In Discussion Paper No. 1501, Bernard Hoekman surveys options that have emerged from recent trade negotiations, concerning the desirability and feasibility of different agreements on trade-related anti-trust principles (TRAPs). Hoekman identifies five policy options for trade and competition promotion in the WTO: agreement on minimum common anti-trust standards; introducing more competition principles into WTO rules; extending the reach of WTO Dispute Settlement Mechanisms; establishing a body to undertake research and explore the implications of alternative options; and keeping all trade-related anti-trust policies off the WTO agenda.

Hoekman uses three criteria to evaluate these alternatives: first, the degree to which the different scenarios enhance the contestability of markets for foreign firms; second, their likely impact on WTO members’ national economic welfare; and last, their effect on the functioning and integrity of the existing trading system. The author argues that, apart from these criteria, any anti-trust or competition law agreements should encourage trade liberalization, this being the main objective of the WTO. While recent regional integration agreements might suggest that there are difficulties in achieving further linkages between anti-trust and trade policies, they also reveal greater scope for establishing minimum competition law standards. Moreover, in so far as placing multilateral negotiations on the WTO agenda helps reduce countries’ resistance to anti-trust measures, initiating negotiations has a positive pay-off.

Trade and Competition Policy in the WTO System
Bernard Hoekman