International Antitrust Negotiations and the False Hope of the WTO

Competition Policy and Antitrust

Article Snapshot

Author(s)

Anu Bradford

Source

Harvard International Law Journal, Vol. 48, pg. 383, 2007

Summary

This paper looks at nations' failed efforts to negotiate an international antitrust agreement within the WTO.

Policy Relevance

Efforts at the World Trade Organization to get nations to agree on international antitrust policy are unlikely to succeed. Nations will continue to cooperate informally instead.

Main Points

  • Some theorists (see Andrew Guzman) support the adoption of a binding international antitrust agreement within the WTO to stop individual nations from using antitrust policy as a tool for protectionism to harm consumers in other countries (a “prisoner’s dilemma” game).
    • But the argument that nations engage in significant antitrust protectionism through a "trade-flow bias", "statutory bias" or "enforcement bias" is not supported by a closer look at trade flows, export cartels and enforcement practices.

  • International antitrust agreement would help nations enforce their competition laws, mitigating both under-enforcement and over-enforcement that currently prevails. Still, all efforts to negotiate a binding international antitrust agreement have failed.

  • Efforts to work towards a binding international antitrust agreement have failed because:
    • Nations see that the benefits are not worth the cost of negotiating international rules.  For instance, the EU and the United States both apply their domestic competition laws to conduct outside their borders, reducing their need for an international enforcement mechanism. Developing countries fear that enforcement costs would exceed any benefits they would derive from the agreement. 
    • Distributional consequences of the agreement would be uneven and hard to predict. Without knowing ex ante who would win and who would lose under the international agreement, nations cannot devise transfer payments and are hence reluctant to enter into an agreement. 
    • Failed WTO antitrust negotiations can be contrasted to succesful efforts to bring intellectual property within the WTO (TRIPS).  TRIPS  was possible because of less ex ante uncertainty on winners and losers and more consensus among the key players, the EU and the United States.

Get The Article

Find the full article online

Search for Full Article

Share