The International Scope of U.S. Antitrust

• Author: Christopher L. Sagers
• Pages: 27-53

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CHAPTER III

THE INTERNATIONAL SCOPE OF U.S. ANTITRUST

As with most of the law discussed in this book, the problem at the

heart of international antitrust is a problem of compromise between

antitrust values and other policy values, or between antitrust

constituencies and other constituencies. In principle, U.S. federal

antitrust law could apply quite broadly to overseas conduct, and in some

respects it does. But unlimited enforcement may conflict with other

policy goals—specifically, diplomatic relations with other nations and

the interests of U.S. exporters—and so the courts and Congress have

limited it through a number of rules of international law and special

statutory modifications.

A. Political Compromises Underlying the International Scope of

Antitrust

Overseas enforcement of U.S. antitrust may conflict with two other

U.S. policy priorities: the conduct of U.S. diplomatic relations and the

protection of U.S. exporters.

1

Antitrust policy relating to international enforcement can at times

conflict with diplomatic goals, both because U.S. antitrust lawsuits can

strain foreign relations and because international trade is already subject

to an array of trade restraints that can seem inconsistent with open

competition.

2

As to the latter, competition policy and trade law do not

always conflict. Liberalization of trade restraints has been underway for

1

. See, e.g., Harvey Applebaum, The Coexistence of Antitrust Law and

Trade Law with Antitrust Policy, 9 CARDOZO L. REV. 1169, 1169 (1988);

Edward T . Hand, Department of Justice Experience in Reconciling

Antitrust and Trade, 47 N. Y. L. SCH. L. REV. 131 ( 2003).

2

. The United States, like most other nations, p ervasively regulates

international trade through a range of export and import re strictions,

including subsidies, tariffs, license requirements, quotas, embargos, and

other measures. See gener ally FOUNDATIONS AND PERSPECTIVES OF

INTERNATIONAL TRADE LAW (Ian F. Fletcher et al., eds 2001).

A Handbook on the Scope of Antitrust

28

decades, resulting in a series of multilateral free trade agreements

3

and in

the World Trade Organization (WTO) framework.

4

Competition and

trade laws even produce the same result in certain cases.

5

Typically,

3

. The United States and other nations have co mpleted free trade

agreements throughout North and South America, Africa, Asia, and the

Middle East. The European Union countries also operate as a free market.

The United States participates in a number of other intergovernmental

and nongovernmental organizations that work to encourage trad e

liberalization, including the Organisation for Economic Cooperation and

Development (OECD) and the United Nations Conference on Trade and

Development (UNCTAD). See generally Jeffrey J. Schott, Overview, in

FREE TRADE AGREEMENTS: U.S. STRATEGIES AND PRIORITIES 3-19

(Jeffrey J. Schott, ed. 2004).

4

. The World Trade Organization (WTO) has the ability to create binding

rules regarding trade and competition, and it uses t hat power to encourage

liberalized trade. WTO, “Understanding the WTO: Basics—Principles of

the Trad ing System,” available at http://www.wto.org/

english/thewto_e/whatis_e/ tif_e/fact2_e.htm. The WTO’s 153 member

countries agree to reduce tariffs and other trade barriers, and must grant

one another non-discriminatory treatment, including “most favored

nation” status. Id.

WT O members have also agreed to support the goals of co mpetition

law, and several agreements specifically req uire antimonopoly

safeguards. The General Agreement o n Trade in Services includes

safeguards to protect market access and prevent a supplier from abusing

its monopoly position. General Agreement o n Trade in Services, arts.

VIII and XVI, Apr. 15, 1994, Marrakesh Agreement Establishing the

World Trade Organization, Annex 1B, 1869 U.N.T.S. 183. The WTO has

also played some role in d eveloping a harmonized international

competition policy, including through the creation of the Working Group

on the Interac tion between Trade and Co mpetition Policy, see, e.g.,

WTO, Documents of the Working Group on the Interactio n between

Trade and Competition P olicy (WGTCP), available at

http://www.wto.org/english/tratop_e/comp_e/wgtcp_docs_e.htm, but so

far that effort has not borne significant fruit. See WTO, Doha Work

Programme—Decision Adopted by the General Cou ncil on 1 August

2004, WT/L/579 (Aug. 2, 2004), at 3, available a t

http://www.wto.org/english/tratop_e/dda_e/ddadraft_31jul04_e.pdf

(finding that competition po licy “will not form part of the Work

Programme set out in that Declaration and therefore no work towards

negotiations on any of these issues will take place”).

5

. For example, in 2000 the United States s uccessfully filed a complaint

against Mexico at the WTO requesting that the WTO force Mexico to

require Telmex, a Mexican telecommunications firm, to provide U.S.