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U.S., Europe Antitrust Views In Spotlight
by William New
Government officials, industry representatives and lawyers are abuzz this week about harmonizing U.S. and foreign antitrust procedures, especially with the European Union.
"Antitrust has been one of the most successful U.S. exports," said Charles James, assistant attorney general for antitrust. James spoke Tuesday at a World Economic Forum event at the U.S. Chamber of Commerce. There are now some 100 antitrust authorities worldwide, he said.
"Now the question is, 'Has this become too much of a good thing?'" he said. Antitrust can be a two-edged sword, he added, providing both protection for businesses and hindering economic activity.
James said he is optimistic that the world will overcome its procedural differences on antitrust issues and move toward harmonization. For instance, the European Union has just issued a "green paper" on antitrust that indicates a move to convergence, he said.
The European Union's rejection last year of the proposed GE-Honeywell merger approved by the United States sent shockwaves across industry, but it may have had a silver lining by providing the impetus for both sides to work on their antitrust differences, James said. "We're now having frank, honest and open debate," he said.
That debate is good from the business perspective because, as Stuart Eizenstadt, a partner at Covington & Burling, said in his opening remarks, "If there is one thing business dislikes, it is uncertainty, particularly over government policy."
Eizenstadt said differing interpretations between the United States and the European Union are "troublesome" in light of increasing integration in the $3 trillion annual bilateral economic relationship. It complicates corporate planning if mergers and acquisitions can be approved by one authority but not others, and can be a "major irritant" in U.S.-EU relations, he said.
James, along with his counterparts in Europe and Canada, has started an International Competition Network (ICN) in order to begin acting on harmonization of competition policies.
Deborah Wince-Smith, president of the Council on Competitiveness, suggested that new technology industries might be above antitrust policies during their startup phases. But James shot down the notion, making an allusion to the Justice Department case against Microsoft. He said the Justice's Antitrust Division has seen "a steady stream" of tech companies coming in, not saying, 'Stay out of my backyard,' but rather, 'Help me to compete.'"
"I think the tech economy is like every other economy," James said. "Antitrust is just as important in those sectors as any other."
Dennis Block, a partner at Cadwalader, Wickersham & Taft, said companies cannot fear "being held hostage" to countries' antitrust authorities, and that there should be no "double dipping" where companies have to complete the same process again for different countries. He also said the fear of giving confidential information to some countries is legitimate, and recommended that the ICN be a clearinghouse for determining which country has the lead on a case.
James cautioned that the business community "cannot have it both ways" on predictability and freedom from government oversight. Finally, James said antitrust procedures should not be dramatically changed in reaction to the Sept. 11 terrorist attacks. Shanker Singham, a partner at Steel, Hector & Davis, agreed that a political reaction would have a damaging effect on foreign investment in the United States.
European Wireless Roundtable Issues Recommendations
A roundtable of 18 of Europe's leading mobile network operators met Tuesday with European Union officials to discuss issues facing the industry, including infrastructure sharing, spectrum management, licensing, network rollout, mobile commerce, new services, and ways the European Commission can help the industry launch advanced, third-generation (3G) networks and services.
Erkki Liikanen, the European commissioner for enterprise and information society, reiterated that 3G services are essential for implementation of the eEurope action plan. Liikanen highlighted the importance of a new EU communications regulatory package, which he said is tech-neutral and will create a more competitive telecom industry in Europe.
GSM Europe, which held the Tuesday meeting, offered several recommendations. It said the commission and regulators should recognize the adverse risk of inappropriate regulation. It also urged consultation with member states and industry on environment, health and planning issues to ensure encouragement for 3G development. And the European Union should ensure that mobile operators could offer innovative mobile commerce services.
FTAA Transition Faces Bumpy Road
Negotiators working on a Free Trade Area of the Americas (FTAA) last week were on schedule in launching talks on access to markets in several sectors, but the action will not intensify until the end of the year. That is the same time that the United States and Brazil will jointly assume the chairmanship of the negotiations until the conclusion scheduled for 2005. The two governments will discuss their transition plans Wednesday in Washington.
Speaking at an event on Tuesday, Deputy U.S. Trade Representative Peter Allgeier said the change in chairmanship will be complicated by occurring after the next FTAA ministerial in Quito, Ecuador, in November. That will be in the midst of a transition in presidents in Brazil, he noted.
The FTAA negotiation will be further complicated by the fact that many countries are simultaneously negotiating to liberalize their markets at the World Trade Organization and other forums. Brazil -- as a member of the Southern Cone Common Market (Mercosur), which includes Argentina, Uruguay and Paraguay -- is negotiating separately with the Andean countries, Mexico, South Africa and the European Union. Brazil's goal is to keep all negotiations on a parallel course to finish by the end of 2005, according to Clodoaldo Hugueney, undersecretary general for integration, economic and foreign trade issues at Brazil's Ministry of Foreign Relations.
Separately, the European Union and Mercosur last week announced an agreement on an action plan to develop measures to facilitate business in the areas of customs, e-commerce and standards, among others. The agreement was announced at the outset of the EU-Latin American and the Caribbean Summit, which brought 48 heads of state together in Madrid, Spain.
In other trade news, Michigander Sander Levin, the ranking Democrat on the House Ways and Means Trade Subcommittee, this week criticized congressional Republicans and the Bush administration for missing a chance to reshape trade policy by building a coalition of bipartisan support for a bill to renew presidential trade-negotiating authority. The House passed the bill 215-214 in December, and it is now before the Senate.
"There has been a plethora of expedient, ill-advised, short-sighted, unworkable side deals," Levin said at the Stanford University law school's International Labor Standards Conference. He cited a carve-out for citrus and other agricultural products, and an agreement to "renege" on past trade-expanding commitments to the Caribbean and African regions.
Indian Businesses Urge Government To Open Online Financial Services
A business group in India this week gave guidance to its government on trade objectives at the WTO. The negotiating objectives should include India's proposals for negotiations on trade in services, such as EU law on "stringent" data-protection requirements for online insurance transactions.
The group, the Federation of Indian Chambers of Commerce and Industry, criticized the EU directive as "the main impediment to online transactions."
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