International Competition Law: A New Dimension for the WTO?

COVER......Page 1
HALF-TITLE......Page 3
TITLE......Page 5
COPYRIGHT......Page 6
DEDICATION......Page 7
CONTENTS......Page 9
TABLES AND FIGURES......Page 14
ABBREVIATIONS......Page 17
1 Introduction......Page 19
PART I
An International Competition
Agreement is Desirable......Page 23
2 Is competition law beneficial?......Page 25
2.1.1 The role of competition in promoting market efficiency......Page 26
2.1.2 Competition law enhances static efficiency and increases
economic welfare......Page 33
2.1.3 Competition law enhances dynamic efficiency and
increases economic growth......Page 38
2.2.1 Social choice theory, social justice and distributional equity......Page 42
2.2.2 Tensions between the objectives of competition policy......Page 44
2.3.1 Competition law as the principal instrument of competition policy......Page 46
2.3.2 Empirical evidence of the benefits of competition policies......Page 49
2.4 Conclusion: competition law is beneficial......Page 51
3
Is an international competition
agreement desirable?......Page 52
3.1.1 Globalisation of the international economy......Page 53
3.1.2 The rise of multinational corporations and
cross-border alliances......Page 54
3.1.3 Cross-border competition regulation and economic externalities......Page 61
3.1.4 Case study: Boeing/McDonnell Douglas merger......Page 69
3.2.1 The extraterritorial application of competition laws......Page 71
3.2.2 Case study: Uranium litigation......Page 74
3.2.3 Case study: Laker litigation......Page 77
3.2.4 The ‘effects doctrine’ and United States extraterritoriality......Page 79
3.2.5 Is extraterritoriality sufficient to regulate cross-border
competition effectively?......Page 83
3.3 Conclusion: an international competition
agreement is desirable......Page 87
4
Is there a sufficient basis for an international
competition agreement?......Page 89
4.1.1 APEC as a proxy for the international community......Page 90
4.1.2 APEC nations without competition laws......Page 91
4.1.3 APEC nations with competition laws......Page 92
4.2 Macro issues: objectives, methodology and structure of
competition laws......Page 94
4.2.1 Objectives of APEC competition laws......Page 95
4.2.2 Methodology and structure of APEC competition laws......Page 96
4.3 Micro issues: particular content and application
of competition laws......Page 97
4.3.1 ‘Conduct-oriented’ and ‘result-oriented’ approaches......Page 98
4.3.3 Market definition and market power under
a rule of reason analysis......Page 99
4.4 Regulation of market structure – merger laws......Page 102
4.4.1 Notification procedures......Page 103
4.4.2 Merger thresholds......Page 105
4.5 Regulation of unilateral conduct – anti-monopoly laws......Page 107
4.5.1 Threshold of dominance......Page 108
4.5.2 Particular prohibitions......Page 109
4.6 Regulation of concerted conduct – horizontal and
vertical agreements......Page 111
4.6.1 Horizontal agreements......Page 112
4.6.2 Vertical agreements and vertical restraints......Page 114
4.7 Exemptions from the application of competition laws......Page 115
4.7.2 Exemptions for public interest cartels......Page 116
4.7.3 Exemptions for particular industries and sectors......Page 117
4.8 Administration and enforcement of domestic
competition laws......Page 118
4.8.1 Appropriate role of administrative agencies......Page 119
4.8.2 Enforcement and remedies......Page 120
4.9 Conclusion: there is a sufficient basis for an international
competition agreement......Page 121
5
Have existing cross-border initiatives
proved sufficient?......Page 124
5.1.1 First generation bilateral competition agreements......Page 125
5.1.2 Second generation bilateral competition agreements......Page 128
5.1.3 Third generation bilateral competition agreements......Page 131
5.1.4 Fourth generation bilateral competition agreements......Page 136
5.1.5 Limitations of bilateral agreements......Page 138
5.2 The current momentum towards plurilateral agreement......Page 140
5.2.1 APEC – common competition policies and greater
bilateral co-operation......Page 141
5.2.2 The European Union – supranational competition law
within a customs union......Page 143
5.2.3 Limitations of plurilateral agreements......Page 146
5.3 Current initiatives towards the realisation of
multilateral agreement......Page 147
5.3.1 UNCTAD and the Code on Restrictive Business Practices......Page 148
5.3.2 The OECD Competition Law and Policy Committee......Page 151
5.3.3 The WTO Working Group on Competition Law and Policy......Page 153
5.3.4 Limitations to multilateral initiatives......Page 156
5.4 Insights into an international competition agreement......Page 157
5.5 Conclusion: existing initiatives towards the regulation of cross-border conduct have clear limitations that could be overcome by an international competition agreement......Page 160
PART II
The WTO Would Provide a Suitable
Institutional Vehicle......Page 163
6
Would the WTO provide a suitable institutional vehicle
for an international competition agreement?......Page 165
6.1.1 Early proposals for the regulation of cross-border
anti-competitive conduct......Page 166
6.1.2 The Havana Charter for the ITO – from cradle to early grave......Page 169
6.1.3 Historical initiatives to incorporate competition
law into the GATT......Page 171
6.1.4 The Uruguay Round and competition provisions
introduced into the WTO......Page 176
6.2 Are international trade law and international
competition law complementary?......Page 181
6.2.1 What is the theoretical rationale for the WTO?......Page 182
6.2.2 Objectives of international competition and
international trade law and policy......Page 185
6.2.3 Comparison between international competition and
international trade law and policy......Page 188
6.3.1 Cross-perspectives between international competition law and
international trade law......Page 194
6.3.2 Contestability theory as a means to reconcile
trade and competition law......Page 197
6.4 Conclusion: the WTO could provide a suitable institutional
vehicle for an international competition agreement......Page 201
7
Would a WTO competition agreement promote
international trade?......Page 203
7.1.1 A useful analytical framework......Page 205
7.1.2 To what extent does the WTO currently prevent private
anti-competitive conduct?......Page 208
7.2 The Kodak-Fuji Film case – application of WTO law to
anti-competitive conduct......Page 209
7.2.1 Violation complaint under Article III (National Treatment)
of the GATT......Page 212
7.2.2 Non-violation complaint under Article XXIII.1(b)
of the GATT......Page 215
7.3 To what extent do domestic competition laws otherwise
prevent such conduct?......Page 219
7.3.1 Domestic Conduct (horizontal concerted) – import cartels......Page 221
7.3.2 Domestic Conduct (horizontal concerted) – ‘dango’ bid-rigging......Page 223
7.3.3 Domestic Conduct (vertical concerted) – ‘keiretsu’
business practices......Page 226
7.4.1 International Conduct (concerted) – OPEC oil cartel......Page 230
7.5 Existing WTO provisions regulating Domestic Conduct
and International Conduct......Page 235
7.5.1 WTO Agreement on Basic Telecommunications......Page 236
7.6 Conclusion: an international competition agreement
would promote international trade......Page 239
8
Would competition regulation of trade measures
promote competition?......Page 242
8.1.1 A useful analytical framework......Page 244
8.1.2 To what extent are trade measures not effectively
regulated by international trade law?......Page 245
8.1.3 To what extent is anti-competitive conduct arising from such trade measures not effectively regulated by domestic competition law?......Page 247
8.1.4 Domestic Conduct, International Conduct and
Governmental Commercial Activities......Page 248
8.2.1 Export cartel policies......Page 250
8.2.2 Trade-oriented industrial policies......Page 255
8.3.1 Voluntary export restraints (VERs)......Page 259
8.3.2 Voluntary import expansions (VIEs)......Page 264
8.4.1 Government procurement......Page 269
8.4.2 State trading enterprises......Page 272
8.5 Conclusion: competition regulation of trade
measures would promote competition......Page 275
9
Should competition principles be introduced
into anti-dumping law?......Page 278
9.1.1 The origins of anti-dumping law and its inclusion within
the world trading system......Page 279
9.1.2 Anti-dumping law and economic efficiency......Page 282
9.1.3 Anti-dumping law and distributional fairness......Page 284
9.1.4 Procedural criticisms of anti-dumping law......Page 287
9.2 International competition law as an alternative to
anti-dumping law......Page 289
9.2.1 The Australia–New Zealand Closer Economic Relations Trade Agreement......Page 291
9.2.2 Criticisms of a competition law approach......Page 294
9.2.3 Could competition principles be introduced into the
Anti-dumping Agreement?......Page 297
9.3 Conclusion: competition principles should be introduced
into anti-dumping law......Page 301
PART III
The Optimal Form for a WTO
Competition Agreement......Page 305
10.1 What would be the optimal institutional vehicle for an
international competition agreement?......Page 307
10.2.1 Previous proposals for introducing competition
law into the WTO......Page 316
10.2.2 The Munich Group’s Draft International Antitrust Code......Page 320
10.2.3 Criticisms of the Munich Code: why was it never adopted?......Page 325
10.3 The objectives for a WTO competition agreement......Page 333
10.4 Core principles for a WTO competition agreement......Page 336
10.4.1 A principle of international co-operation......Page 337
10.4.2 A principle of non-discrimination......Page 339
10.4.3 A principle of comprehensiveness......Page 344
10.4.4 A principle of transparency......Page 345
10.4.5 A principle of procedural fairness......Page 348
10.5 Conclusion: the WTO is the optimal vehicle for an
international competition agreement......Page 352
11
What is the optimal content for a WTO
competition agreement?......Page 354
11.1 To what extent should any WTO competition agreement
seek to achieve harmonisation of domestic competition laws?......Page 355
11.1.1 The benefits of harmonisation......Page 358
11.1.2 The costs of harmonisation......Page 359
11.1.3 The optimal level of convergence or harmonisation of
domestic competition laws......Page 363
11.2.1 Minimum standards for domestic competition laws......Page 366
11.2.2 Criticisms of minimum standards......Page 368
11.3.1 How should ‘ideal’ competition obligations be drafted?......Page 373
11.3.2 International ‘soft law’ and co-regulation......Page 378
11.4 Amendments to existing WTO trade rules......Page 383
11.4.1 Modification of anti-dumping laws......Page 385
11.5 Conclusions on optimal content and approach for a
WTO competition agreement......Page 386
12
What is the optimal structure for a
WTO competition agreement?......Page 388
12.1.1 Coercive techniques to promote effective compliance......Page 389
12.1.2 Non-coercive techniques to promote compliance......Page 394
12.2.1 Nature of international competition disputes......Page 396
12.2.2 Mechanisms for mitigating competition disputes......Page 398
12.3.1 The WTO Dispute Settlement Body......Page 401
12.3.2 Resolution of substantive disputes and procedural disputes......Page 403
12.3.3 Resolution of jurisdictional disputes......Page 405
12.4 Would the suspension of trade concessions be an appropriate sanction for a failure to comply with a WTO competition agreement?......Page 407
12.5 Conclusions on optimal institutional structure
for a WTO competition agreement......Page 411
13.1.1 The procedure for incorporating a competition
agreement into the WTO......Page 413
13.1.2 Singapore Ministerial(1996)–a competition
work programme commences......Page 416
13.1.3 Geneva Ministerial (1998) – the competition
work programme continues......Page 418
13.1.4 Seattle Ministerial (1999) – competition becomes a
bargaining chip against agriculture......Page 421
13.1.5 Doha Ministerial (2001) – negotiations on competition
issues are contemplated......Page 423
13.1.6 Cancún Ministerial (2003) – competition issues again treated as a bargaining chip......Page 425
13.1.7 Insights from WTO negotiations to date......Page 429
13.2 Meeting the concerns of developing countries......Page 431
13.3.1 Building on bilaterals......Page 435
13.3.3 Soft law principles......Page 437
13.3.4 Recognition of differences......Page 438
13.4 Conclusion: a plurilateral WTO competition
agreement is politically achievable......Page 439
14.1.1 An international competition agreement is desirable and would be welfare-enhancing relative to the status quo (Chapters 2 and 3)......Page 441
14.1.2 There is a sufficient basis for an international
competition agreement (Chapter 4)......Page 442
14.1.3 Existing initiatives towards the regulation of cross-border anti-competitive conduct have clear limitations that could be overcome by an international competion agreement (Chapter 5)......Page 443
14.1.4 The WTO could provide a suitable institutional vehicle for an international competition agreement, provided that the relationship between trade and competition were suitably reconciled (Chapter 6)......Page 445
14.1.5 The relationship between trade and competition law can be reconciled by appropriate measures, realising substantive benefits to international trade and international competition (Chapters 7,  8 and 9)......Page 446
14.1.6 The WTO would provide the optimal institutional vehicle for an
international competition agreement (Chapter 10)......Page 447
14.1.7 The optimal content, approach and structure for a WTO competition agreement can be clearly ascertained (Chapters 10, 11 and 12)......Page 448
14.1.8 A multilateral WTO competition agreement would not be politically achievable at the present time. However, a plurilateral WTO competition agreement would be politically achievable (Chapter 13)......Page 450
14.2 Conclusion......Page 452
Structure of the Agreement......Page 453
Preamble......Page 455
Article 1 Acceptance and accession......Page 456
Article 2 Implementation of the Agreement......Page 457
Article 3 Scope of application and jurisdiction......Page 460
Article 4 Objectives......Page 461
Article 5 Principle of non-discrimination......Page 463
Article 6 Principle of transparency......Page 464
Article 7 Principle of procedural fairness......Page 466
Article 8 Principle of comprehensive application......Page 468
Article 9 Principle of international co-operation......Page 469
Article 10 Markets......Page 471
Article 11 Market contestability......Page 472
Article 12 Abuses of market power......Page 473
Article 13 Horizontal restraints......Page 475
Article 14 Vertical restraints......Page 477
Article 15 Export, import and international cartels......Page 479
Article 16 Business concentrations with an international dimension......Page 480
Article 17 Notification requirements......Page 481
Article 18 Excessive market concentration......Page 482
Article 19 Territorial and extra-territorial enforcement......Page 484
Article 20 Remedies......Page 485
Article 21 National Competition Agencies......Page 486
Article 22 Competition Council......Page 487
Article 23 International Competition Agency......Page 489
Article 24 Relationship with existing institutions......Page 490
Article 25 Dispute resolution......Page 491
Article 26 Special and differential treatment......Page 494
Article 27 Technical assistance......Page 496
Article 30 Consideration of competition policy in the WTO......Page 498
Article 31 Withdrawal and non-application......Page 499
Article 33 Miscellaneous......Page 500
Index......Page 501