Should United States antitrust law be applied to state trading enterprises in agricultural trade?

Abstract

In a number of countries, State Trading Enterprises (“STEs”) control agricultural exports to the United States. For antitrust purposes, export STEs may be characterized as cartels of producers colluding to fix prices into importing country markets. This Article considers the legal and policy issues involved in applying United States antitrust law extraterritorially to STEs. In order to analyze these issues, this article uses STEs in the New Zealand dairy industry as a case study. First, the nature of STEs and their legal status in international trade law will be discussed. The Article next considers the potential liability of STEs in United States antitrust law, with particular reference to the New Zealand Dairy Board and its successor company, “Fonterra.” Because these STEs could be characterized as price-fixing cartels, depending on findings of market definition and market power, United States courts would have antitrust jurisdiction, unless this jurisdiction was excluded by considerations of comity. This Article also considers the broader issue of applying United States antitrust law to export STEs in their agricultural trade context, and the corresponding policy implications.