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

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

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

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

5 Prof. Dr. Josef Drexl Unit for Intellectual Property and Competition Law Max Planck Institute for Intellectual Property, Competition and Tax Law 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 5

6 Prof. Dr. Josef Drexl Unit for Intellectual Property and Competition Law Max Planck Institute for Intellectual Property, Competition and Tax Law 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. (5) Defining the scope of application of national law (6) Procedural Rules on co-operation and sanctions (7) Binding International Law and Dispute Settlement 6

7 Prof. Dr. Josef Drexl Unit for Intellectual Property and Competition Law Max Planck Institute for Intellectual Property, Competition and Tax Law F. Conclusions (1) A WTO competition law responding to the problems of globalization is possible (2) Trade diplomats have to give up the traditional trade law approach and accept the competition law rationale (3) Domestic competition laws need to give up the exemption on outbound restraints (in particular on export cartels) (4) Minimal approach, including all elements most needed from a WTO perspective (5) 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 (6) WTO competition could contribute to an overall competition-oriented reform of WTO law 7