Competition Policy---Summary Paper
The WTO was established for the purpose of liberalizing trade among its member countries, with mutually beneficial exchange. One method is to eliminate barriers to international trade, such as tariffs. Therefore the WTO has dealt almost exclusively with ridding its member countries of government-created phenomena that create barriers to free trade.
As government barriers to trade and investment have been reduced, there have been increasing concerns that the gains from such liberalization may be thwarted by private anti-competitive practices. There is also a growing realization that mutually supportive trade and ‘competition policies’ can contribute to sound economic development, where effective competition policies would help to ensure that the benefits of liberalization and market-based reforms flow through to all citizens.
The majority of WTO Member countries (both developed and developing) already had competition laws, such as ‘antitrust’ or ‘anti-monopoly laws’. Typically, these laws provide remedies to deal with a range of anti-competitive practices, such as price-fixing and other cartel arrangements, abuses of a dominant position or monopolization, mergers that limit competition, and agreements between suppliers and distributors (vertical agreements) that created barriers for new competitors to enter the market. But however, other member countries did not have such regulatory policies, and no establishments existed to oversee competition standards internationally.
Thus the twentieth article of the 1996 Singapore Ministerial Declaration called for the establishment of a working group to formally examine the relationship between trade and competition policies. This is to consider the issues raised by Members re ...