EC/U.S. Antitrust Cooperation Agreement: Impact on Transnational Business

By Griffin, Joseph P. | Law and Policy in International Business, Summer 1993 | Go to article overview

EC/U.S. Antitrust Cooperation Agreement: Impact on Transnational Business


Griffin, Joseph P., Law and Policy in International Business


I. INTRODUCTION

Other than among the member states of the European Communities (EC) there is no international law of antitrust. No internationally agreed-upon rules of subject matter jurisdiction have emerged in antitrust cases.(1) The Organization for Economic Cooperation and Development's (OECD) Guidelines for Multinational Enterprises(2) and the United Nations' Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices(3) clearly demonstrate some agreement, especially among industrialized democracies, on minimum substantive antitrust standards. However, the United States and its closest trading partners--the leading industrialized democracies--differ in their views of industrial organization and, consequently, oppose certain types of antitrust enforcement.

This opposition is explained by the fact that assent to intentionally vague recommendations is not equivalent to a commitment to follow those recommendations in specific circumstances, nor is it equivalent to an agreement that a nation may enforce the recommendations against aliens acting outside its territory.(4) Even nations that agree that competition (as opposed to central planning or other options) should be a basic principle of their economics reserve the right to decide when and how they will deviate from the norm of competition.(5) Such deviations--which vary with each nation's size, level of development, and socio-economic traditions--often include government owned and operated enterprises, natural monopolies, regulated industries, "crisis cartels," and exemptions for export activities.(6) Each nation, including the United States, reserves the right to deviate from the norm of competition when it perceives that such action is in its own self-interest.

Deviation from competitive norms based upon self-interest is readily apparent in several Resolutions of the United Nations' General Assembly on Permanent Sovereignty Over Natural Resources(7) as well as in the United Nations' Charter of Economic Rights and Duties of States, which provides:

All States have the right to associate in organizations of primary

commodity producers in order to develop their national economies,

to achieve stable financing for their development and, in

pursuance of their aims, to assist in the promotion of sustained

growth of the world economy, in particular accelerating the

development of developing countries. Correspondingly, all States

have the duty to respect that right by refraining from applying

economic and political measures that would limit it.(8)

These deviations, and the resulting lack of international consensus on antitrust standards, have been acknowledged in U.S. antitrust proceedings. For example, in the Court of Appeals for the Ninth Circuit's International Association of Machinists and Aerospace Workers v. Organization of Petroleum Exporting Countries decision, Judge Choy stated:

While conspiracies in restraint of trade are clearly illegal

under domestic law, the record reveals no international consensus

condemning cartels, royalties, and production agreements.

The United States and other nations have supported the principle

of supreme state sovereignty over natural resources. The

OPEC nations themselves obviously will not agree that their

actions are illegal. We are reluctant to allow judicial interference

in an area so void of international consensus.(9)

Foreign governments have reacted with vehemence towards the enforcement of U.S. antitrust laws in a number of circumstances. This trend has been traced in detail elsewhere.(10) For present purposes, it suffices to acknowledge that polite diplomatic notes of concern and protest(11) have been supplemented by various foreign "blocking" statutes.

In response to specific U. …

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