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Hunter Perez
Hunter Perez

The Republic Of Turkey: 1994 (Trade Policy Review)


PRESS RELEASE PRESS/TPRB/172 17 September 2001 United States: September 2001 The WTO Secretariat report, along with the policy statement by the Government of the United States, will serve as a basis for the sixth trade policy review of the United States by the trade policy review body of the WTO on 14 and 17 September 2001. The United States would strengthen the multilateral trading system by reducing remaining trade barriers




The Republic of Turkey: 1994 (Trade Policy Review)


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This chapter reviews the landscape of global problems that implicate both international trade concerns about access to markets and competition policy concerns about anticompetitive practices that inhibit the operation of markets. Not all international competition problems are relevant to trade problems, however. As discussed in Chapters 2 and 3, the proliferation of merger control regimes is raising transaction costs and introducing new frictions. As discussed in Chapter 4, international cartels appear to be a serious problem for the United States and the global economy. These matters are global competition problems but they are not trade and competition policy issues. There is an important global competition agenda that needs greater attention by policymakers at home and abroad and also requires some new policy initiatives (see Chapter 6).


This chapter considers and evaluates the utility of both old and new approaches to such problems. It starts by defining the scope of trade and competition problems, reviews cases that have animated international attention, and considers alternative policy approaches, including bilateral cooperative solutions, extraterritorial enforcement responses, and expanded international initiatives, at the WTO and elsewhere. The Advisory Committee's Definition of Relevant Practices


The availability of governmental exemptions and exclusions from competition laws has received extensive attention by policymakers and scholars.(9) This Advisory Committee has given it some consideration because the effects of such practices can be felt outside the regulating economy as well as by would-be foreign (and domestic) participants in a market. While significant deregulation has occurred in many OECD countries, many nations have not unilaterally reviewed and constrained the scope of their applicable exemptions and exclusions to competition policy. Further, some exemptions may not be viewed as in an individual country's interest to repeal in that they promote exports or have anticompetitive consequences, if any, only in offshore markets. Individual countries may be reluctant to eliminate or reduce the scope of exemptions if its trading partners continue to permit comparable arrangements to thrive.


There are other competition problems that are not matters of concern for trade policy. For example, Chapters 2 and 3 considered the procedural and substantive features of multijurisdictional merger review that warrant additional efforts at convergence, harmonization and minimization. These issues, while important, are not matters customarily considered of consequence for trade policy, however. Similarly, expanding cooperation between competition authorities and developing protocols regarding the treatment of confidential information are important global challenges to competition policy but are not matters of relevance to trade policy.


In fact, if the U.S. interagency process is working as it should, economic disputes that appear to contain some mixture of private and public restraints are considered in a variety of interagency settings such as those that occur in the National Economic Council, in the USTR's trade policy review group, or elsewhere. It should be natural and is clearly important for the U.S. antitrust agencies to coordinate closely with other executive branch agencies about international economic disputes that require consensus within the U.S. government and particularly those disputes that may implicate the conduct of both private firms and governmental practices. In cases that appear to have some mix of this kind, the dispute could conceivably be handled either as an antitrust dispute under the Sherman Act or as a trade dispute under U.S. trade laws, notably Section 301, and policymakers would need to confer, as they often do, on the proper disposition of the case.


To minimize the possibility for conflicts arising from U.S. extraterritorial enforcement and to increase the possibility of meaningful remedy of the perceived problem, the Advisory Committee supports the view that the Antitrust Division review the ability of the foreign authority in addressing the claim. This approach is consistent with current Justice Department policy, which states that the department will consider whether the objectives to be obtained by the assertion of U.S. law could be achieved in a particular instance by enforcement efforts of a sister agency in another nation. In many instances, the affected foreign nation's antitrust enforcers are likely to be in a better position to complete the investigation of anticompetitive conduct and develop appropriate remedies.


Little more happened on this issue multilaterally until 1958, when a GATT Experts Group issued a report recommending that business practices be left outside of dispute settlement review. The majority contended that the absence of consensus and experience in this policy area made it unrealistic to try to arrive at any multilateral agreement regarding the treatment of international restrictive business practices.(189) In 1960 the GATT adopted a resolution recommending that the parties to a dispute consult with each other on the issue of restrictive business practices.(190)


In 1973, at the instigation of the developing nations, negotiations on restrictive business practices were initiated in the United Nations Conference on Trade and Development (UNCTAD). In 1980 the U.N. General Assembly adopted UNCTAD's Set of Multilaterally Agreed Principles and Rules for the Control of Restrictive Business Practices. (191) However, the Set is nonbinding, and it has not become a source of international law.(192)Although UNCTAD has an extremely broad membership base, it has not evolved into a dynamic organization for the consideration of competition policy issues. Since the successful completion of the Uruguay Round in 1994, consideration of trade and competition issues in a variety of fora including the WTO has increased.


At least, two different OECD committees have engaged in serious work on competition policy: the Competition Law and Policy Committee (CLP), known before 1987 as the Committee of Experts on Restrictive Business Practices; and the Joint Group on Trade and Competition. The CLP is made up of representatives from competition enforcement authorities of the 29 OECD members and "aims primarily to promote common understanding and cooperation among competition policy authorities and officials."(194) As a venue where enforcers can meet and discuss competition issues, the CLP has encouraged greater convergence in the analysis of substantive competition law and policy. Through the production of monographs and more recently, through roundtable discussions and framework papers, the CLP has assisted member countries in developing a common understanding of competition principles. The OECD has also engaged in outreach to nonmember countries to help them develop competition legislation and train judges to develop the analytical tools to review competition cases. More formally, the OECD has produced nonbinding recommendations, including a 1998 Recommendation condemning hard core cartels and a 1995 recommendation on international cooperation among competition authorities (see Chapter 4).(195)


Competition policy arises indirectly in Article 9 of the Agreement on Trade-Related Investment Measures (TRIMS), which requires the Council for Trade in Goods to review the operation of the TRIMS and propose necessary amendments to it by the end of 1999. The council was directed to consider whether those amendments should include provisions on competition policy.


This Advisory Committee's review of the work undertaken by that Working Group since its inception suggests that it has been constructive and active. It has construed its mandate to consider a very broad set of issues such as the relationships among the objectives, principles, scope, and instruments of trade and competition policies; the types and effectiveness of existing instruments, standards, and activities regarding trade and competition policies; and the interaction between trade and competition policies, including a review of the effects of anticompetitive firm practices state monopolies on international trade, and the relationship between trade-related aspects of intellectual property and investment and competition policy.(205)


Creation of National Competition Regimes: Another approach, akin to that being advanced by the EU, argues in support of WTO competition rules to support the development of structural features of competition regimes. Under this proposal, the WTO would establish a set of rules, subject to dispute settlement, that requires countries to enact national laws; allows for private suits; seeks to guarantee political independence of administrative agencies; promotes nondiscrimination; abolishes antidumping laws; prohibits strategic antitrust policy; provides procedural minimum standards for merger review; and expands cooperation between authorities.(225)


The Advisory Committee is not arguing against efforts at promoting soft convergence -- far from it; several proposals that this Advisory Committee believes would be useful efforts along those lines are discussed later in this section. However, deliberations and consultations on substantive as well as procedural features of competition policy regimes are different from the negotiation of a comprehensive international antitrust code. Even if a greater degree of formal harmonization of law than envisioned here were achievable, it is fanciful to imagine that jurisdictions with established competition policy regimes would be prepared to cede national authority to review cases that adversely affect them to a new supranational authority. To establish such a body requires a shared vision and commitment to economic integration that does not currently exist among nations.


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