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Competition group has work programme of sorts

The first substantive meeting (7-8 July 1997) of the WTO Working Group on Trade and Competition Policy ended with a revised non-paper containing a check-list of issues for study, which the Group "took note" of but did not formally adopt. These issues examining the relationships between trade and competition policy will be discussed at the next meeting of the Group in September.

by Chakravarthi Raghavan


GENEVA: Trade and competition policy issues in terms of the relationship between objectives, principles, concepts, scope and instruments of trade and competition policy and their relationships to development and economic growth are among the items that are to be discussed at the WTO's Working Group on Trade and Competition Policy at its next meeting in September.

Other items to figure at that meeting include "stock-taking and analysis" of existing instruments, standards and activities regarding trade and competition policy, including of experience with their application, covering among others under this, national competition policies, laws and instruments as they relate to trade; existing WTO provisions; bilateral, regional, plurilateral and multilateral agreements and initiatives.

The next meeting has been tentatively set for 16 September, with another meeting planned for November.

The working group is chaired by Mr. Frederic Jenny, French academic and chairman of the OECD's Competition Law and Policy Committee.

The group had its first substantive meeting on 7-8 July (preceded by a week of bilateral and plurilateral informal consultations by Jenny with delegations), and heard the initial views and presentations of a number of members, as well as among others, UNCTAD and the World Bank.

At the end of these presentations (and on the basis of earlier informal consultations, where he presented a list of issues for the work programme), Jenny presented a revised "non-paper of the chair" giving a check-list of issues for study by the group, which the group "took note" of, but did not formally adopt.

The revised non-paper came after some informal negotiations, involving on the one hand, the US and EC, which do not want to address the anti-competitive effects of trade policy instruments like anti-dumping, subsidies and countervailing measures, and Japan and Hong Kong, representing the opposing tendency.

In a chapeau, this non-paper talks of the wide recognition that the work programme should be open, non-prejudicial and capable of evolution as it proceeds, and that all elements should be permeated by the development dimension, with particular attention paid to the situation of Least Developed Countries (LDCs).

A check-list of issues

The check-list of issues in the non-paper are:

I. Relationship between the objectives, principles, concepts, scope and instruments of trade and competition policy. Their relationship to development and economic growth.

II. Stocktaking and analysis of existing instruments, standards and activities regarding trade and competition policy, including of experience with their application:

* national competition policies, laws and instruments as they relate to trade;

* existing WTO provisions;

* bilateral, regional, plurilateral and multilateral agreements and initiatives.

III. Interaction between trade and competition policy:

* the impact of anti-competitive practices of enterprises and associations on international trade;

* the impact of state monopolies, exclusive rights and regulatory policies on competition and international trade;

* the relationship between TRIPs and competition policy;

* the relationship between investment and competition policy;

* the impact of trade policy on competition.

IV: Identification of any areas that may merit further consideration in the WTO framework.

On the face of it, the check-list has not specifically mentioned several of the issues of concern to developing countries (for example, transfer pricing by TNCs through purchases and sales of subsidiaries and affiliates, and intra- corporate trade, which is now the major element of the operation of "command economy" in the world) or specifically of anti-dumping, subsidies and countervailing and other "trade instruments" widely used in North America and Europe to hit particular imports and actions of exporters in Japan, South Korea and now, many developing countries.

South needs to do its homework

The revised check-list though, was presented after some informal closed consultations/negotiations with participation of Japan and Hong Kong, whose submissions have clearly sought to address the effects of trade policy instruments and measures on competition.

Third World sources said that both at the next meeting, under the second indent of item II, "existing WTO provisions", and at subsequent meetings under the fifth indent of item III, these issues are expected to be discussed.

Similarly, both under the "relationship of (trade and competition policy) to development and economic growth, in item I", and the first indent of item III, "the impact of anti-competitive practices of enterprises and associations on international trade", the concerns of developing countries on activities of TNCs could be discussed.

But it is clear that developing countries, individually and collectively, need to do more of their own home work, here and at their capitals. But few of their own trade ministries, and bureaucracies, seem to be equipped with expertise to address these issues on a continuous basis, while most of their finance ministries are practically run by the IMF and the World Bank advisors.

Several of their intergovernmental groupings and organizations are ill-equipped to understand, anticipate or deal with the range of WTO trade issues, and respond in an ad hoc way.

This results in good inputs from academics that do not address the needs of negotiators and, sometimes, in developing country negotiators having to spend more time in countering some ill-thought out advices.

Developing countries could perhaps expect some support, in terms of studies and papers, from UNCTAD, whose Secretary- General has been advocating the need by them of formulating their own agenda. But even the UNCTAD support and advice may boil down to which section is asked to provide the support. (TWE 166 1-15 August 1997)

Mr Raghavan is the Chief Editor of the South -North Development Monitor (SUNS) from which the above article first appeared.

 

 

 

 


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