trade and competition policy: anti-dumping and anti-trust ... · ppt file · web...
TRANSCRIPT
Ian WootonIan WootonUniversity of StrathclydeUniversity of Strathclyde
and CEPRand CEPR
Trade and Trade and competition competition
policypolicyanti-dumping and anti-trust anti-dumping and anti-trust
policies in RTAspolicies in RTAs
Competition policyCompetition policyDisciplines behaviour of imperfectly competitive firms in the international marketplace examine the different
opportunities offered by RTAs relative to those under the multilateral trading regime
Competition in autarkyCompetition in autarkyIn a world of self-sufficient countries firms produce entirely for domestic
consumptionIf firms competitive and no distortions free market is efficient
If a firm (or firms) exercise an inappropriate degree of market power government should use competition
policies to address this behaviour “anti-trust” (AT) policies
Competition and tradeCompetition and tradeWhen trade barriers are lowered penetration of domestic markets by
foreign firms bringing aggregate benefits
If firms behave competitively global efficiency with free trade
and free marketsIf foreign firms exercise market power government intervention justified
but limited instruments available
Policy responsesPolicy responsesExporting country options use AT policies to discipline firm
often not in national interestImporting country options
1. does not have ability to use AT rules2. resurrect trade barriers
losing all the gains from trade3. implement “anti-dumping” (AD) policies
only affects goods in import market prevents price discrimination
AT AT versusversus AD 1 AD 1AT focused on encouraging competition AT rules designed to ensure firms do
not undercut the benefits of market integration by collusive behaviour whereas AD often works to
reinstate some of this lost powerIf governments had single goal of promoting efficiency and competition AT the superior instrument
increasingly seems that AD being used to pursue other goals
AT AT versusversus AD 2 AD 2Advantage of AD over AT does not need supranational powers
Disadvantage of AD over AT does not directly address misuse of
market power, except for predation only works indirectly
often the disadvantages of AD overwhelm the advantages
Could be complementary policies AT for domestic markets AD to deal with foreign firms
Anti-dumping legislationAnti-dumping legislationAD a twentieth century phenomenon particularly rapid growth in 1990s
when developing countries increasingly adopted AD legislation
by 2000, more than 90% of world trade potentially subject to AD actions may have pervasive effects even
when duties not imposedStrong correlation with trade liberalization a pressure safety valve for system? an instrument of retaliation?
AD and RTAsAD and RTAsPreferential trading is flourishing what is relationship between
competition policy and RTAs? does RTA creation result in the
elimination of AD on intra-regional trade?
is AD replaced by AT? No clear pattern has emerged seems to depend on goals of the
RTA
RTA examples: polar RTA examples: polar extremesextremes
EU has substituted AD with AT for
intra-union trade applies common AD procedures for
third-country trade driven by goal of single market
NAFTA on AD, only concession by US was
establishment of bi-national panels no harmonization of AT
no acceptance of supranational authority
Multi-dimensional Multi-dimensional integration 1integration 1
Both trade liberalization and competition policy can be pursued multilaterally or bilaterally range of available policy options
depends on the desired degree of integration
Most basic level of regional integration is FTA only obligation is zero tariffs on bilateral
trade with other member nations could parallel this with elimination of AD
on intra-regional trade no reduction in national sovereignty
Multi-dimensional Multi-dimensional integration 2integration 2
Could match deeper trade integration with coordination on competition e.g. common AD together with
common external tariffs regional AD more consistent for
external firms AD more effective as protection
ambiguous welfare implications common AT policies part of
achieving a common market
ConclusionsConclusionsRTAs can facilitate the multilateral process in moving towards free trade by removal of intra-regional AD
policies in addition to tariff elimination
This is especially true given the increasing complexity of the
multilateral negotiations, and the expected expansion in RTAs
ReferenceReferenceIan Wooton and Maurizio Zanardi“Trade and Competition Policy: Anti-Dumping versus Anti-Trust”Forthcoming in James Hartigan, ed., Handbook of Trade and Law, London: Basil Blackwell
As of 31 December 1989
Growth of anti-dumping Growth of anti-dumping lawslaws
Countries with AD law (49) Countries without AD law No information
Countries with AD law (94) Countries without AD law No information
As of 31 December 2001
Growth of anti-dumping Growth of anti-dumping lawslaws
020406080
100120140
1900 1920 1940 1960 1980 2000Year
Countries
AD law, by year GATT/WTO member, by year
Growth of WTO and AD Growth of WTO and AD lawslaws
Stages of bilateral Stages of bilateral integrationintegration
TradeTrade Competition Competition policypolicy
Self sufficiency(autarky)
Autonomous competition (AT)
policyUnilateral tariffs Unilateral AD actions
RTA(free bilateral trade)
Bilateral removal of AD
Customs union(common external
tariff)Common external
AD policyCommon market Common AT policy