EU pushes for world-wide anti-cartel rules

Date: 27/05/1999

By Simon Taylor

MAJOR financial centres such as Hong Kong and Singapore would have to introduce anti-trust rules under proposals drawn up by the European Commission for the Millennium Round of world trade talks.

The Commission claims support is growing for the idea of putting competition rules on to the agenda for the negotiations, which are due to begin at the end of this year.

Under its plan, all 134 members of the World Trade Organisation would be required to introduce laws to combat cartels and monopolies. Around 70 WTO signatories do not currently have any such legislation, including Hong Kong and Singapore.

The Commission argues that establishing a global framework would give firms better protection against national laws which enable local firms to carve up markets at the expense of foreign rivals.

Officials believe it would be possible to agree common rules in some key areas such as anti-cartel measures, and say sceptics have warmed to the idea since the Commission started to clarify its approach.

It has now made it clear that the EU is not seeking to give the WTO the power to arbitrate in individual competition decisions. The US has insisted that it would not accept any move which would give the WTO the right to overturn US rulings on specific cases.

" It is not a realistic objective for competition to have a broad harmonisation of laws or an international authority with investigative powers," said one Commission official.

The institution admits that the Union still has a long way to go to convince Washington that the time is right to bring competition into the WTO negotiations. But it claims Latin American countries are coming round to the idea.

All WTO members are currently holding discussions on the agenda for the next round of talks, due to be launched at a ministerial meeting in Seattle in November. The EU wants a comprehensive round, but the US wants to keep the list of topics short so as to get a rapid deal.

The Commission's bid to put competition on the table has met with a lukewarm response from EU companies. European employers' federation UNICE says that while its members are in favour of measures to dismantle the barriers currently keeping them out of foreign markets, new competition rules would not necessarily help them.

" UNICE would deplore a situation where companies have to comply with fundamentally different approaches to competition law in a variety of countries," the organisation warned in a recent report.

Nor does it agree with the Commission that it would be possible to agree common rules on cartels. Its report points out that the world's 29 leading industrial nations failed to agree on the definition of a 'hardcore' cartel at a recent meeting of the Organisation for Economic Cooperation and Development.