The Trade Association System in Iran: Absence of Competition-Restrictive Activities and Market Fairness

Abstract

The Iranian government has introduced a trade association system that requires collaboration among traders and manufacturers who operate independent businesses in the domestic market to organize themselves into trade associations. This is a unique move considering the current global trend of governments enforcing antitrust legislation in an attempt to guarantee fair trade by prohibiting trade associations from participating in competition-restrictive activities. The introduction of this system is strongly related to the particular characteristics of Iran’s industrial organizations. In Iran,relationships between businesses are usually very weak. Collective competition restrictions are rarely endorsed by traders and manufacturers,let alone by an oligopoly of relatively large businesses. In this context, Iran’s trade association system is expected to remedy the inefficiency of its market and disorder caused by uncooperative business tendencies among traders and manufacturers.