DP4693 International Cooperation on Domestic Policies: Lessons from the WTO Competition Policy Debate

Author(s): Bernard Hoekman , Kamal Saggi

Publication Date: October 2004

Keyword(s): economic development , international cooperation , antitrust , trade negotiations , WTO

JEL(s): F13 , F35 , O19

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP4693.asp

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.