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International Antitrust and the Doha Dome

ELEANOR M. FOX*

TABLE OF CONTENTS
Abstract................................................................................................911
I.
Introduction ................................................................................912
II. Extraterritoriality and Cooperation ............................................915
A. Introduction .......................................................................915
B. Inbound Restraints .............................................................916
C. Outbound CommerceRestraining and Restrained
Exports and Investment .....................................................918
D. Global Problems ................................................................922
E.
Summary...........................................................................925
III. Global Antitrust? ........................................................................925

ABSTRACT
In the wake of globalization, national antitrust law has an imperfect
fit with world markets. The need to solve practical problems has led to
an expansion of the concept of extraterritoriality of national law and to
the adoption of bilateral enforcement cooperation agreements.
Globalization has led also to the creation of a horizontal network of
antitrust agencies (the International Competition Network, or ICN), the
formation of a WTO Working Group on the Interaction Between Trade
and Competition Policy, and also to the seeds of a WTO negotiating
agenda for minimal principles on competition as identified in the
* Walter J. Derenberg Professor of Trade Regulation at New York University School of
Law. The author thanks Andrew Guzman, Paul Stephan, John Shenefield, Chantal Thomas and
the other participants at the University of Virginia Law School and at the Fordham Law School
workshops for their helpful comments.

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Ministerial Declaration at Doha, Qatar of November 2001.

Horizontalists contend that the antitrust problems of nations and
the world, even in this global economy, can best be solved at national
and nation-to-nation level. Internationalists contend that certain globallevel solutions are necessary to solve problems of externalities,
legitimate jurisdiction, nationalistic incentives, and cabined vision. This
article explores the dichotomy of horizontalism versus globalism. First,
it examines the argument of horizontalists that national level antitrust is
legitimately capable of removing global market impediments and that
therefore there is no reason to forfeit local autonomy and risk
unaccountable bureaucracy and compromise of principle. While
acknowledging that national level solutions and working principles are
critically important, the article concludes that there are significant
inadequacies in national-level-only solutions.
The article then examines three models for international antitrust. The
author embraces a model that has the potential to link the worlds tradeand-competition system, especially by suppressing undue public and
private restraints that impair world markets. The global dimensions
would work interactively with horizontal networks to achieve this goal
in a way that honors subsidiarity. The model reflects a vision of a
dynamic horizontal platform capped by the Doha Dome. The author
sees this model, however, as deeply challenging, not because trade law
would compromise antitrust law but because the forces of competition
would threaten to erode the last strongholds of trade law protection,
touching the raw nerve of national politics and sovereignty.
Recognizing the model as one whose time has not yet come, the author
embraces a minimal form, encompassing a horizontal platform under a
more modest Doha Dome.

I. INTRODUCTION
International antitrust has been a gleam in the eye of the world at
least since the proposal of the Havana Charter in the 1940s.1 At that
time, it was poignantly understood that significant restraints of trade and
competition by powerful firms in international commerce can harm the
flow of trade and ideas, create critical shortages, undermine the attempt
to build a community of nations, and crystalize the power of dictators.
Now, we live in the era of globalization, in which history repeats itself
1. See Eleanor M. Fox, Competition Law, in ANDREAS F. LOWENFELD, INTERNATIONAL
ECONOMIC LAW 340, 37475 (Intl Econ. L. Series, 2002). The United States lost interest in the
Charter, and it was never adopted. See LOWENFELD, supra 2526.

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with a difference. We worry that businesses across the globe combine to

rule markets, and that far-flung corporations rise above the authority of
nations, even as nations groom their champions in the name of
international competitiveness.
Again, as in the 1940s, we have the seeds of a new charter: the WTO
ministerial declaration adopted at Doha, Qatar, on November 14, 2001.
In preparation for the next GATT/WTO negotiating agenda, the Doha
Declaration mandates clarification of world competition rules on core
principles, including transparency, non-discrimination and procedural
fairness, and provisions on hardcore cartels.2 The Declaration also
addresses voluntary cooperation, and issues related to the developing
world, including support for capacity-building in developing countries.3
A question is whether the Doha Declarations competition mandate will
go the way of the Havana Charter. This article argues that it should not.
This article sees the Doha competition initiative as culminating in
over-arching rules and principles, much like a European framework
directive.4 The over-arching principle will rationalize and link the nearly
2. Ministerial Conference, Ministerial Declaration, WT/MIN(01)/DEC/1, para. 25 (Nov. 14,
2001), at http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm (last visited
May 25, 2003) [hereinafter Doha Declaration].
3. See id. The portions of the declaration treating competition policy state:
23. Recognizing the case for a multilateral framework to enhance the contribution of
competition policy to international trade and development, and the need for enhanced
technical assistance and capacity-building in this area as referred to in paragraph 24, we
agree that negotiations will take place after the Fifth Session of the Ministerial
Conference on the basis of a decision to be taken, by explicit consensus, at that Session
on modalities of negotiations.
24. We recognize the needs of developing and least-developed countries for
enhanced support for technical assistance and capacity building in this area, including
policy analysis and development so that they may better evaluate the implications of
closer multilateral cooperation for their development policies and objectives, and human
and institution development. To this end, we shall work in cooperation with other
relevant intergovernmental organizations, including UNCTAD, and through appropriate
regional and bilateral channels, to provide strengthened and adequately resourced
assistance to respond to these needs.
25. In the period until the Fifth Session, further work in the Working Group on the
interaction between Trade and Competition Policy will focus on the clarification of:
core principles, including transparency, non-discrimination and procedural fairness, and
provisions on hardcore cartels; modalities for voluntary cooperation; and support for
progressive reinforcement of competition institutions in developing countries through
capacity building. Full account shall be taken of the needs of developing and leastdeveloped country participants and appropriate flexibility provided to address them.
4. A framework directive of the European Community specifies goals to be achieved and
requires the member states to adopt and enforce measures to attain the specified objectives; each
member state is free to do so in its own way. Thus, framework directives respect the spirit of
subsidiaritydelegating to the member state level whatever the states can do as well or better

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one hundred national/regional competition systems of the world. In

some cases, this principle may be implemented by consensus rules. A
necessary mandate, however, will be a prohibition against unjustified
nationalistic restraints and a platform of cooperation and regard for the
interests of the larger community.
The principal alternative proposed to a world initiative and
cosmopolitan understanding is horizontal national enforcement and
nation-to-nation cooperation. The horizontal approach has found a
felicitous home in the virtual forum, the International Competition
Network (ICN).5 There are other fora, however, including the
Organization for Economic Cooperation and Development (OECD),
United Nations Committee on Trade and Development (UNCTAD), and
bilateral and regional cooperation. Nevertheless, ICN is the most
comprehensive example. This article argues that the two projects
horizontal and globalshould be seen as complements, not alternatives.
Some problems can best be solved at a horizontal level, and some
solutions can be best prepared at a horizontal level. Yet, some problems
must be solved, if at all, at a higher level from the vantage of the whole
affected community, informed by deep input at the grass roots. The
horizontal projects, operating not only unilaterally but also in thick
networks with feedback, form a base. The base may be capped by the
higher, linking principles: the Doha Dome.
Horizontalists suggest that we can do all that we need to do at the
national and nation-to-nation level. Looking from the ground up from
the point of view of the United States, it may indeed seem that the
nation/state, acting alone or in voluntary cooperation, is quite well
situated to enhance the antitrust interests of U.S. Americans. In part II
of this article, we ask the question: Is horizontality enough? In part III,
we change the perspective; we look from the top downward. The picture
looks quite differentmuch as it might have looked some hundred
years ago had we argued as New Yorkers or Pennsylvanians6 that state
regulation and state-to-state cooperation could do it all, and that higher-

than the center.

5. See http://www.internationalcompetitionnetwork.org (last visited May 25, 2003).
6. In 1892, the dominant American sugar refiner, a New Jersey corporation, bought four
Philadelphia refineries, giving it a sugar monopoly in the United States. The Supreme Court
dismissed an injunction action by the United States on grounds that the matter concerned
manufacturing, not commerce, and that Congress did not have the power to regulate
manufacturing. United States v. E.C. Knight Co., 156 U.S. 1 (1895). Neither New Jersey nor
Pennsylvania dissipated the sugar monopoly, and sugar consumers (and consuming states) in the
rest of the country had no power to do so. (This early narrow reading of the Commerce Clause
was later implicitly overruled.).

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than-state antitrust policy was not necessary. In part III, we discuss

three models for international antitrust: a complete antitrust code; a
framework directive that addresses the principal private/public barriers
to free trade and competition in the world trading system; and the
proposal from Europe, which is being vetted in the WTO Working
Group on the Interaction Between Trade and Competition Policy, as a
possible framework for the post-Doha negotiating agenda. We consider
how well the models can solve the problems with horizontal solutions
identified in part II. Finally, we marry the horizontal cooperation with
the Doha Dome.

II.
A.

EXTRATERRITORIALITY AND COOPERATION7

Introduction

It is often said that antitrust is about private restraints of trade, and

trade law is about public restraints. When we speak of international
antitrust, we normally speak about that area of commerce that the state
has entrusted to the market.
This section of the article respects this framework but relaxes it at the
margin8 of distant bureaucracy and loss of sovereignty necessarily
entailed by higher law. On the other hand, insufficiency or illegitimacy
suggests a need to think beyond a national-only and voluntarily
cooperative framework (collectively called national-only). The
section explores the capability of national antitrust law combined with
agency cooperation to handle three phenomena generally within the area
that the state entrusts to the market and subjects to antitrust: (1) inbound
restraints, such as off-shore cartels targeted at the regulating nation, (2)
outbound commerce, entailing restraints in export commerce (e.g.,
export cartels) and restraints impairing a regulating nations exports and
foreign investment, and (3) restraints in world markets, such as
7. This section is based on Eleanor M. Fox, Can We Solve the Antitrust Problems of
Globalization by Extraterritoriality and Cooperation? 48:2 ANTITRUST BULL. (forthcoming
summer 2003). The author thanks the Antitrust Bulletin for permission to excerpt parts of that
article.
8. For purposes of this section, antidumping law is not treated as on the margin. Export
exemptions, and industrial policy as a trump over anticompetitive arrangements, are so treated,
however. This distinction cannot be maintained in principle. See, e.g., discussion of the second
model, infra pp. 16-20. The freedom to engage in low price competition is of the essence of
competition law. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 254
(1993). But the conceit of separateness of the competition and trade low-pricing problems is
embraced in this section.

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anticompetitive mergers of firms operating in world markets. We ask, in

each case, how well existing tools of extraterritorial enforcement and
cooperation are able to sufficiently and legitimately cope with the
problems of global markets. If they are sufficient and legitimate, one
may argue that there is no reason to confront the difficult problems

B.

Inbound Restraints

The American effects doctrine was pioneered for inbound restraints.

Offshore cartels (paradigmatically) could be regulated by the U.S.
antitrust laws if the cartel members intended to restrain commerce into
the United States and their cartel had effects in the United States.9
Forms of the effects doctrine have now been accepted in most of the
world.10 The effects doctrine is a robust concept that allows nations the
scope to protect themselves from restraints launched in global
commerce.
There are gaps, nonetheless, in the extent to which a harmed nation
can protect itself. Concerning inbound restraints, a national-only
approach suffers three principal gaps.11 The first gap most directly
relates to developing countries. Many of these nations either do not have
an antitrust law, or they have an antitrust law that is not given serious
regard by their polity, or they simply do not have the resources to
enforce the law. Particularly, they do not have the resources and
credible deterrence power to control the anticompetitive acts of
multinational corporations. In other words, they are easy targets.12
The second gap is an evidentiary gap that affects industrialized
countries as well as those less developed. When the perpetrators are
abroad, the evidence also lies abroad and often it is difficult to obtain.

9. United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945).
10. See Fox, supra note 1, at 34552.
11. A harmed or targeted nation can simply close some gaps by legislating. In some cases
the scope of the legislation is in question; but that is not a subject of this article.
For cases taking a narrow view of the reach of U.S. law to private persons injured abroad,
see United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942 (7th Cir. 2003); Den Norske
Stats Oljeselskap AS v. Heeremac, 241 F.3d 420 (5th Cir. 2001), cert. denied, 534 U.S. 1127
(2001). For cases taking a copious view, see Empagran S.A. v. F. Hoffman-LaRoche, Ltd., 315 F.
3d 338 (D.C. Cir. 2003); Kruman v. Christies Intl PLC, 284 F.3d 384 (2d Cir. 2002).
12. See Frdric Jenny, Globalization, Globalization, Competition and Trade Policy:
Convergence, Divergence and Cooperation, in COMPETITION POLICY IN THE GLOBAL TRADING
SYSTEM: PERSPECTIVES FROM THE EU, JAPAN AND THE USA (Clifford A. Jones and Mitsuo
Matsushita eds., 2002) [hereinafter Globalization, Competition and Trade Policy]; Frdric
Jenny, A Tale of Three Cartels, Luncheon Remarks at the ABA Antitrust Sections 2003 Forum
on International Competition Law (Feb. 5, 2003).

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Thus, good cases fail for want of evidence.13

The third gap concerns overriding industrial policy. Industrial policy
of the exporting country may conflict with the competition policy of the
importing country, and the importing country may withhold
enforcement against the foreign actors implementing or operating in the
shadow of home policy. Perhaps they could not do otherwise without
crossing the line of legitimacy.14
Each of these three problems cannot be solved within the nationalonly framework.
The first gap, involving developing countries, can be narrowed (but
not closed) by intensive technical assistance including aid in capacity
building offered by mature antitrust jurisdictions. The work of ICN and
of technical aid-giving institutions and individuals can make a
significant contribution.
The second problem regards evidence beyond jurisdictional reach.
Bilateral cooperation and information sharing agreements.15 have been
helpful, but have huge shortfalls. Moreover, countries with little
bargaining power have little opportunity to enter such agreements.
Bilateralism clearly has limits.
The third problem lies at the competition/industrial policy interface.
These problems are currently solved nationally by each jurisdiction, ad
hoc. The issue, however, is not a national-only problem, and not even a
two-nation problem. Resolution can be distorted by national-only
decision-making; e.g., through exercise of restraint by one nation to
accommodate another nations anticompetitive industrial policy, or
13. See INTL COMPETITION POLY ADVISORY COMM., ATTORNEY GEN., FINAL REPORT
18385 (2000) [hereinafter ICPAC REPORT].
14. See, e.g., Laker Airways Ltd. v. Sabena, Belg. World Airlines, 731 F.2d 909 (D.C. Cir.
1984); Trugman-Nash, Inc. v. New Zealand Dairy Bd., 954 F. Supp. 733 (S.D.N.Y. 1997). A
lesser gap could exist in the event of inconsistent competition policies. E.g., Country A prohibits
an agreement of major insurers not to insure pollution damage; Country B does not proscribe the
agreement; it regards it as not anticompetitive because other existing or potential insurers are free
to provide the coverage. Country A refrains from suit against Bs nationals out of deference.
This third problem seemed urgent in the 1970s and 1980s. The United States had a strong
pro-competition policy which conflicted with norms of trading partners that facilitated competitor
cooperation. The problem has a lower profile today. Perhaps in view of the competition law
bandwagon and liberalizing agreements in the WTO, nations seem somewhat more reluctant to
assert that their firms are shielded from antitrust suits on foreign soil. Moreover, enforcing
nations seem less intimidated by claims that their enforcement will illegitimately interfere with
defendants home nations prerogatives. The problem of the appropriate interface between one
nations competition policy and another nations industrial policy is nonetheless a charged issue
awaiting the next crisis.
15. International Antitrust Enforcement Assistance Act of 1994, 15 U.S.C. 62016212.

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settlement of a market blockage complaint by a decree reserving a quota

in favor of the complaining nation.16
Suppose that all gaps are filled unilaterally. Is the extraterritorial
enforcement legitimate?17 If legitimacy is in doubt, is informal
cooperation a good solution?
U.S. enforcement against the world members of the uranium cartel
illustrates the problem of illegitimacy. After a U.S. embargo produced
crisis-level underproduction of uranium in the rest of the world, major
British, Canadian, South African, Australian, and French producers
supported orderly mining and marketing of uranium on their soil. When
U.S. nationals, faced with a steep price rise, sued the members of the
uranium cartel, deep hostilities arose. These governments resisted the
American suits in political and judicial fora. U.S. judgments against the
foreign producers were perceived as illegitimate abroad,18 however
legitimate at home. To whom could the uranium producers and their
governments turn to contest Americas unilateralism, right or wrong?
In trade disputes, the WTO provides judicialized panels whose
resolutions are increasingly perceived as fair and legitimate. In
competition law disputes, however, there is nowhere to go. The
regulating nation is arbiter for the world. Thus stand the gaps and
illegitimacies associated with inbound restraintsthe least problematic
restraints in terms of the capability of the national-only framework of
solving the problems in the realm of antitrust law created by the global
economy.

C.

Outbound CommerceRestraining and Restrained Exports and

Investment

The problem as to outbound commerce is two-fold. First, national

law ordinarily does not prohibit nationals and residents from engaging
in conduct such as export cartels that may hurt only foreigners.19
National law simply does not cover outbound commerce and foreign
16. See infra notes 27, 46.
17. I use legitimacy in an objective rather than normative sense. I call measures and
enforcement legitimate when there appears to be an international approving consensus, and I
regard them as of questionable legitimacy when the enforcing nations actions have significant
spillover effects (not necessarily anticompetitive effects) and nations disagree about legitimacy.
What nations accept in WTO agreements may be a proxy for legitimacy.
18. See 973 PARL. DEB., H. C. (5th ser.) (1979) 153342.
19. In fact, the misallocation impairs resource allocation in the world; outbound restraints
hurt not only foreigners. See Eleanor Fox & Janusz Ordover, The Harmonization of Competition
and Trade Law: The Case for Modest Linkages of Law and Limits to Parochial State Action, 19
WORLD COMP. L. & ECON. REV. 5 (Dec. 1995).

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investment that has no direct or significant anticompetitive effect in the

regulating nation. A nation could, of course, ban its firms from harming
others, as U.S. law arguably did before a 1982 cutback;20 but there is no
national constituency to support such a law. Both morality and
efficiency would counsel that nations should adopt such a ban, thus
preventing the harm at its source.21
However, adopting a ban is perceived as altruistic and not what selfregarding nations do. Second, regulating conduct on foreign soil which
most directly affects the foreign nations consumers might
anticompetitively limit a would-be regulating nations export or foreign
investment.
The export exemption, while not seen as a gap in national law, is a
gap in a coherent world competition system. For example, before the
formation of the European Community, France and Germany could
exempt from their law, and disregard, their export cartels that harmed
only the other. But upon the formation of the European Community,
these issues were approached from a higher vantage point. From the
perspective of community, it is unthinkable that the French could legally
cartelize to exploit the Germans and thereby increase the profits of the
French, or vice versa. Is it not similarly unthinkable in the world trading
community for one nation to thus profit at the expense of the other?22
It may be answered that a harmed nation need only use its
extraterritorial jurisdiction and catch the cartel. But life is not so easy.
Most nations, especially developing countries, are not sufficiently well
situated to stop the offshore cartel activity. Even well-endowed agencies
20. See, e.g., Industria Siciliana Asfalti v. Exxon Research & Engg Co., 1977-1 Trade Cas.
(CCH) 61,256 (S.D.N.Y. Jan. 18, 1977), superseded by the Foreign Trade Antitrust
Improvements Act of 1982, Pub. L. No. 97-290, 96 Stat. 1233 (enacting 6a of the Sherman
Act).
21. For a discussion of the wisdom of extending national law to ban hard core export
cartels and to require assistance in enforcement against such cartels, see Fox & Ordover, supra
note 19. See also 1991 A.B.A. ANTITRUST SEC. REP. OF THE SPECIAL COMMITTEE ON
INTERNATIONAL ANTITRUST (Barry E. Hawk, chair), Ch. 3 [hereinafter Hawk Report]; 1994
A.B.A. ANTITRUST SEC. REP. OF THE TASK FORCE ON THE COMPETITION DIMENSIONS OF
NAFTA (Eleanor M. Fox, Chair) Ch. 4, III [hereinafter NAFTA Report]. The principle
against export and import cartels was one of the eight framework principles of the NAFTA
Report specifically adopted by the Antitrust Section and, on August 9, 1994, adopted by the
ABA. Specific details on mechanisms for enforcement and implementation of a rule against
import and export cartels may be found in both reports. See Hawk Report, supra at 8390;
NAFTA Report, supra at 11112.
22. Under 11 of the GATT/WTO Safeguards Agreement, a state may not sponsor or
encourage an export or import cartel. Agreement on Safeguards, Apr. 15, 1994, Marrakesh
Agreement Establishing the World Trade Organization, 1869 U.N.T.S. 154, 159.

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experience problems in obtaining evidence as well as problems in

obtaining personal jurisdiction. The real problem is the blindered
nationalistic conception anchored in history, rather than a conception
springing from contemporary economic reality. Extraterritoriality (the
very word assumes that the boundaries of the nation are the proper
starting and ending point absent a compelling circumstance) is the
horizontal substitute for cosmopolitan and community-wide vision, and
it is an imperfect substitute.
While national competition law that is indifferent to harms to
outsiders is insufficient, national competition law that seeks to pry open
foreign markets may be seen also as illegitimate for its disregard of the
interests and purview of foreign sovereigns. If a single nation combines
the two tacksexempting its own export cartels because they hurt only
foreign consumers but punishing foreign cartels that hurt only the
nations exportersthis may be seen as discriminatory and thus doubly
illegitimate.23
Local conduct on local markets with local consumer effects is
paradigmatically entrusted to the regulatory choices of the locality.
Clashes and claims of intrusion are inevitable when a second nation
purports to regulate the economy of the first. The clash may come when,
in a Sherman Act case against a Japanese import cartel, a U.S. court
finds that an import cartel agreement in Japan existed, and punishes
under U.S. law the Japanese firms that allegedly conspired to exclude
foreigners;24 while the Japanese courts find that no agreement was made
(or no conduct harmed competition) and that the American firms could
not penetrate the Japanese market because they failed to tailor their
product to suit Japanese preferences. A different kind of clash may
come when a firm such as Guardian Glass, or the U.S. Department of
Justice, settles a dispute with Japanese glass makers by an agreement
assuring that the Japanese distributors will buy twenty percent of their
glass from American producers, thus freezing out the Europeans and the

23. The United States is such a jurisdiction. The law exempts export cartels. Under the
language the 1995 U.S. Agency International Guidelines and according to the public statements
of a number of federal officials, the Sherman Act may be invoked to open foreign markets closed
by anticompetitive restraints such as an import cartel or monopolistic exclusive dealing. See U.S.
DEPARTMENT OF JUSTICE & FED. TRADE COMMN, ANTITRUST ENFORCEMENT GUIDELINES FOR
INTERNATIONAL OPERATIONS 3.122 (1995). As a matter of comity, the officials explain that
they are likely to use this power only if the home country of the excluding firms also prohibits the
restraints and declines to enforce its law. Id. at 3.2
24. The U.S. antitrust agencies assert that there is legislative jurisdiction under U.S.
antitrust law to pry open foreign markets closed by anticompetitive restraints. See Fox, supra
note 1, at 35052.

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rest of the world from this segment of business.25 As these examples

show, the problem is not simply a national (U.S.) competition law
problem. It is a competition problem of the home country of the harmed
consumers, and a world trade and foreign investment problem. 26
The foreclosed-foreign-market problem has been addressed in part
through cooperative efforts. Under bilateral positive comity
agreements,27 the complaining nation undertakes to supply evidence of
harmful anticompetitive restraints that are illegal under the laws of the
home nation, and the home nation agrees to sympathetically consider
the request and, if warranted, to enforce its law. The complaining
country may then agree to refrain from action if the home nation agrees
to use best efforts to pursue the matter, to keep the complaining country
advised of the progress of its proceedings, and to take the views of the
complaining country into account.28 The cooperation may work, but
only if the two jurisdictions see eye-to-eye on the anticompetitiveness of
the restraint and the importance of the enforcement given other
priorities.29
In sum, national competition enforcement is not sufficient for control
of export cartels and other offshore anticompetitive restraints. Further,
national competition enforcement is neither legitimately nor sufficiently
able to pry open closed foreign markets or otherwise prevent restraints
on foreign soil principally affecting the home nations internal market.
25. Compare the Japanese/U.S. semiconductor dispute in the late 1980s, settled by the
Japaneses agreement to keep (a target) of 20 percent of the market open to the United States. See
generally chapter 11 of RAJ BHALA, INTERNATIONAL TRADE LAW, CASES AND MATERIALS,
1095, 112532 (1996).
26. The Fuji-Film/Kodak dispute was a matter of foreign investment. Kodak produced film
in Japan for Japan. See Andreas F. Lowenfeld, Dispute Settlement in the WTO, in LOWENFELD,
supra note 2, at 151, 18183.
27. Agreement between the European Communities and the Government of the United
States of American on the Application of Positive Comity Principles in the Enforcement of their
Competition Laws, June 4, 1998, 37 I.L.M. 1070; Agreement between the Government of the
United States of America and the Government of Japan Concerning Cooperation on
Anticompetitive
Activities,
Oct.7,
1999,
available
at
http://www.usdoj.gov/atr/public/international/docs/3740.pdf (last visited Apr. 10, 2003).
28. The United States made one referral to the European Commission, which was in
anticipation of the 1998 positive comity agreement. This was the complaint of SABRE, a U.S.based airline computer reservation system, claiming discriminatory treatment in French, German
and Spanish markets. See ICPAC REPORT, supra note 12, at 23234.
29. The experience in SABRE was not a smooth one, because the U.S. complainants and
Justice Department, and the European Commission, did not see eye-to-eye. For a long period of
time the Commission took no action. Eventually, the process became politicized: efforts of the
U.S. Congress were enlisted and senators sought to put pressure on European Commissioners and
officials.

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Global Problems

Increasingly, competition problems are global. In the 1970s and

1980s, IBMs use of its dominant market power had direct effects
worldwide. In the 1990s and 2000s, Microsofts use of its dominant
market power has direct effects worldwide. Boeing/McDonnell
Douglas,
Exxon/Mobil,
Sandos/Ceiba-Geigy
(Novartis),
Gencor/Lonrho, British Oxygen/Air Liquide, WorldCom/Sprint, and
GE/Honeywell are all actual or proposed mergers of firms doing
business in world markets.
Global mergers present a special problem. Global mergers may have
harmful effects in nations that constitute separate markets and lack the
power to protect themselves. This is particularly true for developing
countries, whose voices are not heard and who must live with whatever
the industrialized countries decide is good for them.30
In Mannesmann/Italimpianti,31 Italian and German makers of
specialized pipes for oil drilling operations suitable only for developing
countries merged to form a monopoly. China was the principal buyer of
this stage of technology. Unusually, Italy conditioned merger clearance
on the firms acceptance of licensing obligations that could ease Chinas
monopoly problem (if potential producers in Europe should seek a
license). More typically, Germany declined to enforce the German law,
allowing the merger because the German marketlike the Italian
marketwas not hurt. While Italys conditions on this proposed merger
benefited China in this case, another China cannot count on any
protection at all.
It may become more, rather than less, common that multinational
mergers impact developing nations with no voice. In general, however,
given the extensive and often redundant vetting of international
mergers, gaps are not the problem of which firms complain. Rather,
overlaps are the major problem. The inefficient overlap of merger
regimes is a problem which is being addressed, but almost wholly in the
area of procedure and process. The U.S./EU merger working group and

30. This may have been the case in Kimberly-Clark/Scott and in Union Pacific/Southern
Pacific Railroad, both of which impacted Mexico. Kimberly-Clark/Scott Paper, Case IV/M623
(Jan. 16, 1996), [1996] O.J. (L 183) 1; Union Pacific Corp., Finance Docket No. 32760, Decision
No. 44, 1996 WL 467636 (S.T.B. Aug. 12, 1996), affd, Western Coal Traffic League v. Surface
Transp. Board, 169 F.3d 775 (D.C. Cir. 1999).
31. See Case No. 3622 (C2227), Fiatimpresit-Mannesmann Demag-Techint/Italimpianti,
Bolletino della Autorita Garante della Concorrenza e del Mercado, Mar. 4, 1996, pp. 1516, 70
71, 130 (Italian Antitrust Auth. Feb. 15, 1996). The proposed merger was below a level that
would have required notifying the European Commission.

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the ICN32 have taken a lead role in this regard.

In addition to the current trend of global mergers, world cartels are
uncovered with increasing frequency. Vitamins and lysine are but two
of the notorious examples.33 For cartels, a principal gap within a system
of only national enforcement and nation-to-nation cooperation concerns
price fixing targeted at developing countries, as noted above. A second
gap may exist if no nation with a mature antitrust system is sufficiently
impacted to take action or accept jurisdiction, as may have been the case
in the matters of the alleged Thai rubber thread cartel34 and the East of
Burma steel cartel.35 Third, where nations whose consumers are harmed
exercise restraint out of respect for restraining nations sovereignty (or
their hands are tied for lack of an effective means of enforcement), the
gap may be great, as in the case of OPEC, marketing boards and
commodity cartels.
In addition to these gaps, there are serious problems of perceived
illegitimacy attending national action against global transactions of nonnational firms, and more are sure to occur. U.S. politicians found it
illegitimate for the European Union to enjoin the merger of GE and
Honeywell.36 Charles James, then an Assistant Attorney General in
Charge of Antitrust, warned Europe not to reprehend Microsoft for
conduct allowed under U.S. law.37 William Baxter, then Assistant
Attorney General, having withdrawn the U.S. monopoly case against
IBM, told the European Commission that its plan to order IBM to

32. See International Competition Network, Recommended Practices for Merger

Notification Procedures and memoranda on recommended practices and guiding principles,
available at http://www.internationalcompetitionnetwork.org/practices.pdf (last visited May 23,
2003). The ICN adopted eight guiding principles for merger notification and review (including
transparency, non-discrimination, procedural fairness, and coordination), and three recommended
practices for notification (one of which is subject to further consideration), particularly regarding
jurisdiction, nexus of transaction to jurisdiction, notification thresholds, and timing and deadlines
for notification.
33. See JOHN M. CONNOR, GLOBAL PRICE FIXING: OUR CUSTOMERS ARE THE ENEMY
(2001); Harry First, The Vitamins Case: Cartel Prosecutions and the Coming of International
Competition Law, 68 ANTITRUST L.J. 711 (2001).
34. Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd., 299 F. 3d 281 (4th Cir. 2002), petition
for cert. filed, 71 U.S.L.W. 3339 (Oct 25, 2002) (No. 02-649).
35. See Jenny, A Tale of Three Cartels, supra note 12.
36. See U.S. Intervenes Over Stalled Honeywell Deal, FINANCIAL TIMES, June 16, 2001, at
1; Editorial, Europe to GE: Go Home, WALL ST. J., June 15, 2001, at A14.
37. See DOJs James warns EC against use of monopoly leveraging argument in
Microsoft,
GLOBAL
COMPETITION
REV.,
May
20,
2002,
available
at
http://www.globalcompetitionreview.com/news/news_item.cfm?item_id=264 (last visited May
23, 2003).

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disclose interface changes was illegitimate.38 If, in the matter of

Boeing/McDonnell Douglas, the airlines (the customers) had sued in a
U.S. court and the court had enjoined the merger,39 that result would
surely have been accepted as legitimate. The decision of the Federal
Trade Commission to close the investigation would have been irrelevant
(or just another view).40 There was, however, no U.S. court case, and
Americans treated the merger as not Europes business.41
The perception of illegitimacy is understandable. No one has elected
the United States or the European Union to be enforcer for the world.
Moreover, when one nations economic interest coincides with its
antitrust agencys action (as in Boeing/McDonnell Douglas), observers
do not lightly shake the suspicion that the decision was based on
industrial policy, not the purity of antitrust.42 When jurisdictions reach
contrary conclusions on the competitive effects of the same global
merger, neither agency commands the trust of the world. Deep
cooperation among national authorities, which is currently practiced,
and cross-fertilization that tends to narrow the margin of substantive
difference, averts some clashes, but not all.
The whole is not the sum of the national-interest parts. Optimizing
two, three, four or five national interests does not add up to world
welfare. For example, in Boeing/McDonnell Douglas, the European
Commission imposed conditions rather than a prohibition, apparently to
appease the United States, even though an injunction seemed to some
Europeans to be the correct solution. In Institut Merieux/Connaught, the
Federal Trade Commission may have ordered licensing rather than an
injunction for the same reason, avoiding clash by a suboptimal solution.
Furthermore, in Mannesmann/Italimpianti, Italy not only did not abort
38. See DOJ Oversight: U.S. v. A.T.&T.: Hearing Before the Senate Comm. On the
Judiciary, 97th Cong., 56130 (1982) (statement of William F. Baxter, Assistant Atty Gen.,
Antitrust Division, Department of Justice). See also Eleanor M. Fox, Monopolization and
Dominance in the United States and the European Community: Efficiency, Opportunity, and
Fairness, 61 NOTRE DAME L. REV. 981, 101415 (1986).
39. Lexecon, the Chicago-based economic consulting firm, had studied the merger and
concluded that it was price-raising. See Boeing/McDonnell Douglas, Case No. IU/M.877, 1997
O.J. (L336) 16 (Dec. 8, 1997) (stating that McDonnell Douglas had put a seven percent lid on
price).
40. See State of California v. American Stores Co., 495 U.S. 271 (1990) (holding that a
state may obtain further divestiture after an FTC consent decree). See also Consolidated Gold
Fields PLC v. Minorco, S.A., 871 F.2d 252 (2d Cir. 1989), cert. dismissed, 492 U.S. 939 (1989)
(upholding an injunction against a world merger that EC, British and U.S. agencies had cleared).
41. See Laura DAndrea Tyson, Mc Boeing Should Be Cleared for Takeoff, WALL ST. J.,
July 22, 1997, at A14.
42. See Eleanor M. Fox, The United States of Boeing Versus the European Union of Airbus,
16 BROOKINGS REV. 30 (1998).

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the merger to monopoly (which imposed no consumer harm in Italy),

but it ordered relief in the form of rights to technology licenses only on
behalf of requesting Europeans.43 Global problems find suboptimal
solutions in a horizontal-only world.

E. Summary
In sum, for inbound problems, within the area entrusted to
agencies and courts for antitrust enforcement, the combination of
extraterritoriality and cooperation works quite well for nations with
well-resourced agencies and incentivized private parties addressing
restraints not authorized by conflicting home country policies. It does
not work well otherwise. For small nations and resource-poor agencies,
the gaps are large.
For outbound problems, gaps are significant and, if they are filled
unilaterally, illegitimacies are significant. For world problems, gaps
exist and illegitimacies abound. Voluntary horizontal coordination of
national interests when and only when those interests are aligned will
neither produce the best result for us as citizens of the world nor inspire
trust in whatever national agency plays the role of global arbiter.
It does not necessarily follow from this criticism that the horizontal
solution is not the best solution. The question is, as compared with
what?

III. GLOBAL ANTITRUST?

In his article, Evolving Toward What? The Development of
International Antitrust,44 Professor Harry First proposes to leave
antitrust at the horizontal networking level and to nurture the
horizontality. Indeed, Professor First commends the United States as
antitrust/anti-cartel enforcer for the world. This view finds many
adherents. Others urge some antitrust at global level.
In this section we consider proposals for some world rules. Nearly all
proponents of global antitrust conclude that the appropriate forum
would logically and practically be the WTO.45 It is the only existing
43. See Bhalas discussion of the resolution of the U.S./Japan semi-conductor dispute,
supra note 25.
44. Compare Diane P. Wood, Soft Harmonization and Competition Laws: Track Record
and Prospects, 48 ANTITRUST BULL. (forthcoming, Summer 2003) (advocating continued work
on soft coordination and cooperation, substantively and procedurally).
45. See, e.g., Andrew T. Guzman, Article: Antitrust and International Regulatory
Federalism, 76 N.Y.U. L. Rev. 1142 (Oct. 2001); Robert D. Anderson & Peter Holmes,

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global economic body to which antitrust could be incrementally added,

and sympathetically so, to its current mandate. Free trade and free
competition naturally go hand in hand, as they are based on sympathetic
values. While a stand-alone world antitrust institution may be
theoretically preferable on grounds of avoiding any semblance of clash
or compromise between competition and trade values, it would be very
difficult to establish. Furthermore, its very being would create the need
for its own integration into the world trading system.
The major question relates to the form that antitrust global
governance should take. The various proposals can be grouped into
three forms, more or less, although the choices may be seen as lying on
a continuum. First, the strong form would establish a complete antitrust
regime for matters significantly affecting world commerce, possibly
even encompassing a world antitrust enforcement system and court.46
This regime might or might not be integrated with trade; it might be
antitrust on its own bottom.
A second model would envision a framework measure sensitive to
the trade-and-competition context. By utilizing the trade law concepts
that discipline government acts in restraint of trade, it would focus on
the most critical problems of private and public/private transnational
restraints that cannot be solved horizontally because of nationalistic
impulses.47
A third approach is a minimal form of the second model combined
with certain on the ground tasks such as technical assistance and peer
review. This approach is reflected in the proposal of the European
Union to the WTO Working Group on the interaction between Trade
and Competition Policy. The proposal calls for a protocol requiring that
every member country of the WTO must be covered by a measure
prohibiting hard core cartels; the competition law regime (national or
Competition Policy and the Future of the Multilateral Trading System, 5 J. INTL ECON. L. 531
(2002); Frdric Jenny, Globalization, Competition and Trade Policy, supra note 12, at 295;
PHILIP MARSDEN, A COMPETITION POLICY FOR THE WORLD TRADE ORGANIZATION (2003).
46. See Munich Working Group, Draft International Antitrust Code, 5 World Trade
Materials 126, Sept. 1993, reprinted in 64 BNA Antitrust & Trade Reg. Rep., Special Supp. July
10, 1993. A minority of the Munich Working Group, however, proposed an alternative approach
that would have incorporated most of what is now the Doha agenda. See id. S8-9 at part VIII.
47. See infra pp. 17-20 (further elaborating the second model). For scholarship sympathetic
to this model, see Edward M. Graham & J. David Richardson, Issue Overview, in GLOBAL
COMPETITION POLICY 3, 346 (Edward M. Graham & J. David Richardson, eds.) (1997);
Anderson & Holmes, supra note 45; Jenny, supra note 12.
Philip Marsden, in A Competition Policy for the World Trade Organization, would focus on
one of the most critical problems at the intersection of trade and competition: anticompetitive
business arrangements that substantially impede market access. See Marsden, supra note 45.

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regional) could include other provisions and exemptions as well.

Additionally, the competition laws of the regime must meet the WTO
standards of transparency, non-discrimination and procedural fairness.
The nations must establish a mechanism for mandatory consultation and
cooperation on hard-core cartel offenses; however, cooperation on other
matters would be voluntary. A WTO Competition Policy Committee
would be established to monitor the agreement itself, facilitate
cooperation, conduct voluntary peer reviews, and facilitate exchanges of
information. Finally, an integrated approach to technical assistance
would be offered to developing countries.48
The strong form is generally regarded as neither practical nor
acceptable to the world. Even the task of reaching agreement on the
terms of a substantive antitrust law for the world would be a daunting
one, especially as the terms become more precise. It is generally thought
that such a comprehensive agreement with precise rules and a system
for enforcement would straight-jacket nations into a single set of rules
and could create an unaccountable and rigid bureaucracy.49
Turning to the second and third models, we first recapitulate the
problems identified in part II as problems not fully solvable
horizontally. Namely: (1) Developing countries cannot protect
themselves from world cartels, and those harms spill over to the rest of
the world. (2) Discovery and information problems abound; information
needed for enforcement is beyond reach. While industrialized countries
can ease the problems by bilateral agreements, developing countries do
not have the clout to obtain such cooperation. (3) Exploitative and
protectionist national industrial policies trump antitrust. State action
slips through the cracks of the WTO; states privatize protection.50 (4)
Nations do not have enforcement incentives commensurate with world
48. WTO Working Group on the Interaction between Trade and Competition Policy,
Communication from the European Community and its Member States, WTO Doc.
WT/WGTCP/W/184 (Apr. 22, 2002). Much of the proposal tracks the Doha mandate. See Fox,
supra note 1.
49. See Joel I. Klein, Anticipating the Millennium: International Antitrust Enforcement at
the End of the Twentieth Century, in 1997 Fordham Corp. Law Institute 9, 9-10, (Barry E. Hawk
ed., 1999); Daniel K. Tarullo, Norms and Institutions in Global Competition Policy, 94 AM. J.
INTL L. 478 (2000).
50. This is the language used in Eastman Kodak Companys complaint against Japan to the
U.S. Trade Representative, complaining that outsiders were shut out of the Japanese consumer
photographic film and paper markets. Japan was required by WTO disciplines to lower its state
barriers to market access. Kodak argued that Japan had no intention of lowering barriers to its
market; it merely handed over the reins to Fuji Film. Memorandum from Dewey Ballantine to
Eastman Kodak Company, Composed in Support of a Petition Filed Pursuant to Section 301 of
the Trade Act of 1974, as amended May 1995 (on file with author).

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welfare; indeed, nation-to-nation reciprocity can lead to world-welfarereducing solutions.

The second model, building upon and working synergistically with
horizontal networks of deep cooperation, could address each of these
problems. It would incorporate the basic consensus substantive antitrust
principles into a framework directive approach. Principles would
prohibit hard-core cartels, including both import and export cartels,51
and also market-blocking, unjustified monopolistic practices. Nations
could implement the directive by adopting national law formulated in
their own terms.52
This model would provide a pathway for addressing system clashes.
Protocols for resolving clashes (e.g., divergent conclusions on whether a
global merger is anticompetitive) would be adopted. For example,
although several nations laws could be applicable to one global
transaction, stylized choice of law principles could be developed on the
basis of the most meaningful contacts. For purposes of determining the
legality of the transaction in the world market, the chosen formulation
of law would be applied to the entire affected geographic area as if the
entire affected area were within the borders of the nation whose law is
applied.53 However, no discrimination based on nationality among
consumers or among producers would be allowed.
Important questions of interface between competition policy and
conflicting state action would be placed on an agenda for discussion and
resolution, so that, for example, the mix between public and private
action as alleged by the United States and Kodak with regard to Japan
and Fuji Film could be treated as a coherent, indivisible problem.54
51. Allowable justifications could be worked out, possibly starting with and tightening the
OECD Hard Core Cartel Recommendation. Developing countries claims for commodity cartels
and marketing board exemptions could be considered, but within a developed framework
requiring justification, transparency and proportionality.
52. Thus, nations would be free to make their own choices of formulation and application,
within the range of world-accepted principles, as long as those choices were transparent and nondiscriminatory. See Eleanor M. Fox, Trade, Competition, and Intellectual PropertyTRIPS and
its Antitrust Counterparts, 29 VAND. J. TRANSNATL L. 481 (1996) (suggesting such an approach
for a TRIPs-acceptable intellectual property/antitrust interface); see also Eleanor M. Fox,
International Antitrust: Against Minimum Rules; For Cosmopolitan Principles, 43 ANTITRUST
BULL. 5, 9 (1998) (point 8 on p. 9 of this article suggests such an approach for blocked market
access).
53. See Eleanor M. Fox, Mergers in Global Markets: GE/Honeywell and the Future of
Merger Control, 23 U. PA. J. INTL ECON. L. 457 (2002) (suggesting such an approach for merger
law clashes).
54. Kodak complained that it was denied access to the Japanese market by a mix of public
and private restraints. Allegedly, Fuji Film (among other things) cornered all important film
distributors, and making it nearly impossible for an outsider to nurture a fledgling distributor

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Furthermore, principles would be developed to determine the

appropriate standard or rule to govern situations such as the uranium
and aluminum cartels and the New Zealand dairy marketing board.55
Meanwhile, a synergistic relation with horizontal networks would be
nurtured. For example, through ICN, national antitrust officials would
work out the terms of a voluntary multilateral cooperation agreement on
information exchanges and on positive comity enforcement. With the
advice of the bar, academia, and consumer non-profit organizations,
officials would continue to work out principles and practices for premerger notification and filing, and the process of merger analysis. They
would recommend modalities pursuant to which the home jurisdiction
of alleged violators would cooperate with harmed jurisdictions in
discovery and possibly enforcement. Networking participants would
also work out protocols for priorities and rules of nondiscrimination in
the event of clash. These voluntary agreements, or at least some of
them, might ultimately be adopted on the world level; others might
remain horizontal and voluntary if commitments might otherwise be
watered down to unacceptable levels otherwise.
Principles of non-discrimination, transparency and due process, and
protocols for clash resolution would be incorporated into a binding
WTO agreement. So too would principles requiring aid in discovery by
the nations in the best position to do the discovery.56 On the other hand,
within a reasonable time frame. An aggressive challenger would turn to other methods of piercing
the market, but all other natural means were foreclosed by other restraints. The Japanese law
allowed resale price maintenance, which Fuji Film fostered, so Kodak could not compete by
enlisting retailers to discount its product. Japanese law banned premiums, so Kodak could not
compete by offering a free roll of film with each sale. The Large Scale Retail Store Act allowed
smaller firms in a neighborhood to veto the establishment of large stores and condition their
operating hours, so Kodak lost the option of aggressive sales through large retail stores.
According to Kodak, it was the combination of public and private restraints that marginalized
Kodak in Japan. Yet there was no forum within which to challenge the symbiotic combination,
and Kodak was relegated to peeling off the parts. See Section 304 Determinations: Barriers to
Access to the Japanese Market for Consumer Photographic Film and Paper, 61 Fed. Reg. 30,929
(June 18, 1996).
55. In the case of aluminum, governments agreed to orderly marketing after Russian stocks
flooded the world market. See Erle Norton & Martin du Bois, Foiled Competition: Dont Call It a
Cartel, But World Aluminum Has Forged New Order, WALL ST. J., June 9, 1994, at A1. U.S.
producers fell into line and held back their production. A U.S. lawsuit against the five major U.S.
aluminum companies was dismissed on grounds of political question, act of state and the NoerrPennington doctrine (right to lobby government). Hammons v. Alcan Aluminum Corp., 132 F.3d
39 (9th Cir. 1997), cert. denied, 525 U.S. 949 (1998).
56. See Agreement on Trade Related Aspects of Intellectual Property Rights [TRIPS], 8,
art. 40(3), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization,
Annex 1C, LEGAL INSTRUMENTSRESULTS OF THE URUGUAY ROUND vol. 31, 33 I.L.M. 81

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the coordination and rendering of technical assistance by mature

antitrust jurisdictions to new and developing agencies, and the
formation of voluntary peer reviews designed to transfer knowledge
might be seen as particularly fitting horizontal tasks. Technical
assistance regimes could be monitored and coordinated by ICN, as
already proposed to be done by ICN. Peer review could continue to be
offered by the OECD.
Dispute resolution in the WTO would be reserved for clear and
objective violations of obligations of nations, such as failing to adopt an
anti-cartel law or failing to provide transparency in derogations.
Dispute resolution by specialized WTO panels could eventually be
available in other instances as well. For example, a specialized panel
might be needed to resolve disputes concerning which jurisdictions
formulation of law should be accorded priority in the case of an
international merger. A specialized panel may be needed, also, to make
the determinations of whether one nation has credibly applied its law
(the standard in NAFTA Article 19 antidumping cases). Only
experience will reveal exactly where these specialized panels will be
most critically needed to make the system more nearly seamless.
The third model is a cooperative protocol. It is less ambitious than
model two. Although it would require commitments on transparency,
non-discrimination and due process, and a law against cartels, it does
not address the most challenging gaps and illegitimaciesthose staterelated restraints emanating from state action, national industrial
policies, and nationalistic behavior. Thus, it does not address the core
problem of creating a more nearly seamless, less parochial world.57
Model three does not view the free-trade/free competition problem as an
integrated whole. It does not seek to solve the Kodak/Fuji Film-type
problem of combined state and private restraints that create barriers.
This is a particularly unattended problem where the state restraints do
not discriminate on the basis of nationality and do not defeat trade
expectations but do harm competition, as we learn from the WTO panel
decision in Fuji/Kodak.58
The omission is surely not attributable to oversight. Model two
makes the frontal challenge; it takes on the impossible task to

(1994) (section 8, Art. 40(3) treats the issue of control of anticompetitive practices in licenses);
see also NAFTA Report, supra note 21, at 11112.
57. This model addresses other elements as well, many of which are ancillary to model 2
also and some of which overlap with ongoing initiatives of ICN (technical assistance) and OECD
(peer review).
58. See supra note 54.

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economically democratize a still balkanized world in a global economy.

Model three is more pragmatic, and its goals are currently within reach.
Resisters to internationalization of antitrust oppose both models two
and three. They raise the specter of pure antitrust law compromised by
impure trade law.59 This article suggests the contrary: preserving the
integrity of antitrust is not the real deterrent to an embrace of
competition principles in the WTO.60 Rather, the attachment of nations
to their antidumping laws and other instruments of selective
protectionism, and the accompanying fear that markets will truly be
open to powerful forces of trade and competition beyond the control of
the state, is closer to the mark.
Two tasks must ultimately be recognized as the sine qua non of world
economic community: addressing the public half of public/private
restraints, and addressing public/private restraints as a coherent whole.
Optimizing competition within the existing framework of each states
restraints on competition can do deceptively little if state restraints stake
out the field.61 Horizontal advocacy policy can do vital groundwork but
still do deceptively little if all of the progress is outside of the
framework of the GATT.62 A sensible world policy on trade and
competition would begin to address the appropriate, and inappropriate,
justifications for state restraints on trade, much as does the Treaty of
Rome. Bringing competition policy and its free competition values
frontally into the WTO by advocating a strong anti-cartel rule and a
strong rule of hospitality toward efficient low pricing may ultimately
put pressure on the community of nations to confront their mutual
interest in disciplining unduly protectionist state restraints. This is what
nations that resist a WTO competition initiative fear the most: not that
protectionist trade will compromise antitrust, but that free-market
antitrust will endanger protectionist trade. For this reason, model two is
59. See Klein, supra note 49.
60. National formulations and applications can be preserved. They are not in danger of
being obliterated, except in the case of discrimination against non-nationals.
61. This is a point that the ICN leadership understands and is addressing by way of urging
competition advocacy by antitrust agencies against excessively anticompetitive measures in their
own nations. See, e.g., Timothy J. Muris, Creating a Culture of Competition: The Essential Role
of Competition Advocacy, at http://internationalcompetitionnetwork.org/muris-naples.pdf (last
visited May 24, 2003). There is, however, no world ombudsman standing the ground against all
nations excessive restraints. To the contrary, there appears to be a Faustian, oligopolistic pact
regarding national measures that harm world competition; for example, each nation knows that if
it criticizes the others antidumping laws too vigorously it may be forced to relinquish its own.
62. The mission of the GATT/WTO is to discipline nationalistic state action that blocks
trade.

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both critical to world well-being and not easily embraced by nations.

While we wait for model two, we can embrace model three, sorting
out what can best be done at the horizontal level and how this horizontal
groundwork can feed into a more nearly coherent world antitrust
system. We need the horizontal groundwork at the foundation; and we
need a Doha Dome.