Antitrust and Trade Policy: Are Legislators Consistent?
Working Paper No. 2008-14. 23 pages. In analyzing the potential exercise of monopoly power in domestic markets, both the academic literature and U.S. antitrust authorities have acknowledged the disciplining role of competition from abroad. In this paper, we explore the extent to which this view seems to reveal itself in recent U.S. Congressional votes taken during the 108th Congress (2003-04) on four free trade agreements (FTAs). To the extent that antitrust and trade liberalization are both viewed as pro-consumer in nature, we would expect to see a positive relationship between antitrust enforcement in their legislative district and Congressional votes in support of new FTAs. We do find evidence supporting a positive relationship between state-level antitrust enforcement (measured either by absolute number of cases filed or by cases relative to the state’s economic size) and support for FTAs.