WRITTEN QUESTION P-1371/00

by Wolfgang Kreissl-Dörfler (Verts/ALE) to the Commission

(26 April 2000)

Subject: Multilateral competition rules

What is the Commission's position on the following questions:

1. In Mr Lamy's discussions with trade partners since Seattle, has the subject of multilateral competition rules been raised?

2. What reactions has Mr Lamy encountered when he has raised the subject of multilateral competition rules during visits to other trading nations?

The Commission's draft concerning the EU's negotiating position for the Millennium Round calls for a multilateral agreement on competition such aspects are mentioned as cooperation among the individual authorities, the drafting of fundamental principles and minimum standards for national competition law, etc. yet no mention is made of more stringent checks on transnational enterprises.

3. Could the Commission indicate its position on the codes of conduct for enterprises drawn up by Unctad (www.unctad.org/en/aubsites/cpolicy/cpset.htm under Principles and Rules for Enterprises, including Transnational Companies)? Would the Commission regard such a code as worthwhile and deserving of support, provided that the rules it contained were binding?

4. Under the auspices of what institution did the Commission wish a body of international competition law and/or an international competition agency to operate? Would the Commission consider it desirable to entrust responsibility for this field to a UN agency such as Unctad?

Answer given by Mr Lamy on behalf of the Commission

(25 May 2000)

In contacts held after Seattle with ministers from both developed and developing countries, the need to launch negotiations

in the World Trade Organisation (WTO) on a basic framework of multilateral rules on competition has been systematically raised. In this context, two basic messages have been stressed. Firstly, the need to reinforce international co-operation in a globalised economy in order to tackle anticompetitive business practices of an international dimension. Secondly, the need to establish a solid basis for such enhanced co-operation through a basic framework of rules, which complement WTO disciplines on trade liberalisation.

A significant number of countries both developed and developing support WTO negotiations on a multilateral framework agreement on competition. This includes all European countries, including candidates to accession to the Union, Canada, Japan, Korea, South Africa, and several countries in Latin America, such as Chile or Brazil. The members of the Commission responsible for Trade and Competition are engaged in intensive discussions to seek a better convergence of views with other trade partners, but particularly the United States, which up to now has been sceptical about a multilateral approach to competition. The issue is also being discussed with India, Egypt and other developing countries in order to identify how a competition agreement could help to address a number of developing country concerns.

The Community favours a realistic approach to the development of multilateral disciplines on competition. An agreement within the WTO should essentially focus on a set of core principles on domestic competition laws which should include principles of non-discrimination and transparency and give a particular priority to the fight against hard-core cartels, on modalities for international cooperation in relation to anticompetitive practices of an international dimension and on support for the progressive reinforcement of competition structures in developing countries. Such an approach would also ensure that there is more effective international co-operation to address anticompetitive practices by multinational enterprises. It should be stressed however, that competition laws should apply in a neutral manner to all firms or agreements among firms in a position of market power, regardless of the nationality of the firm.

It is important to stress what we are not looking for: a global competition authoritiy and/or with dispute settlement rules applying to consideration of individual cases.

In 1980 the United Nations conference on trade and development (Unctad) established a set of multilaterally agreed equitable principles and rules for the control of restrictive business practices. This provided a valuable reference point for the development of competition legislation in many developing countries. Unctad has played an important role both through the provision of technical assistance and the work of an intergovernmental group of experts on restrictive business practices. The set of principles is however non-binding in nature. The Commission considers that the WTO is the appropriate forum to develop binding disciplines on competition. However, a close co-operation between the WTO and other international organisations with expertise in the competition field, such as Unctad, the World Bank and OECD is envisaged. This would be of particular importance to develop an enhanced and better co-ordinated approach to technical assistance.