The Role of Peer Review in a Multilateral Framework on Competition Policy Andrea Bruce Investment Trade Policy UNCTAD Regional Seminar for Latin America and Caribbean Countries on the Post-Doha WTO Competition Issues Sao Paulo, Brazil April, 2003

Overview Benefits of an MFC Core Principles a fundamental component of an MFC Capacity Building a key goal of an MFC Why Peer Review in an MFC

A Multilateral Framework on Competition Policy (MFC) would provide a number of important benefits for Members Establish a coherent set of principles for sound competition law and policy Ensure open and competitive markets for foreign trade and investment Build institutional capacity in WTO Members with no competition laws or newly established regimes Reduce costs to the world economy of global anti- competitive practices Encourage cooperation among Members Benefits

The Core Principles, a cornerstone of multilateral trading system, can be adapted to an MFC Non-discrimination, Transparency and Procedural Fairness should be a fundamental part of an MFC Principles have been continuously adapted to accommodate specific subject matter at the WTO Core principles will need to be tailored to reflect the specifics of competition law, as is done with other ‘new issues’ Competition law and policy should be largely congruent with the core principles Core Principles

The adherence to Core Principles in the application of competition law will enhance trade and investment opportunities Promotes open and competitive markets, and ensures equal opportunities for all potential entrants to conduct business Non- discrimination Promotes the rules-based approach of the WTO, and provides information to all economic actors Transparency Promotes transparency and fairness in the regulatory process Procedural Fairness Core Principles

The Canada-Costa Rica Free Trade Agreement illustrates how the core principles can be adapted to competition law and policy Chapter XI on Competition Policy The Chapter, inter alia, outlines commitments related to each of the core principles to: ensure that measures to proscribe anti-competitive activities and enforcement actions are applicable without regard for the nationality of the business interests involved ensure that such measures are published or otherwise publicly available ensure a number of procedural fairness guarantees for persons directly affected by competition proceedings The Chapter is not subject to dispute settlement Core Principles

Canada believes that each country should have the capacity and tools to maintain and foster open and competitive markets Competition law is part of overall legal regulatory framework that facilitates commercial activity Sound competition policy promotes economic growth and development Many WTO Members do not have competition laws or lack enforcement capabilities An MFC will encourage and promote the development of competition laws and institutions Capacity Building

Capacity building is an ongoing process and must reflect the specific needs of countries Implementation of sound and effective competition laws and policy is an ongoing process Competition law and policy must be developed to meet each countries’ national interests Capacity building strategies must also be tailored to address specific needs of countries An MFC must reflect these capacity building needs Capacity Building

International dialogue on competition law and policy is an important component of the trade and investment policy dialogue Compatibility of approaches and voluntary cooperation will reduce likelihood of conflicts and duplication of competition enforcement efforts Importance of coordinated efforts for Trade- Related Technical Assistance (TRTA), for example, among WTO, UNCTAD and OECD Competition policy is an important component of overall TRTA agenda, such as the FTAA Hemispheric Cooperation Program Capacity Building

Canada believes that Peer Review is an integral part of the overall capacity building strategy Two objectives of a Peer Review Mechanism: 1)An ongoing educative and information sharing mechanism 2)A non-binding compliance mechanism Peer Review

Peer Review would provide an opportunity for ongoing learning and information sharing Transfer knowledge and experience Contribute to institution building Promote convergence of approaches Foster dialogue and cooperation Develop best practices Provide better understanding of interaction between trade and competition policy Peer Review

Canada promotes a non-binding, cooperative approach to compliance for an MFC Possible competition policy obligations would not be subject to formal dispute settlement Application of dispute settlement could result in WTO panels reviewing enforcement decisions A peer review alternative promotes compliance based on assessing competition regimes against agreed principles and standards Consultations among Members would contribute to this non-binding compliance approach Peer Review

Canada has recently been the subject of Peer Review exercises in WTO, APEC and OECD Evaluates the effectiveness of competition institutions, including Members’ legislation, enforcement structure and practices OECD Regulatory Reform Focuses on the completeness and clarity of IAPs as well as their efficacy with respect to achieving free and open trade APEC Individual Action Plan (IAP) Assesses Member’s trade policies and practices and their impact on the functioning of the multilateral trading system WTO Trade Policy Review Peer Review

We can learn from these different experiences in designing a Peer Review Mechanism for an MFC within the WTO Existing Peer Review mechanisms in international forums vary in details regarding structure and output Must consider the advantages of each in the design of a peer review mechanism for an MFC, e.g. policy recommendations of OECD reviews and technical assistance aspect of WTO’s TPRM Peer Review

Canada believes that Peer Review of MFC core elements provides the most appropriate way forward Peer review provides an opportunity for ongoing learning and information sharing on the development of competition law and institutions International dialogue fostered through peer review would reinforce the core principles that would be embedded in an MFC Peer review approach embraces a cooperative versus an adversarial approach to international development of competition policy norms Peer Review