“With the leaders slated to discuss economic growth on Wednesday morning, Singham – who chairs the non-partisan body of fourteen independent international economists – has called on them to focus anew on the importance of economic growth for their respective nations….”
When President Trump and President Xi Jinping concluded their May 14-15 summit in Beijing, the headline outcomes were familiar: discussion of a new U.S.-China “Board of Trade,” expectations of major new Chinese purchases of American agricultural products and indications that some tariffs on non-sensitive goods could eventually be reduced. Markets welcomed the renewed dialogue and continuation of the tariff truce. But the summit produced no meaningful commitments on industrial subsidies, state-directed overcapacity or the broader distortions embedded in China’s economic system.
That matters because managed trade can buy time, but it cannot fix the source of conflict.
(Read entire article by clicking below.)
I. Opening
Chair, members of the Committee, thank you for the opportunity to appear today. My name is Shanker Singham, and I am testifying on behalf of Competere LLC.
The central argument is this. Structural excess capacity is not a naturally occurring market phenomenon. It is the predictable output of government measures that distort competition behind the border. No analysis of why over capacity exists or why the trade deficit has widened can ignore the very real distortions in the global economy that suppress US exports and artificially increase US imports. Section 301 specifically reaches that conduct, through specific reference to unreasonable barriers to trade, as opposed to merely discriminatory ones, and the methodology I will describe shows how to measure it and how to respond proportionately.
II. The Framework — Anti-Competitive Market Distortions
The conduct at issue is what we call Anti-Competitive Market Distortions, or ACMDs. These are government-created or government-enabled measures that raise rivals’ costs, restrict entry, and reallocate rents toward favored firms.
ACMDs operate across three pillars: property rights, domestic competition, and international competition. When governments weaken any of these pillars, productivity falls, United States exports are suppressed, and imports enter the United States under distorted conditions.
The largest share of trade-related economic loss now comes from these behind-the-border distortions, not from tariffs. A formally open market in which institutional arrangements prevent United States firms from competing is, in substance, a closed market. Traditional trade remedies do not reach that problem. This framework can be applied to restrictions that impact US exports or to distortions in countries that more directly lead to increased imports into the US. The same section 301 test of reasonableness applied there also.
III. Tariff Methodology — Three Steps
The proposed tariffs are calibrated in three steps.
First, we measure the level of distortion in the foreign market — the country’s ACMD mass, expressed as the percentage of GDP per capita lost to distortions across the three pillars.
Second, we scale that distortion to the volume of imports the country sends into the United States. That gives us the burden on United States commerce.
Third, we convert that burden into an offsetting tariff rate. Countries exporting less than ten billion dollars to the United States are excluded. The offset is proportionate, bounded, and there is a pathway to zero when the distortions are removed.
We have included in the Annex a table showing the offsetting tariffs calculated based on country distortions.
IV. Korea
Let me turn to the three country cases. Korea first, because the distortions are concentrated, mutually reinforcing, and strategically damaging.
There are two instruments. The first is interventionist antitrust enforcement by the Korea Fair Trade Commission. The second is ex ante platform regulation under the Korean Online Platform Markets Act. They reinforce each other. Ex ante regulation freezes market structures before any consumer harm is shown. The KFTC then treats those distorted structures as evidence of dominance. Regulation and enforcement create a vicious circle.
The strategic dimension matters as much as the economic one. By burdening United States firms in a key allied market while permitting Chinese rivals to scale under state-linked advantages and softer treatment, the Korean system creates the conditions for Chinese firms to consolidate strength and then project it outward — back into the United States market through artificially cheap goods and digital services. The Korean system is, in effect, a ladder for Chinese competitors at the expense of American ones.
The combined economic loss is up to five hundred and twenty-five billion dollars over ten years. The suggested starting tariff is 20.31 percent from Korean general distortions, scalable to 30 percent to take into account this particular barrier and its US impact.
V. India
India operates through two reinforcing channels.
The first is competition-policy implementation. The Competition Commission of India is increasingly applying ecosystem-level market definitions and EU-style reasoning in digital markets. The result is rising regulatory exposure for large United States firms.
The second is foreign-investment restrictions — equity caps, approval routes, sourcing mandates, and beneficial-ownership screening, applied across retail, e-commerce, financial infrastructure, pharmaceuticals, telecom, aviation, defense, and space. Conditional access is not real access.
The harm is the loss of commercial participation in one of the world’s most important growth markets. The total implied GDP drag is one hundred and fifty-six billion dollars over five years. The suggested starting tariff is 28.36 percent.
VI. European Union and United Kingdom — Dynamic Alignment
The European Union case turns on the proposed UK-EU SPS dynamic alignment arrangement. Under that arrangement, the United Kingdom would remain bound to a moving EU rulebook covering sanitary and phytosanitary measures, food safety, pesticides, and related standards.
Dynamic alignment is not a one-time agreement. It is an ongoing obligation to keep pace with future EU rules. The United Kingdom would cease to be a distinct regulatory market and would become an extension of the EU system.
The EU SPS regime has repeatedly been challenged as unscientific and unnecessarily trade restrictive — most notably in the WTO beef hormones dispute. The affected products include United States beef, pork, poultry, crop-protection products, and gene-edited agriculture
The central estimate is twenty-seven billion dollars in foregone exports and thirty-three billion in foregone GDP. At the high end, fifty-eight billion in exports, seventy-two billion in GDP, and approximately three hundred and fifty-two thousand United States jobs. The suggested starting tariffs are 21.04 percent for the European Union and 17.13 percent for the United Kingdom, rising to match the EU tariff if dynamic alignment takes place.
VII. Closing — Common Logic
Three different fact patterns. One underlying problem. In each case, government measures distort competition, suppress United States exports, and burden United States commerce while preserving only the form of openness.
The proposed remedy is calibrated to the severity of the distortion and to the importance of the market. It is proportionate, bounded, and reform-oriented, with a pathway to zero when the underlying distortions are removed. This is not protectionism. It is a defense of competition on the merits.
Thank you. I look forward to the Committee’s questions.
Section 301 Investigations of Acts, Policies, and Practices of Certain Economies Relating to Structural
Excess Capacity and Production in Manufacturing Sectors
Docket No. USTR-2026-0068
Submitted by: Shanker A. Singham
On behalf of: Competere LLC
Date: May 6, 2026
by Shanker Singham
For decades, the standard playbook for international development relied heavily on foreign assistance. But as global economic paradigms shift, we are seeing a growing consensus around a more sustainable model: Trade Over Aid. This approach emphasizes integrating developing nations into the global market rather than making them dependent on external financial support. Some 35 nations have now come out in support of US proposals in this area.
But why is this shift so critical right now? To truly understand the power of prioritizing trade over traditional foreign assistance, we have to look at it through the lens of ACMD (Anti-Competitive Market Distortions) theory. When we do, it becomes clear that “Trade Over Aid” isn’t just a catchy policy slogan—it is a structural necessity for real economic growth.
What is ACMD Theory?
At its core, ACMD theory posits that the greatest threats to economic growth aren’t visible barriers like tariffs. Instead, the real damage comes from Anti-Competitive Market Distortions (ACMDs)—a network of “behind-the-border” policies that inhibit voluntary exchange, favor entrenched incumbents, and stifle new entrants.
Think of trade barriers as an iceberg. Traditional trade policy only looks at the tip of the iceberg: tariffs and quotas. ACMD theory exposes the massive, submerged chunk of ice hiding below the water line. These are the insidious roadblocks:
These distortions act as a massive drag on an economy, absorbing energy, destroying value, and suppressing innovation.
The Fundamental Flaw of “Aid First”
When we pump traditional foreign aid into an economy plagued by high ACMDs, we are effectively pouring water into a leaky bucket.
Worse, aid can sometimes calcify these distortions. Capital influxes without structural reform often end up captured by the very incumbents who benefit from a distorted market. It removes the urgency for governments to fix weak property rights or dismantle cronyism because the financial shortfalls are being subsidized by foreign taxpayers. Aid doesn’t melt the iceberg; it just helps the ship survive the crash a little longer.
Why “Trade Over Aid” is the ACMD Antidote
This is exactly why US proposals favoring Trade Over Aid align perfectly with ACMD theory:
The Bottom Line
The persistence of poverty and sluggish growth in developing markets is rarely a symptom of a lack of capital; it is almost always a symptom of a distorted market.
ACMD theory shows us that true prosperity is only unlocked when willing buyers and willing sellers can exchange freely. By championing Trade Over Aid, the US is shifting the global focus away from treating the symptoms of poverty and moving toward curing the disease of market distortion. Ultimately, an open, competitive market is the greatest engine for human prosperity ever discovered—and trade is the key that starts the ignition.
During the April 16, 2026 US House Appropriations Committee Hearing on the USTR budget, Congressman Ben Cline of Virginia’s Sixth District questioned Ambassador Greer concerning the discrimination against US tech companies by the KFTC. At one point, Cline asked Greer to “lean hard on them.”
Cline cited the recent study by the Competere Foundation showing the damage to the US GDP per capita by the Korean agency’s targeting of US firms.
Here is the transcript of the interchange:
Cline: The 2026 National Trade Estimate report identified Korea’s digital trade policies, including KFTC’s enforcement campaign and the Fairness Act, as significant barriers to U.S. companies. Research by the Competere Foundation estimates that Korea’s policies could cost the U.S. economy 525 billion over the next decade, with American households losing nearly $4,000 each. What specific enforcement mechanisms is USTR using to hold Korea to its commitments under the Joint Fact Sheet? And as you know, the Korean government continues its transparent discrimination against U.S. digital companies. At what point does continued Korean defiance trigger formal trade actions?
Greer: As you know, we have a Joint Fact Sheet with Korea where they specifically agreed and committed not to use these types of laws or rules on a discriminatory basis. And so this is something where we’re holding their feet to the fire. You know, we have tools, Section 301 is a tool that I’ve talked about today, and some of you have discussed. This is something we can use if we need to. Again, I’ve had conversations with my counterpart in Korea. I’ve spoken with the Prime Minister of Korea about this issue. I know there are a lot of views domestically about big tech companies and regulation and that kind of thing. What I want is a situation where Congress gets to decide how American tech companies are controlled and not foreign jurisdictions, so we are very attentive to any suggestion of discrimination by foreign countries against our companies.
Cline: We need to be leaning on them pretty hard. Their proposed fairness access sets market thresholds that Chinese platforms like Tiktok, Temu, and Alibaba fall below, effectively exempting them from the regulations entirely, while American companies are bearing the full weight of the fines and operational mandates. To put it in perspective, just a quick glimpse at the new 1260H list of Chinese military companies included some of these firms, like Alibaba. Does the administration view Korea’s discriminatory treatment as a national security concern? And if so, is that concern being incorporated into how you’re approaching enforcement?
Greer: So if they were to follow through with this and apply these laws in a discriminatory way, we would take action. Until now, they have been proposing to speak to us and negotiate with us, because we are concerned about this, and you know, we are prepared to take action if we need to, because it’s not like there’s some other company waiting to step into the wings, other than some of these Chinese companies you’re talking about.
I saw in the Financial Times last week that the UK wants to align to EU law on animal and plant health while also opting out of rules to suit ourselves. Labour wants to keep rules that: allow stronger hemp-derived cannabidiol (CBD) products of up to 10mg versus the EU’s 2 mg limit; maintain bans on live animal exports and foie gras; and protect domestic innovation in areas such as lab‑grown meat, algae and insect products, gene‑edited crops and a bovine TB vaccine.
‘The UK government is being lobbied by multiple sectors for exceptions, including foodmakers, farmers and the chemical industry,’ we learn. The CBD industry fears losing this benefit of Brexit and rightly says, ‘The industry should not find itself being ruled by regulatory decisions where the UK has no vote and no voice.’ The National Farmers’ Union wants to protect gene editing and a new TB vaccine.
The Cabinet Office says, ‘We are making a sovereign choice in the national interest to align in some areas where it makes sense to do so.’ It is fatuous to call this a sovereign choice while knowingly accepting indefinite subordination without a voice: this rubbish was said about membership itself.
Sovereignty is not merely the technical possibility of making a one‑off decision. It is the continuing ability to govern yourself: to set and revise your own rules in the light of your own needs. When you adopt the regulatory framework of a foreign power, when commercial realities make reversal prohibitively costly and when you have no seat at the table where the rules are made, you may have exercised a choice at the outset but you have chosen powerless subordination thereafter.
It is extraordinary that anyone prefers this submission to the arbitrary power of others. Yet in her recent lecture, the Chancellor made the case for accepting EU law, saying, ‘a decision to align should mean higher growth and investment, more jobs and consumer benefits for the long term.’ So let’s get into the options and why we would be better off as an independent country.
Yes that’s right: it’s back to the old Brexit arguments thanks to this Labour government. And if you think this is bad, wait until Nigel Farage takes power and reverses the lot…Here we go.
The economist Julian Jessop has written about the claim that Brexit has cost us 8 per cent of GDP since 2016. The claim has often been repeated and it is one of the foundation stones in the case for alignment to EU rules.
But have a look at the change in GDP of the UK, comparable EU countries and the US since 2016. If you thought the UK was the obvious under-performer, you would be wrong. That is Germany.
The UK is mid-pack. That’s not impressive and it is a sign of a few things. One is that we did not deregulate sufficiently to make a difference. Another is, as Lord Lawson used to tell me, that leaving the EU did not make much difference to GDP. And if you can disentangle the impact of Covid, well done but I don’t believe you.
But what is radically implausible is the idea that if we had remained in the EU then the UK’s change in GDP would be up above Spain’s. Why would you think that?
The NBER‑type studies that produce the higher numbers rely on synthetic versions of the UK economy that are highly sensitive to modelling choices and are not derived from any observable causal mechanism. The Office for Budget Responsibility’s famous 4 per cent long‑run productivity loss estimate is built on an assumed 15 per cent permanent collapse in UK trade intensity. That collapse has not happened: UK trade as a share of GDP has broadly tracked peer economies instead of falling off a cliff.
This is not merely a row about the impact of leaving the EU. It is a row about what kind of economic analysis we are prepared to trust.
Shanker Singham and the Growth Commission have set out why the standard CGE and GTAP models beloved of Treasuries are structurally incapable of capturing most of the gains from trade liberalisation and pro‑competitive regulatory reform. These models are essentially static. They focus on tariffs and visible border barriers, and they assume fixed industrial structures and patterns of competition. They count what is easiest to count. They do not count what happens to competition, innovation, investment and entrepreneurial energy when you open an economy and strip out market‑distorting regulations.
The consequences are not trivial. When New Zealand’s Treasury modelled the gains from its trade deal with China, it underestimated the outcome by roughly 500 per cent; gains projected over eleven years turned up in about eleven months. That is a fundamental failure of the framework, not a rounding error. Yet these are the same kinds of models now being used to tell us that the marginal gains from EU alignment are decisive while the costs are modest. It will not be true.
So what happens when you apply a framework that can see dynamic effects to the government’s alignment agenda?
The Growth Commission estimates that aligning UK sanitary and phytosanitary (SPS) rules with the EU would cost the British economy around £15 billion. It also notes that the EU’s own SPS regime already imposes costs of about €39 billion (£33.8 billion) on EU member states collectively. These are not regulations that produce prosperity. They are regulations that are already imposing heavy burdens on those who live under them.
More generally, the Growth Commission characterises the EU regulatory model as one of the most anti‑competitive and growth‑destroying in the developed world, with a heavy bias towards precaution and harmonisation at the most restrictive level. That model has produced chronically weak growth across much of the continent. Having left, the UK now has regulatory freedom to set rules that are more open and pro‑competitive than any EU member state: potentially even more agile than the United States, particularly if we pursue mutual recognition and competition‑friendly standards. Every step of alignment forfeits some of that freedom. Once supply chains, investment decisions, and legal obligations are locked to the EU rulebook, reversal becomes politically and economically near‑impossible.
Singham has repeatedly stressed that there are two competing models for the global trading system. The one reflected in the WTO system, the US approach to regulatory cooperation and agreements like CPTPP¹ is based on regulatory competition, equivalence and mutual recognition. The other, favoured by the EU and by China, is based on harmonisation, with market access conditional on replicating their rules.
The government’s alignment strategy, step by step, chooses the second model just as the United States is elevating the reduction of market distortions into the central plank of its trade policy.
The costs radiate outwards. The Growth Commission warns that SPS and broader regulatory alignment risk undermining our CPTPP membership, weakening our relationships with Australia and New Zealand, and creating precisely the kind of internal distortions that invite justified US trade complaints. By aligning with Brussels, we do not simply bind ourselves more tightly to the EU; we jeopardise the strategic and economic relationships which could, if we chose, underpin a prosperous and renewed UK of global outlook.
Alongside alignment, we are once again hearing siren calls for a new UK–EU customs union although this seems to have been ruled out. As the former trade minister Greg Hands has explained, that would be ‘the worst choice of all’.
In a customs union with the EU, the UK would be bound by the EU’s trade policy without a say. We would be obliged to apply tariffs and trade concessions negotiated to suit the EU‑27, not us, in forums where we no longer sit.
The EU-UK Trade and Cooperation Agreement already provides tariff‑free trade in goods, subject to rules of origin. The remaining frictions are overwhelmingly non‑tariff barriers. A customs union does not remove those unless it is paired with far‑reaching regulatory alignment, which brings us straight back to rule‑taking without a say.
Strip away the inflated estimates of Brexit damage and the static models that cannot capture dynamic gains, and the economic case for alignment collapses. What remains is a political preference for the comfort of familiar institutions, the approval of Brussels and the avoidance of decision, all presented as economic necessity. We should instead make use of the freedom we have.
The Growth Commission shows that credible liberalisation and regulatory reform packages deliver gains several times larger than the narrow tariff‑only estimates produced by official models. The headline sub‑1 per cent GDP gains we are used to seeing for ambitious trade and regulatory deals are known to be too pessimistic.
We should treat regulatory freedom outside the EU as a precious asset, not a problem to be managed away. We should pursue a serious global strategy through CPTPP. We should build our relationship with the United States and other like‑minded countries around a shared commitment to regulatory competition, open markets and reduction of anti‑competitive distortions. We should reform at home – planning, energy, tax, labour markets – using dynamic analysis that fully captures the benefits of greater openness and competition rather than relying on models that have already been shown to mislead.
Above all, we should stop pretending that a policy of gradual alignment is something other than what it is: a policy of subordination and decline.
This piece was first published on Steve Baker’s Substack Voices for a Free Future, and republished in the Spectator on March 24, 2026.
Steve Baker is the former MP for Wycombe.
by Shanker Singham
For decades, the architects of the global economic system have operated under a persistent, structural illusion. We have built vast institutional frameworks—from the multilateral treaties of the World Trade Organization (WTO) to the domestic enforcement mechanisms of national competition authorities—with the sincere belief that we were systematically eliminating the barriers to global wealth creation. We have rightly celebrated the drastic reduction of applied tariffs and non-tariff border barriers, the rigorous prosecution of private cartels, and the disciplining of the anti-competitive conduct of monopolies. Yet, despite these monumental efforts, global productivity stagnates, and the trajectory of global GDP per capita routinely falls short of its potential. This has been especially true in the last twenty-five years.
The reason for this persistent shortfall lies in a massive, systemic blind spot. We have meticulously policed the borders and aggressively scrutinized the boardroom, but we have granted a near-total free pass to the most powerful and disruptive economic actor of all: the state.
We now confront the reality that the primary threat to global prosperity is no longer the traditional tariff or the private cartel or monopoly, but the proliferation of anticompetitive market distortions (ACMDs). As I detailed in International Trade, Regulation and the Global Economy: The Impact of Anti-Competitive Market Distortions (Routledge, Abingdon, 2025), ACMDs represent a vast, ungoverned space in global economic governance. They are the myriad ways in which government action—through anticompetitive regulation, distortive subsidies, the actions of state-owned enterprises, and the erosion of property rights—distorts the natural competitive process, misallocates capital, and acts as a suffocating regulatory tax on productive enterprises.
THE TWIN BLIND SPOTS: TRADE LAW AND ANTITRUST
To understand how ACMDs became an ungoverned space, we must examine the historical limitations of our two primary relevant economic disciplines: international trade law and domestic competition policy.
Historically, international trade negotiations have been fundamentally mercantilist exercises, focused heavily on border measures. The General Agreement on Tariffs and Trade (GATT) and subsequently the WTO used this mercantilist impulse to lower tariffs, eliminate overt quotas, and deal with other discriminatory practices. However, as these explicit barriers fell, protectionism simply mutated. It moved behind the border. Governments learned that they could achieve the same protectionist outcomes— shielding favoured domestic incumbents from foreign competition—not through tariffs, but through regulatory barriers, opaque licensing regimes, and massive domestic subsidy programmes.
Modern trade agreements have attempted to reach behind the border, but they have largely failed to discipline government action that distorts markets in fundamentally anticompetitive ways. Trade negotiators often lack the granular economic tools to quantify the exact distortive impact of a domestic regulation, resulting in chapters on “technical barriers to trade” or “good regulatory practices” that are conceptually sound but practically unenforceable. The relatively recent introduction of competition policy disciplines has been largely hortatory in nature and has not dealt with the hard problem of what happens if a domestic competition agency is itself implementing policy in anticompetitive ways. Trade law has been limited by its focus on discrimination, although even in trade law, the most advanced reading of the trade cases in the area of domestic taxation makes it clear that equality of competitive opportunity is the standard, not the aim and effect of the law itself (S. A. Singham and A. F. Abbott, Trade, Competition and Domestic Regulatory Policy: Trade Liberalisation, Competitive Markets and Property Rights Protection, Routledge, Abingdon, 2023, chap. 6, The General Agreement on Tariffs and Trade: A Temporary Fix but a Constitutional Foundation, pp. 130–187, at 140–146). Meanwhile, domestic competition policy officials are rarely brought in by trade agencies to guide them through the intricacies of what constitutes sound competition policy enforcement and what is outside the bounds of what might be construed as reasonable implementation and enforcement.
Simultaneously, domestic competition agencies have been structurally constrained from addressing the problem. Institutions like the Competition and Markets Authority (CMA) in the United Kingdom or the Department of Justice (DOJ) or Federal Trade Commission (FTC) in the United States are principally designed to address private restraints on competition, such as collusion, exclusionary conduct, and abuses of market power by firms. Government-created monopolies and other state-sanctioned restraints, by contrast, have often sat outside the core reach of antitrust enforcement, including in the United States through doctrines such as state action immunity. This is so notwithstanding the repeated guidance of the Organisation for Economic Co-operation and Development (OECD), an intergovernmental body that develops policy standards and analytical tools for market-oriented reform, and the International Competition Network (ICN), the principal informal global network of competition authorities, both of which have emphasized competition advocacy and competition assessment as central functions of competition agencies when reviewing existing or proposed laws and regulations for unnecessary restraints on competition (OECD, Competition Assessment Toolkit, OECD, Paris, 2011; see for example the ICN, Advocacy Toolkit, Part I: Advocacy Process and Tools, ICN, Bonn, 2022 (available at ADVOCACY TOOLKIT , which summarizes the ICN’s work on this topic from 2002 to 2022). The United States’ April 9, 2025, Executive Order on Reducing Anti-Competitive Regulatory Barriers is a recent example of a government adopting an approach consistent with that OECD framework, by directing agencies to identify regulations that create monopolies, impose unnecessary barriers to entry, limit competition, or otherwise distort the operation of the free market (Exec. Order No. 14267, Reducing Anti-Competitive Regulatory Barriers, 90 Fed. Reg. 15629 (Apr. 9, 2025)).
Competition agencies are adept at calculating the consumer harm caused by a private merger, but they are entirely disarmed when a government department enacts a regulation that effectively cartelizes an entire industry. Consequently, the state is permitted to engage in market-distorting behaviours that would result in severe civil or even criminal penalties if attempted by a private corporation.
THE ANATOMY AND MECHANICS OF AN ACMD
An ACMD is not simply a “bad policy”; it is a specific, quantifiable disruption of the competitive process. When a government grants a preferential subsidy to a state-owned enterprise or designs an environmental regulation that coincidentally only incumbent firms can afford to meet, it drains wealth out of the domestic economy and harms its trading partners into the bargain.
To properly govern this space, we must shift our analytical framework to understand how wealth is actually created. This requires moving beyond static, classical models and embracing a more dynamic, probabilistic understanding of trade and regulation. As modelled in my work, the wealth creation potential of an economy—its ability to close its distance to frontier (DTF)—can be understood through a structural equation mapping the kinetic forces of growth against the potential barriers erected by the state.
The wealth creation ability of an economy is driven by three foundational pillars, each weighted by its econometric impact on growth: property rights (PR), domestic competition (DC), and international competition (IC).
Our econometric model, discussed in International Trade, Regulation and the Global Economy: The Impact of Anti-Competitive Market Distortions, is based on 130-country panel data over a 13-year period between 2010 and 2023 (see especially chaps. 3–4). An improvement of one point in these three pillar scores does not operate equally in terms of GDP per capita growth. The coefficients for the pillars are set out below.
ECONOMETRIC IMPACT OF INSTITUTIONAL PILLARS ON GDP PER CAPITA
The table below illustrates the impact of a one-point increase in each of these pillars on GDP per capita.
It is noteworthy that the domestic competition pillar carries the highest coefficient (0.0803). This is not an accident. Domestic competition is the crucible in which firms are forced to innovate, optimize, and allocate capital efficiently. When governments introduce ACMDs—whether through energy price caps, planning delays, or targeted bailouts—they directly degrade this DC score. They insulate inefficient firms from the consequences of their inefficiency. Yet despite this, finance and economic ministries have focused much more on trade policy and Washington-consensus-based models of growth while completely neglecting competition policy (and to a lesser extent, property rights), despite the fact that these two pillars contribute far more to economic growth than conventional trade liberalization alone, important though that is.
ACMDs act as a drag on the system, specifically limiting the probability and intensity of voluntary exchange. They also have negative impacts on the strength of institutions, human capital, and the commercialization of natural resources—three controls our ACMD model uses.
The tragic consequence of this ungoverned space is that billions of dollars in potential global GDP per capita are left unrealized. Capital that should flow toward the most innovative and productive uses is instead trapped, diverted by state action into politically favoured but economically stagnant black holes.
So how do we solve this problem and create a normative framework that enables our economic systems to create wealth for our people?
TOWARDS A NEW GLOBAL ARCHITECTURE
The intellectual challenge of this decade is to design an architecture capable of bringing the rule of law to this ungoverned space. At this time, we cannot rely on the slow, consensus-driven mechanisms of the WTO to solve a problem that many of its largest member states are actively exploiting. We need a new paradigm.
A unified theory of ACMDs: Achieving competitive neutrality
The foundational goal of the new architecture must be to reduce ACMDs and so deliver competitive neutrality. The rules of the game must apply equally to all market participants, regardless of their ownership structure or national origin. State-owned enterprises and privately held firms must compete on the merits of their products and services, not on the strength of their sovereign backing. Domestic competition agencies must be empowered—and politically insulated—to audit and challenge government regulations that inherently distort competitive neutrality. We must bridge the gap between antitrust enforcement, trade and regulatory review, ensuring sectoral regulators have competition mandates. We can build on competition policy’s focus on consumer welfare and trade policy’s focus on equality of competitive opportunity as the basis for a competitive neutrality doctrine across both policy spaces. This will lead to an increase in productive, allocative, and dynamic efficiency—the three efficiencies needed for wealth creation and GDP per capita growth.
Plurilateral coalitions of the willing
Because multilateral consensus on state intervention is currently impossible, progress will require “coalitions of the willing.” Like-minded nations committed to free and competitive markets must forge plurilateral agreements specifically designed to identify, quantify, and penalize ACMDs. These agreements must go beyond traditional tariff schedules and embed the principles of the DC, IC, and PR pillars directly into binding treaty text. If a nation wishes to enjoy the benefits of frictionless trade within the coalition, it must commit to dismantling its domestic potential barriers across all three pillars.
Quantifying the regulatory tax
We cannot govern what we cannot measure. A critical component of this new architecture is the widespread adoption of models capable of translating opaque regulatory barriers into hard economic costs. By utilizing the framework of the ACMD economic model, policymakers and trade negotiators can finally assign a specific “regulatory tax” equivalent to domestic ACMDs. If a foreign subsidy or a domestic licensing regime degrades the DC pillar by a calculable percentage, trade partners can accurately size their compensatory measures or prioritize their negotiating capital.
CONCLUSION
The ultimate goal of international economics is not merely an academic pursuit, but the elevation of the human condition. Every percentage point of GDP per capita lost to an anti-competitive market distortion represents a delay in human progress, a stifling of innovation, and a denial of opportunity. We have spent half a century tearing down the walls at our borders. It is now time to dismantle the invisible barriers within them. Only by confronting the distortive power of the state and establishing a robust global architecture to discipline ACMDs can we finally unleash the wealth-creating forces required to push the global economy to its true frontier.
Reprinted with permission from Concurrences
Citation: Shanker Singham, How to manage anti-competitive market distortions in the global economy, 1 April 2026, Concurrences Nº 4-2026, Art. N° 133027, www.concurrences.com
By Shanker Singham, President, Competere Foundation
Recent statements by Korea Fair Trade Commission (KFTC) Chairman Ju Biung-ghi regarding the aggressive push for the “Online Platform Fairness Act” should sound alarm bells for global trade and competition policy. Promoted by the Republic of Korea Government (ROKG) as a balanced compromise to regulate digital markets, the Fairness Act is, in reality, a deeply flawed legislative vehicle.
By abandoning traditional, effects-based competition enforcement in favor of rigid, ex-ante operational mandates, the KFTC is engineering an asymmetrical regulatory regime. When we apply the Competere Foundation’s analytical framework to these developments, it becomes clear that the Fairness Act functions as an Anti-Competitive Market Distortion (ACMD)—one that breaches the established “collar” of reasonable competition enforcement to disproportionately target innovative U.S. companies while actively protecting domestic monopolies.
Korea’s Double Standard: EU-Style Drift and Precautionary Antitrust
Sound competition policy is anchored in the protection of consumer welfare, operationalized through the maximization of productive, allocative, and dynamic efficiency. However, under Chairman Ju’s leadership, the KFTC is accelerating an “EU-style big is bad” drift.
The Fairness Act represents a dangerous embrace of precautionary antitrust. Rather than requiring the KFTC to prove actual consumer harm in a defined market, the bill shifts the burden of proof onto online platforms to prove that their ordinary business conduct is “fair.” It imposes prescriptive, banking-style rules—such as mandating platforms to hold 50% of funds in escrow and meet strict 10-20 day payout deadlines—measures globally reserved for licensed financial institutions, not technology intermediaries. Furthermore, the Act calls for the creation of “business user organizations,” effectively introducing collective bargaining into platform-to-business relationships.
Relying on precautionary regulations and broad “unfairness” doctrines inevitably leads to massive Type 1 errors (false positives). Punishing globally accepted, pro-competitive conduct chills investment, deters the rollout of new features, and inflicts severe losses on dynamic efficiency.
Targeting U.S. Leaders While Ignoring Domestic Monopolies
Despite the ROKG’s insistence that the Fairness Act’s lower revenue thresholds will capture domestic firms, the legislation remains per se discriminatory due to its platform-only scope. By exclusively targeting the online platform sector—a space where U.S. companies like Google, Apple, Meta, Netflix, Uber, and Coupang are market leaders—the law acts as a targeted non-tariff barrier, degrading the pillar of international competition in our ACMD model.
The hypocrisy of this approach is glaring when juxtaposed with the KFTC’s treatment of Korean conglomerates. While the KFTC subjects a highly competitive digital sector (where U.S. tech faces off against domestic giants like Naver and Kakao, and Chinese rivals like Alibaba and Temu) to draconian oversight, it actively fosters market concentration for domestic chaebols:
By turning a blind eye to these entrenched domestic monopolies while suffocating foreign digital entrants, the KFTC is fundamentally degrading the Domestic Competition pillar. This is classic “murky protectionism”—using the guise of competition policy as a strategic tool of industrial policy.
Different Enforcement Standards: The China Model?
The KFTC’s discriminatory posture is most evident in its penalty methodology. The KFTC employs vastly different standards for domestic and foreign entities accused of similar abuses. It routinely uses massive, structurally disruptive fines to challenge the ingenuity of U.S. tech companies:
In stark contrast, actual domestic monopolies receive a mere slap on the wrist. Naver received an $18 million fine in 2020 (later overturned); Kakao faced a total of $75 million for severe market abuses; and a “record” $207 million fine against Samsung was relegated to a narrow procurement issue regarding corporate cafeteria contracts.
Now, the Fairness Act threatens to empower the KFTC to impose fines of up to 10% of sales based on vague “fairness” standards. While this mirrors the EU’s Digital Markets Act (DMA) penalties, it lacks the DMA’s extensive procedural protections, clear scope limitations, and structured compliance pathways. This represents a severe breach of the procedural and substantive collar that defines legitimate competition enforcement.
Korea’s approach is beginning to look remarkably similar to the Chinese Communist model, where the State Administration of Market Regulation (SAMR) leverages domestic regulations specifically to target foreign businesses (with 80% of adverse approvals since 2008 targeting foreign firms).
Impact of Unsound Competition Policy Implementation and Enforcement on the Poor; What is Fairness?
Chairman Ju makes much of the fact that this type of enforcement and the application of the ex ante framework in the Fairness Act is pro-poor, and so the US should not object to it. The reality is that this unsound competition policy has profoundly damaging effects for Korea’s poor. The fact that it leads to wealth destruction on a massive scale as our ACMD model shows means that the brunt of the damage in GDP per capita terms falls disproportionately on the poorest members of society. If each Korean household loses thousands of dollars each year, then this might be inconvenient for the rich. For the poor is a catastrophe. If it causes the US among other countries to retaliate against these practices, that will be a double hit to Korea’s poor, an astonishing act of economic self-harm. Korean economic policymakers should ask themselves why the KFTC is backing such an extraordinary act.
This is part of a wider malaise, which stems from the use of the word “fair”. Words matter, and the concept of fairness means all things to all people. As such it is an imprecise word, one used to hide a multitude of sins. The only group to whom such legislation and its attendant competition enforcement is “fair” to are status quo, incumbent companies who are not innovative but rely on cosy relationships with government to thwart more dynamic, innovative companies. It continues the protected position of Korean Chaebol and their Chinese firm collaborators, whilst denying market contestability to specifically targeted US firms.
Conclusion
Chairman Ju’s latest push for the Fairness Act is not an exercise in sound competition policy; it is the deployment of an Anti-Competitive Market Distortion designed to handcuff foreign innovators. While Korean companies and aligned quasi-government bodies spend record sums lobbying to ensure U.S. laws do not impact their interests, Seoul is actively constructing an asymmetrical regulatory regime at home.
To restore economic growth and respect bilateral trade commitments, Korea must abandon this “big is bad” legislative drift. The KFTC must return to an effects-based, consumer-welfare standard that protects the competitive process rather than shielding domestic competitors from international rivalry.
For more detailed analysis and economic modeling of how these policies impact both the U.S. and Korean economies, read our comprehensive Korea papers available in the research tab at www.competerefoundation.org.
Buckingham, UK — March 18th, 2026 — Shanker Singham, Chair of the Growth Commission and CEO of Competere, will speak at a major economic conference later this month examining how the United Kingdom can restore economic growth after years of stagnation.
Singham will appear at the conference “Mending Britain’s Broken Economy” on Monday 23 March 2026 at the Vinson Centre at the University of Buckingham. The one-day event is being co-hosted by the Growth Commission and the Institute of International Monetary Research and will bring together leading economists, policymakers and business leaders to debate solutions to Britain’s persistent growth challenge.
Singham will participate in the panel discussion “Supply Side Policy, Market Distortions and Regulatory Failure” from 12:10–13:10, alongside Greg Smith MP, Shadow Minister for Energy Security and Transport, and entrepreneur and investor Simon Dolan.
The panel will examine the role of regulatory policy, competition barriers and supply-side reform in determining the UK’s economic performance.
In his remarks, Singham is expected to address recent proposals for the United Kingdom to align its Sanitary and Phytosanitary (SPS) regulations with those of the European Union — an issue that has sparked growing debate about the future direction of UK trade and regulatory policy.
Recent analysis by Competere for the Growth Commission estimates that dynamic alignment with EU SPS rules could result in a £15 billion hit to the UK economy, while limiting Britain’s ability to pursue a more pro-competitive regulatory framework and negotiate trade agreements with key global partners.
Commenting on the issue recently, Singham said:
“Hardwiring EU SPS regulations into UK law would be a monumental act of self-harm that would be extremely difficult to reverse. With a pressing need to grow its economy, the last thing the UK should be doing is aligning with a regulatory system that has contributed to stagnant growth across much of Europe.
“So far the UK has avoided being subject to a Section 301 investigation initiated by the Trump Administration. The UK would be well advised to consider that moving forward with this realignment may cause the United States to rethink its position, as these new agricultural standards could undermine recently negotiated openings in the UK market for US food exports.”
Singham argues that the global trading system is increasingly characterised by two competing regulatory models. One is based on regulatory competition and mutual recognition, which allows countries to maintain different rules while recognising each other’s standards. The other requires harmonisation at the most restrictive level, a model commonly associated with the EU and China.
According to Singham, the UK’s economic success after Brexit will depend heavily on whether it embraces regulatory competition or moves back toward regulatory harmonisation.
“Having left the European Union, the UK has the opportunity to develop one of the most pro-competitive regulatory systems in the world,” Singham said. “Locking ourselves back into the EU’s regulatory framework would significantly restrict that opportunity as well as undermining the UK’s ability to pursue an ambitious global trade policy.”
Competere’s analysis of the impact of SPS alignment has generated significant national media attention in recent weeks, with coverage appearing in CapX, The Daily Telegraph, GB News, The Daily Express and The Sun, as well as discussion in the House of Lords.
The “Mending Britain’s Broken Economy” conference comes less than three weeks after the Chancellor’s Spring Statement and will provide an opportunity for leading economists to assess the state of the UK economy and debate policy reforms needed to restore growth.
