Interim Report of the NAFTA 1504 Working Group
on Trade and Competition to the NAFTA Commission
A. Introduction
The Working Group on Trade and Competition under NAFTA Article 1504 ("WG") is required to report to the NAFTA Commission on issues concerning the relationship between competition law and policy and trade in the free trade area no later than December 31, 1998, and to make recommendations on further work as appropriate. In this interim report, the WG describes its work accomplished to date and its workplan for the remainder of its five year mandate. The WG has undertaken its mandate via the generation of papers which address trade and competition issues in terms of:
- setting out the contextual framework of the discussion,
- the comparison of competition laws, and
- specific issues relevant to trade and competition.
The studies undertaken to date identify similarities and differences between the competition laws and policies of the three NAFTA Parties, and consider which, if any, of these differences may have implications for trade among the three contracting parties. The WG meets approximately every six months to discuss current and future work.
B. Work to Date
In 1994, the first year of the 1504 WG mandate, the WG conducted an initial discussion of the scope of WG mandate, and also discussed the comparison of key concepts and approaches of trade and competition laws.
In 1995 and 1996, the second and third years of the mandate, the WG has undertaken work to elaborate the framework and context for WG discussions, and to discuss specific issues and substantive provisions of the competition laws of each Party.
To date, the delegations to the WG have produced three general types of discussion papers:
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Contextual Framework. Papers which establish the general contextual framework for discussion of trade and competition matters, including:
- Competition and Trade Policies in the NAFTA Countries: A Comparison of Terms, Concepts and Analytical Approaches - U.S.
Presented at the Third Meeting of the WG in Mexico City, March 1995
A technical compendium of key terms, concepts and methodologies in trade and competition law.
- Objectives and Approaches of the 1504 Working Group - Canada
Presented at the Fourth Meeting of the WG in Washington , D.C.,
September 1995
The Paper suggests a workplan on various issues, beginning with the creation of papers to identify similarities and differences among the competition laws of the Parties and their potential trade-distortive effects, if any.
-
Comparison of Competition Laws. Papers which analyze the similarities and differences between the Parties' competition laws, including potential effects on trade:
- Scope and Coverage of Competition Laws of Canada, Mexico & the United States - Canada
Presented at the Sixth Meeting of the WG in Mexico City, November 1996
This paper compares the scope and coverage of competition laws among the Parties as exclusions from the application of competition laws may affect market access; the paper is an adjunct to the detailed comparison of the Parties' laws and exceptions thereto in the National Treatment paper (see below).
- Vertical Restraints - A Comparative Analysis - Mexico
Presented at the Fifth Meeting of the WG in Ottawa, March 1996
This paper discusses general elements of antitrust enforcement and compares the treatment of specific types of vertical restraints (i.e., contractual or other restrictive arrangements that affect competition within a particular product brand) in each country.
- Horizontal Restraints - A Comparative Analysis - U.S.
Presented at the Fifth Meeting of the WG in Ottawa, March 1996
This paper provides an overview of the treatment of horizontal restraints (i.e., price fixing, bid rigging and other anti-competitive practices involving firms that would otherwise be in competition with each other) in each jurisdiction.
- Merger Review in Canada, the U.S. and Mexico - Canada
Presented at the Fifth Meeting of the WG in Ottawa, March 1996
This paper analyzes the similarities and differences in merger review, including procedural and substantive issues.
- Treatment of Abuse of Dominant Position/Monopolization by Canada, Mexico & the United States - Canada
Presented at the Sixth Meeting of the WG in Mexico City, November 1996
This paper canvasses substantive similarities and differences of the treatment of anti-competitive activity by dominant firms.
- Export Cartels in North America - Mexico
Presented at the Third Meeting of the WG in Mexico City, March 1995
Analyzes the exemption of certain joint export-related activities from the application of the competition laws of each of the NAFTA countries.
-
Specific Issues on Trade and Competition. Papers which discuss specific competition and trade issues:
- National Treatment in the Application of Competition Law by Canada, the United States and Mexico - Canada
Presented at the Third Meeting of the WG in Mexico City, March 1995
Discusses potential national treatment concerns arising from the competition laws of the Parties, and contains a table which contrasts the core standards of the Parties' competition laws.
- Telecommunications and Competition Policy in Mexico - Mexico
Presented at the Sixth Meeting of the WG in Mexico City, November 1996
This paper discusses developments in the Mexican telecom sector and the Federal Competition Commission's efforts to promote competition.
C. ONGOING AND FUTURE WORK
The WG and its members have had contacts with private sector parties interested in the WG’s discussions on the interaction between trade and competition in the free trade area, such as Bar Associations and international business associations. The inclusion of private sector participants facilitates a full discussion of the issues upon which the WG is required to report at the end of its five year mandate. The WG intends to continue to keep the private sector apprised of the work and issues under consideration by the WG, and to seek their views on trade and competition issues in the form of discussions and/or conferences with private sector representatives.
At the next meeting of the WG which will take place in Washington, D.C. in the spring of 1997, the WG will review an inventory of past cross-border competition cases and will discuss a paper to be drafted on cross-border anticompetitive activity. The WG will also review antitrust enforcement cooperation between the three parties, and exchange views on the possibility of formal antitrust cooperation agreements, either bilateral or trilateral. The WG is contemplating study of the interaction of competition and trade with respect to specific sectors in the free trade area. Ongoing work will include further consultation with representatives of the legal, business and/or academic communities.
The WG intends to pursue its mandate during the remainder of its five year term as follows:
Year 4 (1997) |
Continuation of examination of issues related to substantive competition law standards and trade issues, enforcement issues (public and private), and discussion of issues with private sector associations. |
Year 5 (1998) |
Continuation and finalization of work undertaken in Year 4. Preparation of Final Report to Commission. |
February 1997
Source: International Trade
Canada
