The WTO’s First Antitrust Case – Mexican Telecom: A Sleeping Victory for Trade and Competition

Abstract

A World Trade Organization (WTO) dispute panel has decided the WTO's first antitrust case. It resolved the matter in favour of the United States' claim that Mexico had anticompetitively facilitated exploitative prices and a cartel that raised the price of terminating cross-border telephone calls in Mexico and thereby harmed trade and competition. The case is Mexico -- Measures Affecting Telecommunications Services (April 2004) ('the Mexican telecom case'). This essay argues that if the WTO's antitrust clause was in fact triggered (which is a point of contention), Mexico's conduct violated its obligations. Furthermore, it argues that the GATS antitrust obligation in the telecommunications sector should be acknowledged as occupying an important place at the intersection of trade, competition and industrial policies. Antitrust law is the other side of the coin of liberal trade law. Antitrust law opens markets by prohibiting private and other commercial restraints, while trade law opens markets by prohibiting public restraints. Before Mexican telecom, no legal discipline was regarded as copious or flexible enough to address combined public and private restraints. In particular, nations were allowed free rein to privilege national champions that harmed competition in and out of their country, imposing costs on outsiders as well as on their own people. A positive reading of the antitrust clause helps to fill the gap. Copyright 2006, Oxford University Press.