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Competition Issues with an International Dimension: How to tackle (some of) them?

Competition Issues with an International Dimension: How to tackle (some of) them? INCSOC Conference 29 January, 2004 Geneva Dr Philip Marsden Director, Competition Law Forum and Senior Research Fellow p.marsden@biicl.org. Competition issues with an international dimension.

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Competition Issues with an International Dimension: How to tackle (some of) them?

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  1. Competition Issues with an International Dimension: How to tackle (some of) them? INCSOC Conference 29 January, 2004 Geneva Dr Philip Marsden Director, Competition Law Forum and Senior Research Fellow p.marsden@biicl.org

  2. Competition issues with an international dimension • Cartels – import and export • Abuse of dominance – exploitative & exclusionary • Mergers • Vertical arrangements How do we deal with them? • national competition laws • cooperation agreements • other international mechanisms

  3. Gaps in enforcement coverage • Absent or ineffective laws, arrangements for cooperation • Jurisdictional problems • Different substantive approaches

  4. How to fill these gaps? • Accelerate natural spread of competition laws and arrangements • Converge to principled approach • Multilateral agreement can help

  5. Trade and competition at the WTO – now an orphan? Recent past proposals • Competition Law • Cartel Ban • Enforcement cooperation • National Treatment

  6. Cartel ban Can help address cartels, though narrow definition and many exclusions Cannot address abuse of dominance, exclusionary practices, mergers Already exists in competition laws so, a stepping stone to more

  7. Enforcement cooperation Can help address cartels, mergers and some abusive and exclusionary behaviour Cannot help if laws and approaches differ Cannot be made binding …so, a partial answer to some of the problems

  8. National Treatment Can help address encouragement of impediments to foreign entry (where BFE>BDE) Cannot address all aspects of cartel, merger, abusive or exclusionary behaviour (especially if a barrier is a barrier to all i.e. BFE=BDE) …so, a partial answer to some of the problems

  9. There is no ‘one’ solution…but do need something else Q. Not all competition problems are trade problems but what are? A. Exclusion generally across the board The key ‘trade and competition’ link: Exclusion of foreign entrants, by whatever practice

  10. Exclusionary practices Cartels import; collective refusal to deal Abuse individual refusal to deal/licence predation denial of access Mergers vertical & conglomerate mergers Verticals exclusive purchasing, fidelity rebates

  11. Importance of exclusionary practices For trade the main trade frictions and disputes relating to business practices (Structural Impediments Initiative; Kodak/Fuji, SABRE/AMADEUS, GE/Honeywell) For policy if we do not forge a multilateral remedy a unilateral one will be imposed

  12. So why aren’t we trying totackle these problems? Controversy about exclusionary practices • disputes between the trade and competition communities and • debate within the competition community Trade negotiators find it all too difficult Not an easy ‘deliverable’

  13. But all of T&C is ‘too difficult’ Couldn’t in Cancun So, what can we do? Can we bridge the divide? Can we help prevent exclusionary practices that harm trade and competition in all countries?

  14. One suggestion Use the Cancun delay Study the common elements of these practices Combine the work on them by OECD, UNCTAD and the WGTCP Focus on the impact: of exclusion on competition and consumer welfare

  15. Guidelines Compromise outside the ‘T&C’ box is crucial Compromise inside the ‘T&C’ box must never be allowed Do not create a trade remedy that helps only complainant corporations Use both trade and competition policy to protect competition in the market

  16. Recommended focus TradeandCompetition Significant Substantially impediment which lessens to foreign entry thereby competition or expansion in in the relevant a Member’s market market

  17. A focus on both ‘T&C’ Can help address the toleration or encouragement of impediments to foreign entry Can address all exclusionary aspects of cartels, mergers, abuse and verticals Can provide a principled analytical anchor for the application of other competition rules at the WTO

  18. Competition Issues with an International Dimension: How to tackle (some of) them? INCSOC Conference 29 January, 2004 Geneva Dr Philip Marsden Director, Competition Law Forum and Senior Research Fellow p.marsden@biicl.org

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