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WT/DS162/R/Add.1 Page 35


In reply to a request of the Panel for clarification of its argument, the United States notes that the broad interpretation of Article VI advocated by Japan and the European Communities would seem to preclude any legal remedies whatsoever against international price discrimination other than the imposition of offsetting duties particularly described in the WTO agreements.  Logically, this would render inoperative any aspect of a Member's antitrust/competition law applicable to crossborder predatory pricing practices.   In the United States this would include at least Sections 1 and 2 of the Sherman Act107, or perhaps even predatory pricing claims under the RobinsonPatman Act, if the goods in question were imports (and sold at predatory levels by US affiliates or agents of the exporters).   In the EU it would encompass Article 82 of the Treaty of Amsterdam and similar Member State legislation (German and French law, for example), and, in Japan, aspects of the AntiMonopoly Act.  Even where low prices in the enforcing state's territory are not expressly and consistently compared with higher prices in the exporting state, an antitrust law might proscribe predatory selling prices for imported (as well as domestic) goods.108  If "antidumping duties" are suddenly deemed to be the exclusive remedy in all circumstances against lowpriced imports, then the future of these kinds of antitrust remedy is questionable.  


The United States further notes that, to the extent that its Anti-Monopoly Act proscribes lowpricing of imported goods, Japan's own competition enforcement policies could be jeopardized by arguments for the exclusivity of Article VI.  This could include enforcement of the Act's provisions against monopolisation and "unfair trade practices."   According to the Japan Fair Trade Commission, such unfair trade practices include "refusal to deal, discriminatory pricing, dumping and resale price maintenance."109  The exclusive scope argued for Article VI of the GATT 1994 might also prevent continued use of the JFTC's "Guidelines Concerning Unfair Price Cutting"  insofar as they are applied against lowpriced imported goods.


The United States argues that, likewise, European Union "abuse of dominance" cases such as TetraPak II110 or even actions such as the Commission's 1997 decision on Boeing’s acquisition of McDonnell Douglas111 could be suspect, since they included allegations that foreign enterprises used dominant positions in international markets to engage in predation within the EU.  Given the motivations of the European Communities to integrate previously separate national markets, geographic pricediscrimination is often regarded with concern by Brussels.112

107 In response to a question of the Panel, the United States notes that the Sherman Act does not expressly mention price discrimination, but it indirectly addresses international price discrimination when it is a factual element in a monopolisation case based upon predatory pricing (including cases involving attempts or conspiracies to monopolise).

108 The United States considers that the enforcement concern necessarily would be upon adverse economic effects within the enforcing state, not outside of it.  As the Panel is aware, monopolisation (and abuses of dominance) cases require the identification of an appropriate relevant market within national antitrust jurisdiction.  Such a market could, in geographic terms, encompass a part of the enforcing state's territory, or all of it, or even a broader area in which the enforcing state would be a part (e.g., "regional" or "global" markets).

109 The United States refers to the "Overview of the Anti-Monopoly Act," found at "www.jftc.admix.go.jp/epage/ama.htm")

110 The United States refers to [1997] 4 CMLR 662 (ECJ 1996).

111 The United States refers to Decision of 30 July 1997, C (97) 2598.

112 The United States refers to Springer, Borden and United Brands Revisited: a Comparison of the Elements of Price Discrimination under E.C. and U.S. Law, 1 ECLR 42 (1997).

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