Global Policy Forum

By Shalini Mundhra-Rathi

The only universal, voluntary instrument on competition in existence, the UN's 1980 Competition Code, will be reviewed by competition experts meeting in Geneva from 25 to 29 September. The Conference will review all aspects of the UN Competition Code. It will look at experiences gained in international cooperation; provisions on restraint against anti-competitive practices, including international cartels; the role of competition policy in addressing the exercise of intellectual property rights; and best practices in enforcement of competition laws. It will propose a strengthened role for competition authorities in fostering a "culture of competition" by educating society. It will address competition policy in such strategic sectors as telecommunications and regulated industries.

The imperative need to reconcile efficiency with equity in competition matters was recognized by UNCTAD X last February. According to UNCTAD, competition is among the top issues in the daily economic press today, with the advent of globalization; sweeping market-oriented reforms, including privatization of traditional state monopolies; and the growing concentration, and potential abuse, of market power through mergers and acquisitions. Ever since Seattle, the expected benefits of globalization have been increasingly contested by public opinion. Many voices, including from member States, are calling for more than voluntary principles and rules to regulate competition at the multilateral level. The European Union, Japan, Republic of Korea and other States have urged that a multilateral competition framework be considered in a new round of multilateral trade negotiations.

Increased competition at all levels through economic reforms that rely more and more on market forces is a powerful tool to increase efficiency. However, unbridled competition tends to increase inequalities and create monopolies. Hence the need felt in all developed (OECD) countries, most economies in transition and a rapidly growing number of developing countries to adopt national competition legislation and effective enforcement mechanisms that promote competition, encourage innovation and avoid undue concentration of market power in a few hands.

Since the last review of the Code, at the Third Review Conference in 1995, most developing countries and economies in transition have shown interest in competition policy. Some 60 countries have already adopted competition laws, and many others have begun the drafting process. Due to a lack of experience, financial resources and political support, however, many of them have been unable to implement their competition rules in such a way as to have an effective impact on the economy.

GPF Nore: Find out more about the UN Competition Code here.

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