Since the Doha Declaration, there is now active consideration of a multilateral set of rules or principles on competitionpolicy at the WTO. While some developed and developing countries have expressed interest in such principles, there

is also considerable concern in a number of developing countries about the possible constraints that a set of principlesmight impose on their preferred economic development strategies. In other words, an oft-voiced concern is that competitionpolicies might constrain nations in their preferred approach to industrial policy, technology policy, investment policy,or economic development strategy more generally. In the past, similar concerns have been raised about trade liberalization.

This workshop brought together leading legal practitioners, economic and legal experts, and government officials from both developing and developed economies to consider the relationship between competition policy and economicdevelopment. The agenda was divided into two sessions. The opening session, presided over by Merit E. Janow, Professorin the Practice of International Trade, Columbia University, focused on “Competition Policy and Economic Development.”Discussion was interdisciplinary, incorporating the perspectives of economists, including initial comments by Joseph E.Stiglitz, Professor of Economics and Finance, Columbia University; and government officials, including Dr. David Lewis,Chief, South African Competition Tribunal, and Dr. Mario Monti, Commissioner for Competition Policy, EuropeanCommission. Mr. Pradeep S. Mehta, Secretary General, Consumer Unity and Trust Society, India, offered insight intodeveloping country perspectives. Workshop participants discussed a number of issues, including the crucial role of competition policy in furthering the process of economic reform in developing economies; how best to address conflictsbetween competition policy and industrial policy and other public interest considerations; ways to bolster both the public and governmental support for competition policy; the appropriate model for a national competition authority;and what shape the multilateral approach to competition should adopt in order to best serve developing economies and their particular circumstances.

The working luncheon focused explicitly on the role of the WTO in supporting developing economies’ needs withregard to competition policy. Dr. Frederic Jenny, Vice Chairman, Conseil du Concurrence and Chairman, WTO WorkingGroup on Competition, delineated the work under way on competition and trade policy within the WTO working group.Professor Jagdish Bhagwati offered further insight into the perspectives of developing economies with regard to theirperception of multilateral competition policy and how it could best serve them.

The closing session, presided over by Eleanor M. Fox, Professor, New York University School of Law, addressed “MultilateralizingCompetition Policy: Can It Help?” Discussing the pros and cons for developing countries were economists Dr. BernardHoekman, Research Manager, Development Economic Research Group, The World Bank, and Professor Peter Drysdale,Australian National University. Dr. Fernando Sanchez Ugarte, President, Commission Federal de Competencia, Mexico,represented a governmental viewpoint. Given the frustration of the developing world with the progress of globalizationand their own fiscal and manpower constraints, it was agreed that it is crucial to prioritize the work to be done in furthering competition policy in these economies at the multilateral level. Various suggestions were made as to whatissues constitute “priority” concerns. Concrete approaches for implementing competition policy were also given, withparticular attention paid to modes of gathering support. Participants also delineated the complementary roles of the WTO,the ICN, international business organizations, bilateral negotiations and domestic consumer watchdog institutions in gathering support for competition policy, as well as in shaping the scope and form of multilateral cooperation in promoting markets.

COMPETITION POLICY AND ECONOMIC DEVELOPMENTThe Costs and Benefits of Multilateral Principles on Competition for Developing Economics

APEC STUDY CENTER

Kellogg Conference Room - Internat ional Af fa i rs Bui ld ing, 15th Floor - New York, NY 10027

Competition policy is being introduced as a tool to support the transition from

planning to markets.

2 APEC Study Center

Session I: Competition Policy and Economic Development

This session addressed a number of concerns developing

countries share on the relationshipbetween competition policy andeconomic development. More than90 jurisdictions now have somekind of competition law, a greatmany having been introduced inthe last fifteen years. Competitionpolicy is being introduced as a tool to support the transition fromplanning to markets, and usedgenerally to promote greater relianceon markets in developing economies.Still, there is considerable debatesurrounding the merits and demer-its of competition law and policyat the national level. There is agreat deal of tension betweencompetition policy and other eco-nomic policy tools that developingcountries, in particular, are in theprocess of using, considering oreven abandoning these policies,which include industrial policies,infant industry policies, deregula-tion, and privatization. Conflicts alsoexist between the agencies chargedwith promoting and enforcingcompetition law and other institu-tions in the developing countrycontext.

Affirming that competition isessential for the performance of a market economy, it was notedthat there are strong forces at playin most economies that limit com-petition. In many developingcountries, the small scale of theeconomy results in a limited num-ber of firms, particularly in thedistribution sector. Workshop par-ticipants acknowledged that whilemany reforms, such as eliminatingmarketing boards and encouraging

a competitive private sector, haveindeed been successful, there arealso a number of cases in whichgovernment monopolies weremerely replaced with private sectormonopolies. Moreover, as one participant emphasized, these pri-vate monopolies are often able to exploit farmers and other eco-nomic actors more than theirgovernment counterparts, under-mining both growth and economicequity in the economy. Trade officials are still learning when and how best to privatize, andexploring other options such asmaintaining public ownership, buttendering management. This is notto say that public enterprises, perse, are detrimental to the economy.Many developing economies havehad a major expansion of the public sector out of necessity, asprivate entrepreneurs were unwill-ing or unable to provide certaingoods and services deemed criticalby policymakers to the economy.Yet, while trade liberalization andprivatization are appropriate forfostering economic growth indeveloping economies, they areinsufficient to ensure competitivemarkets, particularly when movingbeyond tradable goods, into theareas of services and investment.Competition policy can be crucialto promoting marketization andeconomic development.

One participant suggested thatmedia diversity was an importantcomponent in the transition towarda more marketized economy, anda factor that should be addressedwithin the framework of competitionpolicy. This idea proved controver-sial, however. While most participantsagreed that media diversity was

Joseph Stiglitz

Mario Monti

Competition Policy and Economic Development 3

important in promoting politicalfreedom, they felt that this goalshould not be pursued as a matterof competition policy, since com-petition policy is concerned largelywith consumer welfare, not diversityfor its own sake. It was pointedout, for example, that while theEuropean Commission did prohibita media merger a few years agoon competition policy grounds, itdid this because it was found thatthe merger would strengthen dom-inance with detrimental effect onconsumers, not on media pluralismgrounds.

Industrial policy is another toolof developing economies that isoften at odds with competition pol-icy. Developing economies, it wasargued, continue to emphasize theuse of industrial policy for severalreasons. The first is that in mostdeveloping economies, the stateremains a very important directparticipant in the economy, as isevidenced by the continued exis-tence of very large state-ownedenterprises. The second reason,which is the subject of more debate,is that the most highly regardeddevelopment model for developingcountries is still the Asian tigers. Itis widely held that the Asian states’success was in managing incen-tives that were directed at securingeffective private sector participa-tion in the development process.The actual utility of industrial policy in successfully targetingindustries and promoting growthin East Asia continues to be thesubject of great debate. As oneparticipant pointed out, there aremany industries where one dollar’sworth of input is really four dol-lars’ worth of output. However,

he noted, “My problem is, I don’t know which ones they are. Unfortunately, bureaucratsand politicians know what theyare, and that is the problem.”

Although industrial policy continues to be a factor in theworking of economic policy, significant concessions have beenmade by both sides in the statesvs. markets, or industrial policy vs. competition policy debate.Proponents of the free markethave been forced to recognize that the state has not always beenreplaced with a benign invisiblehand pointing in the direction ofefficient and equitable outcomes.At the same time, in the wake of the Asian crisis, the image ofindustrial policy since the 1990’shas become somewhat tarnished.The developmental state wascharged with being an instrumentof cronyism and inefficiency. Evendie-hard proponents of industrialpolicy acknowledged that theeffectiveness of a developmentalstate of the Asian variety dependedon unusually high levels of bureau-cratic efficiency and discipline, notto mention authoritarian politicalregimes. Still, while few now advo-cate a return to the interventionistdevelopment strategies of the 1950sand 1960s, the respect for industrialpolicy remains very strong. At aminimum, advocates of competitioncontinue to confront those “mouthingthe rhetoric of international competitiveness.”

Industrial policy, however, isnot the only concern that may bein conflict with competition policy.Issues of labor and trade policy alsofrequently challenge those concernedwith promoting competition, as do

Merit E. Janow

Left to right: Joseph Stiglitz, Frederic Jenny,Jagdish Bhagwati

Industrial policy is another tool of developing

economies that isoften at odds withcompetition policy.

4 APEC Study Center

other public interest considerations—one example given was that ofsmall business and black empow-erment policies in South Africa.Competition policy is at a disad-vantage in many cases because, as one participant pointed out,competition law is often “an ideain search of a social champion.”While this situation is not uniqueto developing economies, it is particularly strong in developingeconomies and made more diffi-cult by the combined lobbying of old producer lobbies intent ondefending their interests, as well as new entrepreneurs who arepressing for protection and haveoften supported the new democraticgovernments.

How, then, is it possible to balance competition policy againstthese other social and economicimperatives? Workshop participantsemphasized the importance ofestablishing the independence ofthe competition authorities, as wellas of the judiciary, in order to safe-guard enforcement. It is crucialthat they be independent of otherbranches of government and thatthey have exclusive jurisdictionover competition policy matters.

The difficult question is how toestablish this independence. Asidefrom the issue of corruption, thereare also problems of inertia, indif-ference, and a lack of resourcesand staff. Participants cited the util-ity of having a dual approach toenforcement of competition law in which both government and private, civil action is supported.One participant emphasized thatthis approach was, in fact, adoptedby the U.S. at the end of the 19thcentury in dealing with anti-trust

laws, precisely because it wasacknowledged that large firmswould use their enormous fiscaland political resources to blockanti-trust actions. Providing thejudiciary can be relied upon to befree from corruption, private actionwould involve fewer resources andbe less rigid in approach. An activebar is also critical—private litigationencourages individuals to becomeexpert in competition policy andto support institutions that will allowcompetition policy to flourish.

More broadly, participantsemphasized the importance of a commitment to competition policy at the public, political andacademic levels. One participantdescribed two scenarios that cantake place without that commitmentfirmly in place:

“First, the president or the primeminister looks at the (competition)authority and sees some slots to befilled. A car is assigned, a staff, acell phone and some perks, andthere’s really not very much com-mitment to actually enforcing thelaw in a positive sort of way. Or,you may get a good competitionauthority staff. They investigatecases and they go out and try totake some brave action in order to implement the competition law.The streets of Latin America are littered with the heads of formercompetition agency directors wholost their jobs by attempting to dotheir job. The reason for this is, thepolitical will was not there to backup what they said. The public didnot understand. They did not putpressure on their politicians to givethe agency the support it needs,and as a result, it fails.”

Bernard Hoekman

Peter Drysdale

The streets of Latin America are

littered with theheads of former

competition agencydirectors who lost their

jobs by attempting to do their job.

Competition Policy and Economic Development 5

To help build this public supportfor competition policy, it was sug-gested that competition agenciesengage in outreach programs, inorder to gain support across theprivate sector and in other govern-ment departments. One participantcited the value of appointing pointpersons to engage in ongoing dialogues with other governmentdepartments, making it clear thattheir views and input were valuable,while emphasizing the independ-ence and ultimate authority of thecompetition office. This approachcould encourage those in otherdepartments to consult with thecompetition office frequently anddiscouraged “end-runs” around theoffice. At the same time, the agencymust be careful to obtain inputfrom large and small business, aswell as consumer groups, particu-larly in order to familiarize thesegroups with enforcement policy,but also to build a base of support.This increases transparency andclarity, but it also reduces costs, notonly for the private sector, but alsofor the public sector in clarifyingprocedure.

Public support becomes criticalwhen the competition authoritytakes unpopular steps, such asprohibiting aid to a company, whichthen results in increased unemploy-ment. Another participant citedefforts to introduce a bill in theEuropean Union to enhance theparticipation of consumer organi-zations in merger control proceedings.Similarly, one participant describedthe creation of the American AntitrustInstitute, an organization in the U.S.that brings together people whoare advocates of strong antitrustpolicies to combine their influence.

A great deal of debate centeredupon the question of whether con-sumer protection should dominatethe model of what sort of competi-tion authority should exist in acountry. Several participants pointedout that a consumer orientationcould be very useful in developingeconomies as consumer protectionissues tend to get high public visi-bility and is generally well-receivedby the public. It would seem tooffer a relatively low-cost approachto promoting competition. Otherscountered that there are problemsinherent in adopting consumerwelfare as the “ultimate barometer”of competition law. One participantargued that establishing consumerwelfare could be extremely diffi-cult if the competition policiesadopted led to job losses extensiveenough to mean that there wereno longer consumers to have anywelfare.

It was suggested that it madesense to promote a multilateralapproach to competition in whichno one model predominates. Itwas agreed that countries approachcompetition from a variety of per-spectives and that history plays animportant role. It was pointed outthat competition law had strongpopulous roots in South Africa,while in Indonesia, it was introducedas part of IMF conditionality. Thiscould not fail but to influence howcompetition law is written andhow it is received in that country.It was argued by some participantsthat the resources, institutions andtraditions of a country shouldinform the design of that country’scompetition law and enforcementmechanisms. Where resources arelimited, fewer subjects should be

A consumer orientation could be very useful in

developing economiesas consumer

protection issues tend to get high public visibility and is generally well-received by

the public.

Donald Baker (left), William Rowley

Ko-Yung Tung

6 APEC Study Center

covered and perhaps simpler, moreper se-like rules should be thenorm, rather than broader, moreopen rules.

One participant suggested thatthis sort of multilateral approach, inwhich no single standard predomi-nates, could result in “competitionamong competition policy makers”where the strongest set of compe-tition policies could emerge. Thestrengths of one approach mightmake up for the weaknesses ofanother.

Not all participants favored this approach. Some argued thatallowing a wide variety of localcircumstances to determine thenature of implementation of com-petition law could be unwise. Whilemany legitimate approaches werepossible, some may not representthe consumer welfare orientationthat many in the competition pol-icy community advocate. Do wetake the proliferation of competi-tion laws in the world at face valueand promote them without muchconsideration? What ideas are we really trying to advance? Whatapproaches are effective? Whichcan be accomplished? It was sug-gested by another participant that most of those present were in agreement that “no one size fitsall,” but that there could be somefundamentals all could support.

Key to determining what thesefundamentals should be is adopt-ing an approach that is consciousof the needs and concerns of thedeveloping world. The multilateralapproach to competition risks itscapture by the developed economies,focusing on their concerns andinterests alone. It was pointed out that “much of the multilateral

discussion under the WTO has beendictated by the more advancedindustrial countries. The less devel-oped countries have had to signon at the end.” The Uruguay Round,for example, resulted in supportfor the kinds of industrial policiesdeveloped economies promote, suchas defense research expenditures,but not for the sort of incentivesthe developing economies tend touse. Developing economies viewthis restriction as a strain on theirdevelopment efforts, one that is fundamentally unfair. Wheredeveloped economies once tookadvantage of many of these incen-tives themselves, perversely theynow wish to deprive latecomers to development of the use of thesetools.

Given the pervasive disadvantagesof developing countries, what doesfair competition mean? In devel-oped countries, for example, firmsare in effect subsidized throughextensive provision of infrastruc-ture. How can we decide what are acceptable subsidies and whatare not? When governments inless developed countries providemoney through a developmentbank, if that interest rate is lowerthan the “market rate of interest,”is it a subsidy? The reason this issuch a difficult issue is that whenthe IMF comes into a country withan austerity program, the interestrates may go up to forty percent,and if any interest below that isviewed as a subsidy, effectively,these countries will not be able to provide money to facilitate theirdevelopment. Allowing developingcountry concerns to inform theshape of a multilateral approachto competition policy is made moredifficult by fears on the part of

David Lewis

Russell Damtoft

Given the pervasive disadvantages of

developing countries,what does fair

competition mean?

Competition Policy and Economic Development 7

some economies, including the U.S.,that this could result in an agree-ment representing the least commondenominator, in fact lowering thestandards for some participants.

Working Luncheon Comments

The working luncheon beganby discussing the role of the

WTO Working Group on Tradeand Competition Policy. In aneffort to dispel some of the mis-conceptions about the role of theworking group, it was emphasizedthat no negotiations are takingplace at the present time. Theworking group is attempting todefine the parameters of possiblenegotiation, and is thus raising thecomfort level of the participants in discussing issues they would be less comfortable addressing in a more formal, negotiating session.Members of the working group are not concerned with defining a single standard for competitionlaw, nor are they discussing theconcentration of enforcement ofcompetition law in a centralizedagency or multilateral agency. Morespecifically, there has been no pro-posal that the WTO become anenforcement agency and take overcases from the national authorities.It is not concerned with revisinganti-dumping laws, which is thepurview of another arm of the WTO.Nor is the group as narrowly focusedas the ICN, which is concernedonly with competition law andpolicy. The WTO Working Groupdiscusses trade and competition,but also extends its discussionsbeyond competition policy as such.It has not, however, talked aboutmergers or abuse of dominance,

but it has focused on the anti-competitive behavior of cartels,including with respect to developingeconomies.

What has been the focus of discussion at the WTO? It is recog-nized that that the creation of aglobal market necessitates the cre-ation of rules, and that economictransactions need a legal backgroundin order to lead to efficiency. Therehas also been discussion of therelationship between static anddynamic competition efficiencies,the latter being especially impor-tant for developing countries. Lastly,there was discussion of how tocreate a competition culture. It wasaffirmed that convincing politicalleaders of the value of competitionlaws and policy was not merely amatter of rational efficiency, but of generating “a sufficient level ofoutrage against anti-competitivepractices.” The aggressive pursuitof international antitrust cartels bythe U.S. antitrust authorities overthe last eight years was argued to have made a deep impressionon the minds of local officials indeveloping economies. Generatinga culture of competition extendsbeyond raising the profile of thecompetition authority to persuad-ing the public that competition lawserves a useful purpose.

Given the fragmentation of lawand the globalization of markets,there are many undesirable prac-tices that countries, even if theywish to, cannot eliminate by them-selves. An important feature of thediscussion of the WTO workinggroup has been concerned withdeveloping a protocol of coopera-tion. How should such a protocolbe organized? It was suggested

Eleanor Fox

Workshop in session

Generating a cultureof competition

extends beyond raising the profile of the competition

authority to persuading the

public that competition law

serves a useful purpose.

8 APEC Study Center

that it allow for the diversity of situations and for progressivitybecause many countries do nothave competition law enforcement.Is a law enforcement mechanismrequired? While it is not necessarythat a country have competitionlaws itself, competition law mustapply there. Some kind of domes-tic agency should be charged withthe responsibility for examiningthese sorts of problems. At thesame time, whatever law enforce-ment system exists, it should notbe antagonistic to other proactivesocial or political objectives. Theprotocol should be based on non-discrimination, transparency andprocedural fairness. Inevitably, thereare questions concerning what isto be considered discriminatoryand how far transparency shouldgo. Should decisions, for example,not to prosecute someone be madepublic and how should they bemade public? The desirability of a dispute settlement mechanism is another question that has beenraised.

The response to the descriptionof the concerns of the WTO WorkingGroup on Trade and CompetitionPolicy affirmed the need for a mul-tilateral agreement incorporatingdiversity, but emphasized the impor-tance of a minimalist, voluntaryapproach. Developing economiesdo not have the manpower to con-sider adequately the proliferationof issues that might be “tackedonto” such an agreement: issues of intellectual property, of laborstandards, etc. The perspective of these economies is also ratherdifferent. While there has been agreat deal of discussion of the roleof developed economies’ cartels

coming into poor countries, therehas been little discussion of thepossible positive role of a poorcountry’s cartels in enriching poorcountries. Should OPEC be off lim-its when people talk of commoditypower? The assumption tends tobe that all cartels are bad, all thetime.

Final commentary addressedthe experiences of some partici-pants with competition laws indeveloping environments. Forexample, a certain skepticism aboutthe role of competition policy wasexpressed with respect to the Indiancontext, because the record of anearlier anti-monopoly commissionhad an overly zealous approachthat resulted in enormous ineffi-ciencies and bottlenecks.

Multilateralizing CompetitionPolicy: Can It Help?

This session explored the possiblecontribution of multilateral

efforts to promote competitionpolicy. What kinds of initiatives are likely to be most helpful orharmful? What do these countriesperceive to be the biggest concerns?

It was stressed that those chargedwith addressing competition policyin developing economies areoperating in a particularly difficultenvironment, as many of theseeconomies have become disen-chanted with the globalizationprocess of the last twenty or soyears. One participant pointed outthat we are witnessing not only thereaction of dissident groups, buteven those that have traditionallysupported more liberal economicpolicies. He argued that one of thereasons for the discontent has to

Pradeep Mehta (left), William Rowley

Eleanor Fox, David Lewis

The heart of the discussion of the

WTO working grouphas been concerned

with developing a protocol of cooperation.

Competition Policy and Economic Development 9

do with improper sequencing ofliberalization programs in theseeconomies, and that these programspaid little attention to competitionpolicy. If the problems present inthe sequencing of the liberalizationprograms are to be corrected, itwill require a much more activerole for competition policy. Thereis, thus, a certain amount of ironyinvolved in the lack of receptivityfor competition policy developedeconomies may find in the devel-oping world.

The workshop participantsstressed the importance of priori-tizing the work to be done, pointingout that the WTO has an enormousmission in dealing with policiesthat restrict market access and distort competition. Some haveargued that its agenda is, in fact,over-loaded. As one participantpointed out, it makes little sense to draw attention away from efforts,for example, to eliminate agriculturalsubsidies which amount to some-thing on the order of 300 billiondollars a year, in order to focus onthe much smaller amounts involvedin some of the competition caseson international cartels. There arestill large benefits to be accrued todeveloping economies via the WTO’strade policy agenda. Therefore, itmakes sense to encourage researchto identify the most serious anti-competitive practices.

Others in the workshop echoedthis sentiment. One pointed outthat it was important to recognizethe political economy underlyingthe relationship between develop-ing economies and internationalbusiness. Small economies oftenfeel they cannot create a “crediblethreat to the abuse of market

power within their economies”,especially where multinationalcompanies are concerned, becausethey feel that they stand to losemore from applying their lawsthan from not applying them.Large companies can threaten toleave markets if they are treatedaggressively.

One participant suggested thatthe WTO would be best equippedto address the negative externalitiesthat competition law enforcement(or non-enforcement) can imposeon other economies, particularlywith respect to international car-tels. When policies which are infact legal (or not explicitly illegal)allow export cartels to injure for-eign consumers (and where domesticconsumers are unaffected, andtherefore, can be exempted fromantitrust law and competition law),this is clearly an example of a neg-ative externality associated with theenforcement of national antitrustlaw. Maritime shipping, for example,is a case that comes up frequently.Another possible case worthy ofspecial emphasis would be that ofanti-dumping.

If the focus is to be on interna-tional cartels, one participant arguedthat, in light of the capacity con-straints existing in many developingcountries, it would make sense forthe industrialized economies tobear much of the burden in help-ing developing economies enforcediscipline on the cartels. The ques-tion remains, however, as to whatkind of quid pro quo developingcountries would have to place onthe table in order to encourage thisin the WTO.

Given that there is little discussionon the substantive harmonization

William Kolasky

Jagdish Bhagwati (left), Fernando Sanchez Ugarte

If the problems present in the

sequencing of the liberalization programs are

to be corrected, it will require a muchmore active role forcompetition policy.

10 APEC Study Center

of norms and binding enforcementin the WTO, and more focus insteadon principles like transparency,national treatment, due process,and similar topics, one participantexpressed the concern that thisavoids addressing the fundamentalissues for developing economies.Other participants emphasized thekey role of organizations such asthe International CompetitionNetwork (ICN) in supplementingthe work of the WTO. The ICN is better able to consider how toglobalize competition in accordwith global markets, and considerthe broader aspects of competitionbeyond those related to trade alone.

The work of the ICN is describedas three-fold, consisting of advocacy,merger review and enforcement.Advocacy is one of the simplertasks a competition authority canaccomplish. In advocating compe-tition, the authority creates theleast amount of damage, eitherpolitically or substantively, and ispart of the effort to complementand continue the economic reformsthat have been adopted by manycountries. Merger review is a “soft”attempt to converge policies. Incontrast with the “hard disciplines”of the WTO, the ICN is creating aforum where competition authori-ties can discuss best practices that,once adopted, would make theprocess of merger review moreattuned to the needs of increasingflows of investment and trade. It isa “soft” approach in that no econ-omy is being forced to change itsways. The process clarifies thebenefits of trying to harmonizecompetition policy as much aspossible. Substantial progress hasbeen made in agreeing on best

practices, and the hope is that this will help businesses that haveto do major reviews across differ-ent jurisdictions. Implementationwill take some time, but the factthat the economies involved arechoosing to adopt the new criteriavoluntarily should encourage theprocess. The final work of the ICN,which concerns enforcement ofcompetition law, is still in its nascentstage and likely will be addressedin the future.

Still others argued that the ICNand the WTO cannot stand alonein efforts to encourage the adop-tion of competition policy. As oneparticipant emphasized, there isstill the problem of “socializingcompetition policy in all the relevantconstituencies in which competi-tion policy has yet to be socialized.”It was argued that the championsof competition policy must be“built within the institutions andcultures on the ground,” ratherthan in Geneva. The role of a con-sumer watchdog agency was citedas being particularly helpful ingathering and sustaining politicalsupport for the benefits of compe-tition regulation. The importanceof a grassroots approach was reit-erated, another participant suggestingthat it would be fruitful to focus on“pressing local issues” where promptresults could be achieved withoutthe necessity of a great deal ofinternational cooperation. It wassuggested that service industrieswould be a worthy target. HongKong and Singapore, for example,have very open markets, but also agood deal of local cartelization. Ifconsumers can point to a concreteinstance where competition policywas effective saying, “Gee, the taxi

Peter Drysdale (left), Fernando Sanchez Ugarte

Calvin Goldman

It was argued that the champions of competition policy

must be “built within the institutions and

cultures on theground,” rather than in Geneva.

Competition Policy and Economic Development 11

rates went down as a result,” thatwill certainly encourage support forcompetition policy on the ground.

It was further suggested thatwhile bilateral efforts alone are not sufficient to deal with theproblems that emerge on a globalscale, they can help resolve tradepolicy friction in a way that effec-tively addresses, from time to time,the anti-dumping issue. The CloserEconomic Relations (CER) arrange-ment between Australia and NewZealand was cited as a case in whichthe anti-dumping problem wasresolved effectively. This suggeststhat it may be possible to build upfrom a bilateral and regional basetoward multilateral arrangementsin some areas.

Finally, it was reiterated thatcompetition policy needs the sup-port of the business community; ifmiddle and large-sized companiesare sufficiently opposed to certainregulations, they are capable ofslowing the adoption, implementa-tion and enforcement of them. Thusit was suggested that it would bevaluable to maintain a consultativedialogue with international businessorganizations, such as the InternationalChamber of Commerce, and estab-lish transparent safeguards for theprotection of confidential businessinformation.

In concluding moments, participants stressed the importanceof respecting the needs and view-points of developing countries, aswell as linking them into the worldfamily of trade and competition.The world system, it was observed,offers a support and anchor fordeveloping countries as they moveforward on a common missionbased on markets.

John Fingleton

Left to right: Hugh Patrick, Allan Fels,Peter Drysdale

It may be possible to build up from a bilateral andregional base

toward multilateral arrangements in

some areas.

EDITED BYPatricia Fantulin

ASSOCIATE EDITORSJoshua SafierAndy Wanning

PHOTOGRAPHYColumbia Photo Bureau

DESIGN/PRODUCTIONMelanie Conty

APEC STUDY CENTERColumbia University321 Uris Hall,Mail Code 91553022 BroadwayNew York, NY 10027Phone: (212) 854-3976Fax: (212) 678-6958Email: htp1@columbia.eduwww.columbia.edu/cu/business/apec

Dr. Gwillym J. Allen, Senior Economist and Strategic Policy Advisor, Economic Policy andEnforcement, Competition Policy Branch, Canadian Competition BureauDr. William J. Antholis, Director of Studies and Senior Fellow, The German Marshall Fund ofthe United StatesWilliam J. Baer, Esq., Partner, Head, Antitrust Practice Group, Arnold & PorterDonald I. Baker, Esq., Senior Partner, Baker & Miller PLLCDr. Andrea Belényi, Head of Presidential Secretariat, Hungarian Competition AuthorityProfessor Jagdish Bhagwati, University Professor of Economics and Political Science,Columbia UniversityMolly S. Boast, Esq., Partner, Debevoise & PlimptonRachel Brandenburger, Esq., Partner, Freshfields Bruckhaus DeringerRussell W. Damtoft, Esq., Counsel for International Technical Assistance, Bureau ofCompetition, Federal Trade CommissionThe Honorable Dennis Davis, Judge President, Competition Appeal Court of South AfricaProfessor Peter Drysdale, Australian National UniversityThe Honorable Dr. Allan Fels, Chairman, Australian Competition and Consumer CommissionThe Honorable Dr. John Fingleton, Chairman, Director of Competition Enforcement,Competition Authority, IrelandProfessor Harry First, School of Law, New York UniversityAlbert A. Foer, Esq., President, American Antitrust InstituteProfessor Eleanor Fox, Walter Derenberg Professor of Trade Regulation, School of Law, NewYork UniversityJohn Frank, Esq., Associate General Counsel, Law & Corporate Affairs, MicrosoftCorporationProfessor Michal Gal, Director of Law and MBA Program, University of Haifa, IsraelProfessor Richard N. Gardner, School of Law, Columbia UniversityCalvin S. Goldman, QC, Partner, Blake, Cassels & GraydonEdward Hand, Esq., Chief, Foreign Commerce Division, Antitrust Division, U.S. Departmentof JusticeDr. Bernard Hoekman, Research Manager, Development Economic Research Group, TheWorld BankProfessor Merit E. Janow, Professor in the Practice of International Trade, Director, Programin International Economic Policy, Co-Director, APEC Study Center, SIPA, Columbia UniversityThe Honorable Dr. Frederic Jenny, Vice Chair, Counseil de la ConcurrenceThe Honorable William J. Kolasky, Deputy Assistant Attorney General, Antitrust Division,U.S. Department of JusticeThe Honorable William Kovacic, General Counsel, U.S. Federal Trade CommissionDr. Hwang Lee, Deputy Director, Korea Fair Trade CommissionThe Honorable Dr. David Lewis, Chairperson, Competition Tribunal, South AfricaMr. Pradeep S. Mehta, Secretary General, Consumer Unity & Trust Society, IndiaThe Honorable Dr. Mario Monti, Commissioner for Competition Policy, EuropeanCommissionMr. Takashi Nakayama, Deputy Consul General, Economics Division, Japanese Consulate ofNew YorkProfessor Hugh Patrick, R.D. Calkins Professor of International Business Emeritus, Director,Center on Japanese Economy and Business, Co-Director, APEC Study Center, ColumbiaUniversityMr. Peter M.A.L. Plompen, Senior Vice President, Philips InternationalDr. A. E. Rodriguez, Associate Professor, Department of Economics and Finance, School ofBusiness, University of New HavenJ. William Rowley, QC, McMillan Binch, Toronto, CanadaCharles S. Stark, Esq., Partner, Wilmer, Cutler & PickeringProfessor Joseph E. Stiglitz, Professor of Economics and Finance, Columbia UniversityKo-Yung Tung, Esq., General Counsel, The World BankThe Honorable Dr. Fernando Sanchez Ugarte, President, Commission Federal deCompetencia, MexicoDebra A. Valentine, Esq., Partner, O’Melveny & MyersProfessor Spencer Waller, School of Law, Loyola UniversityMs. Daphne Yong-D’Herve, Senior Policy Manager, International Chamber of Commerce

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