Friday, January 30, 2009

Globalizing Extra-jurisdictional Anti-trust Laws

Globalizing Extra-jurisdictional Anti-trust Laws

Are extra-jurisdictional antitrust laws likely to gain prominence or lose it in the whole wide world or "global village?"

Since mid-December 2008, I have been generally researching food security issues in Korea. Its a huge topic so I don't mean to bore you with the whole whale-shark but it means I have approached the topic with a wide net relating to macro-economic policies, farm management, innovation, supply chain improvements, delivery systems and corporate food distribution policies trends and disparities. There is a wealth of research relating to extra-jurisdictionality in anti-trust laws which may be of particularly important relevance here in the near future. So I am submitting a couple of sweetly tasting portions directly related to this topic of globalizing anti-trust laws.

For example John C. Begin, Jean-Christophe Bureau and Park Sung Joon illustrate in a short and sweet piece, "The Cost of Food Self-Sufficiency and Agricultural Protection in South Korea " (2002) that high tariffs, production prices and government supported purchases continue to protect local producers from import price competition which translates into above global market consumer prices for average Koreans. These obstacles to local fair food price competition are conversely compared to Korea's numerous export manufacturing opportunities and bilateral trade agreements. They contend that poorer consumers indeed often representing a high proportion of the elderly in an aging population (whose problem is described as 20 times worse than that found in Japan) suffer under such conditions and is inconsistent with "access to food for all" food security provisions as described by The Food and Agricultural Organization.

While Korea has made some progress under minimum access provisions of the WTO Uruguay Round Provisions (since 2002) it continues to shelter many local food sector specific producers at the expense of its poorest families and communities. In a Confucian society respect for the elderly is supposed to be a paramount and overarching tenet. But cost to consumers far exceeds gains for producers according to this study especially for those elderly envisioning minimum retirement ages of perhaps 80 in the near to distant future.

Chapter 3. National Policies on Ageing in Korea (Sung-Jae Choi, IDRC Canada)

Without provisions which lower food costs many local conditions appear monopolistic and might face greater challenges under US anti-trust or restraint of trade acts in the near future with possible ratification of the Doha Round as a large proportion of Korea's food imports have their origin in the US. At the same time Chinese competitor products have recently been seen to be replacing US farm produce in comparative threat to trade growth studies on nearly all food sector imports. So local laws and preferred practices may be seen to exist in direct opposition to the implementation of extra-jurisdictional antitrust laws -especially those which might originate in the US.

Bruce Owen of Stanford University Law School explains well in "Imported Antitrust" (2004) a review of Competition Policy for Small Market Economies by Michal S. Gal that challenges of extra-jurisdictional applications are comprised of three main problems.

The first is that U.S. antitrust law or enforcement standards are considered inappropriate in economies with dissimilar business and economic environments. Korea would be one of them.

The second is that antitrust analysis or enforcement needs to be focused on specific markets which are not always comprised of nations, national economies or jurisdictional divisions. He explains the challenge in applying contradictory or conflicting laws which differentiate and shape the context of nations which question the progressive net benefits in a global context of implementing those laws which see few examples of parallel legal regulatory trade enforcements on a global scale other than in the US/EU or perhaps Canada.

Finally he states that individual economic players need to be the focus of increased good corporate governance as their effects on economic performance and global trade make a greater impact on progressive reforms than attempting to implement laws or extra-jurisdictional legal wranglings on a global scale which do not align with local, national political or historical cultural value systems. These same issues plague progress in the growth of free trade policies either in Asia or elsewhere as compared to traditional developing nation mercantilistic systems. So in short, Owen is saying forget the laws, focus on corporations, stakeholder accountability, transparency and good governance.

In Korea, as elsewhere, such progress is often made one leader at a time which never seems to be fast enough for the US. Extra-jurisdictional legal provisions perhaps scare a lot of the world's businesses and may raise the repeated arguments of anti-globalisation supporters that protectionism is better for everyone.

John C. Begin, Jean-Christophe Bureau and Park Sung Joon, "The Cost of Food Self-Sufficiency and Agricultural Protection in South Korea " (2002) Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24879.

Bruce M. Owen, "Imported Antitrust," Stanford Institute for Economic Policy Research (SIEPR); Stanford University Public Policy Program (March 2004) Stanford Law and Economics Olin Working Paper No. 281.

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