WTO members are currently trying to figure out the possible nature and scope of the “new issues” pushed by some for being introduced in multilateral trade negotiations. At this meeting, East African delegates to the WTO were updated on their stakeholders’ perspectives and exchanged views regarding the possible introduction of Competition Policy on the WTO agenda, which is sometimes mentioned as a possible “new issue”. Discussions highlighted that, given its nascent stage in the EAC, it is too early to be introduced in WTO negotiations. Rather, stakeholders recommended that efforts first focus on strengthening it nationally and harmonising it regionally, calling for human capacity, infrastructure, and institutional development assistance in this regard.
WTO members are currently trying to figure out the possible nature and scope of the “new issues” some members are pushing for in multilateral trade negotiations. Outside the WTO, recent agreements have provided for some of the former “Singapore issues” like investment, government procurement and competition policy. On the later, most stakeholders’ opinion, competition policy is at a nascent stage in the EAC and it is too early to be introduced in multilateral negotiations. They recommended efforts first focus on strengthening it nationally and harmonising it regionally, calling for human capacity, infrastructure, and institutional development assistance in this regard.
East African Reflections on “competition policy” being introduced in the Multilateral Trading System
The latest WTO Ministerial meeting, in its Declaration indicates that other issues (apart from the Doha Development Agenda – DDA) may be introduced as part of the negotiating agenda in the WTO if agreed by all Members.
A number of issues are being mentioned in this context amongst which is competition policy. It is therefore imperative for East African Community (EAC) Negotiators to acquaint themselves with the ground realities, such that when these issues are discussed in the WTO, they are able to make informed decisions/proposals. It is in this context that the 3rd EAC Geneva Forum met to discuss stakeholder perspectives on the inclusion of “competition policy” in the multilateral trading system.
Country Update Notes developed by national partners in the region, on “Competition Policy and the multilateral trading system – Stakeholder perspectives”, were disseminated during the forum these include general recommendations to policy makers and Geneva Ambassadors on the way forward with regard to competition and related issues in the WTO suggested. In addition an issue note on competition policy and work so far undertaken in the WTO was also shared with Delegates.
Major Issues from the Stakeholders
There general consensus among the stakeholders was that the time is not yet right for introducing the “competition policy” in the multilateral trading system when it is lacking or is at a nascent stage at the regional and national levels. They were of the view that the policy should be developed first at the national and regional levels before taking it to the multilateral level. They therefore called for human capacity, infrastructure, and institutional development assistance in order to develop and implement competition policy at the national and regional levels. There was also a call to align the national competition policies to the EAC regional Competition Act. Some of the members felt that WTO should first conclude the Doha Development agenda before embarking on new issues like “competition policy.” They are of the view that “competition policy” will divert attention away from key issues like agriculture which are considered more beneficial and priority to developing countries and LDCs. Yet, others felt that the issue is not about the competition policy but the forum through which it will be tackled. They noted that the goal of competition policy as earlier envisaged by UNCTAD has shifted from protecting the development needs of poor countries to promoting the goals of developed countries. They therefore, called for a need to look into alternative forums to discuss “competition policy” rather than in the multilateral trading system.
Deliberations from Members
The members appreciated the fact that they are on the same page with the stakeholders’ views on “competition policy” and on the need to conclude the DDA before embarking on other issues of negotiation. They agreed that it would be a challenge to negotiate on competition policy without a strong base at the national and regional levels. They advised that the competition authorities should be independent to ensure efficiency. The members noted the overlap between competition policy and development issues key to poor developing countries and LDCs such as local content. They called for a balance to ensure that domestic companies have space to survive in multilateral competition. They noted that stakeholder perspectives expressed in the country update notes are informative and helpful in guiding their negotiation positions.
At the multilateral level, the members wondered how competition policy relates to WTO mandate; whether it is really a trade issue. They also expressed concern that there may be an overlap between “competition policy” and key WTO principles of none discrimination i.e. national treatment and Most Favoured Nation (MFN). However, they agreed that it is important to explore what should be put on the negotiating table should “competition policy” eventually become a negotiation issue in the multilateral trading system. The preferred option is for the issue to continue being discussed in exploratory mode so as to understand its implications and clarify terms and scope of application for any obligations that may arise.
Way forward and Recommendations
members called for a deeper study on adopting “competition policy” at the multilateral level and its impact on the EAC region. Such study should specifically examine the nexus between competition policy and the WTO principles of “National Treatment and MFN” towards economic growth and development in the EAC.
The topic for the next EAC Geneva Forum meeting will be on global value chains in the EAC, specifically examining trade and industrial policy on cotton, textile and apparel sector, how the region can move up the value chain, including perspectives from stakeholders. A substantive study on EAC value chains was also requested, and this should be undertaken by an expert on value chains, preferably Rashmi Banga whose work in this area is well recognized.