Global Competition Policy

As border barriers have declined, private barriers to competition have grown more significant. More and more international trade disputes involve private business practices that allegedly block the market access of rival firms. Such disputes include high profile conflicts between Japan and the United States over semiconductors, auto parts, and photographic film, between the European Union and the United States over aerospace and defense mergers, and between Asian nations and others over access to telecommunications networks. More such disputes are inevitable, especially in sectors that have been traditionally state-controlled but that are now subject to privatization. The regulation of private business practices that restrict competition is called competition (or antitrust) policy.

In this book, the authors survey national competition policies and the issues they raise for international trade and investment. The book includes detailed recommendations for international agreement on minimum standards in those competition-policy measures that affect the ability of foreign firms to contest markets. These standards could be negotiated and implemented bilaterally, regionally, and globally at the World Trade Organization. At the international level, governments might agree on certain initial steps to accomplish greater contestability: "national treatment" for foreign-controlled firms, abolition of most international cartels (including those that are now sanctioned), and establishment of mandatory consultation procedures when one government believes that private business practices in another nation foreclose exports or direct investment. There should also be premerger notification requirements for transborder or other mergers having cross-border effects. Further steps might be implemented at a future time.

Edward M. Graham (1944-2007) was a senior fellow at the Peterson Institute from 1990 to 2007. He also taught concurrently as adjunct professor at Columbia University in New York. Previously he was an economist at the US Treasury and taught full-time in the business schools of several US universities (MIT, University of North Carolina Chapel Hill, Duke University, among others). While serving at the Treasury, he was seconded for two years to the Organization for Economic Cooperation and Development (OECD) in Paris. He also served as visiting or adjunct faculty at the University of Virginia, Charlottesville; Stanford University (Washington Program); The Johns Hopkins University; Seoul National University; Harvard University (John F. Kennedy School of Government); INSEAD (European Institute of Administration, Fontainebleau, France); and the University of Paris I (Pantheon/La Sorbonne). His research interests have included foreign direct investment, international competition policy, and the industrial organization of major Asian economies.

J. David Richardson was a Senior Fellow Emeritus and has been a Professor of Economics (and International Relations) at Syracuse University. He writes extensively on international trade policy and its effects. He specializes in empirical research on trade under imperfect competition, on regional trade, and on trade and labor-market outcomes, with a focus on the United States. He has authored two books, co-edited nine books, and written numerous other monographs, book chapters, and papers for professional journals.