article 50.
22. Id. at Article 61.
23. See Eleanor M. Fox and Lawrence A. Sullivan, "Retrospective & Prospective: Where Are We Coming From? Where Are We Going?", in H. First, E.M. Fox and R. Pitofsky (eds), Revitalizing Antitrust in its Second Century (Westport, CT: Quorum, 1991), pp. 4-5.
24. See Communication From the United States, Working Group on the Interaction Between Trade and Competition Policy, WTO, WT/WGTCP/W/142 (3 August 2000), at 2
25. (citing WTO Annual Report for 1997, Special Study on Trade and Competition Policy (1997), 12-14).
26. See, e.g., Note by the Secretariat, Overview of Members' National Competition Legislation, WTO, WT/WGTCP/W/128 (7 June 1999).
27. See Freidl Weiss, From World Trade Law to World Competition Law, 23 Fordham Int'l L.J. (2000), 250, 257.
28. See id.
29. Draft Charter for the International Trade Organization of the United Nations, US Department of State, Pub. No. 2927, Commercial Policy Series 106 (1947) at Article 46.1.
30. Id. at Article 46.2.
31. See Diane P. Wood, The Impossible Dream: Real International Antitrust, U. Chi. Legal F. (1992), 277, 284.
32. This second code catalogued the same restrictive practices as the Havana Charter did, with one exception relating to technology agreements. See Wood, as note 29 above, at, 277, 284-285.
33. For details of the second code, see F.M. Scherer, Competition Policies for an Integrated World Economy (Washington, D.C.: Brookings Institution Press, 1994), p. 39.
34. See Dale P. Furnish, A Transnational Approach to Restrictive Business Practices, 4 Int'l Lawyer (1969), 317, 326-327.
35. 1980 UNRBP Code F.
36. Id. E (3).
37. Id. D (3).
38. See, e.g., Communication From the European Community and its Member States, WT/WGTCP/W/152 (25 September 2000), at 2-3 (noting that 60 percent of the national competition legislation currently in effect was enacted after 1990).
39. Horst G. Krenzer, Globalization and Multinational Rules, 4 Int'l Trade L. & Reg. (1998), 144, 149.
40. See R. Shyman Khemani and Gerald E. Meyerman, East Asia's Economic Crisis and Competition Policy, Global Competition Rev. (August-September 1998), 16, 17 (remarking on the impact of World Bank and IMF technical advisory and funding programmes in certain East Asian nations);
41. see also Statement by Rubens Ricupero, Secretary-General of UNCTAD, to the OECD Global Competition Forum, 17 October 2001 (discussing UNCTAD's efforts to encourage competition policy reform). The IBA Global Forum for Competition and Trade Policy, founded in 1991 and funded in part by the World Bank, coordinates with the OECD, the World Bank, the EU, and UNCTAD "to reduce the friction of different national legal systems in order to establish a model worldwide competition process".
42. See, e.g., Mark R.A. Palim, The Worldwide Growth of Competition Law: an Empirical Analysis, 63 Antitrust Bull. (1993), 105, 109.
43. See 15 U.S.C. §§ 1-18a, 26 (1994 and 2000 Supp.).
44. See Daniel K. Tarullo, Norms and Institutions in Global Competition Policy, 94 A.J.I.L. (2000), 478, 480 (noting that as of 1998, the Department of Justice was pursuing cartel activity in more than 20 countries and that over 90 percent of criminal fines collected in 1997 and 1998 stemmed from the prosecution of international cartels).
45. See Department of Justice/Federal Trade Commission, Antitrust Enforcement Guidelines for International Operations (1995), at 16.
46. See, e.g., Commission Regulation No. 3385/94, O.J. L337 (12 December 1994), 28; Regulation 4064/89, O.J. L395 (1989), 1, as amended; EEC Council Regulation 17, O.J. 13 (21 February 1962), 204-211, as amended.
47. See Communication From the European Community and Its Member States, Working Group on the Interaction Between Trade and Competition Policy, WTO, WT/WGTCP/W/34 (2 March 1998), at 1-3 (providing an overview of Community competition law).
48. See note 31 supra and accompanying text; see also OECD Council Recommendation Concerning Restrictive Business Practices Affecting International Trade, OECD Doc. C(86) 44 (Final), 5 June 1986, reprinted in 25 I.L.M. (1986), 1629.
49. See Commission Press Release, IP (96) 523 (18 June 1996);
50. European Commission Will Urge WTO to Spearhead World Antitrust Battle, 70 Antitrust & Trade Reg. Rep. (BNA) (1996), 693.
51. See, e.g., Submission by the European Community and its Member States, Working Group on the Interaction Between Trade & Competition Policy, WT/WGTCP/W/45 (24 November 1997), at 1 ("By promoting optimal allocation of resources, competition policy contributes to economic growth and development and supports other objectives of macroeconomic policies.").
52. See Treaty Establishing the European Community, Articles 23-25, 7 February 1992, O.J. C224 (1992), 1, C.M.L.R. 573, 627-632.
53. See Clarisse Morgan, Competition Policy & Anti-Dumping - Is It Time for a Reality Check?, 30 J.W.T. 5 (October 1996), 82 (noting that anti-dumping has been eliminated in favour of competition rules only between Australia and New Zealand and between the EC Member States, and notably not among NAFTA parties).
54. See H. Iyori and A. Uesugi, The Antimonopoly Laws & Policies of Japan (1994), p. 16 (explaining the background of Japan's anti-monopoly laws).
55. See, e.g., Allan Van Fleet, Mexico's Federal Economic Competition Law: The Dawn of a New Antitrust Era, 64 Antitrust L.J. (1995), 183 (noting, e.g., that under Mexican law relative monopolistic activity is subject to an analysis similar to the rule of reason in the United States).
56. See Joseph P. Griffin, Jurisdiction & Enforcement: Foreign Governmental Reactions to US Assertions of Extraterritorial Jurisdiction, 6 Geo. Mason L. Rev. (1998), 505, 516 ("These basic differences among [legal] systems are compounded by numerous aspects of American antitrust practice that are not often found outside the United States. These aspects include: jury trials, wide-ranging pre-trial discovery without judicial supervision, enforcement by private plaintiffs, extraterritorial discovery, treble damages, class actions, contingent fees, lack of contribution among co-conspirators, and criminal liability for violations of competition law.").
57. W.M. Knighton, Nationality and Extraterritorial Jurisdiction: US Law Abroad, remarks at Georgetown University Law Center (13 August 1981).
58. See William E. Kovacic, Antitrust and Competition Policy in Transition Economies: A Preliminary Assessment, Int'l Antitrust Law & Policy (2000), 513, 514-15 (explaining why the EU competition policy model has been "ascendant" in transition economies).
59. Prepared Testimony by Ambassador Charlene Barshefsky, Next Steps at the World Trade Organization, House Committee on Ways and Means, Subcommittee on Trade (8 February 2000).
60. See id.
61. See International Competition Policy Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust, Final Report (2000), 267-268.
62. Now part of Daimler Chrysler.
63. See Coalition for Open Trade, The Limits of the GATT: Private Practices in Restraint of Trade (COT, 1991), pp. 26-27.
64. At the December 1996 Singapore Ministerial Meeting, the WTO agreed to establish a working group to study issues raised by Members relating to the interaction between trade and competition policy, including anticompetitive practices, in order to identify any areas that may merit further consideration in the WTO framework. Singapore Ministerial Declaration and WTO WT/MIN (96)/DEC (13 December 1996).
65. See, e.g., WTO, Working Group on the Interaction between Trade and Competition Policy - Report (1997) to the General Council, WT/WGTCP/1 (11 November 1997), at .
66. See Lawrence M. Solan, Sidney Jones, Richard Dicker, & Spencer Weber Waller, Indonesia: Intersection of Human Rights, Financial Markets & Competition, 25 Brooklyn J. Int'l L. 1 (1999), 161, 176-178 (naming the IMF, World Bank, and OECD as institutions that are pressing for reform of competition policy in Indonesia);
67. Khemani and Meyerman, as note 37 above, at 16.
68. See Commission Decision of 30 July 1997 Declaring a Concentration Compatible with the Common Market and the Functioning of the EEA Agreement 97/816/EC, 1997 O.J. L336 (1997), 16.
69. I.M. Destler, "U.S. Approach to International Competition Policy", in Robert Z. Lawrence (ed.), Brookings Trade Forum (Washington, D.C.: Brookings Institution Press, 1998), p. 395.
70. Ibid.
71. See, e.g., UNCTAD, Report of the Expert Meeting on Competition Law and Policy held in Geneva, during 24-26 November 1997, TD/B/COM.2/9-TD/B/ COM.2/EM/12, at .
72. See Communication from Japan, Preparations for the 1999 Ministerial Conference, Trade and Competition, WT/GC/W/308 (25 August 1999).
73. North American Free Trade Act (NAFTA), 17 December 1992, US - Mexico - Canada, 32 I.L.M. 605 (effective 1 January 1994);
74. NAFTA Implementation Act, Pub. L. 103-182, 107 Stat. 2057 (1993).
75. See Morgan, as note 48 above, at 82.
76. See Report of the Task Force of the ABA Section of Antitrust Law on the Competition Dimension of NAFTA (20 July 1994), at 15, 146-148.
77. E.g., Ernst-Ulrich Petersmann, International Competition Rules for Governments & Private Businesses: The Case for Linking Future WTO Negotiations on Investment, Competition & Environmental Rules to Reforms of Anti-Dumping Laws, 30 J.W.T. 3 (June 1996), 5.
78. See Patrick A. Messerlin, "Competition Policy and Antidumping Reform: An Exercise in Transition", in Jeffrey J. Schott (ed.), The World Trading System: Challenges Ahead (Washington, D.C.: Institute of International Economic Law, 1996).
79. See, e.g., Communication From Kenya, Preparations for the 1999 Ministerial Conference, Contribution to the Preparatory Process, WT/ GC/W/233 (5 July 1999), at 9.
80. Marrakesh Agreement Establishing the World Trade Organization, Annex 4: Plurilateral Trade Agreements (1994), at .
81. E.g., Communication From the European Community, as note 35 above, at 9.
82. See id.
83. See id.
84. See id. at 8-9.
85. See Dominique Voillemot and Alexandre Thillier, WTO & Competition Rules, Int'l Antitrust L. & Pol'y (2000), 43, 45.
86. See Competition Act of 1998, ss. 3.1-3.2.
87. 1980 UN RBP Code D (4).
88. See, generally, Joel Davidow, Application of US Antitrust Laws to Keiretsu Practices, 18 World Competition 5 (1994).
89. See OECD, Recommendation of the Council on Competition Policy and Exempted or Regulated Sectors, C(79) 155(FINAL) (25 September 1999).
90. See OECD, Antitrust & Market Access: The Scope & Coverage of Competition Laws & Implications for Trade (Paris: OECD, 1996).
91. See Weiss, as note 25 above, at 250, 259.
92. See International Antitrust Code Working Group, Antitrust Reg. Rep. (BNA) No. 1628 (Spec. Supp. 19 August 1991), at 5-9-92.
93. See Communication From the United States, Working Group on the Interaction Between Trade and Competition Policy, WTO, WT/WGTCP/W/66 (26 March 1998), at 15.
94. See Report of the Working Group on the Interaction Between Trade and Competition Policy to the General Council, WTO, WT/WCTCP/5 (8 October 2001), at para. 18, 100.
95. See Convention Establishing the European Free Trade Association, Articles 17-18 (Vaduz 2001).
96. See Federal Act on Cartels and Other Restraints of Competition (1995).
97. A list of the OECD member countries is available at the OECD website: .
98. North American Free Trade Agreement, 17 December 1992, Articles 1904-05, reprinted in 32 I.L.M. (1993) 605, 682-684.
99. See Brazil Law 8.884 (1962, amended 1990, revised 1994); 8.137 (1990); 9.021 (1995); Argentina Law 22.262 (1980).
100. See, e.g., Marjo Ojala, The Competition Law of Central and Eastern Europe (London: Sweet & Maxwell, 1999).
101. See note 37 supra and accompanying text.
102. See Sutanee Supanit, Thailand: Implementation of Competition Law, 27 Int'l Bus. L. (1999), 497;
103. Norman Pakpahan, Indonesia: Enactment of Competition Law, 27 Int'l Bus. L. (1999), 491.
104. See Report (2001) of the Working Group on the Interaction Between Trade and Competition Policy to the General Council, WTO, WT/WGTCP/5 (8 October 2001) at para. 100 (noting that more than 90 countries have competition laws in place); International Competition Policy Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust, Final Report (2000), at 33 (stating that more than 80 countries have antitrust laws in place and at least 20 more are drafting such laws).
105. For a discussion of antitrust law in the PRC, see Tianlong Yu, An Anti-Unfair Competition Law Without a Core: An Introductory Comparison Between U.S. Antitrust Law & the New Law of the People's Republic of China, 4 Ind. Int'l & Comp. L. Rev. (1994), 315.
106. See 2001 National Trade Estimate Report on Foreign Trade Barriers, at 96 (Egypt), 301 (Malaysia), 329 (Nigeria).
107. See, e.g., Agreement Between the Government of the United States of America and the Commission of European Communities Regarding the Application of Their Competition Laws (23 September 1991), O.J. L95/45, 30 I.L.M. (1991), 1491, corrected by O.J. L131/38 (1995);
108. Agreement Between The Government of the United States of America and the European Communities on the Positive Comity Principles in the Enforcement of Their Competition Laws (4 June 1998), reprinted in 4 Trade Reg. Rep. (CCH) & 13,504A (17 June 1998);
109. Canada-United States Memorandum of Understanding as to Notification, Consultation, and Co-operation With Respect to the Application of National Antitrust Laws, 23 I.L.M. (1984), 275
110. Agreement Relating to Mutual Co-operation Regarding Restrictive Business Practices, United States-Federal Republic of Germany (23 June 1976);
111. Australia-United States Agreement Relating to Co-operation on Antitrust Matters (29 June 1982), 21 I.L.M. (1982), 702.
112. See Andrew T. Guzman, Is International Antitrust Possible?, 73 N.Y.U. L. Rev. (1998), 1501, 1542-1543 (citing various agreements providing for the exchange of information in antitrust investigations and prosecutions).
113. See Agreement Establishing the World Trade Organization, Annex 2: Understanding on Rules and Procedures Governing the Settlement of Disputes (1994).
114. See Report (2001) of the Working Group on the Interaction Between Trade and Competition Policy to the General Council, WTO, WT/WGTCP/5 (8 October 2001), at para. 87.
115. See also Joel Klein, Assistant Attorney General for Antitrust, US Department of Justice, address before the OECD Conference on Trade and Competition, A Reality Check on Antitrust Rules in the World Trade Organization and a Practical Way Forward on International Antitrust (30 June 1999), at 6.
116. See, generally, Joseph Griffin (ed.), Perspectives on the Extraterritorial Application of U.S. Antitrust and Other Laws (American Bar Association, 1979);
117. J.S. Stanford, The Application of the Sherman Act to Conduct Outside the United States: A View From Abroad, 11 Cornell Int'l L.J. (1978), 195.
118. See Joseph P. Griffin, Extraterritoriality in US & EU Antitrust Enforcement, 67 Antitrust L.J. (1999), 159.
119. See Boeing/McDonnell-Douglas, O.J. L336 (1997), 16-47 (Case No. IV/M, 30 July 1997);
120. General Electric/Honeywell (Case No. IV/M.2230) (decision not yet published).
121. See Marrakesh Agreement Establishing the World Trade Organization, Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights, Article 42, 33 I.L.M. (1994), 44.
122. See Communication From the United States, as note 87 above, at 4.
123. For a discussion of views on US antitrust enforcement abroad, see Griffin, as note 51 above, at 505.
124. The US government officials felt that the inability to secure necessary documents and witnesses contributed to the Department of Justice's failed prosecution attempt in the GE/DeBeer's price-fixing case.
125. See Joel I. Klein, then-Acting Assistant Attorney General, Antitrust Division, US Department of Justice, Criminal Enforcement in a Globalized Economy, address before the Advanced Criminal Antitrust Workshop, Phoenix, AZ (20 February 1997).
126. See Griffin, as note 105 above.
127. The private action treble damage remedy has been a particular source of tension between the United States and other nations. In light of this considerable opposition, the Advisory Committee considered whether the United States should detreble, at least with respect to export restraint claims, and concluded that such action would not be appropriate. The US private treble damage remedy plays a useful deterrent effect against anti-competitive conduct both at home and abroad. ICPAC Report, at 35.
128. Agreement Between the Government of Canada and the Government of the United States of America Regarding the Application of Their Competition & Deceptive Marketing Practice Laws (1 August 1995), US-Can. T.S. No. 15.
129. Agreement Between the Government of the United States of America and the Commission of European Communities Regarding the Application of Their Competition Laws (23 September 1991), reprinted in 4 Trade Reg. Rep. (CCH) and 13,504; 61 Antitrust & Trade Reg. Rep. (BNA), 382-385 (26 September 1991; O.J. L95/45 (1991), corrected by O.J. L131/38 (1995)).
130. The implementation of the 1991 Agreement was delayed pending a legal challenge initiated by several Member states. The European Court of Justice ruled that the Commission did not have the necessary authority to enhance the 1991 Agreement. France v. Commission, Case C-327/91 (9 August 1994); [1994] 5 C.M.L.R. 517.
131. The Commission, subsequently, was allowed to enter into a nearly identical agreement in April 1995, O.J. L95/45 (1995), corrected, O.J. L131/38 (1995), recited from ICPAC Report, at 64, Agreement Between The Government of the United States of America and the European Communities on the Positive Comity Principles in the Enforcement of Their Competition Laws (4 June 1998), reprinted in 4 Trade Reg. Rep. (CCH) & 13,504A (17 June 1998).
132. US Department of Justice/Federal Trade Commission, Antitrust Guidelines for International Operations (1995), 16.
133. See 19 U.S.C. s. 2411 (1994 and 2000 Supp.).
134. The legislative history of the amendments to Section 301 is expressed in House Conference Report 100-576 (100th Cong., 2d Sess.), reprinted in 1998 U.S.C.C.A.N.
135. The United States entered into agreements containing positive comity provisions with Canada, Israel, Brazil and Japan. And an agreement has recently been signed between EC and Canada.
136. See US Settles Trade Dispute Averting Billions in Tariffs in Japanese Luxury Autos, New York Times (29 June 1995), 1.
137. See "Privatizing Protection: Japanese Market Barriers in Consumer Photographic Film and Consumer Photographic Paper", Memorandum in Support of a Petition Filed Pursuant to Section 301 of the Trade Act of 1974, as amended (May 1995).
138. In its final report, issued on 30 January 1998, the WTO Panel on film ruled that it was not convinced that the evidence demonstrated that the Japanese government measures violated its GATT obligations. See Japan - Measures Affecting Consumer Photographic Film and Paper, WTO Doc WT/DS44/R (Panel Report issued 31 March 1998).
139. Since the case was initiated, there have been changes in Japan that some commentators believe may increase the possibilities for foreign companies to sell in Japan in this sector. See Alan Wolff, Unanswered Questions: The Place of Trade and Competition Policy in the Seattle Round, paper delivered at the OECD Conference on Trade and Competition, Paris (30 June 1999), at 15-16.
140. See Section of Antitrust Law, American Bar Association, Report of the Special Committee on International Antitrust (1991).
141. See 15 U.S.C. ss. 4001-4021 (1994).
142. Joel Davidow, The Sherman Act and Outward Bound Commerce, 6 Geo. Mason L. Rev. (1998), 449.
143. 15 U.S.C. ss. 61-65 (1918).
144. 15 U.S.C. ss. 6a, 45(a)(3) (1994).
145. See Lennart Ritter et al., EEC Competition Law, A Practitioner's Guide (The Hague: Kluwer, 1991), pp. 22-23.
146. The European Commission has issued guidelines indicating that an association made up of small or medium sized producers might not be prosecuted under the EU competition law. See Commission's Notice on Agreements of Minor Importance (The de minimis notice) O.J. C231 (1986), 2, as amended, 1994 O.J. (C 368). But, see Notice of the Commission Relating to the Revision of the Notice of 3 September 1986 on Agreements of Minor Importance, O.J. C29 (1997), 3.
147. See, e.g., Trugman-Nash, Inc. v. New Zealand Dairy Bd., 854 F.Supp. 733 (S.D.N.Y., 1997).
148. See note 104 supra and accompanying text; see also Griffin, as note 51 above, at 505, 505-506 (summarizing the strong reactions of foreign governments to US extraterritorial enforcement).
149. See Joel Klein, The War Against International Cartels: Lessons From the Battlefront, Int'l Antitrust L. & Pol'y (2000), 13, 15-17 (discussing the history of US prosecutions of international cartels, including the imposition of fines on foreign corporations and prison sentences on foreign executives).
150. See note 106 supra and accompanying text.
151. See note 100 supra and accompanying text.