Are the Goals and Objectives of International Trade and Competition Law Complementary or in Conflict?

vLex InternationalNbr. 1, January 2006International

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Summary


I. Introduction. II. The Interface between trade and competition Laws. III. Towards the establishment of a multilateral competition regime?. IV. Conclusions

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Extract


Are the Goals and Objectives of International Trade and Competition Law Complementary or in Conflict?

I. Introduction

Over the last decades, the liberalisation of international trade and foreign direct investment has opened the markets of many countries worldwide. Due to this, the flow of goods and services has notoriously increased across the borders, to an extent that the conduct of firms in its own market could affect foreign markets and consumers located thousands miles away1. As Weber Waller notes, in this economic integration and interdependence scenario, the realities of companies' behaviour have escape to any single state's jurisdictional control to enforce its competition laws2. Almost every state have a form of domestic competition laws specifically designed to control the domestic market behaviour. However, due to the current economic globalisation process, these policies are proving inadequate to regulate corporate behaviour beyond the nation-state borders 3 . Therefore, although national authorities have the power and the tools to detect and restrain such anticompetitive behaviours, multinational firms are still able to evade such control due to the spread of their economic and corporate activities in many different countries4. Indeed, many undertakings in today's globalised economy are truly "multinational" having a presence worldwide5.

Hence, the claims for the creation of an international competition regime are increasing. For many, the more successful international organisations are in their objective of lowering down the barriers to trade, the more important could protecting the playing field of the domestic markets to safeguard the benefits from opening the border to foreign goods and services be 6.

At this point a question arises, could trade and competition laws work together or are they parallel universes with different goals and objectives?

In Epstein's view, competition laws are traditionally focused in the behaviour of the private undertakings that can potentially damage the competition of a certain market and the welfare of its consumers7. If two or more undertakings conspire to fix prices, reduce output or try to boycott other competitors, competition laws provide the remedies to fix such behaviours establishing economic and criminal penalties and promo...

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