RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/W/162
3 July 2001
(01-3320)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  Spanish
COMMUNICATION FROM COLOMBIA
The following is the final text of a paper re ceived from the Permanent Mission of Colombia
which was circulated as an advance copy for the Working Group's meeting of 22-23 March 2001.
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Discussion Document
Colombia would like to contribute to the proceedings of the Working Group on Competition
from the point of view of a developing country.
1. The new environment
The liberalization of market access has led to a considerable increase in the trade in goods and
services.  At the same time, enterprises have adopted global strategies for production which include
such practices as relocalization, the opening of branches and the acquisition of or merger with
enterprises already established in the new markets.
The considerable increase in multinational tr ade provides an environment conducive to anti-
competitive practices1, which by definition lead to an inefficient use of economic factors and have a
harmful impact on employment and on consumers in the countries, thereby hindering the objectives
pursued through trade liberalization.  Of particular significance in this context are the anti-competitive
practices of enterprises whose export activities have a harmful impact on the competitiveness of theproducts of developing countries.
Anti-competitive practices affect the balance of opportunities for market access already
agreed in the WTO and in many cases put pressure on the local authorities to protect their countries
from unfair competition by restricting access.
The developed countries have responded to these increased risks of anti-competitive practices
arising from the globalization of the economy by strengthening their competition policy and their
supervisory and monitoring bodies.  Regional agreements have in many cases established machinery
for cooperation in the application of the policy to strengthen the existing competition laws so as to
provide mutual assistance and exchange information.
                                                     
1 Agreements to exclude competitors, cartels, mergers with anti-competitive effects, abuses of a
dominant position, etc.WT/WGTCP/W/162
Page 2
In addition, globalization has given rise to problems of competition in national markets on
account of the fact that domestic producers have to meet competition from products provided by
external suppliers which are of substandard quality.  The consumer has no recourse to an appropriate
body that will be responsible for the quality of the product.
Competition in such circumstances leaves the national competitors at a disadvantage since
consumers are able to bring a complaint against the local producers as the costs are of a different
order of magnitude as compared with those that would be incurred in pursuing the complaint in the
country of origin.
2. Particular problems faced by Colombia in the competition field
In response to the process of internationalizing the Colombian economy and adopting an
open, free-market economic model, in 1992 Colombia amended its regulations on competition and
strengthened its supervision over the application of such rules.
Although Colombia has comparatively well developed competition laws that are sufficient to
combat anti-competitive practices, and there is a body responsible for supervising the observance ofsuch laws and penalizing failures to comply, in practice these instruments have proved ineffective
against the anti-competitive practices of multinational companies.
Accordingly, Colombia is, surely like the other developing countries, at a disadvantage as
compared with the developed countries.  Although in theory the developed countries may also be thevictims of monopoly practices, they are less vulnerable since the companies are careful not to carry
out such practices in those countries with a greater capacity for imposing penalties and where the risk
increases with the size and importance of the market for the multinational.
In a situation such as that existing in Colombia, with high legislative and supervisory
standards with regard to competition, the local applic ation of such controls protects the multinational
company as compared with its national competitors, which may possibly have a more dominant
position in that market.
3. Reflections in response to this problem
Following a process of examination and discussion the Colombian authorities have identified
the following factors that would create an id eal environment to confront unfair competition.
• A set of principles including, in particular, national treatment, transparency and due
process.
• Support for the application of the origin-effect principle of the practice in determining
the competence of the local authorities.
• Agreement on a group of actions (rules and common principles) that would
necessarily be included in domestic legislation, without sectoral exclusions orsymmetrical exclusions.
• A clear link with consumer protection.
• Instruments of cooperation.WT/WGTCP/W/162
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4. The WTO and competition
From Colombia's point of view, although it would be desirable to have available prior to the
negotiation all the responses to the concerns that have arisen with regard to competition, we do not
believe that any extension of the proceedings of the working group would be likely to provide us with
responses.
Similarly, although we should like to see solutions to all the problems facing Colombia in this
field, such a result would be by no means easy to achieve in view of the diversity of Members'
policies and their different points of view.
Bearing in mind such considerations, we take a positive view in response to the question of
whether the WTO should be the forum for tackling the issues involving competition.  We base our
response on the fact that the broad participation of the developing countries within the Organization
should ensure the inclusion of the dimension of development and preserve a balance between the
interests and concerns of the various Members.
Consequently, even if the outcome is a multilateral framework that falls somewhat short of
meeting the expectations of a developing country such as Colombia, it would be useful insofar as it
would initiate the process of designing instrume nts that would make it possible to combat anti-
competitive practices at the global level, in particular those that affect the competitiveness of the
exports of the developing countries, as well as furthering the aim of strengthening the institutions for
promoting competition.
In such a context cooperation between national agencies is essential when a State attempts to
investigate an anti-competitive practice by any economic actor whose area of operation lies outside
the limits of its jurisdiction.
We believe that the Member countries need to recognize the importance of cooperation and
coordination between authorities for the effective application of competition law.  Such cooperation
should include such aspects as notification, consultation and the exchange of information on the
application of the laws and competition policies of each country.
In our view, cooperation should promote collaboration and coordination between the
appropriate bodies through regular and constant exchanges of information, assistance in theobservance of laws, technical assistance and the creation of capacity for other countries.
Furthermore, formal channels need to be established so that the various institutions
responsible for ensuring observance of the laws to defend competition may interact by means of
consultations on cases, databases and exchanges of information.
A multilateral framework on competition policy in the WTO could help towards the effective
application of national competition policies and towards various forms of cooperation between the
relevant authorities, as a means of assisting the developing Member countries and those Members
whose economies are in transition to solve practical cross-border problems relating to the applicationof a policy and a law on competition.
Another aspect that needs to be taken into a ccount under the heading of technical assistance
would be the establishment of mechanisms to ensure cooperation between those countries that already
have national laws, those that are in the process of introducing legislative measures and those thathave no legislation in this field.WT/WGTCP/W/162
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Technical assistance should involve programmes that range from general familiarization
activities to increase awareness on free trade and trade negotiations to specialized training
programmes that assist the implementation of WTO Agreements and the implementation and
harmonization of clear rules on competition.
We also believe that the developed countries should provide financial assistance to the
developing countries so as to ensure progress in the policies and application of laws on competition.
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