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The Voluntary Trade Council
 ____________________ 
Post Office Box 100073Tel./Fax: (703) 740-8309 Arlington, VA 22210www.voluntarytrade.org
 June 13, 2005The Hon. Mike DeWineChairman, Senate Subcommittee onAntitrust,Competition Policy, and Consumer Rights140 Russell Senate Office BuildingWashington, DC 20510
 Re: Antitrust/U.S. relations with Uzbekistan
Dear Sen. DeWine:In a recent letter that you and five of your colleagues sent to Secretary of StateCondoleezza Rice and Secretary of Defense Donald Rumsfeld, you encouraged theadministration to reconsider its military relationship with the current regime inUzbekistan in the aftermath of recent actions by Uzbek President Karimov. Specifically
your letter referred to a May 13 massacre of “innocent civilians” by Karimov’s forces, anincident that remains under investigation by international and non-governmentalagencies.Given your call for the Bush administration to reconsider its military ties toKamirov’s regime, I would strongly suggest that it is also time for the United States toend its cooperation with Uzbekistan and other despotic regimes on antitrust matters.For the past several years, the Justice Department and Federal Trade Commission haveled the International Competition Network, a working group of antitrust regulatorsfrom around the world. Uzbekistan is listed as an ICN member despite the repressiveeconomic policies of the Karimov regime. There is no cause for U.S. antitrust officials—who claim to uphold free market ideals—to be in league with such nations.In a column dated May 23, libertarian writer Justin Raimondo explained how themassacre you condemned waspart of a campaign by the Karimov regime to squasheconomic liberty, not “radical Islam,” as the Uzbek authorities claimed:What drove the residents of Kara Suu [in Uzbekistan] to attackgovernment buildings, administer rough justice to local officials, andrebuild a bridge leading to a thriving bazaar on the Kyrgyzstan side of theborder wasn't Islam, but resistance to the regime's crazy attempt to chokeoff trade. The dismantling of the bridge by state decree epitomizes thegovernment's destructive economic policies: onerous regulationsforbidding the sale of imports, high tariffs, and a host of draconian
 
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regulations that all but forbid commerce. Rakhimov's crime, like that ofthe 23 businessmen whose arrest set off the Andijan rebellion, appears tohavebeen too much commercial success: Rakhimov's sock factoryemploys 200 people in a region where unemployment is massive, and itwas his crane that made it possible to rebuild the bridge.
1
Raimondo’s descriptionof the Uzbek economy is confirmed by the most recentHeritage Foundation/Wall Street Journal
Index of Economic Freedom
, which ranks theUzbekistan 147
th
out of 155 nations, earning a classification of “repressed.” The Indexcited the Commerce Department’s findings that said “no major state owned enterprisesin the telecommunications, energy, or mining sectors have been privatized.” The Indexcited another report that noted the Karimov regime was “hostile to allowing thedevelopment of an independent private sector, over which it would have no control.”
2
Perhaps most revealing from an antitrust perspective, the Index described
Uzbekistan’s decrepit regulatory environment:The process for establishing a business is highly burdensome.“Ambiguous rules, legislation, and Presidential decrees often contradicteach other. This is a top complaint of…investors in Uzbekistan,” reportsthe U.S. Department of Commerce. “Sudden legislative and regulatorychanges are common; many decrees have secret provisions.
Theinvolvement of state bodies in commerce, including those withregulatory authority, produces inherently anti-
competitive pressures.”
According to the Economist Intelligence Unit, “Corruption is a serious andall-pervasive problem…that weakens the effectiveness of the state andcreates considerable popular discontent. The political elite dominatesbusiness.”(Emphasis added.)
3
Uzbekistan’s ICN membership is sadly not an anomaly. According to our internalreview, one-third of the ICN’s 69 listed members have economies that are classified bythe
Index ofEconomic Freedom
as being either “mostly unfree” or “repressed.” Two ofUzbekistan’s neighbors on the “repressed” list, Tajikistan and Venezuela, belong to theICN. While the extent of these nations’ participation in the ICN is unclear, their merepresence raises serious concerns about the U.S. government’s commitment to freemarkets in this country and abroad.
1
 Justin Raimondo,
Our Uzbek Problem, and Theirs
, Antiwar.com (May 23, 2005) <available athttp://antiwar.com/justin/?articleid=6039>.
2
Marc A. Miles, Edward J. Fuelner & Mary Anastasia O’Grady,
2005 Index of Economic Freedom
<availableat http://www.heritage.org/research/features/index/>.
3
Ibid
.
 
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There is no evidence that U.S. participation in the ICN furthers any legitimateeconomic or law enforcement objective. The principal beneficiar
ies of the ICN’sexistence would seem to be regimes that see antitrust as a tool to further their controlover emerging market economies (such as the Russian Federation), and individualantitrust officials in the U.S. and Europe who can use their international contacts tobolster future private-sector employment. For example four high-ranking U.S. antitrustofficials, including outgoing Assistant Attorney General Pate, have joined Hunton &WilliamsLLPfor the express purpose of developing that firm’s European andinternational antitrust practices.
4
Such a need has been driven by Pate’s efforts at the Justice Department to expand the international scope of antitrust policy. Viewed in thislight, the ICN is little more than a social network of antitrust lawyers that happen tohold temporary government positions. The taxpayers should not be in a position tosubsidize either the growth of despotic regimes abroad or the careers of multi-millionaire antitrust lawyers in nominally private practice.Your subcommittee has jurisdiction over the administration’s antitrust enforcement,and it would be an appropriate exercise of that jurisdiction to hold hearings on the ICNand the United States’ antitrust relationships with nations like Uzbekistan andVenezuela. The ICN has operated largely outside the public eye, and if nothing else ahearing could shed some valuable light on the behind-the-scenes operations of the ICNand the interplay between various national antitrust agencies. Given the recent stanceyou and your colleagues have taken on U.S. military ties with Uzbekistan, it is certainlyworth the effort to examine policy coordination on a level far removed from the pretextof national security. The U.S. should not be in business with despotic regimes merely tofurther the personal agendas of a handful of antitrust lawyers.My organization, the Voluntary Trade Council, is one of the few nonprofitorganizations that focus on the operations of the FTC and the Justice Department’santitrust division. I would be happy to speak with you or a member of your staff tofurther discuss my concerns about the ICN and U.S. antitrust policy in general. I wouldalso remind you that President Bush is expected to nominate a new member of theFederal Trade Commission and a new assistant attorney general for antitrust within thenext few weeks, and that the ICN should be addressed in any confirmation hearings onsuch nominations.
4
See
Hunton & Williams LLP, “Senior Justice Department Officials Hewitt Pate and David Higbee andVeteran FTC Litigator Mel Orlans to Join Hunton & Williams LLP,” (May 2005) <available athttp://www.hunton.com/files/tbl_s10News%5CFileUpload44%5C11768%5CPate_Release_5.05.pdf>.
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