WTO Meetings on Competition Policy

26 April 1999

On 17 April, the WTO, UNCTAD and the World Bank organised a symposium on Competition Policy (CP) and the trading system. The WTO's Working Group on Trade and Competition Policy met on 19-20 April. The symposium gathered senior representatives from the CP and trade communities, academics and a very few NGOs such as Third World Network (TWN). According to observers, positions expressed in the symposium were reiterated in the Working Group, though in a more negotiation-oriented mode.

CP belongs to the so-called Work Programme decided at the 1996 Singapore WTO Ministerial (i.e. the issues recognised then as needing further study). Whether or not CP should be included in the
possible next round of trade negotiations is also the subject of debate in the preparatory process for the next Ministerial. (See BRIDGES Weekly Trade News Digest, Vol. 3, No 4, 1 February, 1999).

At present, there is no requirement that the WTO consider CP. Those who advocate action on CP in the WTO advance arguments based on two main elements. First, the absence of any global rule ensuring competition sharply contrasts with the global nature of business, and competition rules at the multilateral level could balance globalisation related investment and mergers. Second, CP could contribute to the overall objectives of the WTO, including the promotion of trade. Several developing countries and NGOs oppose negotiating multilateral rules on competition policy in the WTO. Fears include that the WTO national- and most favoured nation-treatment principles would allow big companies to enter national markets, displacing local companies and possibly facilitating concentration of global market power in a few large corporations. Several developing countries also say that a multilateral framework of rules on competition policy would be better negotiated in UNCTAD, which already has rules to control restrictive business practices.

Nevertheless, the EU as the main promoter of a possible multilateral agreement on CP pleads for the adoption of 'core principles of competition law and its enforcement' at multilateral level that would include basic national competition rules. The EC tabled a paper last week advocating this.

Along compatible lines, at the 17 April symposium, Canada drew lessons from the functioning of the TRIPs Agreement for competition law and policy at the multilateral level. Canada considered that the transition period formula provided by the TRIPs Agreement could be suitable for addressing the case of national regimes not yet in force. The U.S., though sharing the same concern for more co-operation at international level, seems not to favour a new instrument on competition policy, since it expressed its support for an evolutionary approach that could better take into account evolutions in antitrust law at national level. The U.S. said it would like to deepen case-specific co-operation mainly on a bilateral basis.

Many developing country representatives shared the concern for implementing efficient competition policies, but at the Working Group the following week, differing views were expressed as to how to increase co-operation between national competition agencies without having legally-binding international rules. India emphasised that CP should emphasise the development dimension into account in its elaboration and implementation. In the Working Group India responded to the EC paper saying that its conclusions were premature, and that the "educative process" in the Working Group should be continued, particularly since the development dimension is only now coming into the discussions. India also reiterated that a number of existing WTO provisions, such as those on anti-dumping, effectively deny foreign producers effective equality of opportunities, thus undermining WTO market-opening commitments.

Brazil expressed support for the idea of enhancing international co-operation and cost-sharing for increasingly international and expensive CP investigations. It specifically would like the definition of core principles at international level (including national treatment and MFN) to be integrated into co-operation agreements with different commitments corresponding to the development level of each country. Brazil also favours other educative tools at international level. It advocates for example for a world report on competition.

India agreed with Brazil that even in the development of national competition policy regimes, there is a need to consider different levels of development, different cultural contexts in which the
regimes will be implemented, the different levels of resources and institutions available for this implementation.

Trade: WTO Competition rules is just global "welfare" for TNCs, SUNS, 23 April, 1999; ICTSD Internal Files.

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