In Discussion Paper No. 1009, Research Fellow Bernard Hoekman and Petros Mavroidis focus on the competition policy aspects of the Europe Agreements from the perspective of the trade policy stance of the CEECs. They explore possible institutional mechanisms that could be implemented by CEEC governments with a view to increasing the sensitivity of competition law enforcement to trade and investment policy.

The competition laws of &nbspthese &nbspcountries tend to resemble EU competition disciplines in the Treaty of Rome, but leave great scope for discretion on the part of the enforcement authorities to interpret the relevant statutes. Much can therefore be done through appropriate wording of criteria and implementation guidelines within the framework of currently existing legislation. Active enforcement of competition laws and maintenance of a liberal trade policy will be crucial not only for national welfare, but also in terms of eliminating the threat of contingent protection on the part of EU firms. It is suggested that a link be sought between competition law enforcement and anti-dumping investigations in the context of the Europe Agreements with the EU.

Hoekman and Mavroidis identify a number of actions through which CEEC competition law enforcement might be strengthened and made more sensitive to trade policy. First, the scope for antitrust agencies to act on their own initiative does not yet appear to have been exploited fully. Second, detailed guidelines would help to reduce uncertainty regarding the priorities given by the competition authorities to different types of competition-reducing practices. Third, the trade policy stance pertaining to an industry should explicitly be taken into account when defining the relevant market in the antitrust enforcement. Last, agencies should publish the reasoning underlying their decisions.

Linking Competition and Trade Policies in Central and East European Countries
Bernard M Hoekman and Petros C Mavroidis

Discussion Paper No. 1009, September 1994 (IT)