A4-0321/96

Resolution on the report of the Group of Experts on competition policy in the new trade order: strengthening international cooperation and rules (COM(95)0359 - C4-0352/95)

The European Parliament,

- having regard to the report of the Group of Experts on competition policy in the new world trade order (COM(95)0359 - C4-0352/95),

- having regard to the Commission Communication to the Council 'towards an international framework of competition rules' (COM(96)0284),

- having regard to its resolution of 14 February 1996 on the 24th Report of the Commission on competition policy - 1994 ((OJ C 65, 4.3.1996, p. 90.)), and in particular the section 'International Aspects',

- having regard to the report of the Committee on External Economic Relations and the opinion of the Committee on Economic and Monetary Affairs and Industrial Policy (A4-0321/96),

A. having regard to the growing liberalization of international trade in goods, services and investment within the framework of the multilateral trade system,

B. whereas the globalization of markets gives firms operating on a worldwide basis increasing freedom of action,

C. whereas international competition rules were discussed as long ago as 1946 in the negotiations on the Havana Charter but were not incorporated into the General Agreement on Tariffs and Trade (GATT),

D. having regard to the work being done by the OECD and the UN on drafting competition rules and codes of conduct for firms operating on a worldwide basis,

E. whereas the effort to achieve free and fair competition governed by specific rules, not least at international level, constitutes one of the cornerstones of a liberal world trade order, without which further moves towards liberalization will meet growing resistance from the public, particularly in the industrialized countries,

1. Notes that the de facto integration of world markets on the basis of the results of the Uruguay Round is advancing and thus further restricting the autonomy of action of national economic policy, and of regional economic blocs;

2. Points out that following the worldwide dismantling of customs barriers, non-tariff barriers to trade have assumed greater importance in protecting domestic markets and that such barriers include anticompetitive business practices which may undermine or nullify the customs concessions negotiated by the WTO contracting parties;

3. Points out that the existing WTO rules, apart from the anti-dumping provisions, consist only of rights and duties for the governments of the WTO contracting parties and do not regulate the actions of undertakings, transnational undertakings or private individuals;

4. Regards the lack of competition rules, or the failure to enforce them particularly in the developing and newly industrializing countries, as a major restriction on cross-border economic activity; points also to the significant differences between competition rules in the industrialized countries, which jeopardize the urgently needed cooperation between national competition authorities;

5. Points out that assessing the effects on competition of cross-border agreements and mergers, which are on the increase, exceeds the terms of reference of the national competition authorities and that measures taken under competition policy may give rise to problems due to the extraterritorial implications;

6. Is therefore pleased to see that, in its communication to the Council, the Commission has proposed that at the WTO Ministerial meeting in December 1996 the Council should press for the setting-up of a working party to develop an international framework of competition rules, is nonetheless concerned that competition policy issues have not been included on the agenda for the OECD negotiations on a multilateral investment agreement;

7. Considers that the WTO is the most suitable international body to draw up and negotiate international competition rules in view of its responsibility for other aspects of the world trade order, its large number of contracting parties including many developing countries, its existing negotiating structures and the possibility of using a single dispute settlement procedure;

8. Regards the work of other international organizations, such as the OECD and UNCTAD, as a valuable contribution to the development of multilateral competition rules;

9. Advocates that international competition rules should be based on the principles of non-discrimination and transparency and should relate to the following areas - abuse of a dominant position, anticompetitive agreements between firms (cartels) and merger control;

10. Points out also the importance of provisions on State aids for competition policy and believes that the ban on export subsidies pursuant to Article XVI of the GATT could provide the basis for an approach to this problem in the WTO, although it needs to be expanded, for example on the lines of the OECD agreement on shipbuilding or the bilateral EU-US agreement on civil aircraft;

11. Advocates therefore that the question of export guarantees should be examined more closely in terms of the implications for competition so that steps can be taken against hidden subsidies;

12. Regards the EU competition rules and code of conduct and EU competition practice as a very useful basis for formulating international competition rules, which will however have to take account of the substantial economic differences between the WTO contracting parties;

13. Advocates as a first step the drafting of common principles of competition policy, whose transposition into national law and effective application with transitional periods allowing for different stages of economic development should be agreed between the WTO contracting parties as binding;

14. Is convinced that the creation of international competition rules will increasingly obviate the need for anti-dumping measures, since dumping is only possible given the existing restrictions on competition, particularly relating to the re-importation of dumped goods;

15. Calls for the early opening of negotiations within the framework of the World Trade Organization with the aim of introducing minimum competition rules into the multilateral world trade system;

16. Calls for an international competition authority to be established as part of the WTO with a quasi-judicial binding procedure;

17. Calls on the Commission to submit to the Council a corresponding draft negotiating mandate, the main elements of which should be a ban on agreements between firms restricting competition (cartels), cross-border merger control and a code of conduct for State aids, as well as provisions to take account of the special protection required by developing countries;

18. Recognizes that the existing bilateral cooperation agreements on competition policy between the EU and a large number of non-member states make a useful contribution to improving international competition but is nonetheless convinced that this network of bilateral agreements is no substitute for a multilateral competition order;

19. Draws attention in particular to the problems in connection with the exchange of confidential data between the EU competition authorities and those of non-member countries, which is an important aspect of competition policy;

20. Points out that a far-reaching harmonization of national competition rules, such as would be possible within the framework of international competition rules, is a precondition for the exchange of confidential data between national competition authorities;

21. Advocates therefore that, irrespective of efforts at multilateral level, the leading industrialized nations should harmonize their existing competition rules, as a precondition for closer cooperation between the EU and the competition authorities of non-member countries;

22. Instructs its President to forward this resolution to the Commission, the Council, the governments and parliaments of the Member States and the contracting parties meeting at the WTO Ministerial Conference in December 1996 in Singapore.