The Interaction Between Competition Policies and Trade Policies

Trade policy and competition policy share the same goal and supplement each others in regard to effectively use of domestic resources and to benefits consumers. The main purpose of competition policy is to protect and promote “competition” so that the consumer can enjoy goods or services in lower prices and better qualities. Trade liberalization policy, via reducing tariff and abolishing non-tariff barriers, aims to open up domestic markets and let goods and services distribute following in the comparative advantage rule.

Trade policy and competition policy conflicts in another way. Trade protection policy tends to protect the domestic industries and hinders competition therefore. Trade measures adopted by a government could be divided into tariff and non-tariff measures. Tariff affects competition in a direct way while non-tariff measure are more complicated and cover a broad range. Various trade measures affect the qualities and quantities of goods and services in different ways and raise different issues to be solved. Competition law protect and promote “competition” while trade rule considers competition as well as other values, including economic and political ones. Competition law tends to protect consumer benefits and trade law tends to protect producer, labor directly and consumer indirectly.

Regulations by national competition authorities differ from each others. Due to different enforcement efforts devoted, same regulations could get different results. There are even some countries do not have competition law. As the regulation and prohibition of anti-competitive practices affect global trade liberalization, efforts including cooperation among national competition authorities, harmonization among national competition laws/policies, broadening the coverage of competition law and ensuring the enforcement of competition law should be devoted to reduce international trade conflicts and enhance economic efficiency.