*{Trade and competition policy forum – the official report [http://www.iccwbo.org/home/news_archives/1998/trade_competition_forum.asp]

Overview of Issues Discussed at the Consultative Forum 

by Crystal Witterick, Member, Coordinator and Rapporteur of the ICC Joint Working Party on Competition and International Trade

5 June 1998} 

*partie=titre 1. Business Concerns *partie=nil

In the context of increasing trade liberalization, business representatives expressed a desire for the right to compete, free from discrimination, in foreign markets. They also seek certainty and efficiency with respect to the enforcement of competition laws, including the identification of clear-cut safe harbours.

Business representatives also expressed concerns about adequate protection for confidential and competitively sensitive information in the face of greater cooperation among competition authorities in response to enforcement problems associated with increasingly global business transactions.

However, it became apparent from the discussion that competition policy is not the only issue for business. A number of other barriers to entry and effective competition were identified, including investment laws, taxation and other domestic regulatory policies. Some commentators expressed the view that there is perhaps an over-emphasis on the role of competition policy in addressing market access issues, but it was noted that this depends on whether you define competition policy broadly or narrowly.

There was general agreement that there are state-imposed barriers to free competition but some expressed the view that these are a matter of sovereign prerogative. In addition to state barriers, there may be private anticompetitive conduct which raises barriers to effective foreign entry, although again, this view is not unanimous.

There are a number of public regulatory policies which affect all businesses. In addressing these issues, it was remarked that businesses want a new approach; not necessarily one policy and not necessarily a global one. Businesses should be able to operate efficiently on a global basis. This objective is impeded by public policies which have not developed within a coherent framework, both within states and on an international level. It was noted that if this were the state of affairs within a company, the company would not survive for very long. Accordingly, the development of a plan to address these issues was supported.

*partie=titre 2. Conflicts and Convergence *partie=nil

It was noted that while the ICC supports increased convergence to facilitate a level playing field for business, there is no consensus as to what standard convergence should be directed. Skepticism about the benefits and practicalities of broad-based convergence, even assuming this is a desirable objective, was expressed given that states have different economic and cultural objectives in developing policies and enforcing laws, and that states are reluctant to liberalize sectors considered vital to their economies. 

As reported below, it was recognized that there is a need to discuss what can be done to reduce frictions which arise as a result of conflicting policies and the manner of enforcement of those policies, while recognizing there are differing views on the issues.

It was noted that in a true global economy, competition policy and trade policy may converge, but that we are not there yet. However, incremental convergence was identified as a possible goal, which could be achieved by starting slowly and focussing on similarities, not differences, in policy and laws. It was also suggested that increased cooperation between states, at least with respect to competition policy, will lead to convergence. This generated a discussion about business concerns about information sharing among antitrust agencies without appropriate safeguards. 

Suggestions were also made that some of these frictions may be caused by a misunderstanding about the terminology used when discussing these issues, and that accordingly, it would be useful to define the relevant concepts, such as convergence, market access and market contestability. It was suggested that the OECD may provide a useful function in this regard.

It was generally agreed that one key issue is where to find a balance between the interests of government and the private sector.

*partie=titre 3. Antidumping and Competition Law and Policy *partie=nil 

There was a lengthy discussion about the role of antidumping laws in trade liberalization, and it was noted that without this remedy, it is difficult to succeed in negotiating away trade barriers given the frictions which inevitably arise. In this sense, antidumping laws are a safeguard measure to pave the way for increased trade liberalization. Accordingly, it was advocated that antidumping remedies must remain available until world markets are sufficiently integrated. It was suggested that antidumping laws are the only instrument available to counteract unfair trade practices and that the WTO framework offers a sensible approach to protect against abuses.

However, the view was also expressed that it is time to repeal or modify the antidumping laws, for example, by tempering them with competition policy rules in order to protect abuses. Concerns were expressed about the potential for antidumping regimes to be used as protectionist measures and seriously restrict import competition. In this context, a number of preconditions necessary to replacing antidumping laws with competition laws were identified, including the existence of minimal tariff barriers, comparable or harmonized competition law regimes, the recognition of jurisdiction based on effects, and adequate private rights of action. Others expressed skepticism that even if this is a desirable objective, it is not practically possible.

In any event, it was generally accepted that to the extent there continue to be antidumping laws, it is important that they offer a quick, effective remedy narrowly targeted at the harm. It was noted that compliance with antidumping rules is usually very onerous and the mere filing of a case can result in substantial market disruption, and that the remedy can be broader in scope than the product which initially prompted the case.

*partie=titre 4. Competition Policy and Market Access *partie=nil

The discussion began with the comment that firms need meaningful market access to compete globally and that it is no longer sufficient to focus on traditional barriers. In this context, market access involves not only the reduction of barriers to entry, but the ability to compete effectively once entry is achieved (characterized as market presence, although it was noted that market presence does not necessarily mean market share). Broadly defined, competition policy was identified as one tool for facilitating market access, particularly the market presence element. 

The other view expressed in this regard was that "market access" really means the use of competition policy to facilitate the opening of markets and that this is not an appropriate objective. Market access is essentially the same as trade liberalization and competition is only a secondary consideration - there is not sufficient evidence that competition policy is necessary to achieve market access. The terms of market access are largely dictated by domestic regulatory policy, not competition policy (again, however, it was noted that this conclusion depends on how narrowly you define competition policy).

Further, because national competition laws and enforcement are local matters and will reflect the economic and other objectives of governments, they should be dealt with separately from the concept of market access. For example, it was noted that one issue cited as a barrier to market access is the granting of exemptions from competition policy for specific industries; however, it must also be recognized that developing countries may need to protect indigenous industries. Accordingly, in light of the different objectives of competition policy, it should not be used to extraterritorially achieve market access. While it was recognized that trade and competition policies may converge in a truly global market, this is not the current state of affairs.

It was remarked that what businesses seem to be seeking is a level playing field, characterized by openness, equality of access and nondiscrimination. These objectives could perhaps be addressed in part through the application of general principles of free and open trade. This could involve the application of competition policies, which is a broader concept than competition laws.

There was also significant discussion about the potential impediments to trade from private restrictive business practices. Some expressed the view that as trade is liberalized, businesses seek other measures to protect their market position, and the problem of international cartels is too important to ignore. However, others argued that there is no evidence that private business practices can restrict international trade (versus domestic competition).

A third view offered was that perhaps some of these frictions will be resolved through a rationalization of all policies, i.e. trade, competition, investment and other regulatory policies.

It was generally agreed that a clearer definition of terms would be useful in framing further debate on these issues, and that it would be helpful to compile evidence supporting the various positions.

*partie=titre 5. Forum for Resolving Disputes *partie=nil

The issue of whether there is merit, at this time, in considering a multilateral forum for dispute resolution with respect to issues arising from the interface between trade and competition policy was the subject of an animated debate. It was evident that there is no clear-cut, universally agreed upon mechanism to address these issues. A number of approaches were identified, which could be pursued either contemporaneously, or in the alternative. These include:
continued analytical work by the OECD and other governmental and business organizations; 
increasing bilateral and multilateral cooperation to promote convergence and reduce friction; 
the incorporation of competition principles within the WTO framework; and 
the adoption of minimum standards or a multilateral competition code. 

The debate focused on what is realistic within present structures. It was generally agreed that further education, analysis and dialogue would be productive. Some expressed skepticism about the benefits and practicalities about broad-based convergence. Concerns about the sharing of information among competition authorities were reiterated.

The OECD was identified as a promising forum given that its members have fully developed competition laws and it provides the opportunity for the greatest possible consensus. However, it was noted that the OECD does not have a dispute settlement mechanism and only limited membership.

The reasons why some felt that a multilateral code is premature were debated. These reasons include the fact that there is a wide disparity in competition laws among countries and that some countries do not even have competition laws. Others suggested that a general framework agreement, rather than a substantive body of rules, might be feasible.

The merits of the WTO as a useful forum to address these issues, at least beyond further study, were discussed. It was noted that the WTO lacks experience in this area and many of its members have only basic competition laws, if any at all. Doubts were also expressed by some about the feasibility of using the WTO dispute resolution mechanism in the context of these issues. 

On the other hand, a number of reasons were identified in support of going forward at the WTO level, including the coherence of the trading system, the considerable trade experience and near universal membership, the fact that it responds to the interests of both the developed and developing countries, and the availability of a model for dispute resolution.

These are key issues confronting business and governments, and business views are still evolving. Given the significant debate on these issues and the wide divergence of views, it seems that the time is not yet ripe to develop international competition policy disciplines in the context of the WTO. There is much work to be done before a sufficient consensus can be achieved among governments and stakeholders with respect to international negotiations concerning the relationship between trade and competition policy.

*partie=titre 6. Need for Further Dialogue *partie=nil

If such a consensus evolves, it will only occur through analytical and educational initiatives such as the Consultative Forum and in other international fora. It is essential that governments and international organizations encourage dialogue with all stakeholders, including international business, regarding the relationship between trade and competition policy. Just as in the domestic economic policy arena where consultations with business stakeholders are essential for the development of an informed, realistic and effective policy, the same is equally true at the international level.

*{ICC Commission on Law and Practices relating to Competition
ICC Conferences 

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