Legal diffusion as protectionism: the case of the U.S. promotion of antitrust laws

Abstract Prior research on the global diffusion and harmonization of antitrust (competition) laws mainly focused on the motivations of countries newly adopting or reforming their national laws. This article instead inquires about the motivations of the powerful states promoting these laws internationally, primarily focusing on the United States. It finds that trade protectionist —rather than globalist— interests and ideas prompted the United States’ promotion of strong international antitrust norms in the 1990s. Analyzing Congressional documents and debates in the 1980s, it shows that American import-competing companies framed foreign industrial policies as cartelization to legitimize their demands for trade protections within the dominant framework of free markets and domestic antitrust laws. The political salience of this narrative in Congress contributed to the preparation of the 1988 Trade Laws and the 1990 trade negotiations with Japan, which formalized the United States’ preference for strong international antitrust norms during the 1990s. These findings highlight that, ironically, ‘anti-market’ reasons can also motivate ‘pro-market’ norm diffusion.


Introduction
Once an American idiosyncrasy, antitrust (competition) laws, which have the official purpose of creating and maintaining market competition, can now be found in all corners of the world.The countries with competition laws grew from 37 in 1989 to 130 in 2010, a 270% increase in two decades (Bradford et al., 2019;B€ uthe, 2015).There are not only more competition laws, but these laws also demonstrate significant similarities in formal rules and procedures (Bradford & Chilton, 2018).Furthermore, the number of international competition policy cooperation agreements and organizations has grown significantly since the 1990s, leading to considerable harmonization in how antitrust statutes are interpreted and put into practice across different jurisdictions (Djelic & Kleiner, 2006;Wigger & N€ olke, 2007)  1 .This paper attempts to explain this movement towards globalization in national competition laws during the 1990s.
Most scholarship on antitrust globalization has focused on what might be called the 'demand-side' of law and policy diffusion, where states-typically with fewer political and/or economic resources-adopted laws and enforcement standards in the 1990s (Buch-Hansen & Wigger, 2011;Gray & Davis, 1993;Hazel, 2015;Kovacic, 2001;Wood, 2005).However, these studies assume that national regulators everywhere have participated in the decision-making process that altered their regulatory landscape freely and through their own calculated decisions (see Simmons, 2004, p. 53).This contradicts numerous empirical records, indicating that the local knowledge of and the political support for antitrust regulations were meager in many countries before the legislation of these laws, and the local histories of protectionism and state economic control have impeded the development of local interest groups that could support the adoption of competition laws. 2  Therefore, this article shifts the focus onto the 'supply-side' of antitrust laws' globalization, where relatively more powerful states promoted laws and policies for other nations' adoption.While the argument that powerful states can impose their preferred laws and regulatory standards onto less powerful states is hardly new in the IPE scholarship ( Gruber, 2000;Simmons, 2001;Drezner, 2008 ), the forces that shape these states' international regulatory preferences remain undertheorized.Furthermore, although previous studies covered the European Union (E.U.) as a powerful actor diffusing its competition law norms (Bradford, 2015(Bradford, , 2020;;Bradford et al., 2019), surprisingly less attention has been given to the international promotion of antitrust laws by the U.S., which has a substantially older antitrust regime and played a prominent role in designing the international legal norms of free trade (see Djelic, 2002 for its post-war influence).As I will show, the U.S. actively promoted the diffusion and harmonization of antitrust law norms in the 1990s, using trade agreements, international financial organizations, technical assistance programs, international legal coordination agreements, and expert networks.However, we know little about the motivations behind this U.S. promotion, which limits our understanding of the political and economic factors that globalized antitrust laws in the past decades.
There are two main accounts on why powerful states may diffuse laws and regulatory standards: due to the ideological commitments of their internationally connected experts (Meyer et al., 1997;Meyer & Rowan, 1977) and the economic interests of their internationally competitive export companies (Drezner, 2008;Vogel & Kagan, 2004).These 'globalists' -borrowing the term coined by Slobodian (2018)-are argued to be the main builders of the diffusion of 'pro-market' laws and regulatory standards in the 1980s and 1990s.However, these are not plausible explanations for the globalization of antitrust, because of the lack of expert consensus on antitrust policies, and the high antitrust compliance costs for export-competing firms.Therefore, I propose and test an alternative argument resting on the literature on trade protectionism.I look at the domestic political pressures from internationally uncompetitive, import-competing companies (Bhagwati, 1982;Tullock, 1967) and protectionist ideas that legitimize free trade limitations (Goldstein, 1988;Goldstein et al., 1993).I also examine the role of domestic institutional settings (Farrell & Newman, 2010;Fioretos, 2011)-namely, the power-sharing arrangements between political decision-makers, domestic trade laws, and national antitrust law enforcement norms.
This study shows that (at least a part of) the process of how competition laws became a global legal norm can be traced back to the trade protectionist interests and motivations inside the U.S. domestic political field in the 1980s.I argue that the global promotion of antitrust norms by the U.S. began not with the globalist economic interests and ideas supporting free market competition, as the common accounts would suggest, but with the protectionist economic interests and ideas that demanded its limitation.These protectionist interests and ideas were shaped in a particular domestic institutional setting, where established trade laws legitimized protectionism based on domestic antitrust law norms, and the domestic antitrust law norms themselves changed to offer fewer protections for the import-competing businesses.In this context, the U.S. promotion of antitrust law norms to foreign nations emerged as one of the leading political responses to protection demands and a preferred method over the traditional methods of protectionism that better fits the then-dominant ideologies of free trade and the domestic established legal norms in the U.S.This finding suggests that powerful states' protectionist motivations can also be the force behind the global diffusion of pro-market laws and regulatory standards.
These arguments build on an empirical analysis of the Congressional hearings, reports, and legislative actions over the U.S. trade deficit issue in the 1980s, focusing particularly on the imbalance with Japan.This article's concentration on the U.S Congress is justified by the previous scholarship, which suggests that Congress was the leading trade policy actor in the 1980s, supporting protectionism in a bipartisan fashion, and over-riding the free trade policies of Republican presidents (Chorev, 2007, p. 671;Nollen & Quinn, 1994, p. 492;Schoppa, 1997, p. 10).To cover the perspective of the executive, this article uses antitrust authorities' official reports and press releases, various secondary resources, and newspaper accounts.

The U.S. promotion of global antitrust norms in the 1990s
The basic rules of the U.S. antitrust laws were first legislated with the Sherman Act of 1890 and reformulated through court adjudication and case law developments over a century of enforcement.These laws prohibit monopolization, i.e. the excessive forms of private market power; they limit the exclusionary contracts and agreements between producers, suppliers, and distributors; they prohibit cartelistic (horizontal) agreements between competitors that fix prices and share customers or territories; and they regulate the mergers and acquisitions (M&As) that increase market concentration, often through an administrative, pre-merger clearance system.In addition to private litigation, public agencies, namely the U.S. Federal Trade Commission (FTC) or the Department of Justice (DOJ)'s Antitrust Division, can bring antitrust complaints to courts.
Before the 1980s, the U.S. antitrust laws primarily focused inwards and did not engage much with foreign governments.While the U.S. did export its antitrust norms to Europe and Japan in the aftermath of the Second World War, this promotion remained isolated and did not turn into a universal promotion of antitrust norms (Freyer, 2006, p. 248).For example, the proposal to create an International Trade Organization (ITO) to prevent international cartel agreements failed when the U.S. Congress refused to ratify the Havana-Charter in 1948.As reflected later on, 'it seemed peculiar for them to abandon an instrument that promised international coordination of competition rules' (Wood, 1992, p. 284).By the end of the 1980s, however, the U.S. became a strong supporter of antitrust laws' international diffusion (i.e.adoption of new antitrust statutes) and harmonization (i.e.increasing the shared standards of enforcement and interpretation) both through its government and through antitrust agencies (the DOJ and FTC).
The U.S. Government encouraged foreign nations' adoption of antitrust laws using economic incentives created by free trade agreements and international financial organizations.For example, the North American Free Trade Agreement (NAFTA) with Mexico and Canada in 1992 required the signatory states to 'adopt or maintain measures to proscribe anti-competitive business conduct and take appropriate action with respect thereto.'They also committed to 'coordinating' their competition law enforcement activities (Solano & Sennekamp, 2006, p. 18).While there were a few free trade agreements with such requirements before the 1980s, almost every agreement signed by the U.S. in the 1990s contained competition policy articles (Bradford & Buthe, 2015).The U.S. Government also promoted competition law developments through the World Bank (WB) and International Monetary Fund (IMF).In the 1990s, these organizations began recommending strong competition laws to low and middle-income countries as complements to their privatization and deregulation market reforms (Khemani, 2007;Laffont, 1998).For example, the Indonesian and Thai competition laws were passed mainly due to IMF agreements after the Asian financial crisis (Hazel, 2015;Lee, 2005).
The U.S. antitrust authorities and their experts also began promoting U.S.-style antitrust laws by giving technical assistance to foreign governments and authorities.In 1991, The Economist wrote, 'The Bush administration's trustbusters are far more interested in what is happening abroad than at home' (Economist, 1991).The Assistant Attorney General (AAG) in charge of the Competition Division at the DOJ, James Rill (1989Rill ( -1992)), testified in 1992 that, 'encouraging worldwide efforts toward effective competition policy is an important aspect of our international antitrust program' (Congress, 1992, p. 10).He further reflected in 1994: To the extent that the years 1989 to 1992 can be in some way distinctive, I think, probably the unique defining factor is the Division's leadership together with that of Janet Steiger and her colleagues at the FTC on the global reach of competition policy … Although international antitrust has for a long time been the focus of the Division … , the events of the recent period were more qualitatively than even quantitatively different, more than incremental.(Rill, 1994, p. 904).
One of the first international involvements of the U.S. antitrust authorities was with the Soviet Union.In October 1989, the AAG visited the Soviet Union, 'where one of the topics high on the agenda was a request for advice on competition policy' (Rill, 1991, p. 27).In April and July 1990, the DOJ and FTC participated in discussions with Soviet officials and hosted a week-long competition seminar in Washington, D.C., for the creation of the first Soviet competition laws (Rill, 1992, p. 275).The same year, antitrust agency representatives also traveled to Eastern European countries to consult with local governments and new antitrust agencies (Rill, 1991).AAG Rill personally visited the new competition agencies in Czechoslovakia, Hungary, and Poland, and officials from the DOJ and FTC stayed on long-term missions in Bulgaria, Poland, and Czechoslovak to train the members of their new competition authorities (Rill, 1991).The U.S. agencies also trained a dozen new Latin American competition authorities in Washington (Glater, 1993).
The U.S. antitrust authorities also established new multilateral coordination and cooperation agreements with other competition agencies to facilitate enforcement harmonization.Congress passed the International Antitrust Enforcement Assistance Act in 1994 allowing antitrust authorities to sign these agreements with foreign antitrust authorities without any formal agreement between governments (Congress, 1992, pp. 10-11).This approach was echoed by the DOJ's International Competition Policy Advisory Committee (ICPAC) in 1997, which recommended new 'global competition initiatives' consisting of voluntary networks of competition authorities and experts (Marquis, 2014).This led to the creation of two of the most active international organizations on competition policy under U.S. leadership.First, within the OECD and under the chairmanship of James Rill, the Competition Committee revised its role in 1994 as 'providing a foundation for convergence of substantive rules and enforcement practices in competition policy' (OECD., 1994, p. 3) and opened its workshops to non-member countries.These changes culminated in the creation of the Global Forum on Competition in 2001.Also, the U.S. authorities were among the first few founders of the International Competition Network (ICN) in 2001, which today comprises 132 competition agencies from 119 jurisdictions (Blachucki, 2016).These networks design legal best practices, provide training and technical assistance to authorities, and create national rankings and point systems that encourage the global diffusion and harmonization of national antitrust law enforcement standards.

Alternative explanations for the U.S. promotion of antitrust policies
The IPE literature conceptualizes powerful states as international normative leaders, creating the laws and policies the other countries emulate.By setting the regulatory standards for their large internal markets and internationally active corporations, these states create strong market pressures on other states to follow suit (Simmons, 2001;Drezner, 2008 ).These states are also skillful political actors, leveraging their economic and normative power to shape the contents and decisions of international institutions, such as the WB or WTO (Drezner, 2005;Williamson, 1993).As the previous section suggests, all these different forms of influence were used by the U.S. to some extent to diffuse antitrust law norms in the 1990s.
What is less clear is how dominant states decide their preferred international legal and regulatory standards in the first place.In this case, why did the U.S. promote strong antitrust law standards internationally in the 1990s?The traditional approach in IPE echoes the 'two-step' approach of the IR theory (Milner, 1997) and looks at the domestic regulatory preferences of states to derive these international preferences.In this approach, various domestic factors, such as economic interest groups, policy ideas, and institutional legacies, determine the domestic regulatory 'status quo' of powerful states (Drezner, 2008, p. 40).This domestic status quo, which is often more stringent than the global norms 3 , then sets the 'ideal' regulations that the dominant states will try to establish internationally (Bradford, 2015, p. 166;Drezner, 2008, p. 843).However, as Fioretos argues, this two-step approach 'offers no clear answer to when government preferences shift and in what direction' (Fioretos, 2010, p. 697).Therefore, it cannot explain why the U.S. became an active promoter of antitrust norms only in the 1990s.This is because this common approach fails to explicitly theorize how domestic economic and political mechanisms translate domestic regulatory arrangements into international regulatory preferences.However, from common IPE accounts on law and policy diffusion, we can derive two possible connections between the domestic and international regulatory preferences of powerful states: globalist experts and economic interest groups.
On the role of experts, research on 'world society' (Finnemore, 1996;Meyer et al., 1997;Meyer & Rowan, 1977) and 'epistemic communities' (Braithwaite & Drahos, 2000;Haas, 1992) argue that the beliefs in certain laws and policies as best practices are the key to their global diffusion.These beliefs often rest on the domestic regulatory experiences of dominant states, which are then generalized through expert theorization and spread through international expert socialization (Burley-Slaughter, 1998;Manners, 2008).Based on this common argument we could hypothesize that the U.S. government and agencies supported the diffusion of antitrust laws and regulatory standards in the 1990s, because the U.S. antitrust policy actors and experts believed in the economic benefits of antitrust regulations, relying on their own regulatory experiences at home, and conceived them as a universal best practice that would also benefit foreign nations.
Nonetheless, there is little evidence to suggest that the U.S. antitrust experts were idealizing the domestic antitrust norms as universal best practices and sought to diffuse them abroad during the 1980s.On the contrary, the traditional confidence in the U.S. antitrust laws and their economic benefits was shattered under intense criticism from the Chicago School of Law and Economics in the 1970s (see Bork, 1967Bork, , 1978;;Posner, 1976).By the 1980s, an expert 'counter-revolution' was already under way to curtail the U.S. domestic antitrust restrictions (Khan, 2017;Khan & Vaheesan, 2017).Under this School's influence, federal courts and antitrust agencies gradually relaxed the enforcement standards, overturned restrictive case law precedents, and re-categorized many business practices previously thought to be anti-competitive as competitive under the U.S. antitrust laws (Davies, 2010;Eisner & Meier, 1990).For example, predatory pricing-a strategy of using aggressive price cuts to eliminate economic rivals-was considered welfare-enhancing and almost categorically pro-competitive (Bork, 1978).Only the cartel agreements with price-fixing effects and the mergers that caused very high levels of market concentration deserved antitrust regulations due to their universal negative effects on consumer welfare (Bork & Bowman, 1965).Furthermore, even if the U.S. antitrust experts sought to diffuse these policies, there was no international expert consensus.The reduced version of antitrust regulations in the U.S. was hardly idealized by the European experts, who continued to uphold a broader vision for competition regulations (Ergen & Kohl, 2019).Therefore, it is unlikely that globalist antitrust experts were the inciters of the U.S. efforts to diffuse these policies abroad.
A more realist approach instead suggests that the international competition for investors and export markets leads powerful states to prefer externalizing their domestic regulatory standards (Bach & Newman, 2010).Having more restrictive regulations at home can put their domestic firms 4 at a disadvantage, facing higher transaction costs than their foreign competitors (Drezner, 2005;Princen, 2004).The 'Baptist-bootlegger' coalition theory argues that the expectation that their foreign competitors in other countries would not be able to succeed in a highly-regulated environment leads multinational companies competing for export markets to actively lobby powerful state governments to externalize their domestic restrictive laws (DeSombre, 1995, p. 68;Vogel & Kagan, 2004, p. 7).These theories suggest a second potential explanation for why the U.S. supported the diffusion of antitrust laws: the U.S.-based, export-competing firms might have pressured the U.S. Government to diffuse antitrust law norms abroad, expecting that their foreign competitors would not be able to adjust to these new regulations, allowing American businesses to gain more market shares in those export markets.
However, American exporting firms also had much to lose from diffusing restrictive antirust policies to other countries.In the 1980s, the U.S. exports consisted mostly of services, mainly financial services, which expanded through international M&As (Lloyd, 1998, p. 169) and restrictive licensing, outsourcing, and franchising agreements with foreign providers (Buckley & Enderwick, 1985).Thus, new foreign antitrust regulations would restrain or at least increase the bureaucratic red tape over these commonly used market expansion strategies.There is also little empirical evidence to suggest that exporting firms were actively lobbying the U.S. government for the diffusion of antitrust law norms in this period.Instead, the most influential representative of export companies, the Business Roundtable, was campaigning for the domestic softening of the U.S. antitrust policies, arguing that restrictive antitrust standards were an impediment over free trade (Christophers, 2016;Congress, 1981b, p. 74).Their main demands from foreign governments focused instead on the elimination of performance and technology transfer requirements, and the remittance and repatriation restrictions on their investments (Congress, 1983e, p. 95).
While I evaluate these potential explanations further in the following empirical sections, given their clear weaknesses in explaining the U.S. motivations to diffuse antitrust norms, I also develop and test an alternative explanation building on the literature on trade protectionism.

The U.S. antitrust promotion as protectionism
Protectionism refers to the policies that aim to protect some domestic companies operating either in the traditional (e.g.textiles, manufacturing) or emerging (e.g.software, supercomputers) sectors of the economy that would otherwise fail to survive foreign competition under conditions of deregulated (free) international trade.Protectionist policies can comprise of asymmetric restrictions for foreign producers (e.g.quotas, fees, dumping charges, etc.) or asymmetric benefits for domestic producers (e.g.subsidies, tax breaks, etc.) (Chorev, 2007;Nivola, 1986;Nollen & Quinn, 1994).They can also manifest in high domestic regulatory standards when these regulations asymmetrically burden foreign companies (Mah e, 1997).
To explain protectionist policies, researchers focus on the influence of importcompeting firms, i.e. domestic companies that have their operations mainly in one national market and are likely internationally uncompetitive (Bhagwati, 1982;Tullock, 1967).Because of the difficulties in differentiating companies in terms of economic operations (in a globalized economy, most businesses have some international connections in development, production, distribution, etc.), these studies instead differentiate import-competing companies by their political complaints.Import-competing firms complain about the import penetration of foreign firms, while, by contrast, export-competing companies' complaints are more about accessing export markets.Import-competing firms are especially influential in political contexts where the success of some national industries (e.g.agriculture or airlines) are associated with national security or international prestige (Nollen & Quinn, 1994, p. 497).
Protectionism literature emphasizes that business demands for trade protections must be articulated and legitimized through some commonly accepted ideas on when and why these protections are necessary or deserved (Goldstein, 1988;Goldstein et al., 1993).A time-honored protectionist idea in the U.S. is, what several scholars have called, 'fair trade' (Chorev, 2007;Goldstein, 1988;Nollen & Quinn, 1994).In this framework, the protection demands and policies are justified by the 'unfair' conditions in the international economy created by some foreign economic practices and policies that diverge from the U.S. ones.This idea of fair trade departs from the orthodox conceptions of free trade, as the latter advises nations to take advantage of and even lean on the differences in their domestic investment and business conditions (e.g.relative factor costs), and the former opposes them as unfair practices (Nivola, 1986, p. 596).Nevertheless, the fair-trade idea serves to justify protectionist policies within the liberal framework on free trade by arguing that they are corrective actions aiming to create 'a level playing field' and a return to more ideal conditions of free, competitive markets in the international economy (Goldstein, 1988, p. 198).
Protectionism studies also highlight the role of state actors and institutions in shaping how protectionist ideas are formulated and received in politics.Political actors can use protectionist policies to compete for votes, ideological influence, and political power.Established institutional settings, such as the power-sharing arrangements between different branches of government, shape how this competition plays out (Lohmann & O'Halloran, 1994).In addition, established domestic legal norms and standards constrain which economic interests and protectionist ideas can influence policy decisions at any point in time (Farrell & Newman, 2010;Fioretos, 2011).For example, as Goldstein shows, the U.S. trade laws constrain how businesses can demand protection from the executive government, what constitutes a legitimate demand for protection, and what protectionist policies the government can employ in response (1988).These laws contain not only the laws in the book, i.e. the formal rules legislated into law, but also the laws in action, such as the interpretations and implementations of the law in practice.
I argue that protectionist economic interests, ideas, and institutional influences can motivate powerful states to advocate for the international diffusion of regulatory norms, which may seem pro-market, like competition laws.Just like exportcompeting companies, import-competing firms can shape states' international regulatory preferences, albeit more indirectly.As they campaign for more restricted trade, they problematize the business practices and policies in foreign nations for creating unfair advantages for their international competitors and an unlevel playing field.The political response to this campaign is not necessarily the creation of more trade restrictions.Instead, how economic, and political agents evaluate international regulatory standards is shaped by their domestic institutional environment.Thus, governments can try to remedy the perceived problems in international trade and try to suppress import-competing firms' protestations over free market policies by diffusing restrictive legal and regulatory norms to foreign nations.This political response is likely when these legal norms are connected to liberal economic ideas and idealized market conditions.Although this does not fulfill their main demands, import-competing companies and their political allies can also get behind this proposal, since, unlike the export-competing firms, they have little to lose from higher regulatory standards abroad, which would only affect foreign competition.
In the following pages, I will demonstrate that this protectionism-based argument offers a better explanation for why the U.S. government became interested in supporting antitrust law as a global norm in the 1990s.I will show that the political pressures from import-competing companies were shaped by the domestic trade and antitrust laws, which then led these companies to argue for the unfairness of foreign business practices and policies based on their infringement on domestic antitrust norms.While these business pressures failed to push the U.S. government to restrict trade, they succeeded in motivating the U.S. government and agencies to diffuse antitrust law norms to foreign nations.

The economic and institutional context
Economic policy debates in the U.S. were dominated by the rapidly worsening trade deficit in the 1980s, which grew from $2.5 billion in 1971 to $128.1 billion in 1988 (U.S.Department of Commerce, 1989).This was largely due to the declining international competitiveness of American manufacturers, not only in the traditionally import-competing sectors of the economy, such as textiles, steel, consumer electronics, and automobiles, but also in high-technology sectors, such as semiconductors, supercomputers, and numerically controlled machinery.The American manufacturers in these high-tech sectors were losing market shares at home, let alone being able to penetrate foreign markets.While the U.S. exports in the services sector, especially finance, were booming, they could not keep up with rising imports.The geographical distribution of U.S. trade was also changing.The share of Western European countries in U.S. exports dropped from one-third in 1970 to 27% in 1989 (Hervey, 1990, p. 4).Concurrently, the imports increased 16fold, exports increased 10-fold with Japan, and the combined the U.S. trade with Southeast Asian countries, namely Hong Kong, the Republic of Korea, Singapore, and Taiwan, exceeded the combined trade with the United Kingdom and West Germany (Hervey, 1990, p. 5).By 1984, the U.S. was also running a deficit with Brazil and Mexico (Congress, 1985b, p. 3).
While Presidents decide the U.S. trade policies, Congress has traditionally been the place where business influence, either in the form of lobbying and campaign donations or in the form of state-level business investments and employment creation, has shaped trade policy decisions (Destler, 2005).In the 1980s, as the U.S. relationship with the Soviet Union improved, Congress focused more on the growing trade deficit as the primary national security problem and increasingly took over this policy area from the President (Schoppa, 1997, p. 54). 5 This reinforced the political influence of import-competing companies, especially those operating in the semiconductor and high-tech machine industries, which were seen essential to maintaining the national defense systems (Dinopoulos & Kreinin, 1991). 6 In the same period, the domestic changes in the U.S. antitrust laws and policies were diminishing the import-competing companies' ability to survive foreign competition.In the 1980s, joint ventures on production and research activity became American manufacturers' main strategy to increase their productivity to compete with foreign competitors (Whitford, 2005).However, with the increasing criminal prosecution of cartel cases under the Chicago School-based interpretation of antitrust rules (Kovacic, 2003, p. 420) this strategy became more liable to antitrust litigations.Two legislations in this period tried to reduce this liability but only benefited export-competing firms: the Export Trading Company Act of 1982 granted partial antitrust immunity and single damage treatment to export ventures, and the National Cooperative Research Act of 1984 gave R&D joint ventures full immunity from antitrust laws (Congress, 1987a).These protections could not be extended to import-competing businesses under the dominant Chicago School approach.When Congress tried to grant antitrust law exemptions to failing import-competing businesses, leading antitrust experts and agencies opposed the proposal.For example, the AAG William Baxter told the Senate he would rather 'grant them [failing companies] a license to import heroin' (Congress, 1990, p. 22).
Furthermore, the domestic anti-cartel rules could not be extended to businesses operating abroad.Most of the countries in Asia and Latin America that started trading freely with the U.S. did not have any domestic antitrust laws, or if they had them in the books, they did not enforce them in practice.While the U.S. antitrust laws have jurisdiction over conduct committed outside of the U.S. when it produces (or attempts to produce) anti-competitive effects in the U.S. domestic markets (so-called effects doctrine) (Waller, 1996), this extraterritorial application has always received fierce resistance from foreign governments. 7In the 1980s, the Reagan administration further rolled back the extraterritorial enforcement of the U.S. antitrust laws to prevent it from being discussed during the GATT negotiations by committing antitrust agencies to 'accommodate the vital interests of other states whenever accommodation is not inconsistent with its own essential national interests' (Congress, 1986a, p. 69).Thus, the domestic changes in the U.S. antitrust laws made the international regulatory imbalance in antitrust regulations especially costly for American import-competing companies.

The association of the U.S. trade deficit with foreign cartels
In this institutional context, the trade deficit problem was perceived and addressed differently by domestic economic and political actors.In his first term, President Reagan's administration maintained that American manufacturers' declining savings, problems in labor management, and insufficient design and marketing efforts were the main causes of this deficit, and blamed these problems on the domestic tax rates, labor and environment laws, and sectoral regulations (Congress, 1979a(Congress, , p. 6, 1979b)).While the administration also accused foreign governments for erecting new 'non-tariff trade barriers,' these barriers were defined narrowly (i.e.product standards, customs clearance procedures, 'buy-national' policies, etc.) and negotiated during the multilateral talks at the GATT (Deputy U.S. Trade Representative in U. S. Congress, 1982, p. 79)  8 .The only protectionist measures the Reagan administration approved were the voluntary export restraints (i.e.foreign exporters agreeing to limit exports of certain products), which were viewed as a more 'liberal' alternative to formal import restrictions (Nivola, 1986).The Business Roundtable and leading economists supported the administration's deregulation and tax reform agenda (Congress, 1981b, p. 74).They also supported the Dollar-Yen negotiations in 1985, arguing that the undervaluation of the Japanese yen by financial restrictions was the primary cause for the U.S. trade imbalance with this country (Congress, 1981b, p. 74;1983a, p. 17).
The import-competing firms instead blamed the industrial policies of foreign governments (also called 'industrial targeting') for the mounting trade deficit problem and turned to Congress for influence.Particularly focusing on Japan, they argued that foreign governments' provision of secure and low-interest rate loans and facilitation of the coordination among domestic manufacturers subsidized the imports into the U.S. and constituted an 'unfair' trade practice, tipping the playing field against the import-competing American businesses (Congress, 1979a, p. 15;1979b, p. 9, 14).However, the American political marketplace at the time was dominated by a strong belief in the benefits of free markets, rejecting the benefits of industrial policy.It was commonly argued that foreign industrial policies presented American consumers with the 'gift' of cheap imports and they would in the long run allow more efficient American producers to take over foreign markets (Milton & Rose, 1980, p. 45).Foreign policies and practices could be grounds for protection only if they were harming consumer welfare and productive efficiency.This led American manufacturers to associate foreign industrial policies with anticompetitive business practices, particularly cartelization, which the U.S. antitrust laws under the Chicago School influence strongly prohibit precisely due to its harmful effects on consumer welfare and productive efficiency.For example, as early as 1979, the representative of the Semiconductor Industry Association stated in Congress that the Japanese enterprises 'coordinate research in ways that would certainly violate our antitrust law' (Congress, 1979b, p. 10).In its 1982 report, this association more explicitly alleged that 'The Government of Japan tolerates and even encourages the formation of cartels' (Congress, 1982a, p. 122).Prominent American car and electronics manufacturers and the National Association of Manufacturers (NAM) made very similar claims (Congress, 1982b, p. 6, 16;1982c, p. 420).
While Japan at the time had numerous legal cartels officially exempted from Japanese antitrust laws 9 , these were not the target of these complaints.Most of these legal cartels were in the declining sectors of the Japanese economy and were not internationally competitive (Congress, 1982c, p. 399).Rather, American businesses targeted the keiretsu firms operating in the growth sectors of the Japanese economy.Keiretsu groups were a network of companies tightly connected through shared (interlocking) owners and directors, exchange of personnel, and management communication, created under the implicit or explicit support of the Japanese Government.American manufacturers argued that, as cartel organizations, keiretsu firms formed exclusivity agreements with their dealers and distributors and solely traded with each other, which effectively blocked the entry of foreign sellers.This allowed the keiretsu groups to collect high profits at home, which they could then use to sell their products at lower prices in the U.S. and to displace the American manufacturers from their own home markets.While this benefited the U.S. consumers in the short run, it would harm them in the long run by raising prices after the elimination of domestic American competitors.In any case, the American antitrust laws prohibited cartels regardless of their price effects (Congress, 1983b, p. 469).
These antitrust-based arguments were built on specific business complaints and petitions, particularly on the Houdaille petition filed in 1982. 10This high-profile petition claimed that a Japanese cartel had systematically displaced Houdaille and other American producers of numerical machines from the U.S. domestic market through exclusionary practices. 11The case gave much material to business lobbying on Congress, providing hundreds of pages detailing Japanese corporations' alleged anti-competitive practices and the Japanese Government's complicity (Congress, 1982b, p. 399).As the following statement by a NAM representative suggests, the Houdaille petition's framing of Japanese industrial policies as cartelization was cognizant that the then-dominant trade policy norms considered foreign industrial policies harmless but registered the presence of foreign cartels as a potentially legitimate basis for import-relief: The petition might as well have said it was achieved as a result of Japanese industrial policy.Presumably it did not because a foreign industrial policy per se provides no explicit basis for a petition under U.S. law, but one that involves 'tolerance of international cartels' does … Because of the Houdaille petition, it is no longer possible to argue that advanced and healthy U.S. industries are immune from the injurious effects of foreign industrial policies (Congress, 1982c, pp.399-400). 12  By 1985, these narratives connecting foreign business practices and policies with cartelization gained significant political influence upon both Democrats and Republicans in Congress, even attracting some former Reagan administration members (Congress, 1987b, p. 104).For example, the 1985 Report of the Congressional Committee on Finance urged the President to respond to the 'unfair trade practices of Japan,' including the 'collusive activity' and 'cartel-like behavior' of keiretsu groups (Packwood, 1985, pp. 8-9).Another Congressional report in 1986 titled 'Japanese Industrial Collusion and Trade' discussed in length why 'the Japanese economy exhibits a unique blend of competition and collusion' (Economic Committee, 1986, III).Another report in 1988 endorsed the argument that national cartels cannot be eliminated by trade liberalization alone; they are instead impediments to fair trade (Price, 1988, p. 27).There was also a growing concern that such practices were not limited to Japan (Congress, 1983d).For example, a 1986 Energy and Commerce report also noted South Korea, Taiwan, Mexico, and Brazil as unfair trade partners (Congress, 1986b).However, given the domestic political commitments to free trade and antitrust law norms, there were few options to remedy this 'unfair' situation.Thus, some business representatives and members of Congress argued that the only way forward was to diffuse antitrust norms abroad: What are our options?Are we going to change the antitrust laws in this country?Of course not, we are not … If we chose to do some of the things that the Japanese have done, modify our antitrust laws and provide low-cost loans for research and development, that is another matter.That is not a political possibility in this country … There is only one way left.The only way is to get them over here, where all of those things or most of those things don't apply (Chairman of American Motors Corp., U. Congress, 1982c, p. 576).
Can we afford to do things the Japanese way?Can the world afford to do things the Japanese way? … I realize that is terribly simple, because there are things we can learn from the Japanese, but I think that our approach to antitrust might be a better model for world competition.(Congressman Bailey, U. Congress, 1982c, p. 696) It is important to highlight that domestic antitrust experts and export-competing companies lent little support to the import-competing businesses' claims regarding foreign cartelization.Most academics and economists, given the opportunity, expressed in Congress that import-competing businesses' cartelization claims were misplaced, and the Japanese keiretsu system was an efficient system of business organization designed to bring a steady supply of components at stable prices to allow for production at lower costs (Congress, 1985a). 13Also importantly, the domestic antitrust experts refused to enforce the U.S. antitrust laws on the foreign business practices that the import-competing companies conceived as extensions of foreign cartelization.The clearest example of this was a U.S. Supreme Court decision, Matsushita Elec.Indus.Co. v. Zenith Radio Corp, in 1986.This complaint echoed the Houdaille petition and argued that Matsushita conspired to fix prices and collected high markups in Japanese markets, which it then used to undercut prices in the U.S. markets.The Supreme Court found Matsushita not guilty, arguing that 'a predatory pricing conspiracy is by its nature speculative.'This decision was supported by an amicus curiae brief filed by the DOJ, where Matsushita's conduct was characterized as 'vigorous price competition' (Congress, 1989a, p. 10).Similarly, the 1984 Business Roundtable report to the Reagan administration and Congress on foreign governments' trade restrictions did not mention cartels or any anti-competitive practices as an impediment over free trade (Congress, 1983e, p. 95).At times the Business Roundtable representatives even explicitly opposed the Congressional calls to diffuse strong antitrust laws, for example, by stating 'We must recognize that we cannot expect the laws of other countries to parallel our own' (Congress, 1982a, p. 291).Therefore, barring the import-competing firms' problematization of foreign business practices as cartelization and their influence over Congress, the U.S. was unlikely to demand strong antitrust law norms from foreign governments in this period.

Trade Law and SII negotiations with Japan
These discussions and business pressures on the U.S. trade deficit set the stage for Congress' reforms to the Trade Law in 1988 and the SII talks with Japan in 1990.By his second term, President Reagan's rejection of business complaints about foreign cartelistic practices, including the Houdaille petition 14 , had led some in Congress to propose revising the U.S. Trade Act of 1974.This Act had already allowed American businesses to request import protections, such as countervailing duty and dumping fines, when there are 'unfair and unreasonable trade practices'.But it also granted the President broad discretion over defining these practices and choosing the protective measures.To limit the President's discretion, import-competing firms proposed to specify the definition of unfair practices to include cartelization and the lack of antitrust laws.The representative of the Semiconductor Industry Association demanded: 'It should be made clear that foreign government tolerance of an industry cartel is actionable under Section 301 of the Trade Act of 1974' (Congress, 1985d, p. 48).Congressmen agreed: 'Obviously, there is no way we can put this Government to work at trust-busting abroad … But we can consider finding a way through the trade law to make such conduct a consideration' (Congressman Gaydos in U. Congress, 1983c, p. 288).Thus, Congress passed the Trade Act of 1988 with this explicit definition of unfair trade practices: (A) … include, but not limited to, any act, policy or practice … which (i) denies fair and equitable … (III) market opportunities, including the toleration by a foreign government of systematic anticompetitive activities by private firms or among private firms in the foreign country 15 (emphasis added).
The US Trade Representative (USTR) was now responsible for not only evaluating business petitions on unfair foreign practices but also compiling a list of countries that consistently protected these practices under the new 'Super 301' provision, which obliged the President to retaliate in some form.Countries could avoid being blacklisted if they made 'significant and tangible' improvements to their institutions to prevent unfair practices.In other words, with the 1988 Trade Act, the U.S. Congress was explicitly putting pressure on foreign nations to adopt stronger antitrust law standards with the threat of unilateral protectionist retaliation.
However, when the USTR finally blacklisted Japan, Brazil, Korea, and India as countries with persisting unfair trade practices on April 30 th , 1988, it did not explicitly condemn the Japanese keiretsu firms and their alleged-cartelistic conduct as unfair practices as Congress had intended.Anticipating Congress's adverse reaction to this omission, the new Bush administration announced on the same day a new round of trade negotiations with Japan called 'Structural Impediments Initiative' (SII).These negotiations departed from the previous ones in two respects: they were not industry-specific but targeted the totality of the Japanese economy, and they were not attempting to correct the trade imbalance through export restrictions but to align the Japanese and American laws, regulations, and business practices assumed to be creating this imbalance (Congress, 1989b, pp. 3-10).
Although SII was designed broadly and involved multiple U.S. departments and agencies 16 , it nevertheless prioritized antitrust policy negotiations.At least half of the departments reported eliminating anti-competitive practices of Japanese businesses as their main negotiation goal (Schoppa, 1997, p. 81 & 216).Carla Hills, the leading trade representative, publicly stated that the Japanese must adopt strong antitrust law enforcement policies 'at a minimum' to call the SII negotiations a success (Congress, 1989c, p. 3).Leading business lobbies and political actors in Congress supported this prioritization.For example, the Vice President of the U.S. Chamber of Commerce exclaimed 'one thing we do agree with Mrs. Hills is that at a minimum, why don't you begin to enforce the antitrust laws of Japan which gets to some of the problems' (Congress, 1989c, p. 8).Although SII also had the goal of opening Japan to U.S. exports, the antitrust negotiations were explicitly motivated by the goal of protecting U.S. markets: For the past 100 years the United States has been free of trusts and cartels and we cannot permit the Japanese to sneak theirs through the back door.Busting Japan's trusts is essentially free trade.With more and more Japanese investment in the United States, it is critical to the preservation of our own free enterprise system of open competition.(Chairman of Boone Co., Congress, 1989c, p. 20).
As this quote suggests, the association between domestic antitrust norms and free markets would also allow the Bush administration to reaffirm its commitment to free trade while simultaneously responding to domestic protectionist demands.
Antitrust laws were not prioritized because they were readily accepted by Japan.On the contrary, there was significant resistance from the Japanese Government and businesses to the U.S. antitrust demands (Matsumoto, 1991), leading to significant delays in negotiations and outright rejection of some proposals (Schoppa, 1997, p. 215).The Japanese antitrust laws were first legislated in 1947 under U.S. occupation and closely resembled the U.S. laws.However, over time, these laws were revised to create loopholes and reduce restrictions to protect the domestic keiretsu groups and small producers (Schaede, 2000, pp. 14-15).In SII, American negotiators sought to reform the Japanese antitrust laws almost entirely.In addition to increasing statutory coverage and penalties, they requested increased staffing and funding for the Japanese Federal Trade Commission (JFTC).Going beyond mere formal changes to the laws in the books, they specifically demanded more active law enforcement (Congress, 1989c, p. 9-10 & 41).They also asked for the creation of a more effective private remedies system for business litigation to compensate for the potential future inactions by the JFTC.Some of these U.S. demands, for example, the creation of more private enforcement, and criminal prosecutions for cartels, would fit the new interpretation of the U.S. antitrust rules at home, but they went beyond and above the domestic standards by demanding stronger restrictions on all anticompetitive practices.
Despite the unpopularity of these demands in Japan, the perception that the U.S. Congress was watching over the talks closely and was ready to unilaterally punish Japan (which was not baseless given that Congress continued to hold hearings and considered new trade legislations while the negotiations were still ongoing) motivated Japanese politicians to make substantial changes to their domestic antitrust regime. 17The JFTC also acted as a natural ally for the American negotiators in supporting the expansion of its jurisdiction and resources (Schoppa, 1997, p. 226).As a result, SII concluded with some commitments from Japan to 'rigorously deal with such conduct as price cartels, supply restraint cartels, market allocations, bid-rigging, and group boycotts, and taking more formal actions' (Congress, 1990, pp. 56-60).In the two years following the agreement, the Japanese Government increased the investigative staff of the JFTC by 38%, reformed its anti-monopoly law to substantially increase administrative fines and criminal violation penalties, took 30 formal actions against violators, including one high-profile criminal cartel case and eight bid-rigging cases, and imposed a record high level of fines ($97 million) (Congress, 1992, pp. 23-25).
Regardless of its actual impact on the Japanese antitrust laws or economy 18 , SII became a model for U.S. free trade agreements with other countries in the 1990s (Matsushita, 1990).The competition law articles of new trade agreements in the 1990s standardized the demands that were initially laid out with Japan.Even without a formal agreement, the high-profile trade negotiations with Japan and the new articles of the 1988 Trade Act threatening protectionist retaliation made every other country aware of the U.S. preference for only trading with nations that adopted strong antitrust regulatory standards.These developments must have also motivated the U.S. antitrust agencies (the FTC and the DOJ) to revamp their international activities to diffuse and harmonize antitrust law norms in the 1990s to gain more legitimacy and resources from Congress.For example, the Congressional pressure led the antitrust agencies to revise their guidelines on the international enforcement of antitrust laws in 1992 in support of more extraterritorial enforcement.This caused substantial fear among Japanese businesses (Matsumoto, 1991) and increased the pressures to revitalize the Japanese antitrust laws.During confirmation and oversight hearings in the early 1990s, Congress showed appreciation for the increased international activism of antitrust agencies and rewarded them with budget increases (Congress, 1990, p. 26 & 53).In other words, the 1988 Trade Law and the SII negotiations with Japan, both aiming to diffuse antitrust law norms to foreign nations, had substantial spillover effects over other trade negotiations and the U.S. antitrust agencies' international activities.

Conclusion
This article shifts the investigation of globalization in antitrust laws away from the usual suspects in the domestic political and economic motivations of the states newly adopting these laws or strengthening their existing ones in the 1990s, and to the domestic political and economic motivations of powerful states promoting and even at times coercing their diffusion and harmonization.While this move is justified by the strong IPE scholarship on the role of powerful states in creating international legal norms under economic globalization, it also addresses a growing need within this scholarship to understand the motivations of these states in their international promotion of certain legal norms.The existing theories in the IPE do not provide straightforward answers to what processes and mechanisms translate the domestic legal institutions of powerful states into their international regulatory preferences.This article proposes and tests two arguments based on common theories on policy and law diffusion and trade protectionism.The first set of hypotheses examines the role of expert ideas and export-competing companies.The second set of hypotheses investigates the economic interests of import-competing businesses, protectionist ideas on fair trade, and the domestic institutions and legal standards affecting them.
While this study found no evidence for the idealization of the U.S. antitrust laws as universal best practices by policy experts, or the demands from the exportcompeting companies for their diffusion in the early 1980s, I did find that the economic interests of the import-competing companies, the protectionist ideas they propagate, and domestic institutions played important roles in the U.S. Government and its agencies' promotion of antitrust law norms in the 1990s.Through an investigation of the Congressional debates over the U.S. trade deficit issue, particularly with Japan, I show that among the alternative interpretations of this complex problem, the antitrust-related ones were among the most politically popular.I traced the origin of this popularity back to the complaints and petitions of import-competing businesses, primarily the semiconductor industry.These narratives contributed to labeling the Japanese industrial policies as unfair trade practices by associating them with cartelization and other anti-competitive practices.In the 1980s, the U.S. antitrust law norms were also transforming at home-becoming less demanding from foreign businesses but more demanding from domestic businesses-which reinforced the antitrust-related demands from import-competing companies.Finally, the 1988 Trade Act formalized that the U.S. could retaliate with protectionism when antitrust norms are not protected abroad, and the U.S. demanded the strengthening of the Japanese anti-monopoly laws at the SII in 1990.This Act and the SII negotiations provided the political stimulus and a model for the U.S. Government and its agencies to continue promoting antitrust norm strengthening in other foreign countries in the 1990s.
The argument that protectionism was the root cause of the United States' interest in diffusing strong antitrust laws challenges the common assumptions on why powerful states may promote these laws.It has been argued that these diffusion efforts can be 'aggressive market-opening measures' (Mastanduno, 1992, p. 246), eliminating foreign monopolies and cartels in export markets so that the multinational corporations can enter them more freely.This was indeed a component of the SII negotiations, where domestic horizontal and vertical integration by the Japanese keiretsu firms was seen as an impediment to the U.S. companies' entry into Japan.However, as I have shown, these firms' advantages in market-closing were strongly tied to their ability to price their exports below cost in the U.S. market, which was the main economic harm politically problematized by Congress.Furthermore, the American export-competing companies themselves were not problematizing the cartels or other anti-competitive practices as impediments to their entry into foreign markets.Rather, they focused on more tangible regulatory barriers to entry in those countries.This may have to do with the suggestion of the mainstream liberal economic ideas that antitrust laws are mostly redundant in deregulated and globally integrated market economies (see a summary of these ideas in B€ uthe, 2015).
The connection between domestic protectionist demands and powerful states' international regulatory preferences for strong international antitrust norms does not mean, however, that the diffusion of these norms necessarily achieves the desired economic effects of reducing imports into those states.It suggests instead that antitrust laws can be used to restrict the export-promoting industrial policies of foreign nations when they turn a blind eye to monopolistic or cartelistic business conduct.From this perspective, the diffusion and harmonization in antitrust norms have been a way to reduce the global heterogeneity in national economic policies and culturally entrenched domestic business practices to create a more leveled playing field for import-competing companies.Furthermore, the connection between protectionism and antitrust globalization laid out here is different from such potential connections argued by other scholars (see, e.g.Baumol & Ordover, 1985).These scholars suggested that the countries adopting new or stronger antitrust laws may intend to use them to protect their national, import-competing industries.While this article does not investigate the demand-side of antitrust law diffusion, it nevertheless suggests that, at least in the case of Japan, there were no clear protectionist motivations for using domestic antitrust laws against U.S. companies.
While focusing on domestic factors and influences on the U.S. international regulatory preferences, this article has mostly left the international influences over these regulatory preferences unexplored.An important point left out of this article is that the U.S. approach to diffusing its preferred antitrust norms contrasts with the diffusion approach the EU pursued in this period: creating a set of international competition laws under the World Trade Organization (WTO) through government negotiations (Marquis, 2014;Waller, 1996). 19The U.S. strongly opposed this proposal and favored multilateral 'soft convergence' through deliberation, persuasion, surveillance, and self-regulation over 'hard convergence' based on international rules (Blachucki, 2016).As AAG Dianne Wood argued in 1995, 'The type of controlled and modest inter-agency sharing arrangement we are now able to create seems greatly preferable to some kind of supranational World Competition Authority' (Wood quoted in Steiner, 1996, p. 587).These findings suggest that the U.S.-E.U.rivalry during this period may have contributed to the United States' motivations to diffuse its own model of antitrust laws.Furthermore, the international reactions to the increasing U.S. interest in diffusing antitrust law norms may also be important in reinforcing the antitrust globalization trend.For example, to break the unilateral U.S. pressures and influence over the Japanese antitrust laws, Japan called on the OECD's Competition Policy Committee to organize multi-national talks to formulate new international guidelines on competition laws and policies in 1991.Therefore, the U.S. unilateral promotion of antitrust norms may have incentivized other states to support the establishment of multilateral agreements and organizations on antitrust policy harmonization.These potentially significant international factors should be explored by future research.
industry stated, 'semiconductors are the crude oil of the 1980s' (Congress, 1979b, p. 9). 7. By 1981, the U.S. Department of State was receiving dozens of complaints per week from foreign governments (Congress, 1981a).Even close U.S. allies, like France and Canada, passed legislations preventing the enforcement of U.S. antitrust laws inside their borders (Congress, 1981a).8.The concept of 'non-tariff' barriers was introduced into international trade negotiations during the Tokyo round of GATT (1973GATT ( -1979)).These barriers are broadly defined as domestic laws, regulations and standards that restrict the activities of foreign industries.9.There were about 500 legal cartels operating in 21 designated industries in Japan in 1985 (Congress, 1985c, p. 173).The U.S. successfully pressured the Japanese Government to limit the issuances of these exemptions in 1983 (Congress, 1983b, p. 229).10.This petition was repeatedly brought up in Congressional hearings, both by the representatives of Houdaille (Congress, 1983b;1985c), and by other business representatives (Congress, 1982a, p. 174;1982b, p. 11).11.Houdaille petition utilized Section 103 of the Revenue Act of 1971, which authorizes the President to suspend investment tax credits to the importers of foreign goods if U.S. commerce was unjustifiably restricted.12.A Houdaile representative also stated: 'We do not view our petition as protectionist in any sense.We believe in free trade … [but] This is not competition.This is a monopoly' (Congress, 1983b, p. 163).13.For example, MIT economist Rudiger Dornbusch testified that Japanese business practices and antitrust laws had 'little to do with' the trade deficit problem (Congress, 1989c, p. 49).14.The President took retaliatory action only twice prior to 1985 (Nara, 1990).15.The Conference agreement on the Trade Act of 1988 also explained: 'This provision reflects the growing conviction on the part of the conferees that anti-competitive, market-restrictive behavior on the part of private firms, when coupled with the failure of a foreign government to intervene to eliminate such behavior, can act as a barrier to market access which is as great as any formal government act, policy, or practice alone.'16.Including the USTR, Treasury, Commerce, State, and Justice departments.17.Japanese newspapers reported that Treasury Secretary Brady warned the Japanese envoy the failure to produce a good result in SII would invite Congress to introduce new protectionist legislations (Kyodo, 1990).18.Some scholars are skeptical that the Japanese economy has overcome its anticompetitive tendencies and the Japanese antitrust laws and authorities have become more active (see Schaede, 2000).19.These laws would be a multilaterally agreed minimum set of competition rules and would have a binding effect by creating dispute settlement procedures.