The CRC Series on Competition, Regulation and Development
Edited by Paul Cook, Colin Kirkpatrick, Martin Minogue and David Parker
Chapter 5: Trade and competition policy at the WTO: issues for developing countries
Peter Holmes1 IS THERE A NEED FOR GLOBAL RULES? Concerns about competition and trade have a long pedigree, back to Adam Smith who devoted a large fraction of the Wealth of Nations to the evil consequences of international trading monopolies such as the East India Company, which he said impoverished both Indian sellers and British consumers. The 1948 Havana Charter of the abortive International Trade Organization (ITO) included a requirement on members to police international restrictive business practices: Each Member shall take appropriate measures and shall co-operate with the Organization to prevent, on the part of private or public commercial enterprises, business practices affecting international trade which restrain competition, limit access to markets, or foster monopolistic control, whenever such practices have harmful effects on the expansion of production or trade and interfere with the achievement of any of the other objectives set forth in Article 1. (UNCTAD, 1948, Article 46, para. 1) There was provision for the ITO secretariat to investigate cases and make recommendations to members. Of course the Havana Charter was not adopted as a whole, only the chapter on trade in goods which became the GATT. Discussions continued in other fora about the trade and competition interface, at the GATT, the OECD and UNCTAD. This work perhaps slightly obscured the fact that the heart of GATT did in fact touch on competition law. Article III of GATT requires non-discrimination (national treatment) in all domestic laws, regulations and taxes that may affect trade. This sweeping obligation was largely...
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