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Policy Coherence Needed to Realise Potential in Promising Agro-processing Sectors

Gathered in the Ugandan capital city until today, high-level officials, experts and agro-entrepreneurs from all corners of East Africa considered policy options for making agro-processing in the region more climate-aware, trade-driven and food security enhancing. The regional meeting, jointly organised by CUTS International and SEATINI, helped identify necessary policy actions to be pursued over the next three years under the regional project “Promoting Agriculture, Climate and Trade Linkages in the East African Community – Phase 2” (PACT EAC2).

KAMPALA. Gathered in the Ugandan capital city until today, high-level officials, experts and agro-entrepreneurs from all corners of East Africa considered policy options for making agro-processing in the region more climate-aware, trade-driven and food security enhancing. The regional meeting, jointly organised by CUTS International and SEATINI, helped identify necessary policy actions to be pursued over the next three years under the regional project “Promoting Agriculture, Climate and Trade Linkages in the East African Community – Phase 2” (PACT EAC2).

“We meet today to learn how the PACT EAC2 project can help to achieve positive climate-food security- trade linkages in agro-processing sectors, and how to best leverage current trade and climate negotiations at the multilateral level,” said yesterday Hon. Werikhe Kafabusa, the Ugandan Minister of State for Trade.

According to him, “Climate change and its detrimental impacts are an undeniable reality we face in the EAC, affecting productivity and trade competitiveness across many sectors.” He was joined by Hon. Jesca Eriyo, Deputy Secretary-General for Productive and Social Sectors of the East African Community, who emphasised the need for creating capacities in agro-processing to create jobs, add value to East African products, and reduce post-harvest losses. Indeed, the Private Sector Foundation Uganda estimates that almost 65% of agricultural production is lost post-harvest.

“I am happy that CUTS and its partners have decided to take up my suggestion to address such policy coherence issues in the Agro-processing sectors,” she said.

The still infant agro-processing industry in East Africa has been earmarked as having huge potential for poverty reduction, growth and regional integration. The region’s success in realising this potential will partly depend on its ability to factor in the ever-increasing challenges posed by climate change, and work in synergy with its own trade agenda. “We all agree that climate change is real, and that agro-processing is the way forward. These issues are intertwined,” said Hon. Fred Mbidde Mukasa, Chair of East African Legislative Assembly’s Committee on Communication, Trade and Investment.

Under spotlight were some key promising sectors such as horticulture, fruits, palm oil, roots, tubers and bananas. Experts shared emerging policy research lessons on how these sectors – and agro-processing more generally – can become more climate-aware, trade-driven and food security enhancing. For instance, Ms. Elisabath Tamale, currently undertaking a research study on the matter for the PACT EAC2 project in Uganda, pointed to some climate change adaptation strategies for agro-processing such as adopting new technology and plant varieties. Adaptive production techniques such as terracing, use of manure, drainage, water channels, and soil management through mulching were also highlighted.

In an ideal scenario, trade policies should ensure the availability of inputs despite climate change, markets for the processed products and access to cleaner technologies; while climate change policies support this effort through targeted adaptation and mitigation initiatives. It was emphasised that the role of international trade and climate negotiations in framing the policy space for such policies should not be overlooked.

“Following last years’ Paris Climate Conference, East African agro-processing could benefit from enhanced international finance for tackling climate change,” said climate negotiator Michael Okumu of Kenya. In particular, he noted that “from 2020, at least USD100 Billion per year should be available under the Green Climate Fund.”

In a session moderated by the Head of UNCTAD’s Regional Office for Africa, Dr. Joy Kategekwa, East African negotiators to the World Trade Organisation (WTO) in Geneva reflected about the potential implications of last year’s Nairobi agreement and the outlook for multilateral trade talks. Besides foreseeing a potential intent to discipline domestic agricultural subsidies at the next ministerial conference, trade negotiators also stressed the need to start implementing some of the advances already secured for East African countries.

In his closing remarks today, H.E. Christopher Onyanga Aparr, Ambassador of Uganda to the UN and other IGOs in Geneva, recalled that “Besides the recent WTO Nairobi conference, other major recent conferences such as COP21 and the UN Agenda 2030 have embraced the subject matter we have discussed in this meeting.”

The project “Promoting Agriculture, Climate and Trade linkages in the EAC – phase 2” (PACT EAC2) builds capacities of East Africans for climate-aware, trade-driven and food securityenhancing agro-processing in their region. Until 2019, the project brings together, informs, trains and moves to advocacy action hundreds of stakeholders from the government, businesses, civil society, media, academia and farming communities. The project is supported by the Swedish International Development Cooperation Agency (Sida), represented at the event by Ms. Fantu Farris who appreciated “the modesty of CUTS’ approach, which puts stakeholders at the centre as agents of change.”

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Uncategorized

Trade Policy can Help SMEs Trade Better Globally, if Inclusive

Around the developing world, small and medium-sized enterprises (SMEs) face unique challenges such as difficulties in customs compliance, access to credit, and lack of knowledge about foreign markets. If complemented by other flanking measures, trade policy may be one of the most important tools to support their better participation in global trade, experts say.

“There is a need to orient trade policies in ways that encourage and facilitate trade by SMEs, with flanking measures enabling them to drive innovation and integrate in value chains” said today the Secretary-General of CUTS International, Pradeep S Mehta, while opening a debate at this week’s WTO Public Forum in Geneva.

SMEs are one of the biggest contributors to employment and growth, representing over 70 per cent of all employment opportunities globally and as much as 90 per cent of all employment in low-income countries. Despite the growing importance of SMEs at the national level, their interests are not properly considered at the multilateral level and their participation in global value chains is yet to be fully developed.

As explained by Rajesh Aggarwal of the International Trade Centre (ITC), “While forward integration of African SMEs is high, as exemplified by their exports of raw materials to Europe, backward integration has remained low.”

A country’s trade policy can be an effective tool to enhance SMEs’ participation in global trade. Experiences such as Bangladesh’s garment export industry suggest that national governments are re-evaluating their trade policies to reduce barriers to trade for SMEs. “A key contributor to this success was our trade policy decision to drop duties on imports geared towards garment exports.” said Mostafa Abid Khan, Minister at the Permanent Mission of Bangladesh in Geneva. “Duty drawbacks are another popular tool in South Asia, although it is more cumbersome”, he added.

The success and growth of SMEs is particularly important for the reduction of poverty in the developing regions of Africa and South Asia, particularly women-owned SMEs which play an equal, if not more, important role. Women’s entrepreneurship is an under-utilised source of growth and poverty reduction. In Africa, while they are actively involved in agriculture, women’s ownership of business ranges from 4% in Eritrea to 60% in Côte d’Ivoire. According to gender and trade expert Mona Shrestha Adhikari, “one third of the world’s SMEs are women-owned businesses, but they are stuck at the bottom of the value chain because they lack access to education, skills and finance.”

Women entrepreneurs in developing countries also have poor access to marketing networks, capital, credit and technical expertise, in addition to cultural and structural barriers. “Every country should look at trade policy through the gender lens, and ensure women participate in the policy making process”, Ms. Adhikari said.

Flanking measures in related policy areas are also required, as SMEs are often restricted due to the unavailability of credit, stringent customs and compliance procedures, lack of awareness, as well as business and IT skills etc. Besides gender equality, “other areas to link with trade policy may include digital economy, access to finance, informality and competition policy,” suggested Marcus Bartley Johns, Senior Trade Specialist at the World Bank.

This session titled “Trade Policy: A tool to facilitate the participation of SMEs in global trade”, organised by CUTS International, aimed to facilitate the exchange of best practices, industry opinions, policy making hurdles, and the role that the WTO can play to help Member countries to orient their trade policies. Through over 100 events, the global trade community gathering this week in Geneva for the 2016 WTO Public Forum is reflecting on how to ensure that trade benefits everyone. In particular, women, innovative start-ups and SMEs should be able to leverage trade opportunities.

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Competition Policy

World Competition Day Celebrations Discuss Interface with Intellectual Property

“Today couldn’t be a better day to celebrate the World Competition Day”, said Philippe Brusick, Former Head of the Competition and Consumer Protection Policies Branch at UNCTAD and the President of CUTS International, Geneva, General Assembly, today in Geneva while speaking at a roundtable discussion organised by CUTS International in celebration of the World Competition Day.

“Today couldn’t be a better day to celebrate the World Competition Day”, said Philippe Brusick, Former Head of the Competition and Consumer Protection Policies Branch at UNCTAD and the President of CUTS International, Geneva, General Assembly, today in Geneva while speaking at a roundtable discussion organised by CUTS International in celebration of the World Competition Day.

“Indeed, on 5th of December 1980 the United Nations adopted the UN Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices which to date remains the only multilaterally agreed instrument on Competition Policy and paved the way for enormous progress on consumer welfare”, he added.

He was joined by Ambassador Yi Xiaozhun, WTO Deputy Director-General who, in his welcome address, recalled that it is indeed fitting and appropriate to celebrate the UN Set milestone on this day. “I am happy to celebrate with you the World Competition Day, which is intended to remind us of the role competitive markets play for people”, he said.

This year, celebrations addressed the theme “Linkages between Competition and Intellectual Property.” The two areas share the same goals of economic efficiency and consumer welfare, and should therefore not only be seen as compatible but also complementary. Nevertheless, it was acknowledged that challenges sometimes arise when they seem to clash in certain circumstances.

According to Teresa Moreira, the new Head of UNCTAD’s Competition Policy and Consumer Protection Branch, “While intellectual property aims to encourage innovation by rewarding investment and R&D, the exercise of IPRs occasionally gives rise to competition concerns, e.g. in cases of refusals to license, infra-technology restrictions, patents and standards setting processes, and pay for delay settlement.”

The discussion reminded that the interface between the two issues is already recognized in existing WTO agreements, particularly the TRIPS agreements where Article 8 recognizes that appropriate measures may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

“Other relevant provisions include TRIPS Articles 31 and 40, with the latter recognizing the potential adverse trade effects of licensing practices or conditions pertaining to IPRs which restrain competition.” said Robert Anderson, Counsellor and Team Leader for Government Procurement and Competition Policy at the WTO Secretariat.

Exploring avenues for harnessing the complementarities between the two disciplines, Giovanni Napolitano, Consultant at WIPO for the IP and Competition Policy Division, indicated that WIPO facilitates MoUs between IP Offices and Competition authorities for them to exchange know-how and better engage with each other.

The discussions highlighted the need for greater documentation of cases from developing countries where competition authorities have successfully used competition tools to tackle IPR abuses. While some case examples exist, such as the Refusal to License Patents in AIDS medications in South Africa, more systematic identification of relevant cases could help developing countries overcome the challenges they face at the interface of the two issues.

International Days are observed to draw the attention of the society at large on issues that are extremely important for human development in the present and particularly for the future.

Competition Policy falls into this category, and this is why a global movement led by CUTS International at the initiative of its Secretary-General Pradeep S. Mehta has been celebrating and calling for the adoption of a World Competition Day on 5th December, date of the adoption of the first-ever Set on Competition Policy by the UNGA 36 years ago. “I do remember when Pradeep Mehta first advocated the idea of a World Competition Day, which was a new and innovative idea to stimulate interest and giving rise to discussions on the role of competition around the globe.”, said Mr. Anderson.

In 2012, UNCTAD also joined CUTS in the promotion of the World Competition Day which since then has swiftly gained popularity amongst Competition Authorities worldwide. Currently, 24 countries have supported the call including the United Kingdom, Russia, Sweden, Austria, Afghanistan, Tanzania, Spain, Gambia, etc.

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Investments

CUTS Seminar Launches a Study on Trade and Investment in the Multilateral Trading System

Launched by CUTS at a seminar today, a new study on “Trade and Investment in the Multilateral Trading System: How has it Evolved?“ precisely aims to contribute to this, by building awareness on possible approaches to trade and investment in the multilateral trading system.

GENEVA. Since the Working Group on Trade and Investment (WGTI) went into hibernation in 2003, the understanding WTO members had started building on issues and linkages between trade and investment has not been nurtured. With interest resuming since the Nairobi ministerial, members now need to look back at where the WTO left its work on the matter and assess to what extent it remains relevant nowadays. Launched by CUTS at a seminar today, a new study on “Trade and Investment in the Multilateral Trading System: How has it Evolved?“ precisely aims to contribute to this, by building awareness on possible approaches to trade and investment in the multilateral trading system.

“The nexus between trade and investment has come in political debate”, said Hubert Schillinger, Director of the Geneva office of the Friedrich-Ebert-Stiftung when opening the seminar.

Presenting the study findings, Julian Mukiibi, Assistant Director at CUTS International Geneva recalled the long multilateral journey of trade and investment since the 1948 Havana Charter, noting that that no multilateral agreement on rules has been concluded so far. According to Mr. Mukiibi, consensus has been lacking on issues such as requirements, market access and dispute settlement among other.

“Regional Trade Agreements are increasingly covering the issue of trade and investment, although the level of commitment with regards to the issues of dispute settlement, technology transfer, transparency and non-discrimination is very different” he said.

Nevertheless, an approach focusing on investment facilitation while avoiding contentious issues from previous negotiations has been recently proposed in the WTO. Among other members, Brazil has been trying to develop new ideas on adapting bilateral advances to a multilateral approach. “We should not revive the ghosts of WGTI, but rather find new solutions to new issues”, advocated at the seminar Mr. Felipe Hees, Counsellor at the Permanent Mission of Brazil to the WTO.

According to him, investment facilitation could be seen as a single electronic window in multilateral agreements that could reduce the current burdens to international investment. In addition, agreement on investment facilitation would also need to provide for dispute settlement. “A binding agreement with dispute settlement is the stick you need, as a stimulus to make the single electronic window a reality”, he said.

Other international organisations such as UNCTAD are undertaking policy analysis and technical assistance to establish a single window, build consensus among stakeholders, and develop adequate tools to reform policies. The voluntary nature of UNCTAD´s “Action Menu for Investment Facilitation” does not compel countries to adapt their policies in a dictated way, but provides options and analysis for them to decide which policies they want to implement.

“There is a pressing need for systemic, sustainable development oriented reform of International Investment Agreements”, said Ms. Elisabeth Tuerk, Chief International Agreements Section, Division on Investment and Enterprise at UNCTAD, referring to the increasing number of cases where investors brought both developed and developing countries to dispute settlement international arbitration.

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E-Commerce and the Digital Economy

Diplomats receive blockchain certificates for digital commerce course

Speaking during the ceremony, Ms Marion Jansen, Chief Economist of the International Trade Centre (ITC), said that an important objective of capacity development programmes was to help participants overcome their fear of unknown subjects, and of asking questions. Successful programmes are the ones that help participants lose their fears to ask the questions they need to answer in order to take informed decisions.

Speaking during the ceremony, Ms Marion Jansen, Chief Economist of the International Trade Centre (ITC), said that an important objective of capacity development programmes was to help participants overcome their fear of unknown subjects, and of asking questions. Successful programmes are the ones that help participants lose their fears to ask the questions they need to answer in order to take informed decisions.

Mr Rashid S. Kaukab, Executive Director, CUTS International Geneva, complimented the participants on their sustained engagement during the course, as well as their questions and observations that enriched the discussion. He was confident that the materials and lectures will remain relevant sources for them in their ongoing and future work.

Mr Angel Gonzalez-Sanz, Chief of the Science, Technology and ICT Branch, Division on Technology and Logistics, UNCTAD, said that the knowledge gained from the course will help diplomats further interact and engage in upcoming digital trade-related discussions.

Welcoming the course as a model for the Geneva Initiative on Capacity Development in Digital Policy, Mr Michael Kleiner, economic development officer, State of Geneva Directorate General for Economic Development, explained that capacity development in the field of digital policy can draw on the wide expertise available in Geneva.

Prof. Jovan Kurbalija, Director of DiploFoundation and Head of the Geneva Internet Platform, who presided over the ceremony, stressed that the course contributed towards a more inclusive and informed debate on the future of digital commerce. An informed search for policy convergences is particularly important at a time where there are many divergent views on digital policy.

The course covered a wide range of issues of relevance to current e-commerce discussions, with particular emphasis on the intersection between digital policy and trade. Participants had the opportunity to engage in the study of topics such as emerging online business models, e-payments, digital currencies, taxation, competition, cybersecurity, encryption, privacy and data protection, cross-border data flows, data localisation, regional trade agreements and multilateral discussions at the World Trade Organisation. The blended learning course format included weekly face-to-face meetings.

The ceremony of delivery of certificates was preceded by a lecture on Blockchain technology and Bitcoin, delivered by Diplo’s cryptocurrency expert Mr Arvin Kamberi. At the end of the ceremony, certificates were delivered in traditional format as well as in digital format through blockchain, in order to provide an example of the use of this technology for authentication.

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Competition Policy

On World Competition Day, CUTS Releases a Study on Competition Concerns in Cross-border E-commerce

This year, CUTS invited the Geneva community to celebrate the World Competition Day by exploring the interaction between the digital economy and competition policy. The digital economy is a major driver of economic growth in the 21st century and is fuelled by the rapid emergence of digital innovations. While digital markets have the potential to foster competition and innovation, some of their characteristics can also enhance the risk of certain anticompetitive practices. In this context, the event analysed contemporary competition law and policy challenges faced in the digital economy and e-commerce, including in developing countries.

This year, CUTS invited the Geneva community to celebrate the World Competition Day by exploring the interaction between the digital economy and competition policy. The digital economy is a major driver of economic growth in the 21st century and is fuelled by the rapid emergence of digital innovations. While digital markets have the potential to foster competition and innovation, some of their characteristics can also enhance the risk of certain anticompetitive practices. In this context, the event released a study analysing contemporary competition law and policy challenges faced in the digital economy and e-commerce, including in developing countries.

In his opening remarks, Hannu Wager, Senior Counsellor, Intellectual Property, Government Procurement and Competition Division, World Trade Organization (WTO) recalled that while competition-related work has been put on hold by the WTO General Council in 2004, related aspects continue to be addressed in Trade Policy Reviews among other regular activities. He also noted that this year’s WTO World Trade Report highligted the relevance of competition policy for digital trade..

“Digital innovation has resulted in the emergence of new “winner-takes-all” dynamics. In particular, the emergence of tech giants such as Amazon, Alibaba and Google raises important potential concerns about market dominance. Many governments and regulatory authorities are turning to competition policy to address perceived excesses of market power and/or to ensure a level playing field for smaller firms”, he quoted..

Presenting highlights from his new study on “Competition Concerns in Cross-border E-Commerce: Implications for Developing Countries” (https://goo.gl/j7wDMC), Philippe Brusick, Former Head of Competition Branch of UNCTAD, and Chairperson of the General Assembly, CUTS International, Geneva, reviewed anticompetitive practices arising in the digital economy. These include horizontal and vertical restraints, unilateral conduct by dominant firms, as well as anticompetitive concentrations. .

While the digital markets-powered digital economy may foster competition and innovation through more products and market players, some of its characteristics can also enhance the risk of certain anticompetitive practices. A typical concern is the prevalence of network effects whereby the size of a platform is a major competitive advantage, hence increasing risks associated with market dominance. Other concerns include the emergence of multi-sided internet platforms that facilitate transactions between different types of users have made it more difficult for competition authorities to define the relevant market. Also, the increasing use of artificial intelligence, e.g. on price comparison websites, may facilitate not only conscious price collusion by firms but also unintended price collusion through automatic price-parallellism decisions by algorithms..

“Existing competition law might need to be adapted to the types of challenges faced by competition authorities in the digital economy,” Mr. Brusick said..

This was echoed by Ebru Gökçe Dessemond, Economist at UNCTAD, who noted that a number of competition authorities are engaged in updating their enforcement tools. A case in point is the recent revision of the German Competition Law, which now categorises digital platforms as markets even if they seem to provide free services to users. In a recent breakthrough decision, the German Bundeskartellamt also decided that Facebook had a dominant position in Germany for social networks, because of their network effect, which enabled it to impose unclear and unfair trading conditions of user data.

“This is interesting because it amounts to say there was abuse of dominance towards consumers, i.e. suppliers, rather than players down the value chain such as advertisers. It also considers that the unfair price paid by consumers is not in money but in the amount of personal data they are obliged to give to be part of the dominant platform,” she remarked..

Nadezhda Sporysheva, Economic Analyst at the Intellectual Property, Government Procurement and Competition Policy Division of the WTO emphasised the following characteristics as being intrinsic to competition law enforcement in digital markets: (i) data as a primary competitive asset; (ii) privacy as an important component during the merger reviews; and (iii) the definition of the relevant market and market power. In particular, as digital markets often involve nominally free products, a key competitive factor concerns control over data. She remarked that competition in digital markets is influenced by additional forces that are largely absent in conventional markets, namely network effects and externalities, ‘scale without mass’ and switching costs, which tend to result in market concentration and barriers to entry into the relevant markets..

“The cross-border dimension of the activity of digital firms can result in cross-jurisdictional spillovers in therms of competition enforment,” she added. This has been exemplified by cases of conflicting stances across jurisdictions towards abuses of dominant position and merger or their impact across national markets, as shown by the Microsoft case in China..

Earlier in the discussion, Philippe Brusick recalled that the celebration of December 5 as World Competition Day has long been advocated by CUTS with the support of numerous competition authorities. International Days are observed to draw the attention of the society at large on issues critical for human development. The date refers to the adoption of the first-ever Set of Principles on Competition Policy by the UN General Assembly on December 5, 1980. “To this day, the UN Set remains the only multilateral agreement on competition,” he recalled..

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E-Commerce and the Digital Economy

CUTS Celebrates World Competition Day in Geneva: Digital Markets under Spotlight

“Today couldn’t be a better day to celebrate the World Competition Day”, said Philippe Brusick, Former Head of the Competition and Consumer Protection Policies Branch at UNCTAD and the President of CUTS International, Geneva, General Assembly, today in Geneva while speaking at an event organised by CUTS International in celebration of the World Competition Day.

“Indeed, on 5th of December 1980 the United Nations adopted the UN Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, which to date remains the only multilaterally agreed instrument on Competition Policy and paved the way for enormous progress on consumer welfare”, he added.

This year, celebrations addressed the theme “Ensuring Effective Competition in an Increasingly Online World.” The online economy is increasingly witnessing consolidation with a few large players left to cater to large swaths of consumers. In this context, it is important to understand how best competition and regulatory regimes can best deliver on their mandate.

Experts on the panel noted that digital markets present unique features that are posing new questions and challenges for competition authorities around the world. Digital platforms are often multi-sided markets, where network effects take a central importance to quickly attract more users than rivals and gain a data advantage. This encourages firms to pursue growth over profits, and engage in a “winner-takes-all” race where they fight for the market rather than in the market. As a result, digital markets tend to be monopolistic.

Pricing structures online are also different, since zero-pricing on one side of a platform is a common strategy used to attract users on the side of a platform. Online shopping and algorithms have also enabled digital firms to personalise prices based on the perceived readiness of a consumer to pay. In addition, digital businesses are also characterised by large initial investments which may act as barriers for new entrants, as well as the tendency of tech giants to diversify into conglomerates.

These unique features have led competition agencies to grapple with new questions and challenges, particularly as defining the relevant market of a platform – and hence its market power and potential abuse of it – is not easy. For instance, is Uber a transportation service provider or a mere “matchmaker” like a flight comparator? Such questions are important to determine the laws applicable to platforms, not only for competition but also labour, tax etc. Moreover, traditional market definition tools are based on prices, and tend to become less relevant in the age of zero pricing.

Similarly, the “consumer welfare” standard traditionally used by competition authorities seeks to ensure that consumers are not charged unfair prices as a result of anti-competitive practices. Data and zero pricing have long been absent from the picture, despite their critical role on competitive relationships. Recently however, some authorities have engaged in adapting their regime, such as the new German Competition Law which now clarifies that even free services can constitute a market. The law also introduced a list of new data-related criteria for assessing market power in multi-sided markets.

Panellists also stressed the need for ensuring predictability and coherent enforcement across jurisdictions globally. Indeed, while digital markets are borderless, global firms are subject to over 130 different competition regimes. It was recalled that no international set of competition rules exists to date. Nevertheless, some elements of competition can be found in certain WTO agreements, and recent proposals by a few members in the context of the WTO joint statement initiative on e-commerce have shown interest in addressing competition aspects.

On the panel were Philippe Brusick, Former Head of Competition Branch of UNCTAD, and Chairperson of the General Assembly, CUTS International, Geneva; Julien Grollier, Senior Programme Officer, CUTS International, Geneva; Nadezhda Sporysheva, Legal/Economic Analyst, Intellectual Property, Government Procurement and Competition Policy Division, WTO; Ahsan Ali, Trade Policy Analyst, Council and TNC Division, WTO Secretariat; Justine Lan, Economic Affairs Officer, Development Division, WTO Secretariat; and Ebru Gokce Dessemond, Legal Officer, Competition and Consumer Policies Branch, International Trade Division, UNCTAD.

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E-Commerce and the Digital Economy

National study on electronic commerce crucial says Foreign Sec. Carl Greenidge

A national study on Electronic Commerce (E-Commerce) is necessary and will be very helpful to the entire country since a situational analysis will allow stakeholders to take stock of the work done to date; find the strengths and weaknesses of the current legal and regulatory landscape and identify gaps.

This was posited by Foreign Secretary, Carl Greenidge, during the opening of a National Workshop on E-Commerce, held by the Ministry of Foreign Affairs, earlier on Thursday.

‘We can set priorities and from this study receive some guidance on the necessary reforms to develop our e-commerce architecture,’ Greenidge told the participants, adding that there is also an international dimension to the exercise.

‘You will hear during the course of today’s seminar that the World Trade Organisation has taken up e-commerce, MSMEs and investment facilitation for development, inter alia, as part of a bundle of new issues on which to negotiate multilateral agreements,’ he explained.

Foreign Secretary Greenidge delivers the keynote address. Also pictured: Dr. Dianna Glasgow, Director of Foreign TradeStakeholders engage in discussions on electronic commerce.

However, Greenidge stated that although most participants agreed that e-commerce and digital trade can support economic development, especially by providing an effective way for small companies in less developed countries to engage in global trade, conflicting views stall negotiation on new e-commerce related rules.

‘In my view, a global regime with equitable rules on which countries engage in these activities are needed. The specifics remain to be agreed.’

He also mentioned that there was need for the digital divide to be bridged.

The Foreign Secretary shared that Government’s Green State Development Strategy embraces the concept of the digital economy as a way to support economic diversification; e-commerce to support micro, small and medium-sized enterprises and e-government to improve access and efficiency of government services.

‘Pursuant to this strategy, there are several projects to develop the necessary architecture for e-commerce; including the national payment system project to reduce the number of cash-based transactions, the trade facilitation roadmap to reduce customs clearance time and the cost thereof,’ he stated.

Adding that more recently, there has been exponential growth in the number of local companies offering logistics services in Guyana, as well as some initial work having already started on updating Guyana’s intellectual property legislation and cybercrime legislation to protect the public online.

Greenidge said undoubtedly, e-commerce is revolutionising how the world trades. ‘It is arguable that these changes are symptomatic of a paradigm shift in global business. E-commerce can be a catalyst for boosting economic transformation.’

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Competition Policy

As Covid-19 Continues, CUTS’ World Competition Day Celebrations Raises Questions on whether strong IPR has helped Innovation or Not

“We need to reflect more as to how much of innovation has the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights has actually promoted or not”, said Mr Pradeep S. Mehta, Secretary General, CUTS International at a global webinar on the issues of healthcare and competition policy.

The webinar was organised by CUTS International and CUTS Institute for Regulation & Competition to invite the global community to celebrate the World Competition Day (WCD) on 5th December by releasing a Toolkit for practitioners and people on “Competition and Access to Healthcare”.

The toolkit provides guidance on using both ex-ante and ex-post competition policy as tools to enhance access to healthcare, the urgency of which has increased in the wake of Covid-19.

“In the context of Covid-19, today’s theme is particularly timely and topical. Indeed, it has never been more important to ensure adequate flexibilities in the intellectual property regime to allow medication and medical equipment to be more freely available without IPR restrictions”, said Mehta.

Released today (available at https://bit.ly/3l68bs8), the publication prepared by CUTS International and CIRC aims to contribute to an enabling policy environment that promotes competition in the market, including removal of entry barriers and market distortions, and inducing ease of doing and running businesses. Indeed, to keep the market competitive, competition law enforcement alone may not be sufficient.

The Toolkit provides guidance on using both ex-ante and ex-post competition policy as tools to enhance access to healthcare, the urgency of which has increased in the wake of Covid-19.

It also captured case laws and recommendations across areas such as: (i) Regulation and Competition Policy; (ii) Pro-competition Patent Laws; (iii) Horizontal Agreements; (iv) Vertical Arrangements; (v) Abuse of Dominance; (vi) Pay for Delay; (vii) Mergers and Acquisitions in the Pharma Industry; (viii) Frivolous Litigation; and (ix) Covid-19 Responses.

These will help competition authorities around the world tackle some of these challenges, and a number of its recommendations and issues addressed were discussed with expert panellists today.

On the panel, experts reviewed some of the complex and sophisticated anti-competitive practices seen in the healthcare and pharmaceutical sector. These involve inter alia excessive and unfair pricing of patented drugs; Pay for delay agreements between patent holder and generic producers to delay generic entry and keep prices of drugs artificially high;

Strategic mergers leading to monopolies or duopolies reducing competition, resulting in price increase and loss of innovation; Agreements such as exclusive supply or distribution, resale price maintenance, and “refusal to deal” etc.

Rashid S. Kaukab, Executive Director, CUTS International, Geneva moderated the rich session while Dr. Arvind Mayaram, Chairman, CUTS Institute for Regulation & Competition introduced the Toolkit in an elaborate manner.

Other speakers included Teresa Moreira, Head, Competition and Consumer Policies Branch, UNCTAD; Hardin Ratshisusu, Deputy Commissioner, South African Competition Commission; Carlos Correa, Executive Director, South Centre; Alexey Ivanov, Director, BRICS Competition Law and Policy Centre, HSE, Moscow; and Antony Taubman, Director, IP, Government Procurement and Competition Division, World Trade Organization.

Among other recommendations provided by the Toolkit are: (i) Compliance training programme for the stakeholders to prevent anticompetitive behaviour; (ii) In-house pharmacies and diagnostic services at hospitals should be for convenience and emergencies; (iii) Doctors should be encouraged to prescribe generic medicines; (iv) Strengthening of competition advocacy to address information asymmetry; (v) Regular competition assessment of healthcare sector; and (vi) Compulsory licensing should be resorted to in exceptional circumstances.

Finally, it was also recalled that, on 5th of December 1980, the United Nations adopted the UN Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices.

To date, this “UN Set” remains the only multilaterally agreed instrument on Competition Policy, and paved the way for enormous progress on consumer welfare. Since then, a global movement led by CUTS International has been celebrating and calling for the adoption of a World Competition Day on 5th December.

To date, over 24 countries have supported the call and celebrated this Day, some of which like Philippines having officially adopted it at national level.

The video recording of the event is available below.

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Competition Policy

World Competition Day: A “Whole of All Governments” Approach Needed for Competition to Support Climate Action

This year, CUTS International Geneva, the WTO Secretariat, and UNCTAD’s Competition and Consumer Policies Branch invited the Geneva community to celebrate the World Competition Day (WCD) on 5th December by exploring the interaction between climate change action and competition policy.

Climate change is one of the key disruptors of economies, and most competition policies and laws are flexible enough to be part of the solution provided they are appropriately designed and effectively implemented. “We need a “whole of all governments” approach to deal with the present crisis of climate change with competition policy tools” said Pradeep S Mehta, Secretary General of CUTS International while opening the discussions. His stress was on the global community to act together

“On 5th of December 1980 the United Nations adopted the UN Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, which to date remains the only multilaterally agreed instrument on Competition Policy”, he recalled, as today’s event celebrated World Competition Day in commemoration of this date.

Synergies between competition and climate policies can play an important role in greening the economy, including by incentivising for green innovation, curbing entry barriers to flow of environmentally benign goods and services, and empowering consumers to make informed decisions. Competition policy is also key to ensure efficient allocation of capital needed to reach environmental goals.

Yet, competition authorities may face challenges when undertaking competition assessments, such as determining which and to what extent environmental effects may be taken into account; how environmental efficiencies can benefit consumers; which timeframe for environmental effects to adopt; and how to balance environmental effects with other types of effects. Therefore, sensitising and building capacities of competition authorities on the interface between competition policy and climate change should be a priority.

In this regard, international organisations such as UNCTAD, World Bank and WTO can assist developing countries to create, develop and improve competition law and policy, consumers’ lives, and achieving sustainable development goals.

Discussing how competition law and policy can support sustainability, experts on the panel noted that, in certain cases, some horizontal agreements or cooperation between competitors may lead to greater benefits for consumers and the society. In fact, firms through such cooperation can leverage complementarities and achieve greater scale and productivity in reaching environmental objectives. Taking this into account may sometimes require clarifying the objectives of competition law, its definition of consumer welfare, incorporating considerations of sustainability in their competition assessments, and adjusting legislation accordingly.

As a case in point, it was noted that in 2021 Austria adopted the Cartel and Competition Law Amendment Act to allow for the consideration of sustainability goals, which was followed by the Austrian Competition authority “Sustainability Guidelines”, providing guidance for competition law exemptions of some environmental sustainability agreements.

The Dutch Competition Authority also published in 2021 “Guidelines on Sustainability Agreements”, providing guidance on the application of competition law to sustainability initiatives and to considering the rationale for adopting exemptions in this context. This had been supported by a 2021 technical report commissioned by the Dutch and the Greek competition authorities.

Such paradigm shifts in competition enforcement have been observed in the past, and can contribute to ensure the continued relevance of regulators’ actions in a changing world. For instance, the “wait and see” approach of competition authorities towards digital markets changed towards legal amendments, use of data analysis, tighter law enforcement and “ex-ante” regulation in recent years due to the rise of digital platforms and the increased weight of data in market power.

Experts however cautioned that sustainability approaches in competition law and enforcement remain new, and being experimented by a few advanced competition regimes so far. Before time is ripe for their adoption by smaller or younger competition authorities in developing countries, experience of practice will need to be further acquired and lessons shared through exchange of knowledge and cooperation. In conclusion, CUTS’ Secretary General Pradeep S. Mehta emphasised the need for better governance and increased policy coherence with some key policy issues related to competition and climate change, including by taking into consideration the role of intellectual property rights.

He added that even the UN Guidelines for Consumer Protection has a full chapter on sustainable consumption which has direct relation to curbing adverse climate change actions. Even the SDGs Agenda at Goal 12 deals with Sustainable Consumption and Production. “We have so many international instruments to deal with the issue of climate change and economic governance and thus we need a forward looking narrative for a better tomorrow, through all appropriate means”, he said.

On the panel were Pradeep S Mehta, Secretary General, CUTS International; Teresa Moreira, Head, Competition and Consumer Policies Branch, UNCTAD; Antony Taubman; Director, IP, Government Procurement and Competition Division, World Trade Organization. The discussion was moderated by Rashid S Kaukab, Executive Director, CUTS International Geneva.