Are the Competition Rules in the WTO TRIPS Agreement Adequate?

Abstract

In connection with the run-up to the Cancun Ministerial Conference, the author was asked whether there are grounds for recommending amendment of WTO TRIPS Agreement rules addressing competition. The general conclusion of the study is that the TRIPS Agreement in its present form provides substantial discretion to WTO Members in the formulation and application of competition rules regulating intellectual property, and this arrangement serves the best interests of developed and developing countries. Potential amendments were considered across a matrix of interested country groups: North-North, North-South, South-North and South-South. Although country groups with different interests might seek to modify TRIPS competition-related rules to their perceived advantage, there is little reason to believe that consensus would be reached on such changes. The study acknowledges that global welfare benefits might flow from a more highly integrated international competition regime with powers to investigate and enforce agreed upon rules. There is, however, little identifiable near-term impetus for building such a regime, whether at the WTO or elsewhere. Competition laws of certain developed countries expressly exempt conduct with wholly foreign effects from the application of rules regulating anticompetitive practices, including those concerning intellectual property. Such exemptions appear inconsistent with advocacy of liberal market principles, and they are damaging to developing country interests. As part of the Doha Development Round commitment to developing countries, a decision by developed countries to eliminate these exemptions would be constructive.