Collusive international trade arrangements
Name(s):
Secret trade cartels
International cartels
Nature
Collusive arrangements at national and international levels with regard to exports and imports clearly affect international trade. Collusion at the international level is often aimed at retaining exports by combating newcomers; and at maximizing gains, in particular with respect to governments' procurement of imports through collusive tendering. Intrafirm transactions by transnational corporations can also have adverse effects on international trade, in particular when imports by subsidiaries from parent companies are at prices above those prevailing in the world market. Moreover, refusal to supply, or selling at discriminatory prices, singly or collectively, can also have adverse effects on trade. Exclusive dealing arrangements in international trade transactions also tend to rigidify trade patterns by making it difficult for newcomers to enter markets, especially where the purchasers or distributors who are parties to such arrangements hold a dominant position of market power.
Incidence
In 1990, the EEC/EU fined two chemical companies (British and Belgian) a record 47 million ecus for running a soda-ash cartel.
In the case of international cartels and national export cartels, which are permitted in most countries, there continues to be a general lack of transparency even about their number, let alone the nature and extent of their operations. This lack of transparency is a major hindrance to ensuring effective control, including that by countries which suffer from the effects of such practices.
Aggravated by
Reference(s)
Type
(E) Emanations of other problems