Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
20
Competition Policy
Most EU and some US FTAs contain requirements for a competition policy to be in place that
will prevent private barriers to entry and distortions to trade. Once again it is important to
distinguish between:
• An obligation to have some kind of competition policy to eliminate private barriers to
trade (as in most EU FTAs)
• An obligation to seriously harmonise only in the EU accession agreements and EU
Turkey CU
• An obligation to consult/cooperate
The latter issue is invariably purely voluntary with the exception of the ANZCERTA and the
self-standing US Australia anti-trust agreement, which is the only such agreement to allow for
the exchange of confidential information. Turkey has complained that whilst it has to make its
competition policy comply with EU norms the EU authorities will not tackle cases where
actions in the EU affect the Turkish market. 2
Countries deal with competition problems, including those emanating from international
trade, such as import distribution monopolies and cartels, overseas export cartels, and the
abuses of dominant firms from abroad. They observe that international trade presents
complex competition policy issues because an abuse of market power can occur unevenly
across several markets and jurisdictions, with consequences for the jurisdictional limits of a
national authority. Effectively enforced regional competition provisions may serve to lock in
reforms that are politically difficult to sustain because of the influence of strong domestic
lobbying groups that do not immediately benefit from competition law. PTAs can also pioneer
or test- run provisions and so facilitate their negotiation at a multilateral level at a later date.
Finally, regional competition regimes offer a demonstration effect of the positive gains to be
had from effective national cooperation to underpin and improve the market liberalization
process.3
In the case of North-South PTAs, greater development benefits can be reaped if the more
developed party offers appropriate technical assistance and capacity building. For developing
countries with little experience in implementing competition rules, the PTA provisions should
initially be limited to the exchange of information, technical assistance, and capacity-building
support, as it may be more beneficial at first to focus on establishing a culture that values
competition at the national or sub regional level. Subsequent negotiations could expand the
agreement. The use of soft law could be beneficial if governments are uncertain of the
2
3 See Chapter 1: Eager to ink, but ready to act? RTA proliferation and international cooperation
on competition policy by Lucian Cernat in UNCTAD,