Wto Agreement On Competition Policy

22 Dec

From the company`s point of view, a merger entails many costs and bureaucratic constraints. Each country has its own competition authority for mergers. Since most competition authorities apply their right to any behaviour that affects domestic competition, international mergers are still multi-jurisdictional concentrations, which means that several competition authorities independently revere the same concentration. The result is costs, uncertainties and delays for merging companies. Friction arises when competition authorities do not agree on the authorization of a merger. With regard to the Boeing-McDonnell Douglas merger,[50] the European Commission expressed concern about some long-term contractual agreements between Boeing and commercial airlines. However, the U.S. Federal Trade Commission did not issue such reservations and quickly agreed to the transaction. [51] It is interesting to note that Boeing`s only remaining competitor is the European Airbus Group, and critics claim that the European Commission, when it set conditions for the merger, only intended to protect its domestic industry. [52] This example points out that not only economic, but also political, issues can play an important role in international concentration control. Vertical restrictions, including long-term distribution agreements, are one of the most controversial themes of international competition policy. Most exporting countries insist on the negative effects of vertical restrictions on trade and market access. [44] But this market access perspective is only half the truth.

Countries whose markets are closed by vertical restrictions emphasize the effectiveness and reasons for the failure of market entry are more incompetence of their foreign competitors. [45] By implementing a competition policy, a government defines the framework within which transactions can take place. Ubi juice, ibi commercium. In the absence of a well-functioning competition authority supported by a reasonable competition policy, it is likely that trade will be controlled by monopolies or cartels that do not allow foreign competitors to enter the market or develop new domestic competitors. Therefore, a well-managed competition policy is also a prerequisite for foreign direct investment (FDI). Competition policy could play an incentive role in favour of FDI by favouring domestic competitors over foreign competitors. It is very common to grant exemptions to immigrant competitors in the formation of export cartels, thus making their market more attractive to third countries. However, competition with competition laws would certainly have a negative impact on the global economy and trade, as it would lead to a race to lower competition standards. [22] Another objective highlighted by the EC is the protection of small and medium-sized enterprises. This objective runs counter to the Chicago school`s impact-based approach to Anglo-American competition.

[28] Other objectives of competition policy are the maintenance of the free enterprise system and the maintenance of fairness and honesty in competition. [29] According to different competitive cultures, these objectives are more or less reflected in the state`s competition policy. From the perspective of a multilateral agreement on competition, they are of little importance and assistance.