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Trade and Competition Policy: Perspectives for Developing Countries

Working papers

This is a background paper for Observatory of Globalisation workshop on "The regulatory framework of globalisation" (October 2001).

Over the recent years, and in particular since the 1996 World Trade Organization (WTO) Ministerial Conference in Singapore, increasing attention has been granted to the linkages between trade and competition. In a globalised world, the question arises as to whether, parallel to trade liberalisation initiatives, a global and coherent approach to competition policies is needed.

On the one hand, trade liberalization triggers competitive pressures which can act as a substitute to competition policies. On the other hand, anti-competitive practices may reduce the benefits from trade liberalization, hence calling for a reinforcement (or the introduction) of basic competition principles and rules. Hence, the first question is whether trade liberalisation and the implementation of an effective competition policy are substitutes or complements. In the latter case, the issue then arises as to the appropriate type of competition policies required, and the level (global, regional, or national) at which it should be tackled. Finally, in the case where in principle competition rules would appear desirable, questions related to the opportunity of a pro-competitive policy for development purposes, as well as the feasibility (in terms of implementation and enforcement capacity) would have to be addressed.

The purpose of this paper is to briefly review the current state of the debate on these issues in order to assess the relevance of a global competition policy framework for developing countries.

Sanoussi Bilal