Competition Policy and Trade in the Global Economy: Towards an Integrated Approach

This leads the present paper to reflect on the need for additional coordination mechanisms to address the challenges of an increasingly globalized and networked economy. In recognition of the fundamental complementarity of competition and trade policy, multiple initiatives have been taken at the international level to attempt to formalize their interrelationships and better harness related synergies. To date, none of these initiatives has resulted in a binding framework that ensures a better application of competition policy in relation to trade and investment. In the context of this incomplete institutional and policy infrastructure, the paper puts forward a set of policy options with the objective of intensifying international convergence and injecting competition into international trade. Many of these recommendations can be implemented through existing mechanisms and institutions. They include: (i) multidimensional awareness raising concerning the role of competition policy; (ii) practical steps aimed at enhancing cooperation in the implementation of competition policy at the international level; (iii) the progressive introduction of international dispute resolution and appeal mechanisms; (iv) the promotion of convergence and best practices in competition regimes through peer reviews; (v) the enhanced engagement of national competition authorities in assessing and advising on the implementation of trade measures; (vi) the review of rules on competitive neutrality as a tool to address the role of state-owned enterprises; and (vii) efforts to broaden the application of innovative approaches to the trade and competition interface in free trade agreements. The paper advocates an incremental path to reform and emphasizes that the efforts to be undertaken in the international competition policy arena should build on the important work already being conducted on related issues by organizations such as the ICN, the OECD, and UNCTAD.