479
19981
THE INTERFACE OF THE TRADE LAWS AND THE
ANTITRUST LAWS
Harvey M. Applebaum*
INTRODUCTION
The relationshipbetweeninternationaltradelaw andantitrust-competition law hasbeenaddressedoften in the past,’ but now arisesin a different atmosphere.It is universally regardedas an important topic that
deservesattention:the subjecthasbeenraisedin the World TradeOrganization (WTO), in the Organizationfor EconomicCooperationand Development(OECD), in the contextof the North AmericanFreeTradeAgreement(NAFTA) andits Working Groups,and in the AmericanBar Association (ABA). The recentformationof the WTO Working Group on Trade
andCompetitionis the latestconfirmationof global interestin this subject.
The growing and continuing interest on the part of these institutions
suggeststhat it is conceivablethat someform of internationalagreementor
approachthat accommodatesthese two different bodies of law may
eventuallyemerge.
The interestin this subjecttendsto fall principally into two categories. The fast issue concernsforeign barriers to market accesswhere
privatesectorrestraintsare involved.The questionis whethertradelaw or
antitrust law providesthe best mechanismfor opening foreign markets.
The secondissue concernsthe antidumpinglaw and whether it can, to
someor any extent,be replacedby the antitrustlaws or at leastbe revised
to accommodate
competitionlaw concepts.Many observersin the trade
communitybelievethat much of the overall interestin the trade-antitrust
interfaceis stimulatedby those who would like to displaceor at least
revisethe antidumpinglaws.
The generalobjectiveof U.S. tradelaw is to protectdomesticproduc-
HarveyM. Applebaumis a F%tncrin the law firm of Covington & Burling, Washington,D.C.,
and a Memberof ABA Antitrust Section’sNAFTA Task Forcead Antitrust and the Global Economy
Task Force.
’ See,e.g.,Harvey U Applebaum,An&rust and the OmnibusTrade and CompericivenessAct of
1988,58 ANTITRUST
LJ. 557 (1989) [hcreiaafterApplebaum,Antitrust ud ‘h& Act]; Harvey M.
Applebamn,Foreign Predation and Price LX&mination Against U.S. Firms-+lntidumping Under Title
VII, 1984 FORDHAM
CORP.L. INST. 1; Harvey M. Applebaum, Hamwnizdion of
and
Antitrust
Atcthmping Luws: An Opportunity for Creative l3perimentation in the North American Free Trade
Area, 4 U.S.-MEXICO
LJ. 49 (1996); HarveyM. Applebaum,Thefnfetfiie of
Law
and Policy: An Anrifnuz Perspective, 56 ANTITRUST
LJ. 409 (1987) @mhaftcr Applebaum,An
Aluhst Perspective].
TradclContpetition
GEO. hiMON L. REV.
482
[vol. 6:3
Courtsof Appeals,whetherthe appealis from a DOJ suit or a privatesuit
in federaldistrict court,or from an administrativedecisionof the FTC. The
SupremeCourt regularly reviews antitrust casesbut only very rarely
acceptsa tradelaw casefor review.
Anotherimportantdifferencebetweenthe two bodiesof law is in the
relief and remediesthey provide. Trade law remediesgenerallyinvolve
increasedor special duties or quotas on imports. Antitrust relief can
includesingle or treble damages,injunctions,divestitureor restructuring,
or criminal penalties.
IlI.
DIFFERINGINJURY AND PRICING STANDARDSIN U.S. TRADE AND
ANTITRUST LAW
The mostdebatedandcontroversialdifferencebetweenthe tradelaws
and the antitrustlaws concernstheir contrastingstandardsfor the demonstrationof injury and the demonstrationof unfair pricing in “predatory”
pricing or price discriminationcases.
A. Injury Standards
The two most importantand most frequentlyinvokedtradelaws, the
antidumpingandcountervailingduty laws, requirea showingonly that the
dumpingor subsidies“contributed” to material injury.4Material injury is
defined as “harm which is not inconsequential,immaterial or unimportant.“5The antitrustlaws manifestlyhavemuchhigher standardsof injury
and causation.In general,they require a showing of an unreasonable
restraint of trade (which is per se in some situations) or a substantial
lesseningof competition,6anda showingthat the antitrustviolation caused
the injury or at leastwas a materialcauseof the injury? In price discrimination cases,the Robinson-Patman
Act provides “meeting competition”
andcost-justificationdefenseswhich are not availablein antidumpingand
countervailingduty proceedings.*
Section301 of the Trade Act of 1974: which is generallyusedto
FederalTradeCommissiondecisionsand similar administrativep@gs.
‘ SeeBritish SteelCorp. V. united States,8 Ct Int’l Trade 86.96 (1984); see&o United fi8.g
Br Forgingv. United States,15 Ct. Int’l Trade 561,580 (1991).
’ 19 U.S.C. 8 1677(7)(A)(1994).
6 See,e.g., Board of Trade v. United States,246 U.S. 231, 238 (1918); StandardOil Co. vhited states.221 U.S. 1 (1911).
’ St%e.g.,BrunswickCorp.V. PuebloBowl-O-Mat, Inc., 429 U.S. 477 (1977); StevenC.Sabp
& l-am= J. Whk EconomicAnalysis of Private A&mt Litigation, 74 Gu). LJ. 1001(1986).
’ 15 USC. $0 13(a),(b)(1994).
9 Ph. L- NO.93-618,s 301.88 Stat. 1978(1974) (&ifid at 19 U.S.C. $5 241l-2421 (1994)).
19981
INTERFACE OF -i”RADE LAWS AND &Tl’TRuST
LAWS
challengebarriersto foreign marketaccess,requiresa showingomy of an
unjustifiable burden on U.S. commerceby a foreign gove~ent.10
hr
contrast, an antitrust case brought to challengeforeign market access
requiresa showingof a conspiracyto restraintradewhich hasi.nju& the
affectedU.S. industry’sability to compete.”
Section337 of the Tariff Act of 1930,” which bansunfair methods
of competitionby importers,doesrequirea showingthat the unfair method
injured a competingU.S. industry.13Although amongthe trade laws this
statute’slanguageis the most similar to the antitrust laws, it has been
invokedprimarily in intellectualpropertycases,particularlythoseconceming patent infringement.14
There is no requirementof an injury showing
in suchintellectualpropertycases.Further,it is importantto observethat
Section337 was declaredto be in violation of the GeneralAgreementon
Tariffs and Trade (GATT) by a GATT panel,” and correctivelegislation
was includedin Congress’UruguayRoundimplementinglegislation.‘6
Section201 of the Trade Act of 1974concernsonly fair imports.”
It requiresa showingof seriousinjury that hasbeensubstantiallycaused
by increasedimports.Substantialcauseis definedas a causewhich is no
less than any other cause.Section201 is intendedto provide temporary
relief from fair import competition and has underpinningin the wTG
Agreementon Safeguards.”Section201 relief can ultimately be provided
only by the President,following an affirmative recommendation
from the
ITC. Section201 has beenusedinfrequentlyin recentyead
lo See19 U.S.C. 0 241l(a)(l)(B)(ii).
” see SECl’lON OF ANTlTRUST LAW, AMERICAN BAR ASS’N, REPORT OF THE SPECL~L COMMITTEE ON INTERNATlONAL hlITRUsT
(1991) (discussing the considemtitxt? involved in de&&g
whethera foreign marketaccesschallengeis bestpursuedin an antitrustaction under the ShermanAct
or in a tradeaction under Section301).
” 19 U.S.C. 8 1337.
” Seeid 6 1337(a)(l)(A).
” The IX did completeone fully adjudicatedantitmst caseunderSection337. SeeIn re Certain
Electrically Resistive MonocomponentToner & Black Pow&r PreparationsThenfor, USlTC Pub.
2069, Inv. No. 337-TA-253, 10 I.T.R.D. (BNA) 1672(1988) (finding no violation of Section337).
” SeeUnited States-Section 337 of the Tariff Act of 1930,Nov. 7,1989, GATT B.I.S.D. (36th
Supp.)at 395 (1990).
I6 Uruguay Round AgreementsAct, Pub. L. No. 103-465,0 321, 108 Stat. 4809, 4943 (1994)
(amending19 U.S.C. 0 1377).
” 19 U.S.C. 0 2251.
” Final Act Embodying the Resultsof the Uruguay Round of Multilateral Tmde Negotiations,
RESULTS OF THE URUGUAY ROUND
Apr. 15.1994, Agreementon Safeguards,LEOALAGB
Vol. 1 (1994),33 I.L.M. 1125, 1128 (1994).
I9 In addition to the fact that Section 201 requiresa Prhiential decisionand is thereforevery
poIitlcal. the statute requires the petitioning domestic industry to present a detailed plan on the
adjustmentsthe industry would undertakeduring the period of temporary @ofi relief. See 19 U.S.C.
Q~uw.
GEO.MASON L. REV.
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B.
[vol. 6:3
Pricing Stan&n&
Oneof the mostcontroversialelementsof the antidumpinglaw is the
methodologyused by the Departmentof Commerceto determinediscriminatoryor unfair pricing ascomparedto the muchmorestrict requirementsof the antitrust laws?’ In particular, it is well establishedthat the
antidumpinglaw doesnot require any showingof predatoryintent, even
thoughit is often referredto as a predatorypricing statute.2’At the time
it enactedthe OmnibusTradeAct of 1988,Congresswas so concernedthat
it might be arguedthat predatoryintent had to be shownthat it amended
the antidumpinginjury provision in order to clarify that predatoryintent
was not required.uIn contrast,the Robinson-Patman
Act and Section2
1 of the ShermanAct, underwhich pricing strategydirectedat competitors
can be challenged,generallyrequiresa showingof predatoryintent.23
The garden-varietyantidumpingcaseinvolvesprice-to-pricecomparisons between sales in the United States and sales in the foreign
competitor’shomemarket(or third countries).In suchcases,there is no
requirementthat the salesin the United Statesarebelow cost.Accordingly,
therecan be dumping(salesbelow normal value)evenif the salesin both
marketsare profitable andevenif the salesin the United Statesare above
averagevariable cost. A severely criticized element of antidumping
enforcementis that when there is a need under the law to determine
whether salesare at prices below the cost of production (in the home
market),the CommerceDepartmentusesaveragetotal costasthe standard.
In antitrustcaseswherethereare allegationsof predatorybelow-cost
selling,thereis not a singlestandard,but mostCourtsof Appealsgenerally
usemarginalcost or averagevariablecost as the test.24It is clearfrom the
SupremeCourt’s Brooke Group case that below-costselling will not be
AhlERICAN BARAWN, Antidumping and Antitrust, in THE REPORT OF THE ABA ANTITRUST
SEXTON TASK FORCE ON THE COMPEITIION DIMENSION OF THE NORTH AMERICAN FREE TRADE
A~~~~~~~~ch.6(1994)[he&after TASKFORCEONCOMPFITI~ONOFNAFTA].
” SeeApplebaum,An Antitrust Perspective, supra note 1, at 412.
*’ The ITC had previously beendirectedto, amongother things, considerwhetherthe dumped
imports were “undercutting” the U.S. market prices. Congressevidently believed that undercutting
might connotepredatoryintent. It thereforechangedthe term from ‘undercutting” to “underselling” and
included a statementin the legislative history to clarify that predatoryintent was not required.See19
U.S.C. 0 1677(7)(C)(ii)(I); H.R. CONF.REP. No. 100576, I.C.2.17.b (1988). reprinred in 1988
U.S.C.C.A.N.1547, 1650.
21 SeeBrookeGroup, Ltd. v. Brown & Williamson TobaccoCorp., 509 U.S. 209 (1993);seeaLFo
McGaheev. NorthernPropaneGasCo., 858 F.2d 1487(1lth Cir. 1988);Henry v. Chloride, Inc., 809
F.2d 1334 (8th Cir. 1987); 0. Hommel Co. v. Ferro Corp., 659 F.2d 340 (3d Cir. 1981); In re
InternationalTel. & Tel. Corp., 104 F.T.C. 280 (1984).
24 See, e.g., Henry, 809 F.2d at 1346,O’Hommcl, 659 F.2d at 352. But see McGahee, 858 F.2d
at 14% (holding that “averagetotal cost [is] the cost abovewhich no inferenceof predatoryintent can
be made”).
19981
INTERFACEOFTRADELAWS AND ~~T~WSTLAWS
485
sufficient for antitrust law purposesunlessit can also be shownthat the
defendantwas capableof eventualrecoupmentof its lost profits.” Thus
thereis a starkcontrastbetweenthe antidumpinglaw testsfor salesbelow
normal value and below-costselling, and the predatorypricing requirementsof the Brooke Group case.
IV. OVERLAPOF U.S. TRADE LAW AND ANTITRUST LAW CONCERNING
FOREIGNGOVERNMENT
TOLERATIONOFS~STEMATIC
ANTKOhtPETlTIVE Amrrtus
THAT &STRICT
MARKET
Accms
In the OmnibusTradeAct of 1988,Congressattemptedto blend some
tradelaw andantitrustlaw conceptsthroughan amendmentto Section 301
of the Trade Act,26which provides a causeof action when a foreign
governmenttoleratessystematicanticompetitiveactivitiesby foreign firms
that restrict market access.”Although this provision drew considerable
attentionat the time of its enactment,it had not beenfully invokeduntil
1996in the Section301 proceedinginitiated in EastmanKodak’s action
concerningaccessto the Japanesemarket for photographicfilm and paper? The delay and infrequencyof its use may have been becauseit
requiresa showing of “toleration” by a foreign governmentand the fact
that the provision doesnot permit a direct challengeto a private foreign
cartel or other private restraints.Moreover,the legislativehistory of the
provision indicates that foreign (rather than U.S.) law should control
determinationsof whether there has beena tolerationof anticompetitive
practices.?g
The very limited useof the “toleration” provisionmay explainin part
the UruguayRoundimplementinglegislation’sprovisionthat requiresthe
USTR’s annualNational Trade Estimatereport to include a “section on
foreign anticompetitive practices, the toleration of which by foreign
u See Brooke Group, 509 U.S. at 224.
26 19 U.S.C. $2411(d)O)(B)(i)(lV); see Applebaum,Antitrust and Traa? Act, supra note 1, at
557.
n The provision makes actionable “the toleration by a foreign government of systematic
anticompetitiveactivities by enterprisesor amongenterprisesin the foreign country that havethe effect
of restricting, on a basis that is inconsistentwith commercialconsiderations,accessof United States
goodsor servicesto a foreign market” 19 U.S.C. 8 2411(d)(3)(B)(i)(lVj.
p See William H. Barringer, Competition Policy and Cross Border Dispute Resolution: L.essons
Leanudfiom the U.S.-Japan Film Dispute, 6 GEO. MASON L. REV. 459 (1998) (discussing the Kodak
Section301 caseand the WTO casefiled by the United States).
29 SeeH.R. CONP.REP.No. 100-576,LC.1, Actionable Foreign Acts, Policies, or Practices(e)
(1988). reprinted in 1988U.S.C.C.A.N.1547, 1603(stating that the “intent is not to regulatebusiness
practicesof foreign fums or to enforce upon foreign governmentsU.S. conceptsof antitrust law . . .
the USTR may continueto take into account,amongother things, whetherthe anticompetitiveforeign
private activities are inconsistentwith local (not U.S.) law . . . .?.
486
GEO.MASON L. REV.
[Vol. 63
governmentsis adverselyaffecting exports of United Statesgoods or
The implementinglegislation continuesto define a foreign
services.“3o
government’stolerationof systematicanticompetitiveactivitiesthat restrict
U.S. marketaccessas an unreasonable
act underSection301.The amended provisionclarifies that this is applicableto both goodsand servicesand
changesthe referenceto anticompetitiveactivities by or amongprivate
firms to by or among“enterprises.“31
The ShermanAct canbe invokedto challengeprivateforeign cartels,
boycotts,or restraintsthat restrict the access’of U.S. exports.The Intemational Antitrust EnforcementGuidelinesconfii that the DOJ and FTC
may takeactionagainstanticompetitiveconductthat restrainsU.S. exports
if the conducthasa direct, substantial,andreasonablyforeseeable
effect on
U.S. exports and the U.S. courts can obtain jurisdiction of the parties
engagedin suchconduct.32
OF TRADE AND ANTITRUST LAW CONCERNINGSYSTEMV. OVERLAP
ATIC DUMPING WITHAN INTENTTO INURE A U.S. INDUSTRY
The AntidumpingAct of 1916makesforeign producers’systematic
dumpingwith an intention to injure a U.S. industry a crime and provides
treble damageactions as a remedy to these activities.33This very old
statute thus representsan early mixture of antidumping and antitrust
concepts.There have,however,beenno fully adjudicatedcasesunder it,
presumablybecausethe scienterrequirementis very difficult to meet.In
fact, the statutehasbeeninvokedin only a handfulof cases.The constitutionality of the statutewas upheldin the Zenith34 litigation, but the claims
there were dismisseddue to an absenceof comparableproducts.There
havebeencontinuingefforts to amendthe statuteto makeit more accessible and practicable,but theseefforts haveso far beenunsuccessful,
There is one important recentdevelopmentunder the Antidumping
Act of 1916.In a 1997casebeforethe U.S. District Court of Utah con-
y) UruguayRound AgreementsAct, Pub. L. No. 103-465,9 31l(a)(l)(C), 108 Stat. 4809, 4938
(1994) (amending19 U.S.C. 0 2241(b)(2)).
3’ Id. 5 314(c)(l)(N). The HouseWays and Means CommitteeReport clarifies that the term
enterprise “applies to . . . state-ownedenterprisesas well as private firms,” and that the provision
appliesto “anticompetitivepracticesthat restrictthe saleof U.S. goodsor servicesto a foreign market,
not just to foreign fums that engagein suchpractices.”H.R. REP.No. 103-826(I),at 136 (1994), reprinted in 1994U.S.C.C.A.N.3773, 3908.
32 See U.S. DEP'T OF JUSTKE8c FEDERALTRADE COMM'N, ANTITRUST FMQRCEMENT
GUIDELINES FOR INTERNATIONAL OPERATIONS 0 4.1 (1995). reprintedin 4 Trade Reg.Rep.(CCH)
9(13,107,at 20589-17 to -18 (1995).
3’ 15 U.K. Q72 (1994).
” Zenith Radio Corp. v. MatsushitaElec. Indus. CO..402 F. Supp.244 (E.D. Pa. 1975).
19981
~TERFACEOF TRADE LAWS AND ANTITRUST LAWS
487
ceming carbonsteelplateV3’
the court found that the Antidumping Act of
1916“is not limited only to antitrust injury or predatorypr& discfimination. It is also designedto protect U.S. industry.“36Accordingly the
court ruled in responseto a motion to dismissthat the plaintiffs did not
haveto satisfyantitrustpredatoryintent standardsin pursuingrelief under
the Act.37This decisionis expectedto stimulateadditionalinterestin arid
support of the EuropeanUnion’s position that the AntidumpingAct of
1916is contraryto the WTO AntidumpingCodesinceit providesa form
of relief from dumping (treble damages)other than the specialduties
providedby the Code.
VI. LEGISLATIVE ATTEMITSTO COMBINE(OR DISTORT) U.S. TRADE
AND ANTITRUST LAW CONCEPTS
There have been some relatively recent congressionalattemptsto
combine(or, as critics claim, distort) tradelaw andantitrustlaw concepts.
This effort hasbeendriven in large part by membersof Congressseeking
to create an additional remedy where closed foreign marketsarguably
providea subsidyor supportfor low priced importsinto the UnitedStates.
The most prominentlegislationwas SenatorMetzenbaum’s(D-Ohio) bill
entitled the “International Fair CompetitionAct of 1992.“38A modified
versionof that bill was approvedby the SenateJudiciaryCommittee(“the
Committee”)but was not passedby the full Senate.The bill attemptedto
createa new “antitrust” treble damageremedyfor U.S. salesby foreign
producersat prices less than total averagecost. The bill would have
amendedthe AntidumpingAct of 1916to prohibit systematicdumpingat
priceslessthanaveragetotal costsif the effect is to destroyor injure U.S.
commerceandthe foreign homemarket“(i) lackseffectiveprice competition amongcompetitors;or (ii) is substantiallyclosedto effectiveintemational competition.“39The bill would have thus injected the Commerce
Department’saveragetotal cost approachin so-calledantitrustlegislation,
despitethe fact that, as discussedabove,predatorypricing casesunderthe
antitrustlaws generallyrequirea showingof salesbelow marginalcostor
averagevariable cost. The proponents’ assertionthat the bill merely
extendedthe Robinson-PatmanAct to imports was thereforenot valid.
Further, the bill did not contain the Robinson-PatmanAct “meeting
competition*’andcost-justificationdefenses.Finally, the proposedremedy
” SeeGenevaSteelCo. v. RangerSteel Co., 980 F. Supp. 1209(D. Utah 1997).
36 Id. at 1215.
3’ see id.
y S. 2610, 102dCong. (1992); seeS. REP.No. 102403 (1992).
39 S. 2610 Q3(b)(2).
Gm.
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L. REV.
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for “destroyingor injuring” U.S. commercedid not appearto be relatedto
antitrustinjury but rathersimilar to the protectionof domesticproducersin
the antidumpinglaw.
In approvingthe modifiedbill, the SenateJudiciaryCommitteestated
that it was “neededto assurethat foreign fiis do not enjoy an unfair
competitiveadvantagein our marketsbecausecartels,which can charge
supracompetitiveprices, are toleratedin theirs.‘- The Committee’sbill
would haveprovideda defensewheredefendantscould showthat “the lack
of domesticor foreign competitionin their homemarketwas not a factor
in their ability to chargea price below averagetotal cost in the United
States.“4*The Committee’sbill providedno guidanceon how a private
party could establishthe absenceof competitionin the foreign marketor
that the foreign marketwas closedto import competition.
SenatorSpecter(R-Pa.)andothersfor manyyearsintroducedlegislation to provideprivate actionsunderthe AntidumpingAct of 1916.Their
proposedlegislationwas similar to the Metzenbaumbill, characterizedas
a responseto marketaccessproblems.However,thesebills too would have
providedonly a private remedy againstdumping or internationalprice
discrimination.Such legislation would raise a number of WTO issues,
particularlyconcerningthe provisionin the WTO AntidumpingCodethat
limits the remedyfor dumpingto specialdumpingduties. It also would
raise many of the sameproblemsas the Metzenbaumbill in seekingto
blendtradelaw and antitrustconcepts.
In any event,neither of theseapproacheswould haveprovidednew
remediesto obtainforeign marketaccess.Rather,they would haveprovided an additionallegal weaponenablingU.S. producerswho believe that
they were unfairly precludedfrom foreign marketsto bring actionsbased
on U.S. imports-and therebyagainsttheir would-becompetitorsin foreign
markets.It shouldbe observedthat for the reasonsdiscussedaboveand
others,the ABA Antitrust Sectionopposedboth typesof legislation.
VKNAFTA’s APPROACHTOTHERELATIONSHPOFTHETRADELAWS
AND THE ANTITRUST LAWS
Whenthe United Statesand Canadacommencedthe negotiationsof
a FreeTradeAgreementin 1988,a major objectiveof the Canadiangovernmentwas that antidumpingand countervailingduty laws should not
apply within the free trade area. The Canadianpremise was that the
competitionlaws could fill the vacuum.The Canadianobjectivewas not
y)
S. REP. No. 102403, pt. V(F).
atpt. V(E).
” Id.
19981
hTJ%FACE
OF
TRADELAWS
AND AN-El-RUST LAWS
489
accomplished.
As a compromise,the FreeTradeAgreementcreatedspecial
bi-nationalpanelsto review antidumpingand countervailing decisions in
lieu of the judicial regimesof the two respectivecountrles.42
Therewere
someearly proposalsby both CanadaandMexic.0for removalof the trade
laws from NAFTA, but the United Statesagainresistedandthe bi-national
panelswere continued.43
However, the NAFTA partiesdid createthree
working groups-on subsidiesand countervailingduties,on dumpingand
antidumpingduties,andmostinterestingly,on the relationshipof the competition and tradelaws. This latter working group continuesto meet.
VIII.
THE ABA ANTITRUST SECT-ION'SNAFTA TASK FORCEAND
OPTIONSFORTHE CONVERGENCEOF'T~DEANDANTITRUST
LAW
The NAFTA Task Force of the ABA Antitrust Section(“the Task
Force”) consideredoptionsfor convergenceof the antidumping and antitrust laws in its report entitled “The CompetitionDimensionof the North
American Free Trade Agreement.“44
The Task Force’s preferredoption
wasreplacementof antidumpinglaw with antitrustlaws coveringprice discrimination, predation,and monopolization,and the considerationof a
commonlegal standardfor NAFTA parties.The TaskForceconcludedthat
this approachwas most consistentwith the conceptof a free trade area
becauseit would eliminatean artificial tradebarrier betweenthe NAFTA
nations,achievethe samelegal treatmentamongthe nations,and make
price differentialsamongthe three countriesless likely. The Task Force
recognizedthat this replacementwould reduceprotectionof domesticindustriesand workers from import competitionfrom other NAFTA countries, but consideredthe approachmore consistentwith a free tradearea.
In the United States,the antidumpinglaw would be replacedby reliance
on predatorypricing casesunderthe Robinson-Patman
Act and Section2
of the ShermanAct. The Task Force concludedthat considerationof a
commonlegal standardwas not necessaryto ensurea level playing field
but would further the goal of convergenceand efficient allocation of
resourcesin the free tradearea.Sucha consideration,of course,is complicatedby stateantitrustlaws andthe availability of privatedamageactions
in the United States.The Task Forcealsorecognizedthat the treatmentof
non-NAFTA importsandmultiple-countrycaseswould haveto be considered.
The Task Force’s second-preferred
option was to maintainseparate
42 See Free Trade Agreement, Jan, 2, 1988, Canada-U&
27 I.L.M. 281,386 (1988).
” See North American Free Trade Agreement, Dec. 17, 1992,32 I.L.M. 289,605 (1993).
u See TASK FORCE ON COMPETEION DIMENSION OF NAFTA, sup note 20.
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GEO. MASON L. REV.
[Vol.
6:3
antidumpingand antitrustlaws (and their different objectives),but to use
antitrust market definitions, predation concepts,and injury analysisin
antidumpingcasesto the extentconsistentwith the protectionof domestic
producers.This option would raise the standardof proof in antidumping
casesandmakethe commonquestionsof marketdefinition, causation,and
the standardof actionableinjury more consistent.Actionableinjury could
requiredirect causationand relief limited to the injury actually suffered.
The antitrustlaw approachto deter-miningbelow-costpricing couldbe used
in determiningwhether there was dumping.The “meeting competition”
defenseand the impact on downstreamconsumersalso could be considered.The Task Force concludedthat the convergenceof legal standards
would not be required and the outcomecould still differ basedon the
different objectivesof the two separatelaws.45 .
IX. PRA~CALCONSIDERATIONS IFANTIDUMPINGLAWIS‘XEPLACED"
BY ANTITRUSTLAW
It has often been proposedthat the antidumping law should be
replacedby or phasedinto the antitrust laws. This has, for many, been
especiallyappealingin connectionwith NAFTA andother free tradeareas
as discussedabove.However,thosewho haveproposedsuchreplacement
have often done so without evaluating the practical consequencesor
difficulties in achievingthis result.In fact, if antidumpinglaw were simply
to be repealedandthe antitrustlaws weretheir replacementfor challenging
import competition,antidumpingremedieswould, for all practicalpurposes, be eliminated.
The proposedreplacementof antidumpinglaw by the antitrustlaws is
normally presumedto be accomplishedthrough use of the RobinsonPatmanAct, which also condemnsinjurious price discrimination.That
statute,however, currently does not apply to sales outside the United
States.To coverinternationalprice discrimination,the plaintiff would need
to allege a higher price in the foreign market (or that the U.S. price is
below-cost),Accordingly,the Robinson-Patman
Act’s currentlimitation to
sales“for use,consumptionor resale” in the United States&would need
to be amended.
Many larger problems also would have to be resolved. Proof of
” The Task Force considered two other options but deemed them less desirable. One was
expanded use of Section 201 of the Trade Act, the safeguardsremedy. This would mean more effective
use of that statute to provide temporary relief from import competition without regard to whether such
competition is unfair or based on price. Finally, the Task Force considered improvements in the U.S.
antidumping law through procedural and definitional changes, some of which were achieved in the
Uruguay Round Agreements Act.
y, 15 U.S.C. $5 13(a), 14 (1994).
19981
INTERFACEOF TRADE LAWS AND ANTITRUSTLAWS
491
ixW!‘nationalprice discriminationcould be difficult for a plaintiff to &h
andpresentto a Court.Accessto substantialforeign ma&et price md cost
information would be necessaryto establish he discrimination.It is
doubtful that the presentantitrust laws could adequately deal Witi the
potentialjurisdictional,discoveryandevidentiaryobjections to be expect4
from foreign sellers.The typical submissionof price andcost information
by a foreign seller in antidumpingcases(subjectto CommerceDepartment
verification) would be exceedinglydifficult for a federaldistrict court to
admit as evidence under the existing rules. The replacementof the
antidumpinglaw might well be practicalonly if someinternationalcodeor
regimeexistedandwas receptiveto dumpingchallengesunderthe antitrust
laws.
Assumingthat thesepracticalhurdlescould be overcome,a traditional
antidumpingcasewould still have almost no prospectfor successunder
currentantitrustpredatory-pricingcriteria. The prosecutionof a RobinsonPatmanAct primary line case(equivalentto a dumpingcase),or possibly
a Section2 ShermanAct attemptto monopolizecasebasedon below-cost
sales,currently requiresproof of predatoryintent. As discussedabove,the
U.S. Courts of Appeals have held that in order to establishpredatory
intent, there must be a showingof below-costselling,.and they generally
usemarginalcost or averagevariablecost asthe test for this purpose.And
the SupremeCourt in Brook Group held that even where below-cost
selling is established,predatoryintent requiresproof the defendantwas
eventuallycapableof recoupmentof its lost profits? In addition to the
difficulties of a dumpingcasesatisfyingthe predatorypricing standardsof
the antitrust laws, there would also be the difficulty of the injury and
causationstandardsdiscussedearlier.
Accordingly, the antitrustlaws would needto be significantlyamended to enablethe prosecutionof dumpingcases.If that were in fact done,
theremay havebeenlittle accomplishedin the “replacement”unlesstherequirements
for prosecutinga dumping case were made more t-igorousMetier
that approach has any clear advantagesover harmonizationor
convergenceof the two bodiesof law is not clear..
CONCLUSION
The interfaceof tradelaw and antitrustlaw is often oneof tension,of
conflict, or of incompatibility.Thereis, as indicated,a growingrecognition
that an internationalapproachto greaterreconciliationof or harmonization
of theselaws should be considered.The subjecthas been raised in the
n h0kc Group, Ltd. V. &oWII & Wibmson Tobacco COIp., sw us 209,224 (1993).
492
GEO.MASONL. REV.
[Vol. 6:3
WTO, OECD, NAFTA, and other multinational forums, as well as the
ABA. Dialogueandefforts to accommodatethe two bodiesof laws should
continue,andmay possiblyresult in someeventualharmonization,melding
or blendingof internationaltrade and antitrustrules. In any event,as free
tradein goodsand servicesexpands,theremay be lessneedfor tradelaw
protections,but a continuedneedfor the antitrust-competitionlaw guarantee of free marketinterplay.
Reprinted with permission from 6 Geo. Mason L. Rev. 479 (1998).