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EXPORT CARTELS : A Developing Country Perspective

  • Aditya Bhattacharjea

    (Delhi School of Economics)

Export cartels are exempted from the competition laws of most countries. While some scholars and several WTO members have recently condemned such cartels, others have argued that they allow efficiency gains that actually promote competition and trade. This paper examines the various issues involved, with special reference to developing countries and to recent discussions on trade and competition policy. After summarising the contending views on export cartels, and also the scanty theoretical literature on the subject, it reviews the treatment of such cartels in various jurisdictions and the limited empirical evidence that is available on their prevalence, efficiency justifications, and effects on international trade. Insights from economic theory are then applied to the arguments for and against export cartels, suggesting criteria that could help to determine their validity and an importing country’s best response. The paper concludes that while importing countries should evaluate foreign export cartels under a “rule of reason”, most of them will be constrained by a lack of technical expertise and limited enforcement capacity. It suggests a novel approach, based on parallels with anti-dumping procedures, which would strengthen their hands.

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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 120.

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Length: 40 pages
Date of creation: Jan 2004
Date of revision:
Handle: RePEc:cde:cdewps:120
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  1. Levenstein, Margaret & Suslow, Valerie Y. & Oswald, Lynda J., 2003. "Contemporary International Cartels And Developing Countries: Economic Effects And Implications For Competition Policy," Working Papers 14590, International Agricultural Trade Research Consortium.
  2. James A. Brander & Barbara J. Spencer, 1983. "Trade Warfare: Tariffs and Cartels," NBER Working Papers 1193, National Bureau of Economic Research, Inc.
  3. Levy, Santiago & Nolan, Sean, 1991. "Trade and foreign investment policies under imperfect competition : Lessons for developing countries," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 31-62, November.
  4. Spector, David, 2003. "Horizontal mergers, entry, and efficiency defences," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1591-1600, December.
  5. Sadao Nagaoka, 1998. "International Trade Aspects of Competition Policy," NBER Working Papers 6720, National Bureau of Economic Research, Inc.
  6. Joseph Farrell and Carl Shapiro., 1988. "Horizontal Mergers: An Equilibrium Analysis," Economics Working Papers 8880, University of California at Berkeley.
  7. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
  8. Larson, David A, 1970. "An Economic Analysis of the Webb-Pomerene Act," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 461-500, October.
  9. Hoekman, Bernard & Mavroidis, Petros C., 2002. "Economic development, competition policy, and the World Trade Organization," Policy Research Working Paper Series 2917, The World Bank.
  10. Simon Cowan, 1989. "Trade and Competition Policies for Oligopolies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 125(3), pages 464-483, September.
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