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Competition policy in WTO sectoral agreements

Dr. Pierre ArhelCounsellor (competition policy)

Intellectual Property Division

Sao Paulo, 23-25 April 2003Presentation based on s1ides prepared by R. Anderson (Counsellor, WTO Secretariat)

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Issues to be addressed

The Doha Mandate on Competition Policy

Possible Elements of WTO Competition Policy Agreement

Competition - Related Provisions and Core Principles in Existing WTO Agreements

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The Doha Ministerial Conference: Background

23. Recognizing the case for a multilateral framework to enhance the contribution of competition policy to international trade and development, and the need for enhanced technical assistance and capacity-building in this area as referred to in paragraph 24, we agree that negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that Session on modalities of negotiations.

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24. We recognize the needs of developing and least-developed countries for enhanced support for technical assistance and capacity building in this area, including policy analysis and development so that they may better evaluate the implications of closer multilateral cooperation for their development policies and objectives, and human and institutional development. To this end, we shall work in cooperation with other relevant intergovernmental organisations, including UNCTAD, and through appropriate regional and bilateral channels, to provide strengthened and adequately resourced assistance to respond to these needs.

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25. In the period until the Fifth Session, further work in the Working Group on the Interaction between Trade and Competition Policy will focus on the clarification of: core principles, including transparency, non-discrimination and procedural fairness, and provisions on hardcore cartels; modalities for voluntary cooperation; and support for progressive reinforcement of competition institutions in developing countries through capacity building. Full account shall be taken of the needs of developing and least-developed country participants and appropriate flexibility provided to address them.

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Possible Elements of WTO Competition Policy Agreement

Commitment by WTO Members to a set of core principles, comprising transparency, non-discrimination and procedural fairness in the application of competition law and/or policy

Commitment to the taking of measures against hard-core cartels

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Possible Elements of WTO Competition Policy Agreement (cont’d)

Modalities for cooperation, of a voluntary nature, with respect to national legislation, the exchange of national experience by competition authorities and aspects of enforcement

Enhanced support for technical assistance and institution-building relating to competition policy, in the framework of the WTO but in cooperation with other interested organizations and national governments

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Possible Elements of WTO Competition Policy Agreement (cont’d)

A standing WTO Committee on Competition Policy to provide a forum for exchange of national experience/peer review, promote voluntary convergence in Members’ policies etc.

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Competition - Related Provisions in Existing WTO Agreements

GATS, Article VIII: Members to ensure that state monopolies do not act in a manner inconsistent with their obligations/specific commitments

TRIPS, Articles 8 and 40: Authority to take measures against abuses of intellectual property rights/ anti-competitive licensing practices

Basic Telecom Negotiations, Reference Paper on Regulatory Principles: Commitment to adopt appropriate measures to prevent anti-competitive practices by major suppliers

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Competition - Related Provisions in Existing WTO Agreements (Cont’d)

Agreement on Safeguards, Article 11:3: Members not to encourage/support the adoption of non-governmental measures equivalent to voluntary export restraints, orderly marketing arrangements or other governmental arrangements prohibited under Article 11.1

Consultation Arrangements, 1960 Resolution under GATT and GATS: Recognition that business practices that restrict competition in international trade may hamper the expansion of world trade and economic development

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Implications?

Competition is NOT a new issue at the WTO

However, it has not, as yet, been systematically developed

Major sectoral areas are not covered

Hard core cartels are not covered

No provision on cooperation

The need for a coherent case law cannot be met

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Core Principles in Existing WTO Agreements

When it affects trade, competition policy is already subject to the principles of non-discrimination, transparency and procedural fairness.

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Implications?

Given the unique characteristics of competition policy and its inherent differences from conventional trade issues, it is desirable to consider and make more explicit the application of the principles in the area of competition, in a manner that takes account of the special characteristics of this field.

A good precedent for this approach could be found in various existing WTO agreements.