Understanding and Regulating the Market at a Time of Globalization: The Case of the Cement Industry PDF
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Understanding and Regulating the Market at a Time of Globalization Also by Herve Dumez and Alain feunemaftre FINANCIAL MARKETS REGULATION (co-authors) LA POLITIQUE DE CONCURRENCE EN EUROPE (co-editors) Understanding and Regulating the Market at a Time of Globalization The Case of the Cement Industry Herve Dumez Researcher ,. t the Centre de Re c here he erJ Ges tion Ecole Polytechnique Paris and Alain jeunemaitre Re.>earcher La Maison Fram;aise and Nuffie/d College i/IJJ Associate Regu I at ory l'nlicy Rewa rch CI 'll tre Hertford College Ox(nrd Foreword by Suzanne Berger First pu bl is hed in G real Britain 2000 by MACMILLAN PRESS LTD Houndmills. Basingstoke. Hampshire RG2l 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British ubrary. ISBN 978-1-349-39436-4 ISBN 978-0-230-28875-1 (eBook) DOI 10.1057/9780230288751 First published in the United States of America 2000 hy ST. MARTIN'S PRESS, INC., Scholar!)· and Reference Division. 175 Fifth Avenue, New York, N.Y. 10010 ISBN 978-0-312-22622-0 Library of Congres> Cataloging-in-Publication Data Dumez, Herve. Understanding and regulating the market at a time of globalization : the case of the cement industry I Herve Dumez and Alain J eu nemai Ire. P- em. Includes bibliographical references and i nde~- ISBN 978-0-312-22622-0 (cloth) I. Cement industries-Government policy-C'.-ase studies_ 2_ 1-'oreign ttade regulation. -~-International trade. .:1_ Competition. I ntemationaL L Jeunemaltre, Alain_ IL Title. HD9622.A2086 1999 338.4'766694-dc21 99-15385 CIP :t: Herve Dumez and Alain Jeunema"itre 2000 Foreword© Suzanne Berger 2000 Comment© F. M. Scherer 2000 Softcover reprint of the hardcover 1st edition 2000 978-0-333-63383-0 All rights reserved. No reproduction, copy or transmission of this pub! ication may he made without wrinen permission. No paragraph of this publication may he reproduced. copied or transmitted save with '>~ril\en pcrmi ssi on or in accordance with the prov is ions of the Copy rig lit, Designs and Patents Act !988, or under the terms of any licence permitting limi led copying issued by the Copyright Ucensing Ageucy. 90 Tonenham Coun Road. London WI P OLP Any person who does any unauthorised act in relation to this publication may be Ii able to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with tile Copyright Designs and Patents Act !988. Tlli s book is printed on paper sui tab Ie for recy cJ i n g and made from f u II y managed and sustained f ores! sources. 10987654321 09 08 07 06 05 04 03 02 01 00 CONTENTS Acknowledgements VII Abbreviations and acronyms IX Foreword by Suzanne Berger, M.l. T. XI Introduction 1 I. The cement industry: a model case 5 I Local competition 23 2. Stabilising local competition 27 3. Local market stabilisation and rivalry 57 4. Local market stabilisation and competition policy 75 5. Concluding comments 105 II Globalisation of local markets 109 6. The internal conditions of globalisation 113 7. The globalisation process 125 8. Strategic responses to globalisation 141 9. Concluding comments 163 III Understanding and regulating markets at a time of globalisation 167 10. The European case 171 Conclusion 195 Postface by F.M. Scherer, Harvard University 207 Bibliography 213 Index 229 ACKNOWLEDGEMENTS We are deeply grateful to the many people we met in the course of our research. In particular our special thanks to: The executives of Lafarge (France), Bertrand Collomb, President Directeur General and Bernard Kasriel, Directeur General, Dominique Hooreman, Directeur d'affaires; Lafarge Corp. (Reston Virginia, and Dallas, Texas); Davenport Cement (Missouri); Calcia, then Ciments Fran~ais (France), Philippe Ronsin; Southdown (Houston, Texas), John Edgar Marston III, Vice President and General Counsel, John T. Bloom Junior, Manager Corporate Development; The executives of the US Department of Justice, Paul Dennis; the Federal Trade Commission, Anne Malester, Claudia Higgins, Howard Morse, Benjamin Tahyar. The Syndicat Fran~ais de l'Industrie Cimentiere (SFIC), Renaud Lambert; European lawyers, above all Henry Lesguillons (Jeantet et associes, Paris, Bruxelles), and US lawyers, Timothy MacCormick (Thompson and Knight, Dallas, Texas); Douglas M. Queen (Douglas M. Queen Inc., Williamston, Massachussets); John Lynch (Lynch Research and Investment, NY); Michael Klass (National Economic Research Associates, Washington DC); Jonathan Goldfarb (Merry! Lynch, New York). We are also greatly indebted to our French colleagues of the Ecole Polytechnique, from the Centre de Recherche en Gestion (CRG), particularly to Jacques Girin, his director, Michel Berry, the honorary director, Florence Charue-Duboc and Bertrand Nicolas, and from the Laboratoire d'Econometrie, to Jean Pierre Ponssard and Claude Henry. vii We would also like to make particular mention of the Regulatory Policy Research Centre, George Yarrow, the Director, Susan Belton Jones, and Tim Keyworth. They all gave us invaluable advice. Tim managed to significantly improve our first English version. His guidance has been very helpful. Our work has also benefited from the assistance of many in the search and the gathering of documents, Joyce Aicklen (Lafarge Corp.), civil servants at the US International Trade Commission, the Japanese Fair Trade Commission, Nathalie Moutot the librarian of ATHIL, Michel Multan, librarian at the Ecole Polytechnique. Finally, many thanks to Michele Breton who helped in the editing process of the book. The views expressed here are those of the authors and should not be ascribed to the above mentioned persons. Herve Dumez and Alain Jeunemaitre viii ABBREVIATIONS AND ACRONYMS AD/CVD Antidumping and Countervailing Duty BKA Bundeskartellamt. The German competition policy agency RMC Ready Mix Concrete FOB Free on Board IBJ International Bulk Journal ICR International Cement Review. International journal JFfC Japanese Fair Trade Commission L1FV Less Than Fair Value, dumping price PCA Portland Cement Association P&Q Pit and Quarry. US journal RP Rock Products. US journal RTP Court Restrictive Trade Practices Court (UK) USFfC US Federal Trade Commission USITC US International Trade Commission we World Cement. International journal DEFINITION The units "tons", when used in official US data, refers to "metric tons" from 1993 and to "short tons" in earlier years. One short ton equals 0.907 metric tons, and 5.139 barrels. ix FOREWORD Suzanne Berger Dorman-Starbuck Professor of Political Science, M.I.T. The impact of globalization on the economies and societies of advanced industrial countries has raised a storm of controversy in research communities and in the public at large. Virtually every major claim about how changes in the international economy translate into changes in the well-being, autonomy, and future trajectory of advanced industrial nations can be challenged. Indeed, many of the claims advanced rest on little more than chains of deductive reasoning, illustrated by anecdotes. It is the great merit of the research by Herve Dumez and Alain Jeunemaitre in to have developed their arguments on the basis of a in-depth empirical analysis of a particular industry and to have examined evidence about changes in the structures of the cement industry under globalization over time and across a number of major producing countries. First, even the starting point of most analyses of globalization -namely, the notion that it marks a radical innovation in the nature of the international economy- can hardly be taken for granted. If we step back from the changes in the world economy of the past two decades and consider the longer historical sweep of the period from before the First World War to the present, the vista we see is quite different. Researchers who have studied the international economy at the turn of the 20th century have raised a number of serious challenges to the now-conventional wisdom about the globalized economy by pointing to significant xi
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