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Economic development, competition policy, and the World Trade Organization

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Author Info
Hoekman, Bernard
Mavroidis, Petros C.

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Abstract

At the recent World Trade Organization (WTO) ministerial meeting in Doha, Qatar, WTO members called for the launch of negotiations on disciplines relating to competition based on explicit consensus on modalities to be agreed at the fifth WTO ministerial meeting in 2003. WTO discussions since 1997 have revealed little support for ambitious multilateral action. Proponents of the WTO antitrust disciplines currently propose an agreement that is limited to"core principles"-nondiscrimination, transparency, and provisions banning"hard core"cartels. The authors argue that an agreement along such lines will create compliance costs for developing countries without addressing the anticompetitive behavior of firms located in foreign jurisdictions. To be unambiguously beneficial to low-income countries, any WTO antitrust disciplines should recognize the capacity constraints that prevail in these economies, make illegal collusive business practices by firms with international operations that raise prices in developing country markets, and require competition authorities in high-income countries to take action against firms located in their jurisdictions to defend the interests of affected developing country consumers. More generally, a case is made that traditional liberalization commitments using existing WTO fora will be the most effective means of lowering prices and increasing access to an expanded variety of goods and services.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2917.

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Date of creation: 31 Oct 2002
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Handle: RePEc:wbk:wbrwps:2917

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Keywords: Markets and Market Access; Economic Theory&Research; Labor Policies; Environmental Economics&Policies; ICT Policy and Strategies; Environmental Economics&Policies; Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; ICT Policy and Strategies; Access to Markets;

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  1. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2001. "Trade in international maritime services : how much does policy matter?," Policy Research Working Paper Series 2522, The World Bank. [Downloadable!]
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  2. Hoekman, Bernard & Mavroidis, Petros C, 1994. "Competition, Competition Policy and the GATT," CEPR Discussion Papers 876, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May. [Downloadable!] (restricted)
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  4. Simeon Djankov & Bernard Hoekman, 1998. "Conditions of Competition and Multilateral Surveillance," The World Economy, Blackwell Publishing, vol. 21(8), pages 1109-1128, November. [Downloadable!] (restricted)
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  5. Auquier, A A & Caves, R E, 1979. "Monopolistic Export Industries, Trade Taxes, and Optimal Competition Policy," Economic Journal, Royal Economic Society, vol. 89(355), pages 559-81, September. [Downloadable!] (restricted)
  6. Henrik Horn & James Levinsohn, 1997. "Merger Policies and Trade Liberalization," NBER Working Papers 6077, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Kyle Bagwell & Robert W. Staiger, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March. [Downloadable!] (restricted)
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  8. Francois, Joseph F & Wooton, Ian, 2001. "Trade in International Transport Services: The Role of Competition," Review of International Economics, Blackwell Publishing, vol. 9(2), pages 249-61, May. [Downloadable!] (restricted)
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  9. Simeon Djankov & Bernard Hoekman, 2000. "Market discipline and corporate efficiency: evidence from Bulgaria," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 190-212, February. [Downloadable!] (restricted)
  10. Tollison, Robert D. & Willett, Thomas D., 1979. "An economic theory of mutually advantageous issue linkages in international negotiations," International Organization, Cambridge University Press, vol. 33(04), pages 425-449, September. [Downloadable!]
  11. Barrett, Christopher B. & Yang, Yi-Nung, 2001. "Rational incompatibility with international product standards," Journal of International Economics, Elsevier, vol. 54(1), pages 171-191, June. [Downloadable!] (restricted)
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  12. Richardson, Martin, 2002. "An elementary proposition concerning parallel imports," Journal of International Economics, Elsevier, vol. 56(1), pages 233-245, January. [Downloadable!] (restricted)
  13. Michael R. Veall, 1985. "On Product Standardization as Competition Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 18(2), pages 416-25, May. [Downloadable!] (restricted)
  14. Gandal, Neil & Shy, Oz, 2001. "Standardization policy and international trade," Journal of International Economics, Elsevier, vol. 53(2), pages 363-383, April. [Downloadable!] (restricted)
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  15. Conconi, Paola & Perroni, Carlo, 2002. "Issue linkage and issue tie-in in multilateral negotiations," Journal of International Economics, Elsevier, vol. 57(2), pages 423-447, August. [Downloadable!] (restricted)
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  16. Simeon Djankov & Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "The Regulation Of Entry," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 1-37, February. [Downloadable!] (restricted)
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  17. Fox, Eleanor M, 1999. "Competition Law and the Millennium Round," Journal of International Economic Law, Oxford University Press, vol. 2(4), pages 665-79, December.
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