Konceptpapir vedrørende handel og konkurrence (eng)
4 in as full a manner as possible and
they will be referred to in this
submission only in passing.
The issues under (b) and (c) have been
addressed by many participants, including
the EC and its Member States, as
part of many written submissions and oral state-
ments, under the headings
of either “flexibility and progressivity' and/or “special
and differential
treatment'. At this stage of the debate in the WGTCP, however, it
appears
useful to present the ideas that have emerged in this connection in a more
coherent fashion. Some of these issues
concern essentially developing and least
developed countries. As such, they could be dealt with under the heading of
“spe-
cial and differential treatment'. Other issues concern all Members
and, even though
they have a more dramatic impact on developing and least
developed countries than
they have on developed
Members, it would be hard to justify
dealing with them
under the SDT heading. Yet, all these
issues are intertwined and it is only by loo-
king at them together that
one could begin piecing together the picture of problems
and solutions in
this area.
For these reasons, the EC and its Member States have chosen to
address all issues
concerning both capacity constraints and scope and
applicability together, under the
overall heading of
“flexibility and progressivity'. It must be
clearly understood,
however, that these issues affect
exclusively or disproportionately developing and
3
This
regardless of the fact that a majority of WTO Members, comprising both
developed and developing countries, has already adopted a competition regi-
me.
4
To list only those tabled since the Doha Ministerial
Conference:
WT/WGTCP/W/184, 193, 222 and 229
4
least developed Members and that, taken together, the
ideas suggested to address
them represent special and differential
treatment, even though some of the relevant
provisions could
apply to all WTO Members, irrespective
of their level of deve-
lopment.
A.
FLEXIBILITY
1.
The scope of a WTO Agreement and the “design' of
domestic com-
petition law: no harmonisation
The structure and
substantive content of a WTO Competition Agreement as pro-
posed by the EC
provides for a high degree of flexibility, necessary in order to re-
spect
the differing levels of development, needs and policy priorities of all WTO
members.
To begin with, the EC proposal does not call for a complete
multilateral definition
of the substantive scope of a domestic
competition regime. The only substantive
provision that we envisage
would be an obligation for WTO Members to enact in
their domestic
competition law a ban on hard core
cartels. We do expect that a
great
number of WTO members (as is already the case among those who already
have
a competition law) would want to include other substantive provisions in their
domestic competition laws, dealing with issues such as a wider range of
cartels, abu-
ses of a dominant position,
monopolisation and merger control, in
addition to a
ban on hard core cartels. Nevertheless, a
WTO agreement should not entail an ob-
ligation for domestic
competition laws to include any such additional
substantive
provisions. That should be a policy choice of each WTO member.
As regards provisions dealing with the basic foundations of a domestic
competition
law – whatever its substantive scope – the EC proposal is based
on the three core
principles of transparency, non-discrimination and
procedural fairness. The use of
the word “principles' is
not casual here. While the exact
wording and degree of
precision of multilateral
provisions on these three issues is obviously a matter for
negotiations, we
have tried to make it clear that these must remain general and must
not
dictate how they are going to apply in a domestic competition framework. For
example:
(a) In the area of transparency, a multilateral obligation to
make laws, regulations
and guidelines of general application publicly
available cannot prescribe the means
to achieve this (for example, actual
publication vs. electronic dissemination).
(b) In the area of
non-discrimination, our core principles submission5 allows a ma-
ximum of flexibility to WTO members by proposing a limitation to
prohibition of
discrimination in the letter of the law, regulation or
guideline of general application,
in order to eliminate any hint of
interference with the way individual decisions are
taken.
(c) In the
area of procedural fairness, we have suggested that an obligation to pro-
vide a judicial review of administrative decisions should be drafted so as not
to pre-
5
WT/WGTCP/W/222
5
judge (i) whether or not competition law is enforced
through administrative decisi-
ons (in some legal systems this can be done
through judicial decisions only) and (ii)
what kind of judicial body should
do the review (the ordinary courts, administrative
tribunals where they
exist, a specialised competition tribunal, …).
These are obviously only a
few examples, but we hope they give a clearer idea of
what kind of
core principles provisions we envisage in
a WTO Competition
Agreement.
In conclusion,
the EC proposal is for a minimum
set of multilateral provisions
which will influence
and guide WTO Members in setting up a domestic competi-
tion regime,
including mechanisms that will make it “self-correcting' (a typical such
provision would be the obligation of a judicial review of some sort), while
avoiding
any tendency towards harmonisation of such regimes across WTO
Members.
2.
Exclusions and exemptions
In our earlier submission
on “core principles'6 we stressed that the issue of sec-
toral
exclusions and exemptions from the scope and application of competition
law
is of great importance from both a competition and a trade perspective. We
believe that WTO Members should retain the policy space they need to
main-
tain and implement important domestic policies that respond to their
social, eco-
nomic and developmental objectives.
We also
recognised that it constitutes a question of great
sensitivity and com-
plexity both among developing countries as
well as OECD members, including
the EC and its Member States, even though
it may be of particular significance
for those developing countries who do
not yet have a domestic competition law
or whose law is still relatively
recent and untested.
When analysing recent
developments, the trend has clearly been
to eliminate
such exclusions or to define them in increasingly
narrow terms7. We have there-
fore suggested that a flexible
approach would be to focus - at this stage - on the
essential question of
transparency and its application to sectoral exclusions and
exemptions, as
well as their review over time. For instance, the Working Group
(and later
the proposed Competition Policy Committee) could also usefully ex-
amine
the experience of WTO Members who have phased out exemptions and
exclusions (including the reasons for and the timing of such phasing out), as
well
as the domestic processes employed to
enact such exemptions and exclusions.
Furthermore,
the domestic legal framework should be
left free to define the
scope and
modalities of exclusions and exemptions,
provided they do so in a
transparent
and predictable manner.
6
WT/WGTCP/W/222
7
The
EC itself has virtually no such exclusions or exemptions from competition
rules laid down in the treaty. For example, agricultural cartels are fully
inclu-
ded, as a recent fine imposed from the EC Commission on a cartel
concerning
bovine meat shows. EC Regulations known as "block exemptions"
are, despite
the name, a means of applying EC competition law by declaring
certain types
of agreements authorised.
6
3.
Regional approaches
In cases where a
competition law regime (and along with that possibly also an
enforcement
agency) has been – or will be - established at the regional rather
than national level, parties to such regional agreements - particularly small
coun-
tries/economies - may find the development of a separate national
competition
regime (or certain parts of it,
such as merger review) unnecessary and
decide
that the regional competition regime is sufficient to
effectively enforce competi-
tion law throughout the region. This, of
course, will not – and should not - ex-
clude the country in question from
adopting a domestic competition law as well,
later or at the same time, and
which could co-exist with a regional competition
regime. For example
CARICOM and COMESA are examples of regional group-
ings with competition
among their competences8
Moreover, the role of competition
regimes in fostering regional economic integrati-
on, consolidating
regional markets and making them more
attractive to both do-
mestic and foreign direct
investment should not be overlooked.
4.
Administrative and
resource implication of competition enfor-
cement
While a number of jurisdictions in both developed and developing
countries have
chosen to establish a competition authority charged solely
with the application and
enforcement of competition law (for the sake of
brevity, “administrative enforce-
ment'), this should by no means be taken
as the only way of ensuring such applica-
tion and enforcement. To begin
with, some countries may choose to rely on judicial
enforcement of
competition law, either exclusively or in combination with admini-
strative
enforcement. Moreover, judicial enforcement itself can take different forms
(e.g. private actions by affected competitors and/or actions by a public
prosecutor).
Among countries who have a preference for administrative
enforcement, the more
frequent model is that of
a “dedicated' competition agency or authority
(that is,
one that is solely dedicated to the task of enforcing
competition law) and a fairly
large number of countries have chosen to
establish such an independent competi-
tion authority. Yet, there may be a
number of reasons, including the administrative
structure and
tradition of a country, as well as
budgetary restrictions, which may
lead a country to
either establish or designate an authority charged with other tasks
as well
to also apply and enforce its competition law. This could be an agency for
consumer protection or other regulatory matters, just as it could be a
government
8
In 2002, the EC approved €745,000 of
technical assistance to COMESA for
competition capacity building, and on
March 3 2003, an EC-funded €1.5 milli-
on programme for competition law and
enforcement in ANDEAN was an-
nounced.
7
ministry. For example, many competition enforcement
agencies, in both developed
and developing countries, deal with both
competition and consumer protection9.
Clearly, in
order to have any deterrent effect, a
competition enforcement agency
needs to
establish its credibility by completing
successful investigations, and this
cannot be done
without adequate staff and resources. Moreover, it should also be a
real
partner in international co-operation. However, there cannot be any established
norms for “adequacy', as this depends on individual factors such as the
size of the
relevant market, the level of economic activity within it, the
nature and sophistica-
tion of the economic operators, other laws and
regulations affecting the competiti-
ve behaviour of firms, as well as more
“subjective' factors, such as how well rooted
a “culture of competition' is
among firms operating in that market. Thus, it is ob-
vious to us that a WTO
Competition Agreement could not possibly aim at
establishing international
standards for the level of resources that a country chooses
(or
rather, in most cases, can afford) to
allocate to competition enforcement. All
which can be said at
this stage is that the resource implications for a small develo-
ping
economy are, in absolute terms, very much smaller than those needed for
the
implementation even of similar provisions
in a large developed economy such as
the EU or the US, while
recognising that, in relative terms, this could still represent
a
considerable expenditure of resources for a developing countries with many com-
peting priorities. Nevertheless, this has to be
seen also in light of recent studies
such as
the research paper initially presented
before the WGTCP in February
200310, the World Bank report Global Economic Prospects 2003, and
other studies,
which have pointed to the net benefits for developing
countries that might arise, in
the medium- or long term, from the existence
of a competition policy and its effec-
tive implementation, in particular
as regards to a ban on hard core cartels.
B.
PROGRESSIVITY
5.
Implementation periods and plans
The concept of progressivity would
apply principally to those WTO members who
have yet to adopt a competition
law and/or establish a competition agency or other
relevant enforcement
authority. For this group of countries, an obligation to have a
domestic
law and enforcement authority in place
from the entry into force of a
WTO competition agreement could place an
unreasonably onerous burden upon
them.
Rather, such countries should – in the light of their particular circumstances,
inclu-
ding level of development as well as administrative and judicial
“infrastructure'– be
allowed reasonable and more individualised
time-periods within which to adopt a
domestic (or regional)
competition law and establish an enforcement
authority.
Such time-periods could be modulated according
to the level of development, as
well as to the
wishes and needs of each country.
9
Examples are the
Office of Fair Trading in the UK, the Australian Competition
and Consumer
Commission, the Polish Office of Competition and Consumer
Protection, and
the Jamaican Fair Trade Commission.
10
WT/WGTCP/W/228
8
In
order to avoid de facto “implementation backloading', these time periods could
be accompanied by indicative implementation
plans, who could help these coun-
tries
map out the steps needed to establish a WTO-compliant domestic competition
regime and the time needed for each step.
Needless to say, the provision
of adequate technical and capacity-building assistance
will be of key
importance here. Developed countries should assume their responsi-
bility for supporting the implementation, through technical assistance and
coopera-
tion. Also, through the activities of a WTO Competition Policy
Committee, imple-
menting countries could benefit from the experience of
other WTO members.
6.
Progressive development of a domestic
competition regime
This is an issue that links to the point made earlier,
under the heading of “flexibili-
ty', in relation to
the substantive scope of a domestic
competition regime. As is
known, our
proposal envisages only a minimum of
substantive provisions: those
concerning a ban on
hard-core cartels. It is obvious that countries that choose to go
beyond
that can do so in a progressive manner. Indeed, as a matter of fact, while
broad anti-cartel provisions and some form
of anti-monopoly or abuse of domi-
nance
provisions are very common at an early stage, merger control provisions tend
to appear in domestic competition regimes only at a later stage. Clearly,
the kind of
WTO Competition Agreement we envisage
would leave total freedom to WTO
Members to expand the substantive scope of their competition law beyond
hard-
core cartels (if they so wish) at their own rhythm and according to
their own priori-
ties.
In this respect, the establishment of a WTO
Competition Policy Committee and of
an appropriate mechanism for WTO
Members to exchange views and experiences
would be an important support for
Members in making their competition regime
evolve and stay adapted to their
economic situation and needs.
-oOo-