Regional trade
Competition clauses in bilateral trade treaties: analysing the issues in the context of India's future negotiating strategy
Should free trade agreements (FTAs) try to harmonise competition laws?
Authors:
S. Sahu (ed); N. Gupta (ed)
Publisher:
Indian Council for Research on International Economic Relations , 2008
The failure to include competition provisions at the WTO multilateral framework provided the scope for including their inclusion at bilateral/regional level. However, there are large differences across free trade agreements (FTAs) in terms of how the competition provisions are addressed. In this context, this research report tries to analyse the competition provisions in some selected FTAs and draw lessons for India.
The paper indicates that the provision related to harmonisation of competition laws should not be tried, considering that many countries don’t yet have domestic competition laws. In addition, it notes that the harmonisation clauses which require reduction of existing diversity in various domestic competition laws can not be achieved. However, the soft laws on cooperation, including any procedures for consultations, notification, or comity are found to be useful for enhancing cooperation among the competition agencies while dealing with anticompetitive practices.
On the other hand, the paper finds that differences which may arise in the regulation of anticompetitive conduct across borders can lead to distortions in the trading system. Therefore, as a solution, the paper suggests the extra-territorial application of competition laws by one country over firms in the jurisdiction of another country. The paper also recommends developing appropriate mechanisms for sharing confidential information.
The paper concludes that India should consider including competition provisions related to cooperation and technical assistance in its future negotiating strategy for RTAs. The adopted competition laws based on these agreements should have an international dimension and agree to the cooperation and information sharing protocols.
