INTRODUCTION II. THEORETICAL APPROACHES TO INTERNATIONAL COOPERATION A. Realism B. Liberal and Institutional Theories C. Conclusion III. OVERVIEW OF INTERNATIONAL COOPERATION IN COMPETITION LAW A. Problems of Not Having International Cooperation in Competition Law B. Costs of International Cooperation in Competition Law IV. GLOBAL COOPERATION IN COMPETITION LAW A. Harmonized Global Competition Regime B. International Agreements Relying on National Competition Regimes 1. The Collapse of the Havana Charter 2. The Unborn Draft International Antitrust Code 3. The Failure of a WTO's Agreement on Competition C. Soft Laws and Soft Cooperation Governing Transnational Competition Problems 1. The International Competition Network 2. The Organization for Economic Co-operation and Development 3. The United Nations Conference on Trade and Development V. BILATERAL COOPERATION IN COMPETITION LAW A. Bilateral Agreement between Developed Countries 1. Canada and the United States 2. Japan and the United States 3. Canada and Japan B. Bilateral Agreement between a Developed Country and a Developing Country 1. Vietnam and the U.S. 2. Vietnam and Japan C. A Comparative Analysis VI. CONCLUSION VII. BIBLIOGRAPHY I. INTRODUCTION
Under economic globalization, anti-competitive activities transcend national borders and pose a challenge for international trade law as traditionally conceived. The annual average number of cross-border competition cases in an average year has increased substantially. According to the Organization for Economic Co-operation and Development, the annual average number of cross-border mergers has increased from 3,513 in the period from 1995 to 1999 to 7,523 in the period from 2007 to 2011. (1) Similarly, from 1990 to 1994, there was an average of about three cross-border cartels per year. From 2007 to 2011, the average number of revealed cartel cases per year was about 16. (2)
Countries have been dealing with cross-border competition problems by unilaterally extending national jurisdiction to acts conducted in foreign territory and/or cooperating in enforcing competition law especially by multilateral trade agreements. Although some countries exercise national jurisdiction extraterritorially to deal with cross-border competition cases, some other countries strongly oppose the unilateral enforcement of competition law because it harms international comity. (3) Countries therefore need to strengthen cooperation to deal with transnational competition challenges.
International cooperation in competition law, however, is constrained by conflicting national interests. This paper examines different means of cooperation among countries in dealing with transnational anticompetitive conduct and indicates that countries have never achieved any globally binding mechanisms that can deal with cross-border anticompetitive conduct. The problems of multilateral cooperation in competition law reflect the typical tension in world politics after the Second World War ("WWII") between the development of national economic welfare and the development of ideal international institutions. (4) In negotiating international agreements on competition, while developed countries sought to achieve international competition regimes that facilitate trade liberalization, developing countries emphasized the need to respect their diversity in terms of stages of development, socio-economic circumstances, legal frameworks, and cultural norms. (5) Developing countries also raised concerns about the financial and administrative burdens they would have to incur in implementing an agreement that set developed-country standards. (6)
By discussing international cooperation in competition law, this paper also contributes to the discourse among international relations theories on cooperation among countries. The study questions the optimism of liberal and institutional theories concerning international institutions and endorses realism's assertion that states' concerns about cheating and relative gains constrain countries from cooperation. (7) The failure of efforts to achieve international cooperation in competition law endorses the following assertions of realists: (i) that the international system is anarchic rather than hierarchic, (ii) that international law and international institutions are unlikely "to transcend or replace nationalism," (iii) that the actions of states are rational and they seek to maximize their national interests, (iv) that countries have little trust to each other, and (v) that states are concerned more about relative gains than absolute ones so international cooperation is hard to achieve and maintain. International cooperation in competition law, therefore, relies on national competition laws and enforcement mechanisms (competition regimes) as well as soft cooperation mechanisms. The efforts of international institutions such as the Organization for Economic Co-operation and Development ("OECD"), United Nations Conference on Trade and Development ("UNCTAD"), or International Competition Network ("ICN") to maintain soft law and soft cooperation in competition law supports the neo-liberal institutionalist belief that states "can work together and can do so especially with the assistance of international institutions." (8)
This paper consists of four sections. The first section discusses theoretical approaches to international cooperation, which explain the behavior of states in international relations. The second section provides an overview of international cooperation in competition law. This section analyzes the benefits as well as the difficulties of having an international agreement on competition. The third section discusses multilateral cooperation in competition law. The discussion indicates that countries are attempting to integrate competition rules into multilateral agreements of which the main objective is to promote market access but not to protect consumer welfare, competition, or efficiencies. A possible solution for multilateral cooperation in this area of law is having soft or non-binding transnational laws. The fourth section analyzes bilateral cooperation in competition law enforcement. This level of cooperation provides substantive methods for countries to deal with cross-border competition cases, but it works only for developed countries in which competition regimes are robust.
THEORETICAL APPROACHES TO INTERNATIONAL COOPERATION
After World War II, the international economy experienced a profound tension between the demands of states to enhance national economic welfare--which serves to promote national competitiveness--and the need for an ideal international institution that would govern state behavior. (9) These conflicting demands have long been the focus of discussions among mainstream theories of international law and international relations. (10) The theories "posit that states are the main 'subjects' and agents or voices of the global polity and that state consent is the prerequisite for a 'source' of legal regulation." (11) These theories also assume that states seek to maximize their self-interest. (12) Realism and liberal and institutional theories, however, provoke a tension in international relations theory. (13) Realists expect that the world is characterized by multipolar competition under anarchy while institutionalists expect the development of international institutions in quantity and complexity. (14) Given that international relation theories help explain international-political outcomes and the economic interactions of states, (15) this section briefly reviews these theories to provide theoretical frameworks for the analysis of international cooperation in the competition law area.
Realism is an important approach to international relations that focuses on power, interests, and rationality in state decision-making. (16) Realists construct their theories on "fundamental insights about world politics and state action." (17) This theory rejects the role of international law in world politics. (18) Realism consists of several assumptions suggesting "the main determinants of international conditions, and suggest a research agenda for further enquiry about [international relations]." (19)
The first assumption is that the international system is anarchic rather than hierarchic. (20) The world is characterized by interaction among formally equal countries. (21) According to realists, while the national political system is certain, the international political system is more hypothetical. (22) International society lacks an overarching legislature, judiciary, and police force. (23) This decentralization of international law derives from the nature of international society, which is also decentralized. (24) Countries, therefore, together "make international relations largely a realm of power and interest." (25) The absence of an effective government at international level is supposed to result in unsettled conflicts among the interests of states. (26) Moreover, an anarchic system makes international law unable to regulate a number of problems including those in the economic sphere. (27)
Anarchy, however, does not mean that global society is chaotic or is in disorder. (28) States maintain their sovereignty and national order within their territory. (29) In addition, realists still acknowledge that international law provides "rights and duties of states in relation to each other" at the international level. (30) Second, realists assume that states depend on each other. Modern national economies have never been autonomous or functioned independently from each other. (31) Countries mutually enrich their national societies by employing a division of labor in international markets. (32) Thus, despite the anarchy and certain conflicts among countries, interdependence makes states loosely connected. (33)
The third assumption of realism is that states are the most important actors...
REALISM AND INTERNATIONAL COOPERATION IN COMPETITION LAW.
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