Remarks by AIT Deputy Director David J. Keegan at a Reception in Honor of the Continuing Competition Policy Dialogue Between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office
BG0407E | Date: 2004-12-20
I am very pleased to have the honor of welcoming such a distinguished gathering to this reception to mark the occasion of our discussion of competition policy and anti-trust enforcement. These are topics of prime concern to both our economies as they are directly related to future competitiveness, economic growth and standards of living for our respective populations.
Taiwan has seen a series of successful transitions over the last five decades, from import substitution to export-led growth, from labor-intensive products to more capital- and technology-intensive goods, from doing all operations in Taiwan to moving production off-shore to take advantage of an increasingly globalized economy.
At every stage, Taiwan's companies have been able to find opportunities that maximize the island's unique mix of resources. As a result, Taiwan has emerged as a ranking international economy and an industrial powerhouse.
Today, Taiwan is at a crucial point where both international trade and domestic market reforms will figure prominently in Taiwan's economic future. To take its economy to the next level, Taiwan will need economic policies that attract new investment in services and manufacturing. It will also need policies and statutes that promote competitive markets and regulatory transparency. This includes a competition regime that promotes freedom of consumer choice and competitive prices while implementing regulation that relies to the greatest extent possible on private incentives rather than detailed controls. Efficiency should be cultivated by exposure to competition without regard to the survival of an individual competitor or group of competitors or to the size or nationality of an enterprise.
United States Competition Policy
U.S. antitrust laws have fostered economic growth by protecting the competitive process and allowing market mechanisms to work. We have found that allowing market mechanisms, rather than the government, to determine the best allocation of resources, have led to dynamism, innovation and ease of entry. Our antitrust enforcers have sought to create an economic environment that enables those entrepreneurs with the best acumen to succeed, thereby allowing our economy to move forward in the direction that the market dictates, rather than trying to hold back market forces by protecting industries chosen for success by government officials who are responding to political, rather than market, cues. Strong anti-trust laws to foster domestic competition are crucial to gaining international competitiveness.
The United States embraces - rather than fears - the role of foreign competitors in fostering competition in our markets. We apply our antitrust laws without regard to the nationality of individual competitors. This means that the U.S. Department of Justice antitrust enforcers equally treat competition from foreign firms in our markets as we do the competition from domestic firms. We also apply our antitrust laws equally to foreign or domestic companies that seek to monopolize our market through unlawful means.
Globalization and Anti-Trust Enforcement
Economic globalization has enhanced the competitive process by expanding the number of competitors and potential entrants in U.S. markets. This increased competition has led to lower prices and greater product choice for our consumers and lower input prices for our businesses. One aspect of the globalization of markets is that cartels are becoming more global in their efforts to eliminate competition and raise prices. The Justice Department has uncovered a large number of international cartels over the last 10 years. These cartels frequently seek to restrain competition in all countries in which they operate, harming consumers all over the world.
Nations around the globe now perceive a common interest in preventing cartels. This has resulted in an emerging international consensus on the importance of strong antitrust laws and the need for international cooperation to address these global cartels. We frequently use mutual legal assistance agreements to obtain evidence relevant to our investigations of cartels that are located in foreign territory. We reciprocate by providing evidence located in the United States when foreign authorities request it under those instruments for use in their prosecutions of international cartel members.
In sum, economic globalization has helped to maintain competitive markets, and at the same time has led us to develop cooperative international investigation procedures to take account of this globalization trend.
Taiwan's Competition Policy
Based on our discussion today, Taiwan has several competition policy options before it. These include disciplined regulatory transparency - open and transparent administrative procedures, consultations with interested parties before issuing regulations, provision of advance notice and comment periods, and publication of all regulations. Taiwan's competition policies should seek a balance between aggressive enforcement against anticompetitive practices to prevent market distortions and overly broad action that impedes the functioning of the market place. Finally, enforcement actions should eradicate activities that harm the competitive process in the Taiwan economy, but not than protect individual competitors from the competitive process.
Taiwan is well on the way to achieving these aims. Our regular discussions of anti-trust issues, supported by the US Department of Justice and the Taiwan Fair Trade Commission, are a useful tool. We look forward to using this dialogue to promote mutual understanding and continued progress in improving the competitive environment in Taiwan.