Working Paper: CEPR ID: DP4693
Authors: Bernard Hoekman; Kamal Saggi
Abstract: International cooperation is generally driven by a desire to offset a negative spillover imposed by other countries or to help governments to overcome domestic political economy constraints that impede the adoption of welfare enhancing policy changes. In principle, both conditions are satisfied in the competition policy context for developing countries. This then raises the question why no agreement could be reached in the WTO to launch negotiations on competition law. In this Paper we review what was on the table in the WTO and discuss the lessons that are suggested by the seven-year effort in the WTO to develop a negotiating/cooperation agenda. We argue that the process was a productive one, as it helped identify potential gains from cooperation, although the institutional framework for this has come to lie outside the WTO. A reason for this is that over time the discussions came to focus less on areas where there clearly are spillovers, and more on ?good practices? for domestic enforcement of antitrust law ? an area in which the WTO does not have an obvious comparative advantage.
Keywords: antitrust; economic development; international cooperation; trade negotiations; WTO
JEL Codes: F13; F35; O19
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international cooperation on domestic policies (F55) | developing countries addressing negative spillovers from foreign competition policies (F68) |
| lack of a binding agreement in the WTO (F13) | diminished focus on addressing spillovers over time (F42) |
| domestic political economy constraints (P16) | impede unilateral actions by governments to adopt beneficial policies (F13) |
| international cooperation (F53) | help overcome domestic political economy constraints (O17) |
| domestic competition enforcement (L49) | ability of firms to compete in international markets (F23) |
| addressing externalities (D62) | rationale for binding international agreements (F53) |
| international cartels and export cartels (F13) | negative spillovers that hinder market access and competition (F69) |