For global markets, there is no generally applicable competition law.
However, today's WTO does not lack rules that have an impact on the competitive conditions for companies competing in the global market.
First and foremost, we need to establish what ‘level playing field’ signifies under the WTO system.
There are generally no applicable competition law rules explicitly stated within WTO frameworks or agreements (GATT for example) regulating competition law for companies competing in the global market. For the purposes of this essay WTO Agreements" refers to the components of the WTO Agreements package on an individual basis. The ways in which that the WTO seeks to create a level playing field in world trade is manifold.
Trading between countries means that competition in the global economy is made ‘fair’, on equal footing and on a ‘level playing field’. “Trade need not be distorted by market barriers and government actions that favour companies and products that are not necessarily the best.” [1] To answer the question we need to first establish what is meant by ‘level playing field’ which implies ‘all countries and firms compete on an equal footing to offer consumers everywhere the widest possible choice and the best value for money.’ [2]Question 1 (a-c) will be answered from a ‘level playing field’ or fairness between signatories to the WTO agreements spectrum.
First of all, the general principle of the GATT which was created as a result of WTO order stipulates the MFN and the NT principles. These seek to create a level playing field non-discrimination for actions of the state vis-a -vis foreign goods or services. National treatment (NT) means Treating foreigners and locals equally. Imported and locally-produced goods should be treated equally after the foreign goods have entered the market. These founding principles can be found in all the three main WTO agreements (Article 3 of GATT, Article 17 of GATS and Article 3 of TRIPS). The MFN principle lays out that countries may not discriminate between their trading partners, for example by granting someone a special favour (such as a lower customs duty rate for one of their products) and then the same would apply for all other WTO members GATS (article 2) and TRIPS (Article 4). These are designed to to secure fair conditions of trade.
Many other agreements do however, aim to support fair competition: in agriculture, intellectual property rights, services, to name a few. The agreement on government procurement (a “plurilateral” agreement since it is signed by only 21 out of 48 MS of WTO members who are party to it) encompasses competition rules to purchases by thousands of government bodies in many countries. The aim of the GPA is to mutually open government procurement markets among its signatories. Negotiations can also be seen as setting a level playing field as it decisions are taken unanimously between the parties. “As a result of several rounds of negotiations, the GPA parties have opened procurement activities estimated to be worth more than US$ 1.7 trillion annually to international competition (i.e. to suppliers from the GPA parties offering goods, services or construction services).”[3]
Secondly, a level playing field for competition can be created though foreign investments and free trade agreements where businesses or individuals invest in another country to either source components/raw materials, to locate their production in cost-efficient or skillsabundant locations, or to get closer to their customers. One can categorise these into two categories which are, Foreign direct investment (FDI) i.e. where an investor sets up or buys a company (or a controlling share in a company) in another country, and. The second type is a –“Portfolio investment” i.e. where an investor buys shares in, or debt of, a foreign company without controlling that company. However, level playing field for competition globally is oftentimes created via the means of Investment Agreements (IA) which create specific guarantees from the host state on the treatment of their investors and investments by those third countries. These can be in the form of commitments against unfair or discriminatory treatment or guarantee of prompt, adequate and effective compensation in case of expropriation. The WTO allows for FTA’s which include competition clauses or clauses which promote sustainable competition, for example. One example is the CETA or the EU-Canada Comprehensive and Economic Trade Agreement. In its chapter 8 it creates provisions on Establishment of investments, Market access, Non-discriminatory treatment, Performance Requirements, Investment and regulatory measures, Treatment of investors and of covered investments, Senior Management and Boards of Directors, Compensation for losses, Expropriation, Transfers, Subrogation, Formal requirements, Resolution of investment disputes between investors and state.[4] In relation to the second point of this essay, we know that if corruption A state exists then countries are less willing to invest in that state (A) which may hamper effective competition in the short and long run. Therefore, International instruments regulating anti-competitive behaviour of states are stipulated in international frameworks such as the “OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997)”, “the UN Convention against Corruption (UNCAC) (2003)” , the “OECD Guidelines for Multinational Enterprises (2011)”, The Council of Europe: Criminal Law Convention on Corruption, Civil Law Convention on Corruption and as mentioned above the WTO Agreement on Government Procurement (GPA). So we know that Corruption is of a growing challenge for international business and investments and that Laws work only where the rule of law already exists, especially in relation to anti-competitive practices, globally. Provisions on anticompetitive behaviour in International investment (IIA) agreements and free trade agreements (FTA) can take the form of investor obligations, comprising of provisions referring to or promoting corporate social responsibility, ”carve out” clauses and transnational norms and domestic legislation related to corruption. On a higher lever in the form of State Commitments these can be formulated as, Commitments without concrete measures and concrete legislative measures and cooperation and standards.
Thirdly, a level playing field can be established through Global state aid control encapsulating the ban on subsidies that alter the flow of goods that otherwise would take place and subsidies that cause distortions in the relative shares of world export trade. How does subsidy policy and state aid go hand in hand? Through the Promotion of innovation, promotion of environmentally friendly production methods, stimulation of employment of labour, promotion regional development , supporting an inefficient business model and bringing them on the same level playing field as other efficient business models. The law regulating subsidies on a WTO level are states
“Subsidy (WTO) Article 1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement): a subsidy shall be deemed to exist if there is a financial contribution by a government or any public body within the territory of a Member or any form of income or price support in the sense of Article XVI of GATT 1994, which confers a benefit.”
Lastly, on a transnational level, a level playing field for competition can be created via the medium of transnational organizations on a global level. These consist of the CN (International Competition Network), OECD (Organisation for Economic Co-operation and Development , the UNCTAD (UN Commission on Trade and Development). The ICN organization deals only with competition law.6 It was created by competition officials from the US, Canada, and others as a forum for exchanging information, experience, and ideas. Its members are CAs, not states. OECD (Organisation for Economic Co-operation and Development): This Paris-based organization is highly influential in many areas of economic policy and lastly the , UNCTAD where The competition organ of the UN reflects the structure of the UN membership and therefore pays particular attention to the interests of emerging markets.
[1] https://www.oecd.org/trade/topics/levelling-the-playing-field/ [2] https://www.oecd.org/trade/topics/levelling-the-playing-field/ [3] https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm [4] https://ec.europa.eu/trade/policy/in-focus/ceta/ceta-chapter-by-chapter/ [5] The Commission State Aid Action Plan, COM (2005) 107 final, p. 4. [6] ECJ - Judgments of 3 October 2000, University of Cambridge, C-380/98, EU:C:2000:529, paragraph 16; of 18 October 2001, SIAC Construction, C-19/00, EU:C:2001:553, paragraph 32; and of 24 January 2008, Lianakis and Others, C-532/06, EU:C:2008:40, paragraph 39). [7] C-513/99 Concordia Bus [2002] ECR I-7213 [8] https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm [9] (C-324/98, Telekom Austria) [10] cases 31/87 Beentjes (respect all relevant provisions of EU law), 45/87, Commission v Ireland [11] M Andhov, “contracting authorities and strategic goals of the public procurement – A relationship defined by discretion?” page 137 [12] https://www.econstor.eu/bitstream/10419/125655/1/WWWforEurope_Policy_Paper_028.pdf [13] See WTO homepage https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm [14] Case C-41/90 Höfner and Fritz Elser v Macrotron GmbH [1992] ECR I-1979, para 21. [15] D Chalmers et al, European Union Law (4th edn, Cambridge University Press 2019) [16] Case T-41/96, Bayer AG v Commission [17] Case 48/69, Suiker Unie v Commission, para 64 [18] D Chalmers et al, European Union Law (4th edn, Cambridge University Press 2019) 925 [19] D Chalmers et al, European Union Law (4th edn, Cambridge University Press 2019) 925 [20] Commission v. Anic Partecipazioni SpA, (-49/92 , ECLI:EU:C:1999:356 para 112. [21] D Chalmers et al, European Union Law (4th edn, Cambridge University Press 2019) 925 [22] Eturas UAB and Others v. Lietuvos Respublikos konkurencijos taryba, C - 74/14 [23] https://www.concurrences.com/en/dictionary/anticompetitive-objet-or-effect#:~:text=In%20other%20words%2C%20for%20the,of%20competition%20as%20its%20object.&text=Restrictions%20of%20competition%20by%20object,the%20potential%20of%20restricting%20competition. [24] ECJ - Judgments of 3 October 2000, University of Cambridge, C-380/98, EU:C:2000:529, paragraph 16; of 18 October 2001, SIAC Construction, C-19/00, EU:C:2001:553, paragraph 32; and of 24 January 2008, Lianakis and Others, C-532/06, EU:C:2008:40, paragraph 39). [25] C-513/99 Concordia Bus [2002] ECR I-7213 [26] C-513/99 Concordia Bus [2002] ECR I-7213 [27] Case C-368/10 Commission v Netherlands (“Dutch coffee” /Max Havellaar) [28] Case C-368/10 Commission v Netherlands (“Dutch coffee” /Max Havellaar) [29] C-513/99 Concordia Bus [2002] ECR I-7213 [30] Commission v Germany (C-17/09). [31] (C-324/98, Telekom Austria) [32] (C-71/92, Commission v. Spain) [33] C-324/98 Telecom Austria, para 62) [34] https://www.concurrences.com/en/dictionary/anticompetitive-objet-or-effect#:~:text=In%20other%20words%2C%20for%20the,of%20competition%20as%20its%20object.&text=Restrictions%20of%20competition%20by%20object,the%20potential%20of%20restricting%20competition.
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