AMERICA'S ANTITRUST COPS have been pounding a global beat this year. In the last three months, the Justice Department has joined with foreign governments to stop international cartels in the fax paper and plastic dinnerware industries, and to restrain software giant Microsoft.
Despite the cooperation, global antitrust policy remains a thorny issue, especially as companies compete fiercely across national borders. Sometime soon, major nations will have to begin work on a set of international antitrust rules that supports the trading system and ensures that companies are forced to compete.Antitrust enforcement - also called competition policy - is one of the three big issues confronting trading nations. The other two - the impact of trade on the environment and on labor - stir much stronger emotions. Yet competition policy is more fundamental, since it directly affects how companies price their goods, whom they can talk to and how they organize their businesses.
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The huge increase in world trade - the value of exports has been rising 33 percent faster than the value of all production - underlines the need for a set of global competition rules. Companies, after all, are less likely to trade if they believe competitors are acting unfairly. Moreover, antitrust authorities bound by national borders can't adequately police cross-border monopolists and price-fixers.
International antitrust problems are hardly new. As far back as the 1930s, Britain's Imperial Chemical Industries and America's DuPont essentially agreed to divide up much of the world chemical market. Cartels, in fact, have come and gone over the years; while OPEC is perhaps the best known, antitrust officials have prosecuted conspiracies involving everything from uranium to quinine.
Another reason to set global competition standards is to stop abusive national anti-dumping laws. Most of these laws, especially those in the United States, are protectionist; they treat foreign competitors much more harshly than domestic companies. Last year's steel cases are a good example. At a time when many steel companies worldwide were losing money, each nation accused others of illegal dumping. In all cases, dumping laws made it easier to blame ''predatory" foreign competition than to search for problems at home.
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Forging a set of global competition rules will be difficult. In a new book on the subject by Washington's Brookings Institution, F.M. Scherer, a Harvard professor, notes that "trade policy seeks . . . cooperative solutions among nations; competition policy fosters non-cooperative solutions among businesses . . . "
Beyond that, many countries have vastly different legal traditions, a serious impediment to antitrust enforcement. And competition policy often conflicts directly with industrial policy - a government's attempt to make a certain industry or company much stronger. Consider Japan, which until recently virtually ignored antitrust issues in pursuit of a sophisticated industrial policy.
National sovereignty also will be an issue: Will countries allow international antitrust cops to stop their firms from merging, or to break up export cartels that governments believe are in their national interest?
Even with these concerns, the outlook is far from bleak. Roughly 50 countries now have competition laws, and most of the new ones are based on U.S. and European models. That provides a good foundation for an eventual international agreement. Indeed, the 12-nation European Union has proved that nations can align competition policies. Even Japan, under pressure from Washington, has significantly stepped up its antitrust enforcement.
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Mr. Scherer has gone the next step, proposing an international compact that would police cartels and monopolists. Operating within the new World Trade Organization, the antitrust office would start modestly by requiring countries to simply register their cartels and explain how they work. The idea here is that a bit of sunlight would expose collusion, creating pressure among the cartels' victims to force changes. Within five years, countries would have to outlaw most of their cartels, although each would be allowed exceptions to appease sovereignty concerns. The cartel office would hear complaints and rule on disputes.
None of this is likely to happen any time soon. Yet the close cooperation between U.S., European and Canadian officials recently is a strong sign that nations with a common interest in promoting trade can find common ground on competition policies as well.