WTO Public Symposium 2003: Session X - Trade & Competition

Panel Moderator: Mr. Adrian Otten, WTO Director

The moderator for this discussion opened the session with a brief recap of the trade and competition issue. He then explained the organization of the session. The consumer and business discussants were each given time to speak and then were followed by the delegates from the EU and India. 

Mr. Julian Edwards, Director-General, Consumers International, United Kingdom

Technical report
Discussion paper

As a representative of consumers Mr. Edwards explained that he is undeniably in favor of competition policy because a competitive market favors consumers by promoting efficiency. And, in the long run, increased efficiency in use of economic resources increases employment. The interest of business, however, is to minimize competition. Therefore, government action is necessary to promote it through efforts on both the supply and demand side. Anti-competitive practices should be limited through competition policy (supply side) and there should also be an effort to promote consumer knowledge about their rights in the market (demand side).

Mr. Edwards went on to explain that many countries already have competition policies or are at least in the process of passing a framework for such laws. This means that consumer protection mechanisms already exist in most countries, along with appropriate enforcement measures. This makes sense, as over the last 10 years the global business landscape has changed. The world has generally moved away from planned economies, toward market economies, and the resulting interdependence of countries on each other has promoted the growth of large multinational corporations. To counteract this, new national competition policies are therefore in the process of being solidified, as most countries have accepted that there is a need.

Many research projects have looked into the impact of competition policies.  Mr. Edwards cited studies by his group, Consumers International, which look at how competition policies fit in with various stages of market economies. One particular line of research found that consumer protection is a necessary element of any competition policy.  This result has been backed up by similar studies conducted through CUTS.

Mr. Edwards then addressed the possibility of a multilateral competition framework.  He expressed the opinion that the WTO is indeed the most likely place for such an agreement.  He questioned whether the negotiators in Cancun will decide to set up a committee or continue the existing working group.  He also voiced concern over the feasibility of the single undertaking.  Edwards would personally like to see competition treated as its own separate issue outside the single undertaking.

Mr. Calvin Goldman, Q.C., Blake, Cassels & Graydon LLP, Toronto, Canada / Chair, ICC Task Force on Competition and Trade

Speaking for business interests in the discussion was Mr. Calvin Goldman.  His participation on the ICC task force has immersed him in this issue, and he has made submissions to the WTO working group on competition policy.

He explained that the ICC perspective going into Cancun is as follows.  Cartels are not favored, as they distort the level playing field.  The ICC also support the working group and they have attempted to build consensus on this issue.  However, because ICC is an international group, they have not adopted a formal position on whether a multilateral framework for competition policy should be constructed.  Instead, each delegate to the committee will submit to their own countries suggestions for what type of competition policy to push for the through the WTO as well as the detailed paper that the ICC has written on each of the Doha issues. 

Regarding competition, the ICC specifically suggest a cautious and sensitive approach, and emphasize that both public and private sector input should be used.  Their core principals for competition policy are transparency, but with protection of confidential information. They believe that if these principles are upheld, there will be no disputes. The ICC also thinks that one size does not fit all with this issue.  Each country should be able to decide its own competition regime and have a phased approach in implementing it.

Mr. Mauro Petriccione, European Commission, DG Trade

The EU, Mr. Petriccione explained, would like to see the development of competition regimes around the world.  One motivation for an international competition agreement is that it is an essential element of economic governance, and the EU sees it as important for both trade and development.  They are convinced of the need for an international competition agenda and they see competition as an important issue for regional integration as well (it is already part of most bilateral agreements).    The mergers and acquisitions aspect of competition policy is also quite complicated and it is useful to have an international forum to discuss such matters.

The EU sees the WTO as the “low rung” of the ladder in formulating competition policy, capable of creating the most basic framework of rules that all member countries could implement.  Comprehensive policies can be developed autonomously at the national level.

Petriccione also addressed specific issues.  He said there is growing evidence of the damages caused by hardcore cartels and that he feels there is increasing consensus on this point.  He then stressed the need for a flexible agreement.  With capacity building, he said that the transitional periods aren’t the issue but instead the question of how to tie the agreement to development of domestic competition law. 

To conclude his remarks, Petriccione noted that he thinks the working group on competition policy has done a tremendous job thus far in preparation for the Cancun ministerial.  The EU is prepared for the possibility of negotiating the issue in Cancun because the Doha ministers took the decision to create the working group for the purpose of having discussions launched at that time.  Petriccione said that if consensus cannot be reached on the modalities of the competition framework thenthe desirability of discussing this issue within the WTO will diminish for the EU.

Mr Rajesh Aggarwal, Counsellor, Government of India

The Counsellor from India began his intervention by declaring that his country advises caution on the issue of competition policy.  He said that one must distinguish between the need for domestic legislation and the need for a multilateral competition framework.  And once that distinction is made, he believes that the decision of competition should be left to developing countries.  He warned that the reputation of the WTO in such countries has not been good, especially after the recent failure to agree on new TRIPs measures, and that discussion of competition only aggravates this image problem. 

Mr. Aggarwal went on to question what value added a multilateral competition agreement could offer.  He said that non-discrimination is bad for developing countries and there is apprehension of across-the-board adoption of this principle. While India naturally supports the banning of hardcore cartels, he said his country questions why there is no intention to ban export cartels.  Another issue of contention is the price such a multilateral regime would impose upon developing countries in terms of people needed and implementation costs.  Overall he felt the costs outweigh the benefits, and again urged caution going into Cancun.