Can you understand Cancún?

Trade and Competition: From Doha to Cancún
OECD Observer

A cry for transparency always accompanies any WTO trade round, and Doha is no exception. Yet trade talks remain clogged with terms of reference, jargon and ambiguities.

Trade and Competition: From Doha to Cancún tries to respond to this problem, coming as it does out of a meeting of trade and competition experts from developed and developing countries who met to explore and clarify some key themes in the Doha Declaration.

It starts by addressing the core principles of nondiscrimination, transparency and procedural fairness. The fundamental raison d’être for the trade agreement calls for non-discrimination on both a national level, in which members agree to accord all other member nations identical trade conditions, and on a “most favoured nation” level, which states that any advantage given to one member country is automatically conferred on the other members.

But, acknowledging imbalances in trade between developed and developing countries, exceptions, exclusions and exemptions have crept in, and the devil is in the details. What does “timely” mean in the context of micro-chip exports, how does a country put into practice “transparent” policies without sufficient resources, and what would “fair and equitable procedures” mean if applied to trade between small, local enterprises and multinationals.

Then there are issues of discrimination between, for instance, two countries that have built up special cooperative relationships, or between regions that disagree on international sales of specific commodities.

According to Trade and Competition: From Doha to Cancún, the relevant issue is not whether exclusions and exemptions are beneficial or harmful from the competition policy standpoint, but whether those that do exist discriminate against foreign enterprises.

Other sticky issues addressed here include the pros and cons of voluntary co-operation as opposed to binding commitments; the identification and categorisation of hardcore cartels, as distinct from export cartels and state-owned cartels, plus effectiveness of enforcement (i.e. tools to identify, investigate and sanction cartels); it asks why the capacity building and technical assistance of the last 30 years has not been successful; plus, it takes a look at the competition policy peer reviews in the OECD’s regulatory reform programme.

©OECD Observer No 238, July 2003

Economic data

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