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International Competition Policy after Cancún
Placing a Singapore Issue on the Doha Development
Agenda Josef Drexl University of Munich Max
Planck Institute for Intellectual Property,
Competition and Tax Law
Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
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• History of the WTO Process on Competition Policy
• (1) Singapore Ministerial Declaration 1996
• ? WTO Working Group on the Interaction between
  Trade and Competition Policy
• (2) Failure of the Seattle Ministerial Conference
  1999
• (3) Doha Ministerial Declaration 2001
• ? Negotiations on a Multilateral Framework
  Agreement will start after the following
  Ministerial Conference
• (4) Cancún Ministerial Conference 2003
• ? Disagreement on Singapore issues causes the
  failure of the conference
• (5) Europe Giving up the Single Undertaking
  Approach? 2

Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
3

• B. Europes Approach to the WTO Multilateral
  Framework Agreement for Competition
• Objectives (1) Establishment of systems of
  competition policy in all countries. (2)
  Progressive harmonization of national
  competition laws.
• Three-track approach (1) Core principles of
  national competition law. (2) International
  cooperation of authorities. (3) Capacity
  building in developing countries.
• Core principles of national competition law
• (1) Transparency, non-discrimination, procedural
  justice.
• (2) Prohibition of hard-core cartels.
• (3) Principle of progressivity and flexibility
  WTO Competition Policy Committee
• Application of DSU to truly international
  obligations.
• 3

Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
4

• C. Arguments of Developing Countries
• Intrinsic Reasons
• - Capacity Problem Legislative and
  administrative burden of introducing
  competition law (TRIPS as a bad experience)
• - Distrusting the Europeans Why do we need a
  WTO obligation to introduce domestic laws if
  such laws are in our best interest?
• - Failure to comply with WTO competition laws
  should not give rise to trade sanctions. DSU
  is not adequate to solve the enforcement
  problem.
• - Non-discrimination may prohibit effective
  policies vis-à-vis multinational companies.
• Extrinisic Reasons
• - Refusal to discuss competition law in the WTO
  framework contradicts national development
  (e.g., India).
• - Resistance increases the bargaining power of
  developing countries
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Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
5
D. Concepts of WTO Competition Policy (1) The
Trade Law Rationale - WTO law continues to draw
its justification from mutually advantages
agreements - Hudec Private economic actors may
not be allowed to undermine such agreements by
private restraints ? WTO law would not protect
competition on cross-border markets, but the
results of trade liberalization (market access
to domestic markets) (2) The Competition Law
Rationale - WTO Working Group Theory of
complementarity ? competition-oriented trade
law - Trade liberalization and TRIPS enable
firms to restrain competition in emerging
cross-border markets of supply - WTO law has to
protect competition in transition countries
that are unable to protect themselves
effectively against the abuse of growing market
freedoms ? WTO competition law as the
constitutional backbone of the WTO system
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Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
6

• E. Putting WTO Competition Policy on the Doha
  Development Agenda
• (1) No obligation to introduce competition law.
• WTO Members should be beneficiaries of WTO
  competition law rules without having competition
  law themselves. Justification Trade
  liberalization and global IP protection.
• (2) No harmonization of substantive standards.
• (3) Transparency, non-discrimination and
  procedural justice.
• (4) Obligation to protect international markets
• WTO Members must not discriminate between
  the protection of domestic and foreign markets.
• Defining the scope of application of national
  law
• Procedural Rules on co-operation and sanctions
• Binding International Law and Dispute
  Settlement
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Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law
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• F. Conclusions
• A WTO competition law responding to the
  problems of globalization is possible
• Trade diplomats have to give up the traditional
  trade law approach and accept the competition
  law rationale
• Domestic competition laws need to give up the
  exemption on outbound restraints (in particular
  on export cartels)
• Minimal approach, including all elements most
  needed from a WTO perspective
• Harmonization of the law is not excluded for
  the future. Harmonization would disregard
  different stages of economic development, as
  well as political, social and cultural
  peculiarities
• WTO competition could contribute to an overall
  competition-oriented reform of WTO law 7

Prof. Dr. Josef Drexl Unit for Intellectual
Property and Competition Law Max Planck
Institute for Intellectual Property, Competition
and Tax Law