Competition policy

There is general agreement that competition among firms enables consumers to enjoy freedom of choice, low prices, and good value for money, while at the same time promoting innovation and higher standards. On the national level, the need for regulation to prevent anticompetitive practices is, accordingly, widely accepted. On the plane of international trade, the competition policy issues are more complex. Abuse of market power can span markets and national boundaries, and many countries lack a competition policy framework that would facilitate cooperation with other countries. The inclusion of competition provisions in trade agree- ments is potentially beneficial—particularly for developing countries, which suffer disproportionately from cross- border anticompetitive practices. Competition law and policy inherently contribute to better balance between the rights of producers and protection for consumers and other members of society. A well-administered competi- tion law will have positive spillover effects on the economy at large, not just the particular firms or groups that bring complaints. The extent to which regional competition provisions in trade agreements can promote regional public goods and deal with market failures depends on the nature of the pro- visions and on their implementation and enforcement. A small group of countries has begun to develop cooperative practices and appears to be active in initiating such agree- ments. These are primarily developed countries with estab- lished national competition law, existing agencies, and a strong competition culture. In other regional competition regimes, such provisions are the beginnings of state-to-state practices that are likely to develop over time. The develop- ment and effective implementation of national law and pol- icy regarding competition and consumer protection are essential complements to regional competition policy.