The issue of a framework multilateral agreement on competition policy within the multilateral trading system has been at the heart of heated debates for at least twenty years, until it was dropped from WTO negotiations as demanded by developing countries. But with the surge of cartels and other anti-competitive practices globally, many of these developing countries have come to appreciate their vulnerability and today 130 countries have adopted competition regulations. The lack of a multilateral framework in this regard poses challenges for governments, consumers and businesses alike. Panelists reviewed possible avenues for reviving a multilateral agenda on trade and competition policy, including through exploring more recent issues such as developing countries’ request for focusing on export cartels rather than international cartels.
“The situation has changed since trade and competition policy was dropped from the Doha Round of negotiations over a decade ago,” said Bipul Chatterjee, Executive Director of CUTS International while opening a session organised by CUTS International at the WTO Public Forum, 2015, discussing the relevance and features of a possible multilateral framework on trade and policy. “Today, over 130 countries have a competition policy, including most developing countries,” he added. The discussion was aimed to design a roadmap for the international community to address competition-related trade distortions by intervening at domestic, regional and international level.
As far back as 1947 and the Havana Charter, which was to establish the International Trade Organisation, trade and competition have remained different parts of the same coin. According to Philippe Brusick, Former Head of the Competition and Consumer Protection Policies Branch at UNCTAD and Chairman, CUTS International, Geneva, this Charter which led to the GATT negotiations addressed “restrictive trade practices”, which today are known as anti-competitive practices.
“Competition policy considerations can indeed be tracked in existing WTO Agreements such as the General Agreement on Trade in Services and even the Agreement on Trade-Related Aspects of Intellectual Property Rights,” confirmed Robert Anderson, Counsellor at the Intellectual Property and Investment Division of the WTO.
The issue of a multilateral agreement on trade and competition policy within the multilateral trading system has been at the heart of heated debates for at least twenty years, until it was dropped from the Doha Round of WTO negotiations in July, 2004, as demanded by some developing countries. However, with the surge of cartels and other anti-competitive practices globally, many of those developing countries have come to appreciate their vulnerability and have adopted competition regulations to protect the interest of their consumers against such practices.
In recent years, the issue has been revived though the inclusion of competition-related provisions in many bilateral and regional trade agreements. The adoption of regional guidelines on competition policy in the ASEAN is a case in point, but other agreements such as the Economic Partnership Agreements between the Africa, Caribbean and Pacific group of countries and the European Union have also embraced competition-related issues.
“The subject is being taken forward at various levels, what we need is to bring everything together. Definitely, the plurilateral and multilateral goes in tandem,” said Harsha Vardhana Singh, Former Deputy Director General of the WTO.
In fact, the lack of a multilateral framework in this regard poses challenges for governments, consumers and businesses alike. It is, for instance, a burden for international mergers for as they need to be cleared simultaneously by many competition agencies. Direct implications for the multilateral trading system were also illustrated by Anthony Amunategui Abad, Chief Executive Officer of Trade Advisory Group of the Philippines, through the example of a state monopoly on rice imports in the Philippines which successfully waived the tariffication of rice at the WTO.
“Rather than protecting farmers as claimed by the government, the decision to waive rice tariffication actually worsened the food security situation by protecting a state monopoly and maintaining higher rice prices for consumers,” he said.
Panellists reviewed possible avenues for reviving a multilateral agenda on trade and competition policy, including through exploring more recent issues such as developing countries’ request for focusing on export cartels rather than international cartels. The new set of issues on “competitive neutrality”, which is a way of addressing concerns about abusive market power of state-owned enterprises, was also mentioned.
Some of them also argued that previous proposals for a multilateral framework on trade and competition policy could also be revived, some of which addressing contemporary issues as export cartels that damage developing countries, promoting cooperation and institution-building in competition policy, and promoting transparency and non-discrimination in the application of competition policy.
Moving forward, it was stressed that there is no space or appetite to revive this issue at the WTO at this moment. “Given what is happening in WTO negotiations, it is time bring the Doha round to a respectable conclusion,” said Debapriya Bhattacharya of the Centre for Policy Dialogue (CPD), Bangladesh. “However, there is a need to develop the capacity of low income countries to understand welfare implications of anti-competitive market distortions in their countries”, he added.