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Press
Release
Consumers
would welcome competition law and policy at the international level, but not
sure if the WTO is the best place
Doha, 12
November 2001
The
proposed multilateral competition policy is about enabling cooperation at the
international level, and not imposing an international competition law.
Frederic
Jenny, chairman of the WTO working group on trade and competition law, made this
point at a panel discussion on “Trade and Competition Policy” organised by
Consumers International and CUTS Centre for International Trade, Economics &
Environment here on the sidelines of the 4th WTO Ministerial Conference.
“The
purpose of this meeting is to explore how we can move forward in ensuring that
consumers are adequately protected from anti-competitive practices by business
in a globalising economy,” said Pradeep S. Mehta, Secretary General of CUTS.
“In 1995 only about 50 countries had a competition law, and due to the
discussions at the WTO, which resulted in an increased profile, today over 100
countries have a competition law.”
Julian
Edwards, Director General of Consumers International, in his welcome address
noted that an effective competition policy and law enhances consumer welfare,
and that CI members are actively engaged in pursuing the same. CI is currently
involved in a multi-country research project which is examining issues under the
agreements on agriculture and services, and on competition policy in 16
countries through member organisations. He said that the preliminary results of
the research are very enlightening.
Jenny
went on to say that no one is suggesting that there should be one uniform style
of competition law. One size doesn’t fit all and countries need to design
their own law according to their needs, culture and size of the economy. As
regards the issue of a multilateral competition policy, he felt that due to its
rules-based approach the WTO is the best place to situate it. UNCTAD cannot be a
host because it doesn’t have any negotiating mandate or teeth to enforce any
future agreement.
George
Kiriazis of the European Commission was the third speaker, who kicked off
discussions with the classic statement: “With increasing trade liberalization,
competition abuses are also growing. The negative effects need to be checked
through a good competition law.”
As regards the issue of a multilateral competition policy (MCP), the WTO already
has references to competition policy in several agreements such as TRIMs,
services and TRIPs so it cannot be considered to be a new issue. All these need
to be given strength and we seek their convergence for the purpose of coherence,
Kiriazis added.
“Under
the proposed MCP, countries will be able to deal with cross border issues
through cooperation mechanisms. If the Doha meeting doesn’t agree to having
negotiations on an MCP, the EU will go ahead with bilateral and pluritaleral
agreements. For example, the Cotonou Agreement with 73 ACP countries already has
a provision on competition policy, and we will launch negotiations there”,
asserted Kiriazis. “Technical assistance and capacity building will be an
integral part of any MCP.”
“At
any level, a country requires a competition law, as I have seen in my own
country: Slovenia,” said Breda Kutin, head of the Slovene Consumers
Association. “We are a transition economy with only 2mn population and also a
candidate for membership of the EU. For that reason, Slovenian economy is
already open and liberal, and we are already witnessing many restrictive
business practices which cost consumers. Therefore, we need effective
implementation of our competition law and closer cooperation with other
countries.”
In a
lively interactive session which followed the preliminary remarks, some
participants questioned the necessity of having an international competition
policy. Jenny and Mehta drew attention to the international cartels which have a
deleterious effect on developing countries and their consumers, and can only be
properly tackled through an MCP.
Quoting
from the latest World Development Report, Jenny pointed out that developing
countries have experienced the effects of cartels in vitamins, electrical
equipment, graphite electrodes etc. However, no action has been taken.
Mehta
added that in the case of the recent vitamins cartel, action was taken in the
USA, Canada and Australia, as result of which over a billion dollar fine was
levied on three European manufacturers and six Japanese manufacturers. Even a
developing country like Brazil has taken action by getting cooperation from the
US Justice Department, but India, where all three companies are operating, has
not taken any action.
James
Musonda of the COMESA (Common Market for Eastern and Southern Africa)
Secretariat noted that cross border mergers and acquisitions are taking place
across the region, potentially threatening competition. “The issue of
cooperation between different competition authorities is becoming more necessary
than ever before, and therefore too an MCP is desirable.”
In
response to a question on the link between competition policy and corruption,
Jenny pointed out the benefits of a transparent and predictable system on
checking abuses. For example, in collusive tendering, where corruption is
inherent, an action under competition law has often deterred corruption.
Participants
as a whole recognised the potential benefits, but wondered whether WTO is the
best place to locate it. It was pointed out that developing countries are not
favour of an MCP at the WTO because of several problems there that are not
directly related to the outline of the agreement: the inherent inequities in the
system; an overloaded agenda and lack of capacity; and how can cooperation be
ensured, when it will be voluntary.
For more
information, please contact:
Mr. Nitya Nanda
E-mail:
cuts@cuts.org
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