Geneva 26 May 2004

There is a case, and a need, for multilateral competition framework (MCF) to enable developing countries to deal with the increasing prevalence of cross-border anti-competitive practices. However in view of the difficulty of negotiating such a deal at the WTO, a joint UNCTAD-WTO body will perhaps be the best host. This opinion emerged at a Panel Discussion organised by the CUTS Centre for Competition, Investment & Economic Regulation (C-CIER) on the second day of the Public Symposium hosted by the WTO at Geneva, Switzerland.

Robert Anderson, WTO Counsellor, took a neutral position to start the “most enlightening discussion” so far of the Symposium by giving an overall introduction to the issues. All the speakers as well as participants expressed positively about the necessity of having such a framework if developing countries’ interests are to be protected against cross-border anti-competitive practices increasingly prevalent in this globalisation era. The question is no longer about whether there should be an MCF, but rather on where and how.

The EU’s insistence on bundling the four Singapore issues and then wavering on them at Cancun, has caused much harm to competition policy, which is one of the benevolent and good governance instruments to be negotiated internationally. It became a case of throwing out the baby with the bathwater.

Now, the EU’s approach to negotiate competition at the WTO as a plurilateral agreement will also not enable any sensible thinking as many developing countries will not agree to any plurilateral deals. “If there is a plurilateral deal on competition, then there could be one on labour standards or any other non-trade issue, and therefore it is not at all acceptable to the South”, said Pradeep Mehta of CUTS, who was moderating the panel.

Interestingly, as pointed out by Josef Drexl of Max Planck Institute, the EU proposal is not only too obviously market access-oriented, it is also rather “consistent” with EU’s own legislations. A harmonization in this direction would only effectively lead to having an EU competition code at the multilateral level.

Drexl’s academic perspectives were reiterated by NGOs’ activists as well as practitioners in the field. Patrick Krauskopf of COMCO, Switzerland quoted an example of an EU-Switzerland Air Transport agreement, which left the Swiss having a European Commission office in Switzerland take charge of the competition provisions.

Mehta in an answer to a contribution from the floor by a Japanese expert on the problems of having one-size-fit-all competition legislation as per the current proposal at WTO, quoted CUTS’s experience in the 7-UP project, a comparative study of competition regimes of several developing countries, to point to the equally problematic but largely forgotten issue of “one-type-fit-all”. Developing countries do need competition law/policy, however, it needs to be an appropriate one suited to their needs, levels of development and local peculiarities.

“We do need concessions and special and differential treatment for the South in a multilateral competition regime to work well” noted Taimoon Stewart of University of West Indies. She was making a presentation on her recent study of CARICOM countries. S&D treatment was also the theme of presentation made by Philippe Brusick, UNCTAD, who reiterated the need for an MCF. However, to achieve these concessions as well as treatment, “traditional approach has to be given up”, a more constructive collective bargaining power is indispensable. “If developing countries continue to enter into bilateral and regional agreements […], they will have less bargaining power. Together, they can get a better deal in a multilateral context”.

Several specific examples were quoted by Phil Evans of the UK Consumers Association, Taimoon Stewart, and Patrick Krauskopf of COMCO Switzerland, all pointing to the fact that developing countries’ economic health is suffering from serious fever, whose cause can be traced back to big business in the developed world.

In view of the reluctance of many developing countries to do a deal at the WTO, a multilateral framework in a joint “UNCTAD-WTO” body is the best approach. Concrete implementation mechanisms, nonetheless, are yet to be proposed, and still pose a daunting question for experts and concerned parties.

However, let us not leave the collapse at Cancun a bump on the road forward, and “take advantage of this small window of the opportunity given to us” to build up a constructive dialogue on an international competition policy.