FTAA - COMMITTEE OF GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF
CIVIL SOCIETY

COVER SHEET FOR OPEN INVITATION CONTRIBUTIONS

Open Invitation to Civil Society in FTAA
FTAA/PERU COMMISION
Participating Countries

Proposal from the Working Group on Competition Policy

April 2002

In the 2001 Buenos Aires Ministerial Declaration, the Negotiation Group on Competition Policy was instructed to identify any areas involving the relationship between competition and antidumping policy that may merit further consideration by the TNC. The Negotiation Group on Dumping, Subsidies and Compensatory Rights was likewise required to undertake a similar process of identification.

This is a subject of prime importance, as it affects the future of trade flows within the FTAA. If antidumping rules do not have built-in competition principles, barriers to fair competition between companies in the hemisphere could result. Conversely, competition rules should incorporate relevant market criteria – the trade policies in such markets - in economically integrated areas already in operation since they could entail cross-border effects on competition. Pro-trade and pro-competition policies thus imply some overlapping between the objectives and potential adverse effects on the well-being and economic efficiency of the countries integrated through the free trade area.

This priority is not only manifested in theory, either. In practice, other fora, such as APEC, are considering the need for APEC economies to give effect, through their trade policies, to the competition principles which they uphold, especially in antidumping and countervailing duty cases. Similarly, the interaction between competition policy and trade within the WTO was pointed up in the recent Doha Declaration (paragraph 25).

With the foregoing in mind, Peruvian civil society, represented by the FTAA/PERU Committee proposes further study and incorporation in the FTAA of the relationship between trade and competition policy. This would include an assessment of:

• The potential for antidumping policy to create dominant positions for local producers, importers, or foreign producers on the local market or the relevant cross-border market.

• Experiences in countries where competition principles or criteria have been incorporated in domestic antidumping laws.

• Impact on the well-being and efficiency in the implementation of antidumping measures.

• Cases in which competition rules and pro-trade policies can be applied, and  their results and market impact compared.

• Barriers to entry and trade in pro-trade and competition rules alike.