Commerce Secretary Malcolm Baldrige, citing a new order of world trade, today proposed repeal of the federal law blocking corporate mergers that may lessen domestic competition.
He said the nation's antitrust laws "have been properly revered by generations of lawyers" but that times change and "looking backward can get us run over today."
Now, he said, some of those restrictions place "unnecessary costs on our businesses and unnecessary impediments" to competition in an expanding world market.
Baldrige raised the possibility of repealing Section 7 of the Clayton Act in a speech to the American Bar Assn. last August and said at a breakfast meeting with reporters today that he submitted the proposal to the Office of Management and Budget last Friday.
Baldrige emphasized that he is not proposing to touch parts of federal law that enable government prosecutors to break up mergers where restraint of trade can be shown--only the part that blocks mergers in advance when the Justice Department concludes that there "may be" a lessening of competition or those that "tend to" create a monopoly.
He acknowledged that his proposal, which faces full Administration review and would have to be approved by Congress, would "give U.S. firms more latitude to merge" and, in effect, place a heavier burden on those in or out of government seeking to block mergers.
Baldrige said current trading realities are "light-years away" from what they were in 1950, when the law was last revised. He said 75% of the products offered by U.S. firms are subject to competition from abroad.
Rather than stop mergers in advance, he said, his proposal would create a climate in which companies "would have to sin first" before being punished.