Overview of competition rules Overview of competition rules in Regional Trade Agreementsin Regional Trade Agreements

Lecturer: Professor Mihai Berinde, PhDLecturer: Professor Mihai Berinde, PhD

President of Romanian Competition CouncilPresident of Romanian Competition Council

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OutlineOutline

I.I. Proliferation of RTA Proliferation of RTA II.II. Rationales for competition-related provisions in Rationales for competition-related provisions in

RTARTAIII.III. Approach of trade and competition at multilateral Approach of trade and competition at multilateral

levellevelIV.IV. Competition provisions and the bilateral & Competition provisions and the bilateral &

regional trade agreementsregional trade agreementsV.V. Types of competition provisionsTypes of competition provisionsVI.VI. Common competition provisions in RTACommon competition provisions in RTAVII.VII. Romania‘s trade and competition policyRomania‘s trade and competition policyVIII.VIII. RTAs to which Romania is a party – coverage of RTAs to which Romania is a party – coverage of

competition competition IX.IX. Closing remarksClosing remarks

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I. Proliferation of RTAI. Proliferation of RTA

GATT’s art. XXIV provides the legal GATT’s art. XXIV provides the legal foundation for RTAsfoundation for RTAs

The EU and EFTA are the main The EU and EFTA are the main continental hubs sharing similar continental hubs sharing similar networks of RTAsnetworks of RTAs

Almost 200 RTAs have Almost 200 RTAs have been notified to the been notified to the WTOWTO

More than half of the More than half of the world trade is now world trade is now governed under RTAgoverned under RTA

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II. Rationales for competition-II. Rationales for competition-related provisions in RTArelated provisions in RTA

Competition policyCompetition policy – – a relatively new a relatively new feature in international trade agreementsfeature in international trade agreements

The competition rules play an important The competition rules play an important role in trade liberalizationrole in trade liberalization

Competition rules protect the outcome of Competition rules protect the outcome of

trade liberalisationtrade liberalisation

In a global economy, anticompetitive In a global economy, anticompetitive practicespractices are are likely to have an impact on likely to have an impact on tradetrade

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Domestic firms colluding to keep foreign Domestic firms colluding to keep foreign competitors out of their marketscompetitors out of their markets

Exporting firms abusing of their dominant Exporting firms abusing of their dominant position in different foreign marketsposition in different foreign markets

Incompatible economic concentrationsIncompatible economic concentrations

II. Rationales for competition-II. Rationales for competition-related provisions in RTArelated provisions in RTA

Anticompetitive practices reducing the Anticompetitive practices reducing the benefits of trade:benefits of trade:

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III. III. Approach of trade and Approach of trade and competition at multilateral levelcompetition at multilateral level

Uruguay round – TRIPS and GATS – TRIPS and GATS agreements agreements

Singapore – 1996 Ministerial Declaration– 1996 Ministerial Declaration WTO Working Group on the Interaction WTO Working Group on the Interaction between Trade and Competition Policybetween Trade and Competition Policy

Doha – Ministerial Declaration 2001– Ministerial Declaration 2001Proposal for a “Multilateral Framework Proposal for a “Multilateral Framework Agreement on competition ” (MCF)Agreement on competition ” (MCF)

Cancún – Ministerial Conference 2003– Ministerial Conference 2003 Disagreement on Singapore issuesDisagreement on Singapore issues

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IV. IV. Competition provisions and the Competition provisions and the bilateral & regional trade agreementsbilateral & regional trade agreements

No consensus reached No consensus reached at multilateral levelat multilateral level

The new generation of The new generation of RTAs include more RTAs include more often rules on often rules on competitioncompetition

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V. V. Types of competition provisionsTypes of competition provisions

Main RTAs competition provisions:Main RTAs competition provisions:

1.1.Adoption of competition lawsAdoption of competition laws

2.2.Coordination and cooperation provisionsCoordination and cooperation provisions

3.3.Provisions addressing specific anticompetitive practicesProvisions addressing specific anticompetitive practices

4.4.Provisions relating to “core principles”Provisions relating to “core principles”

5.5.Exclusion of antidumpingExclusion of antidumping

6.6.Recourse to trade measuresRecourse to trade measures

7.7.Provisions relating to dispute settlementProvisions relating to dispute settlement

8.8.Special and differential treatment (SDT)Special and differential treatment (SDT)

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VI. Common competition VI. Common competition provisions in RTAsprovisions in RTAs

Agreements involving the Agreements involving the European UnionEuropean Union – oriented – oriented towards harmonization of towards harmonization of competition rules among the competition rules among the contracting parties contracting parties

Agreements involving Agreements involving USA USA and Canadaand Canada – oriented – oriented towards cooperative provisions towards cooperative provisions

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VII. Romania‘s trade and VII. Romania‘s trade and competition policycompetition policy

RomaniaRomania – – one of the one of the beneficiaries of beneficiaries of trade liberalization within the multilateral trade liberalization within the multilateral frameworks of the GATT and WTOframeworks of the GATT and WTO

Romanian trade policy in Romanian trade policy in accordance with the relevant accordance with the relevant WTO rulesWTO rules

Romanian competition policy Romanian competition policy in line with both international in line with both international rules in the field and EU rules rules in the field and EU rules

The application of the The application of the competition acquis prior to competition acquis prior to the closure of the EU the closure of the EU accession negotiationsaccession negotiations

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VIII. RTAs to which Romania is a VIII. RTAs to which Romania is a party – coverage of competitionparty – coverage of competition

The Europe Association The Europe Association Agreement:Agreement:• agreements and concerted agreements and concerted

practices, abuse of practices, abuse of dominancedominance

• State aidState aid EFTA-Romania FTAEFTA-Romania FTA

• similar to the EU similar to the EU Association AgreementAssociation Agreement

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Romania’s Agreement with CEFTA Romania’s Agreement with CEFTA countriescountries agreements and concerted practicesagreements and concerted practices State aidState aid

New evolutions in CEFTANew evolutions in CEFTAmodernization of competition packagemodernization of competition package

VIII. RTAs to which Romania is a VIII. RTAs to which Romania is a party – coverage of competitionparty – coverage of competition

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BFTAs with the ex-Yugoslavian countries, BFTAs with the ex-Yugoslavian countries, Republic of Moldavia, Albania, Israel and Republic of Moldavia, Albania, Israel and TurkeyTurkey• agreements and concerted practices, agreements and concerted practices,

abuse of dominanceabuse of dominance• State aidState aid

VIII. RTAs to which Romania is a VIII. RTAs to which Romania is a party – coverage of competitionparty – coverage of competition

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IX. Closing remarksIX. Closing remarks

For Romania, European integration and regional For Romania, European integration and regional cooperation are mutually reinforcing goalscooperation are mutually reinforcing goals

RTA – a complement to and support for RTA – a complement to and support for multilateralismmultilateralism

A WTO competition law responding to the problems A WTO competition law responding to the problems of globalization is possible of globalization is possible

RTA – a likely mean for an efficient and effective RTA – a likely mean for an efficient and effective control of anti-competitive practicescontrol of anti-competitive practices

Welfare of the whole global community – ensured by Welfare of the whole global community – ensured by a liberal international trade system sustained on a liberal international trade system sustained on three pillars: free competition, non-discrimination, three pillars: free competition, non-discrimination, elimination of barrierselimination of barriers

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Thank you very much for Thank you very much for your kind attention!your kind attention!