Strategies to Achieve a Binding International Agreement on Regulating Cartels: Overcoming Doha Standstill

343 Pages·2016·3.87 MB·English

by  John Sanghyun Lee (auth.)

John Sanghyun Lee
Strategies to
Achieve a Binding
International
Agreement on
Regulating Cartels
Overcoming Doha Standstill
Strategies to Achieve a Binding International
Agreement on Regulating Cartels
John Sanghyun Lee
Strategies to Achieve
a Binding International
Agreement on Regulating
Cartels
Overcoming Doha Standstill
123
JohnSanghyunLee
GlobalLawDepartment,
Collegeof Law
Soongsil University
Seoul
Korea (Republicof)
and
Golden GateUniversity School ofLaw
SanFrancisco, CA
USA
ISBN978-981-10-2755-0 ISBN978-981-10-2756-7 (eBook)
DOI 10.1007/978-981-10-2756-7
LibraryofCongressControlNumber:2016954593
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Preface
A cartel, restricting competition among suppliers and getting rid of consumers’
welfare, among other things, has been actively regulated mostly by advanced
economies. International organizations tried to reach international agreement on
competitionlawandpolicy,includingcartelregulation.Inspiteoftensofcountries
in North America and Europe with experiences of serious law enforcement on
competition law, such trials have faced hurdles since a multilateral negotiation on
DohaDevelopmentAgenda(DDA)droppedcompetitionpolicyfromthediscussion
table in 2003. After dropping the issue, DDA has still produced few, if any,
noticeable fruits. A different view between advanced economies and developing
countries and its consequential rupture of the discussion are analyzed to be main
factors of standstill of DDA.
In order to achieve a binding international agreement on cartels, international
community needs to focus on hard core cartel (HHC) activities, narrower than its
original definition, because most countries agree with the necessity of regulating
such narrowed cartels and because international agreements have been developed
with such focuses. Moreover, interstate commodity agreements (ICAs) or inter-
governmental producers associations (IPAs) are to be treated differently under the
area of international commodity law in light of international law history. Several
cases of international cartels, made up of competing private companies, ICAs, and
IPAs under suspicion of cartels are to be reviewed with in-depth research.
Four advanced countries, USA, UK, France, and Germany, with experiences of
cartelregulationsandcompetitionlawenforcementsaretobeaddressedincontrast
to examples of four developing economies, South Africa, South Korea, People’s
Republic of China, and Mexico, with less experiences than the four countries.
Historic study of international development law and its results will be applied to
internationalagreementoncartelregulationsincesuchstudyonlawshedslighton
future international law on cartel regulation reflecting developing countries’
interests.
Upuntilnow,internationalcompetitionlaw,particularlyinternationalagreement
on cartels, has grown up centering on soft-law-typed multilateral agreements and
binding-poweredbilateralagreements.Basedupontheobservationandresearchon
v
vi Preface
international law development, two strategies, short-term and long-term approa-
ches, are suggested for achieving a binding international agreement on cartels. By
reducing fear of developing countries that international cartel regulation may
seriouslyinterferewiththeireconomicinterests,internationalorganizations’efforts
to have effective international cartel regulation can increase the probability of
success.
Meanwhile, distinctive features of commodity led to international commodity
agreements under the agenda of sustainable development, formerly defunct,
requiring, for adjustment to current trade law system. The following are to be
proposed for the adjustment: ①productivity-focused model and ②multilateral
cooperation model to reflect multistakeholders’ interests.
Seoul, Korea (Republic of) John Sanghyun Lee
Acknowledgments
This book is a work which revised my doctorate thesis originally written in 2008
through reflecting on updated information. A substantial part of the book was
influenced by expertise advice from my supervisors, Dr. Sompong Sucharitkul,
Prof. Dr. Christian Okeke, Director of SJD International Legal Studies at Golden
Gate University School of Law, and Prof. Bart Selden. Professor Sompong had
guidedmewithhiswisdomfromhisrichexperienceininternationallawareasuntil
he retired. Professor Okeke encouraged me to pursue this research project, at its
initialstage,andsuggestedseveraltopicsforfurtherresearch.ProfessorEsq.Selden
instructed the foundation of international trade law and business transactions
through a series of lectures. This research would have followed a different path
without their proper and insightful advice.
I would like to express my thanks to other professors and advisors at GGU.
Professor Emeka Duruigbo taught the ways for a young candidate to develop his
idea. Professor Michael Daw and Marienne Gerber enriched my research skills
throughInternetandlegaldatabases.ProfessorChrisPaganodidnotsparehertime
ingivingspecialadvice;sheprovidedmewithscholarshipwhenIwasadmittedat
SJD program. Mr. John Pluebell, Senior Academic Advisor, has enabled me to
studywithoutbeinginterruptedbyanyadministrativeproblem.Hisgoodworksand
counsel let me concentrate on researching.
Interacting with good colleagues who have had interest in international law or
have sincerely pursued the same degree stimulated me so that I could develop this
projectseriouslyandeagerly.Amongthem,Justin,Nick,Peter,ArtGambell,Huon
Thach, Nobert, Franzier Robhert, Joon-Kil Lee, and Patcharang were good friend
who shared warm conversation. I would like to express my appreciation to SJD
program at Golden Gate University School of Law for the precious opportunity of
studying and communicating with students from all over the world.
I am heavily indebted to my two friends, Sorah Kim and Jay Choi, who made
commentsonmydrafts,andpublicofficersatcompetitionauthoritiesinUK.South
Africa and South Korea. I reflected their valuable opinions on my study. I would
like to extend my gratitude to Mr. Jae-Hoon Jung who edited footnotes sincerely.
vii
viii Acknowledgments
Ifeelthankfulandsorryformywife,Sunhee,whosupportedmywork,andour
lovelydaughters,JoyceandEunice,whoputupwithplayswithouttheirfather.All
the research would be impossible without support from my father, mother, and
father-in law and mother-in-law, who cared for my kids and encouraged my
research with continuous prayers. Aunt-in-law have spared little efforts in praying
for me. Finally, I would like to express my deep gratitude to the Lord Jesus who
helped me overcome hurdles whenever I faced difficulties.
Contents
1 Introduction.... .... .... ..... .... .... .... .... .... ..... .... 1
1.1 Hard Core Cartel Against Competition Law. .... .... ..... .... 1
1.2 Spreading Competition Laws to the International Community .... 2
1.3 Hurdles to Leveling Cartel Regulations up to International
Laws.. .... .... .... ..... .... .... .... .... .... ..... .... 4
1.4 Topic Question and Hypothesis of the Research.. .... ..... .... 5
1.5 Structure of the Book. ..... .... .... .... .... .... ..... .... 6
1.5.1 Structure of this Book.... .... .... .... .... ..... .... 6
References.. .... .... .... ..... .... .... .... .... .... ..... .... 8
2 Defining a Cartel and Analyzing Its Effects ... .... .... ..... .... 9
2.1 A Cartel in Its Historical Context. .... .... .... .... ..... .... 9
2.2 Definition.. .... .... ..... .... .... .... .... .... ..... .... 10
2.3 Discussions: Advantage and Disadvantage of Cartels.. ..... .... 26
2.4 Intergovernmental Agreement for a Commodity Distinctive
from a Private Cartel . ..... .... .... .... .... .... ..... .... 38
2.5 International Cartels and Their Representatives .. .... ..... .... 50
2.6 Conclusion. .... .... ..... .... .... .... .... .... ..... .... 58
References.. .... .... .... ..... .... .... .... .... .... ..... .... 60
3 Legal Status and Historical Background of Cartels
in International Law. .... ..... .... .... .... .... .... ..... .... 63
3.1 Opening International Law Era: Infant Stage .... .... ..... .... 63
3.2 Legal Status of International Cartel in International Law .... .... 65
3.3 Development of National Cartel Laws and the Necessity
of International Law.. ..... .... .... .... .... .... ..... .... 96
3.4 Development of International Commodity Agreements (ICAs)
Separate from Cartel Regime .... .... .... .... .... ..... .... 105
3.5 International Organizations’ Endeavors to Achieve
Multilateral Agreements Regarding Cartels.. .... .... ..... .... 118
ix
x Contents
3.6 Extending Bilateral or Regional Agreement . .... .... ..... .... 133
3.7 Conclusion. .... .... ..... .... .... .... .... .... ..... .... 139
References.. .... .... .... ..... .... .... .... .... .... ..... .... 141
4 Conciliation of Conflicts of Opinion Between the North
and the South on International Law Regulating Cartel.. ..... .... 145
4.1 Introduction .... .... ..... .... .... .... .... .... ..... .... 146
4.2 Failure of Further Negotiation on Competition Policy
Under Doha Development Agenda (DDA) at WTO
Ministerial Conferences .... .... .... .... .... .... ..... .... 147
4.3 Necessity of Regulating Cartels in Developing Countries.... .... 154
4.4 Different Positions Where Developing Countries Are Placed . .... 159
4.5 International Competition Law Reflecting Development..... .... 167
4.6 Roadmap Toward Binding International Cartel Agreement... .... 183
4.7 Conclusion. .... .... ..... .... .... .... .... .... ..... .... 187
References.. .... .... .... ..... .... .... .... .... .... ..... .... 189
5 The Regulation of Cartels in Developing Countries . .... ..... .... 193
5.1 Introduction .... .... ..... .... .... .... .... .... ..... .... 193
5.2 Development of Cartel Regulation in the North
and the South... .... ..... .... .... .... .... .... ..... .... 194
5.3 Building Consensus to Enforce Cartel Regulation .... ..... .... 221
5.4 Securing Institutional Supports for Cartel Regulation.. ..... .... 232
5.5 Capacities Building Through International Cooperation ..... .... 240
5.6 Conclusion. .... .... ..... .... .... .... .... .... ..... .... 247
References.. .... .... .... ..... .... .... .... .... .... ..... .... 250
6 The Need for the Development of International Law on Cartels.... 253
6.1 Current Stage of International Cartel Regulation . .... ..... .... 254
6.2 Hurdles to a Binding Multilateral Agreement.... .... ..... .... 255
6.3 Functions of a Bilateral Agreement Toward a Multilateral
Agreement Regulating Cartels ... .... .... .... .... ..... .... 259
6.4 Strategies for Achieving a Binding Multilateral Agreement .. .... 265
6.5 Applicability of International Criminal Law as to Cartels.... .... 287
6.6 Proposing a New Approach for International Commodity
Agreements (ICAs)... ..... .... .... .... .... .... ..... .... 296
6.7 Conclusion. .... .... ..... .... .... .... .... .... ..... .... 317
References.. .... .... .... ..... .... .... .... .... .... ..... .... 321
7 General Conclusion: Summary and Prospect .. .... .... ..... .... 325
7.1 Compendium of Research... .... .... .... .... .... ..... .... 325
7.2 Moderation of Distinction Between International Competition
Law and International Commodity Law.... .... .... ..... .... 332
Index .... .... .... .... .... ..... .... .... .... .... .... ..... .... 335