Social justice should be integral to Global South: CUTS International

The Economic Times, December 7, 2023

Social justice should be an inherent part of competition laws in the developing world, said Pradeep S. Mehta, Secretary General of CUTS International. Mehta was speaking at the CUTS-WTO-UNCTAD event in Geneva to commemorate the World Competition Day by focusing on socially sensitive sectors in the context of the crises currently facing the world.

Top online courses in Business, Marketing, Programming Languages Held in the WTO premises, the event had speakers from four leading organisations: WTO represented by Anthony Taubman; UNCTAD by Teresa Moreira, BRICS Competition Law Centre by Alexey Ivanov and South Centre by Vitor Pinto.

While panelists agreed that the world is still reeling from the shock of covid- 19, the impacts of climate change, armed conflicts and geopolitical churning have hit the poor and vulnerable the hardest. In fact, the current situation of geopolitical churning has introduced uncertainty into decision-making.

These crises have had a negative impact on the global supply chain, orchestrated job losses and exacerbated food shortages, driving up the cost of living in many parts of the world. Indeed, the current geopolitical situation is hitting the poor and vulnerable the hardest.

In response to these challenges, the panelists called for prioritization of socially sensitive sectors. Panelists stressed the need to prioritize socially sensitive sectors, given that competition authorities are expected to deal with competition issues in a variety of sectors. The four most socially sensitive areas were identified as pharmaceuticals, food and agriculture, the gig economy, and climate change and sustainability.

In the pharmaceuticals sector, panelists expressed concern about the market-distorting effects of protectionism and cartels, which make access tomedicines difficult for many vulnerable populations. Panelists also noted thatthe food and agriculture sector is marred by anti-competitive policies,distortionary subsidies and environmental concerns that threaten toexacerbate food insecurity in developing countries.

As far as the gig economy is concerned, issues of labour abuses with gigworkers being excluded or ignored when policy issues are addressed wasidentified as a concern. With regard to climate change and sustainability, thepanelists cited various anomalies in the way competition and the transition toa green economy are managed, with many developing countries subjected toanti-competitive practices.According to the panelists, it is necessary to examine the issues of energy transition, open and transparent public procurement and carbon footprint in the context of competition.

When the UN General Assembly approved the set of principles on competition (The UN Set), on 5th December, 1980, member states were encouraged to adoptand implement competition laws and policies.The panelists noted that competition law and policy must be adopted by developing countries, taking into account their unique circumstances. They stressed the need for international cooperation to encourage the adoption and implementation of competition law and policy worldwide, in order to promotesustainable growth and development.According to the panelists, this is very important, as competition law andpolicy play an important role in achieving SDGs 8, 9, 10, 12 and 17. The panelists expressed that only 12% of the 17 SDGs are on track.The complexity of the situation has been compounded by rising inequality, the negative effects of climate change, the uneven pace of digitisation, thewidening digital divide and certain state interventions through subsidies(state aid) that continue to undermine competitive neutrality day after day.

The panelists noted that since the suspension of the WTO Working Group onthe Interaction between Trade and Competition Policy it 2003, it hasremained inactive for 20 years. During the discussion, it also emerged thatthere is a strong demand for technical assistance for developing countries inthe field of adopting and maintaining competition laws and establishing orstrengthening competition authorities.

The panelists noted that great progress has already been made despite thesuspension of negotiations, and that the number of competition authoritiesset up in developing countries has increased considerably. This means thatmany countries already have the necessary institutions in place. However,concern was expressed about the lack of negotiations in this area at present.The panellists also noted a growing complementarity between trade and competition policies. In this case, the issues most present in this complementarity scenario were largely related to the greening of trade, access to medicines, the role of the supply chain in the event of a pandemic, access to green innovations, consumer welfare, the social and environmental impact oftrade, political dimensions, inequality, innovation, the nature of equity and competition, and consumer protection.

Discussions on trade and competition policies, according to the panellists,will remain relevant. Moreover, the issue of technology transfer will remaintopical in developing countrieswhere it is expected to continue to reshapeconsumer welfare while encouraging competition.

However, concerns were expressed that some developed countries were beingallowed to violate certain trade rules using the excuse of sustainability inwhat has become a common practice of greenwashing.It was noted that similar violations in developing countries would result insanctions, raising the question of a level playing field between developing anddeveloped countries.

Panellists called for the application of the rule of reasonto curb interventions related to climate change and environmentalsustainability that justify anti-competitive behaviours.In fact, it was noted that the sustainability issue was being used by somedeveloped countries to monopolise the market. The panellists called for apost-merger impact analysis to ensure that social dimensions are taken intoaccount and that the sustainability issue is truly safeguarded.

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