TRADE AND COMPETITION POLICY
Working group set up by Singapore ministerial
As government barriers to trade and investment have been reduced, there have been increasing concerns that the gains from such liberalization may be thwarted by private anti-competitive practices. There is also a growing realization that mutually supportive trade and competition policies can contribute to sound economic development, and that effective competition policies help to ensure that the benefits of liberalization and market-based reforms flow through to all citizens.
> Director-Generals message
> Built-in Agenda
> The WTO agreements and developing countries
> Least-developed countries
> Agriculture (1)
> Agriculture (2)
> Sanitary and phytosanitary (SPS) measures
> Intellectual property (TRIPS)
> Textiles and clothing
> Information technology products
> Trade and environment
> Trade and investment
> Trade facilitation
> Transparency in government procurement
> Trade and labour standards
> Disputes (1)
> Disputes (2)
> Electronic commerce
> Members and accessions
> Some facts and figures
> Glossary of terms
> Other ministerial meetings
Approximately 80 WTO Member countries, including some 50 developing and transition countries, have adopted competition laws, also known as antitrust or anti-monopoly laws. Typically, these laws provide remedies to deal with a range of anti-competitive practices, including price fixing and other cartel arrangements, abuses of a dominant position or monopolization, mergers that limit competition, and agreements between suppliers and distributors (vertical agreements) that foreclose markets to new competitors. The concept of competition policy includes competition laws in addition to other measures aimed at promoting competition in the national economy, such as sectoral regulations and privatization policies.
The WTO Working Group on the Interaction between Trade and Competition Policy (WGTCP) was established at the Singapore Ministerial Conference in December 1996 to consider issues raised by Members relating to the interaction of these two policy fields. Since its initial meeting in July 1997, the Group has examined a wide range of such issues. The approximately 125 submissions received by the Working Group from Members thus far attest to the keen interest that has been shown by Members in the subject.
In 1997 and 1998, the work of the WTO Working Group was organized around a Checklist of Issues Suggested For Study which was developed at the first meeting of the Group. In particular, the work focused on the following main elements of the Checklist:
- The relationship between the objectives, principles, concepts, scope and instruments of trade and competition policy; and their relationship to development and economic growth.
- Stocktaking and analysis of existing instruments, standards and activities regarding trade and competition policy, including of experience with their application.
- The interaction between trade and competition policy, including consideration of the following sub-elements:
- the impact of anti-competitive practices of enterprises and associations on international trade;
- the impact of state monopolies, exclusive rights and regulatory policies on competition and international trade;
- the relationship between the trade-related aspects of intellectual property rights and competition policy;
- the relationship between investment and competition policy;
- the impact of trade policy on competition.
A detailed Report on the Groups deliberations on the above matters was issued in December 1998. The Report documents views expressed by Members regarding matters such as the mutually supportive relationship between trade liberalization and competition policy, the categories of anti-competitive practices that can impact adversely on international trade and investment and the potential contributions of competition policies to economic development. In addition, since 1997 the WTO has organized, in cooperation with UNCTAD and the World Bank, four Symposia on issues related to the work of the Working Group.
Pursuant to a decision by the General Council of the WTO, the Working Group examined in 1999 three further topics:
- the relevance of the fundamental WTO principles of national treatment, transparency, and most-favoured-nation treatment to competition policy and vice versa;
- approaches to promoting cooperation and communication among Members, including in the field of technical cooperation; and
- the contribution of competition policy to achieving the objectives of the WTO, including the promotion of international trade.
While the relevance of WTO principles to competition policy and the need for enhanced cooperation among Members in addressing anti-competitive practices were affirmed by a number of Members, views differed as to the need for action at the level of the WTO to enhance the relevance of competition policy to the multilateral trading system. In particular, while a number of Members expressed support for the development of a multilateral framework on competition policy in the WTO, to support the implementation of effective competition policies by Member countries and reduce the potential for conflicts in this area, others questioned the desirability of such a framework and favoured bilateral and/or regional approaches to cooperation in this field.
The question of the desirability of developing a multilateral framework on competition policy will now be taken up at the Seattle Ministerial Conference. In the preparations for the Conference, a number of Members have renewed the call for a WTO framework to support the implementation of effective national competition policies by Members and enhance the overall contribution of competition policy to the multilateral trading system while other Members have expressed continuing objections to negotiations on this matter.