Options for the Internationalization of Competition Policy — Results of Consultations
Increased international cooperation on competition policy
Competition authorities are constantly being challenged by businesses striving to gain competitive advantage in more and more markets. The adoption of a sound competition law, properly enforced, enables countries to keep pace with increasingly globalized markets and growing international dimensions of competition law enforcement. The Competition Bureau believes that the development of a framework agreement on competition policy within the World Trade Organization (WTO) would act as an impetus towards building a culture of competition. It would also encourage countries without a competition policy to adopt one. Further, a framework agreement would ensure that progress made through previous trade and investment liberalization initiatives at multi-lateral, regional and bilateral levels, is not negated by private anti‑competitive activities.
The Bureau has been active within a variety of international fora in promoting international cooperation among competition authorities. Within the context of the WTO, the Bureau has been working on an initiative to negotiate a multilateral agreement on competition policy among WTO members. To prepare for possible negotiations, the Bureau drafted a paper entitled Options for the Internationalization of Competition Policy.
The options paper sets out the basic framework to a multilateral agreement on competition policy within the WTO system. The principal elements proposed would include a requirement of WTO members to adopt a sound competition law; a commitment to the principles of transparency, non-discrimination and procedural fairness; access to effective deterrents; an advocacy role for the competition authority and the protection of confidential information; common substantive approaches to private conduct that directly and adversely affects opportunities created by trade and investment liberalization; and mechanisms to facilitate and foster cooperation between competition authorities as well as to promote conformity with the agreement. In respect to dispute settlement, there would be no review of individual decisions of independent competition authorities, or a pattern of decisions.
In order to solicit reaction and views on the substantive approach proposed in the options paper, the Bureau held sessions between June 7 - June 9, 1999. Bureau officers met with academics, competition lawyers, private industry representatives and federal government officials in Ottawa, Toronto and Montreal.
Summary of responses
The comments from the consultations can be summarized as follows:
- Participants were generally supportive of initiating negotiations on a WTO agreement on competition policy. It was acknowledged that the approach outlined in the options paper represented a good first step towards an incremental approach to development of an international competition policy.
- Participants felt that an important goal of such an agreement should be to increase awareness within countries (particularly developing countries) on both the domestic and international benefits of implementing domestic competition law and policy. As a leading member of the WTO and not seen as bound to either the US or EU, Canada was viewed as being a good example to developing countries of the benefits that can be derived from an effective competition policy. It was felt that Canada should focus on the aspects of competition policy that foster economic development.
- Participants expressed general concern over the possibility of a WTO binding competition policy dispute settlement mechanism having authority to perform case by case reviews of domestic enforcement agencies' decisions.
- Participants favoured effective action against international cartels, procedural issues related to merger review and prohibited practices in respect of abuse of dominance as the primary substantive approaches for inclusion in a multilateral agreement.
The Bureau was encouraged by the general support from stakeholders with respect to its proposed approach to the negotiation in the WTO of a framework agreement on competition policy. No decision was made at the 1999 Seattle Ministerial as to the timing and scope of the next round of multilateral negotiations.
The WTO Working Group on The Interaction between Trade and Competition Policy will meet twice in 2000. The topics to be discussed include the role of competition law and policy in economic development, the role of the competition authority as an advocate for pro-competitive regulatory reform and the challenges faced by small, open economies in implementing a competition regime.
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