Competition

There is a general consensus among many countries that trade liberalisation fosters competition. Tariffs have been reduced to improve market access. This has had the effect of increasing liberalisation and globalisation of markets. However business has highlighted concerns about possible non-tariff barriers, which may act as barriers to trade. Anti-competitive behaviour can take many forms, including ; collusion to divide markets and/or increase prices; or abuse of monopoly power to keep out competitors and increase prices. Such practices can significantly harm consumers, other businesses and ultimately lead to a less efficient economy. National competition policies have therefore looked at ways of   addressing the anti-competitive behaviour.

The World Trade Organisation (WTO) already has some provisions on competition in existing agreements, example the agreements on services and telecommunications.   A WTO Working Group, established in 1996 consisting of the member countries,   explored the interaction between trade and competition.   This included the overall objective of an international approach to competition policy and how it could promote trade. During this process, the Government noted that there were concerns on the nature of any rules and how they would work in practice, particularly in relation to existing competition law. Moreover, the Government thought that the development needs of countries would have to be fully considered.

The aim was that negotiations on a multilateral competition agreement would be launched at the fifth ministerial conference at Cancun in 2003. However WTO members were unable to agree, by explicit consensus at that meeting, on this course of action. At the July 2004 meeting of the WTO General Council, a decision was taken (dated 1 August) that ‘no work towards negotiations on (trade and competition) will take place within the WTO during the Doha Round’.

The Government supported the idea of negotiations in principle, but has of course accepted this decision.   We continue to be   responsible for developing UK policy on trade and competition in conjunction with other interested DTI Directorates, particularly Consumer and Competition Policy, the Department For International Development and other Government Departments.

Contact:

Dave Harvey
Tel: 020 7215 6773
Fax: 020 7215 6226
e-mail : david.Harvey@dti.gsi.gov.uk