This paper discusses critically the links between trade and competition policies, starting with the empirical literature which suggests that liberal trade policies and tight competition policy are, in a loosely defined sense, substitutes. Next, the underpinnings for the "substitution" hypothesis in a strategic environment, whereby trade liberalization may reduce the incentive to enforce anti-trust legislation, are evaluated. Political-economy motives behind trade and competition policies are then considered to discuss the incentives for a government to approve a merger when there are cross-border effects. Finally, the pros and cons for harmonization at the regional or multilateral levels are considered.