378 =EPORT ON COOPERATION IN AMERICAN EXPORT TRADE,

combinations in the home market not only safeguards against artificially
 maintained prices at home, but also gives substantial economic
guaranties that American export prices will not, in general, be lower
than American domestic prices.. Where the domestic prices are kept
on a competitive basis there is little margin left to enable the exporter
 to sell goods abroad at lower prices. This desirable and necessary
 prohibition of combinations in the domestic trade of the
United States, however, would undoubtedly have the effect of considerably
 diminishing the efficacy of export combinations among
American exporters when obliged to compete with foreign combinations
 which are permitted to operate in their home markets as well
as abroad. One of the chief advantages to be gained from combinations
 among American exporters is that they will thereby be put in
a position generally to secure higher profits through increased selling
efficiency, and in some cases to get higher prices abroad through
better bargaining power.
The fear has been expressed by some that cooperative export
organization might be used to the disadvantage of nonmember American
 firms engaged in export trade. In so far as the export organization
 secures its business through greater economies in introducing
and selling goods in foreign markets, and from better facilities for
transportation, and for handling credits, it is clearly entitled to such
business, whether it gets it at the expense of some foreign rival, or
of an American competitor. So long as unfair methods are not employed
 any loss of trade suffered by a nonmember American firm
must be because it can not do the business as cheaply as the combination.
 If, however, the advantage of the export combination
over its American rival should be obtained through the use of methods
 which would be considered unfair practices in the United States,
the situation would be entirely different. It is important that the
law under which export combinations are permitted should make
clear that such actions on the part of one American exporter against
another are prohibited. whether the actions take place in the United
States or abroad.
Doubt as to the law now prevents export cooperation.—The Commission
 has been strongly impressed with the fact that doubt as to
the effect of the antitrust laws operates in many cases to prevent the
formation of cooperative organizations for export trade. It made
special inquiry as to this matter. More than half of all who replied
bo the Commission’s question stated that they understood the antitrust
 laws to prohibit combination or cooperation solely for export
business, not accompanied by oppressive or unfair practices, and a
large proportion replied that they understood the prohibition to apply
to organizations of noncompetitors as well as of competitors. Moreover,
 many of these replies were based upon the advice of counsel.