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Time is ripe for a multilateral competition regime
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MULTI-BILLION dollar deals across the world tend to concentrate the global market. BRICS countries can manage this risk by tackling it jointly through a coordinated competition policy.
While this may not be an immediate concern for some countries, such as India, as long as there is foreign investment in the food sector, countries need to closely track global developments and should become a partner to any global strategy dealing with increasing consolidation and associated concerns, such as abuse of dominance.
Akey element of any such strategy is competition policy, and at its heart is economic analysis, which is inevitably guided by the economic doctrine followed by the enforcing country.
Corporate power, backed by rich nations, makes it difficult for developing nations to assert their position.
To redress the balance, developing countries through groups such as BRICS should to come together to shape a multilateral strategy. Positive developments on this front include BRICS competition authorities signing a cooperation agreement, meetings of patent authorities, and a BRICS Food Working Group working on strategies. Above all, the theme of the 8th BRICS Summit, held in India this month, is very apt: Building Responsive, Inclusive and Collective Solutions. All these factors underscore the forum’s suitability in taking the lead in developing an agenda for a Multilateral Competition Policy.
One approach may be for BRICS nations to first develop a Plurilateral Competition Policy amongst themselves, after which it would be opened to other like-minded countries.
In another development, ChemChina is acquiring Syngenta, adding a new dimension as it joins large corporate powers while at the same time being part of a developing country grouping.
The agenda on Trade & Competition Policy was introduced at the World Trade Organisation in 1996 as “new issue,” along with investment and transparency in government procurement.
It began as a study approach, but when it became a negotiating agenda, strong opposition came from the developing world, resulting in the withdrawal of the entire agenda (other than trade faci l itation) from the WTODoha Development Agenda in 2004.
Sea change
Since then, there has been a sea change in global economic architecture, following the two WTOministerials at Bali in 2013 and Nairobi in 2015.
In all probability competition policy and investment policy may be on the future negotiating agenda at the WTOas plurilateral agreements.
With substantial experience of trade and globalization in the developing world, the developing countries should participate proactively in negotiations like these in order to influence the content and ensure balance.
In any multilateral negotiation, contentious issues arise mainly because of two factors: an aggressive agenda of market access and a defensive agenda, which includes protection of policy space to address national concerns.
For example, inclusion of intellectual property rights into the WTOacquis was the most contentious issue during the Uruguay Round. This was finally settled when trade and IP rules allowed policy space for nation states to address their concerns, particularly with respect to agriculture (seed) and health (pharmaceuticals).
Today, it is imperative to find common ground on the regulation of market distortions in the highly sensitive sectors of food and agriculture through better and more cooperative competition regimes, and more so in the multilateral trading system. We ignore this at our own peril. BRICS can offer a middle path, and introduce it at the WTO.
The author is Secretary General, CUTS International. Ujjwal Kumar of CUTS contributed. Shanghai Daily condensed the article.
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