Good morning. I am happy to be in this beautiful resort city of Davao and to be among friends and colleagues from our APEC family of nations and to be able to share with you some thoughts on competition policy and its linkages. Please allow me to thank both our wonderful hosts from the Philippines for being what comes naturally to them, that is being gracious hosts, as well as the officials of the New Zealand Ministry of Commerce for shouldering the primary responsibilities of acting as originators for this workshop.

Any marketplace -- be it local, national or international -- is being profoundly changed by the forces of globalized trade and investment, falling regulatory barriers, and rapid technological innovation. The old complacent world of static equilibrium has given way to the dynamic world of shifting equilibria. These changes are creating new opportunities as well as new challenges for consumers, businesses and governments. No where is this more true than among our group of dynamic Asia-Pacific nations.

As we noted last year in Auckland, there has been a fundamental shift in economic philosophy over the past few years in many countries, away from interventionist approaches and towards a new vision of an economy in which competitive market forces are the key factors in shaping this global economy. In particular, successive rounds of trade liberalization have enhanced market access worldwide, as government restrictions on the competitive movement of international goods and services have been reduced in several key sectors. This liberalization of trade and investment has been reinforced on the domestic side by an increasing trend towards privatization and deregulation in most countries of the world.

My presentation this morning will essentially be an overview of some aspects of competition policy. I will start out by briefly recounting some of the generally accepted objectives of competition policy as understood in selected jurisdictions. I will then discuss the interrelationship between competition policy and the concept of economic efficiency, detailing the treatment of efficiency in Canada's competition law. How the reliance on the application and enforcement of competition law and policy, rather than selective government assistance, can benefit a nation's international competitiveness will then be discussed. I will conclude by discussing, in broad terms, some of the linkages between competition policy and other policy areas like trade policy, industrial policy, regulatory reforms and intellectual property rights and talk about their implications.

2. Objectives of Competition Policy:

Within APEC, countries like the United States, Canada, Australia, New Zealand and Japan have a long history of applying and enforcing competition laws. As well, other APEC members like Mexico, Chile, the People's Republic of China, the Republic of Korea and Chinese Taipei have also been applying their respective competition laws or are about do so, while still others are in the process of developing their laws.

In Canada, the cornerstone of the law was set in place in 1889 with the enactment by the House of Commons of an "Act for the Prevention and Suppression of Combinations Formed in Restraint of Trade". Legislation governing competition within Canada has evolved significantly since then in response to changing perspectives on the economic priorities and practical approaches to administering a framework law on competition, as well as the accumulated knowledge of modern industrial economies which the design and application of antitrust law. Today's policy, embodied in the Competition Act of 1986, has retained the flavor of its historical origins while also representing a modern approach to competition policy, law and economics. Notwithstanding the many amendments over the years, the chief objectives of Canadian competition policy have remained: maintaining free competition, preventing abuses of market power, and achieving economic efficiency.¹

In the US., antitrust legislation has been a prominent component of national economic policy framework since the passing of the Sherman Act in 1890. The vigorous maintenance of unfettered competition has always been the central objective of the US. antitrust policy. Given the absolute, as well as, the relative size of the US. economy, the US. has tended to place a greater weight on consumer surplus considerations in comparison to jurisdictions like Canada. For example, mergers in the US. tend to get assessed principally in terms of their anticipated effect on consumer prices where as Canada prefers to adopt a "total welfare" approach in merger reviews.² I should make it clear, however, that the US. merger enforcement guidelines do allow the consideration of potential efficiency gains, although such gains are not generally seen as being sufficient to offset the anticompetitive effects of potentially higher prices for consumers.

Among the other APEC members, the principal objective of the Japanese Antimonopoly Act has traditionally been the promotion of free and fair competition. In Mexico, the principal objective of the Federal Law on Economic Competition is to protect the process of competition in the Mexican market, and enhance economic efficiency. In Australia, the recent revamping of the erstwhile Trade Practices Act was motivated by the strong belief that competition policy is a central element of the country's ongoing microeconomic reforms, emphasizing the efficiency gains that come from a competitive marketplace. And, in New Zealand, a cornerstone of the bold economic reforms initiated in that country over that last decade has been its competition policy with its focus on nurturing efficiency-enhancing rivalry in the marketplace and the extension of competition into public utilities and other previously-regulated sectors. Competition policy in the Chinese Taipei also seeks the twin goals of fostering competitive rivalry and the protection of consumers from deceptive business practices.

Finally, and outside the APEC, competition law in the European Union is guided by two underlying objectives which must be balanced against one another: the first is the usual competition policy objective of enhancing economic efficiency; at the same time, however, competition law is a cornerstone of the European project of promoting integration of the common market. In light of the market integration objective, the EU has traditionally taken a relatively harsh position against market-separating vertical restrictions, and a relatively tolerant position against horizontal arrangements that may allow corporate integration to facilitate regional integration.

3. Competition Policy and Economic Efficiency3:

The traditional economic underpinning for competition policy stemmed directly from the concept of perfect competition. As Dennis Mueller observed in a recent article: "Firms maximise profits and compete by price.

Consumers' surplus is maximised when competitors are prevented from colluding, from merging to increase market power, and from adopting other practices that might restrict competition or tend to create a monopoly."⁴

The role of competition policy in modern market economies is based directly on economists' understanding of the optimizing properties of competitive markets. The starting premise is that competition ensures that the prices paid by consumers are equivalent to the marginal costs of producing a good or a service, leading to efficient allocation of resources throughout the economy ("allocative efficiency").⁵ Competition is also generally believed to encourage firms to minimize their costs by adopting the best available technologies and organizational forms. This is sometimes referred to as "X-efficiency".⁶ From this perspective, the role of competition policy is to deter or remedy business transactions and practices that undermine efficiency by impeding the competitive process.⁷

While the benefits of competitive markets are widely accepted, the role of competition policy has sometimes been questioned on several grounds. On one level, critics such as Armentano argue that any threat of monopolization or cartelization is likely to be transitory, and consequently, that the benefits of competitive markets do not depend on continuing government intervention.⁸ They also question the role of competition or antitrust law on ideological grounds (i.e., as a limitation on "natural" rights of private property and freedom of contract). On another level, "Chicago School" theorists led by Robert Bork have argued that, in the past, antitrust policy (particularly in the United States) has interfered unnecessarily with allegedly efficient business practices, notably in the area of vertical contractual relations.⁹ These critics nonetheless support the core role of competition law and policy in dealing with interfirm agreements and mergers that restrict competition.

In the specific area of merger policy, analysts such as Eckbo and Weir have questioned the fundamental hypothesis that mergers or related anti-competitive practices create market power. This challenge is based primarily on empirical analysis of the effects of mergers on the stock prices of rival firms. On this basis, Eckbo and Weir argue that antitrust challenges of mergers should be abandoned.¹⁰

Although scholarly debate surrounding the effect of competition policies will undoubtedly continue, recent research on industrial organization effectively challenges the premise that antitrust intervention to counteract the exercise of market power is superfluous. This analysis shows clearly that mergers and inter-firm agreements can indeed cause significant welfare losses.¹¹ Studies of industries with market power have also confirmed that such power is prevalent and is attributable, in good measure, to anti-competitive conduct.¹²

With regard to the specific contributions of Eckbo and Weir, more recent analysis suggests that their policy inferences are misplaced. Specifically, their failure to find evidence of anti-competitive effects of mergers by examining stock market data can be attributed to the multiproduct nature of many participating firms and/or to other factors.¹³ Indeed, it may simply relfect the effectiveness of existing merger policies in deterring genuinely anti-competitive mergers.¹⁴ Analysis of individual mergers undertaken early in the history of the US. Sherman Act (before the legislation acquired an enforcement history sufficient to deter anti-competitive conduct) indicates the presence of significant anti-competitive effects.¹⁵ In this context, it should be noted that merger enforcement in both Canada and the United States focuses on only a small minority of transactions that are considered to have potentially anti-competitive consequences.

Recent research also highlights competition as a specific factor in increasing the rate at which multinational enterprises transfer technology into host countries such as Canada. In particular, competition ensures a continuous inflow of the best available technology within individual enterprises, enabling them to keep pace with competitors.¹⁶ This, in turn, enhances positive technological spillovers in the host country market, creating a "virtuous circle" of technological advancement and productivity growth.¹⁷

Competition may also foster productivity by spurring rapid adoption of improved managerial practices.¹⁸

In reflecting on the role of competition policy in a modern market economy, it is important to recognize that in some circumstances efficiency as an overall objective may justify arrangements that to some degree limit competition. Arrangements such as mergers and joint ventures which sometimes limit competition may nevertheless enhance overall economic welfare if they yield offsetting cost reductions through economies of scale, synergy or in other ways. Analytically, this is acknowledged in the "Williamson trade-off" between competition and efficiency in merger evaluations.¹⁹

An approach to competition policy that takes into account possible cost savings for producers as well as changes in consumer surpluses resulting from business transactions is sometimes referred to as a "total welfare" approach. Such an approach can be contrasted with a "consumer surplus" approach, which gives no particular weight to cost savings for producers that are not passed on to consumers.²⁰ Arguably, a total welfare approach is particularly appropriate for relatively smaller economies, where firms may not be operating at minimum efficient scale and where large market shares and high levels of concentration may be necessary to achieve economies of scale and specialization. However, such an approach may not be necessary in larger economies, where the relevant technical efficiencies can be achieved at lower concentration levels.

Finally, it should be stated that competition policy promotes public confidence in the competitive market system by providing a set of basic "rules of the game".²¹ This, in turn, helps to avoid other, more intrusive forms of government intervention (e.g., industry-specific regulatory controls) which can undermine the competitive system.

To summarize this section, the concept of economic efficiency provides an important theoretical underpinning for competition policy. While the protection of consumers from the undue exercise of market power by firms is clearly a desirable goal for competition authorities, the considerations that flow out of the Williamsonian trade-off between competition and efficiency are necessary in analyzing mergers and other forms of inter-firm arrangements. This recognition is confirmed by the observable convergence in the treatment of efficiency in the competition laws of both developed and developing economies.

3. 1. The Treatment of Efficiencies in Canada's Competition Law:

The notion of efficiency appears in both civil and criminal provisions of Canada's Competition Act. The purpose clause of the Act identifies efficiency prominently among other objectives. Beyond this, the civil sections concerned with specialization agreements and mergers speak explicitly of efficiency. Other sections of the Act also contain provisions that embody specific aspects of efficiency.

In its criminal treatment of conspiracy, the Act groups in a list nine specific defenses which could conceptually be viewed as embodying elements of efficiency. For example, one such defence is cooperation in R&D. However, it is made clear that such defences do not apply if the arrangement in question has anticompetitive effects. A separate defence for export consortia is similarly presented. Again, to be applicable, there must be no domestic anticompetitive effects; the agreement must affect only exports.

The treatment of specialization agreements represents an exception to the criminal law on conspiracy. Specialization agreements are defined as two or more parties' jointly rationalizing production. Each partner agrees to discontinue producing an article. Such agreements may be presented to the Competition Tribunal (a body created specifically for dealing with civil matters with a membership that combines economic and legal expertise) for registration and, if successful, the conspiracy section of the Act no longer applies. In deciding to register an agreement the Tribunal must conclude that the agreement is necessary for efficiencies that offset or exceed any lessening of competition that results -- that is, a tradeoff. The Act goes on to specify that the Tribunal shall consider the impact on trade as a factor in assessing gains in efficiency, though it is not limited in this regard. As well, the Act states that efficiency must not be inferred only from a redistribution of income.

Abuse of dominance is also subject to civil review by the Tribunal. Abuse is defined as anticompetitive activities practised by "one or more persons" who substantively or completely control a class of business. However the Act requires that in establishing anti-competitiveness the Tribunal "consider" whether the practice in question is the result of "superior competitive performance".

Mergers is one of two instances where the Act identifies efficiency, as such, as an issue. There are two exceptions to merger review that are associated with efficiency considerations. The first is the exception granted to joint ventures. A joint venture is defined as a combination of two or more parties which entails a commitment of assets and which undertakes a specific, time-limited project or a program of research and development. A joint venture may be anticompetitive so long as this is limited to what is necessary for the project to be effected, and the venture involves no change in control of any party. Efficiency is not explicitly at issue, but these requirements suggest a tradeoff between efficiency and competition.

The second exception -- in addition to joint ventures -- to the merger review process is explicitly directed to efficiencies. It calls for a tradeoff between gains to efficiency and any lessening of competition where a merger is necessary for efficiency. Thus, the Act states:

"The Tribunal shall not make an order ... if it finds that the merger ... is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition ... and that the gains in efficiency would not likely be attained if the order were made."

Similar to specialization agreements, trade effects should be considered in assessing gains to efficiency, and that efficiency should not be inferred where only redistribution of income occurs.

Efficiencies are limited to Canadian production, calculated on post-merger output, and they must be real, exclusive of transfers. Thus, savings in resources associated with such things as scale and transactions costs would qualify, but reductions in pecuniary costs due to increased bargaining power with suppliers or workers would not. Efficiencies may include those in other markets, where there is no anticompetitive impact, but only if they are inextricably linked to the market in question.

There are two classes of potential efficiency: production and dynamic efficiencies. Dynamic efficiencies, which are associated with the development of new products and techniques, are hard to measure, and so would have only a qualitative weight. Production efficiencies would include reduced per unit operating and fixed costs as a result of lengthened production lines or the integration of new activities -- economies of scale and scope. Claimed efficiencies of this type more easily lend themselves to objective verification and should be supported by such documentation as accounting statements or engineering studies. Another type of production efficiency is the transfer of existing, but superior, know-how and technology from one organization to another.

Claimed efficiencies only have weight if they are contingent on the merger being sustained, raising the question of other, less anticompetitive alternatives to the merger, including internal growth, joint ventures, specialization agreements, licensing, or third-party mergers. Generally, alternative mergers are considered only if there is concrete reason for expecting them to proceed. Joint ventures, licensing or other contractual alternatives are considered only if they represent standard industry practice. The possibility of internal growth is assessed taking into account the growth of the industry, excess capacity and, thus, the possibility of incremental expansion.

Competition and competitiveness are distinct but related concepts, and should be seen as such. It is worth stressing that competition policy protects and promotes the competitive process, not individual competitors. Competition is seen as a dynamic process in which the constant pressure to improve and adjust to changing market conditions can only be met by firms operating in a flexible, unrestrained setting. Competitiveness, on the other hand, is sometimes seen as a proxy word for buttressing the hands of the incumbent and to prevent new entry, whether domestic or foreign. It is also seen frequently as a proxy for the promotion of non-economic objectives that would de-emphasize competitive rivalry as a catalyst for allocative efficiency.

The use of government policy tools to provide support to "national champions" in order to maintain or enhance a country's international competitiveness can, at best, be of limited value, and at worst, distort the allocation of resources and thus hamper longer-term economic growth. There is a parallel to such policy behavior in monetary policy and it is known as "cheap money" policy. As has been proven many times and for many countries, any advantage in international competitiveness, acquired through induced inflation and a deliberate depreciation of a country's currency, are purely transient and they do much greater harm in the longer-run. On the other hand, superiority in terms of price, quality and choice, acquired by operating in a competitive environment, can be the basis of a sustainable international competitiveness. This argument was highlighted particularly by Michael Porter in his Competitive Advantage of Nations.²²

Porter argued that domestic rivalry is particularly effective in promoting competitive advantages. Traditional thinking postulated that: (a) competition in the international marketplace prevents national firms from creating or exercising market power domestically; and, (b) faced with intense competition in the global market, national firms should be allowed to grow through the exercise of monopoly power, acquisitions and strategic alliances, i.e. the need for "national champions" should have precedence over competition policy considerations. In refuting this line of thinking, Porter argued that (a) a vigorously-enforced competition policy is critical in fostering domestic rivalry that spurs innovation and efficiency; (b) a well-designed competition policy promotes efficiency-enhancing vertical arrangements; and, (c) competition rules should, therefore, be among the guiding principles in domestic regulatory reforms.²³

Porter also argued that while the formation of a local industry is normally triggered by a single factor, such as natural resources or domestic demand, for an industry to flourish, domestic rivalry is nearly always necessary.²⁴ One unambiguous finding in Porter's analysis is that domestic rivalry is conducive to sustained success in international markets.

Finally, the realities of contemporary markets have given a new meaning to staying competitive. With trade barriers coming down and new and innovative product development taking place all around, companies are no longer insulated from competition even if they choose to focus exclusively on the "domestic" market. Businesses are, in effect, "competing abroad" even if they do not export and even if they are content with local markets. To remain truly competitive, businesses must hone their enterprising skills that can only happen when faced with the healthy rivalry that competition policy can foster.

5. Competition Policy and its linkages with other policy areas:

A noteworthy feature of the 1990s is the growing extent of linkages between different economic policy areas. This has certainly been true for competition policy. Indeed, competition policy principles have become an important consideration in the design and implementation of a broad range of other economic policies, including trade policy, industrial policy, policies in respect of international investment, industry-specific regulatory reforms and intellectual property rights. In each of these areas, competition policy can and must contribute importantly to wider government initiatives relating to the efficient operation of markets.

5. 1. The relationship between competition policy and liberalized trade policy

Taking into account the new realities flowing from globalization, three stylized facts emerge:

1. freer international trade increases the scope for employing competition law;

2. competition policy can play an important role in sustaining and expanding the effectiveness of international and domestic trade policies; and

3. there can be both congruence and conflict between the two policy fields.

Focusing on the last of the above stylized facts, as with any two sets of policies, there are areas of both congruence as well as conflict. In a broad sense, there is a fundamental congruence between competition policy objectives and those of liberal trade policy. These include the promotion of economic efficiency and innovation through open markets and competition. This complementarity was recognized as far back as the Havana charter of 1947 and the International Trade Organization that was proposed at that time.

From a trade policy perspective, the primary focus is generally upon public impediments to trade. Competition policy complements liberal trade policy by preventing private restrictions on cross-border flows of goods, services, investment and technology. From a competition policy perspective, increased international trade and investment can lessen the impact of anti-competitive practices in domestic markets. International flows of goods, services and capital can, therefore, affect the assessment of relevant markets, barriers to entry and market power. Both policies also possess such common attributes as non-discrimination based on nationality, transparency and an emphasis on due process.

However, in some instances, competition and trade policy may not be conducive to open, competitive markets and cross-border flows. In the case of trade policy, it has sometimes been argued that trade remedies like anti-dumping and countervail actions have the effect of segmenting international markets and to enhance the market power of one country's businesses. As well, a variety of non-traditional, non-tariff barriers like Voluntary Export Restraints (VERs) or similar arrangements, have sometimes been used to the same effect. Trade policy practitioners have countered this by arguing that anti-dumping, other trade remedy laws, and other trade measures are needed to counteract the injurious effects of international price perdition and price discrimination, particularly in respect of producers and workers.

Competition policy has also been criticized for errors of commission and, particularly, omission. The former include explicit exceptions made in competition law for export cartels. The latter include uneven enforcement and limitations on the coverage of the law with respect to domestic monopolies, consortia, and access to national distribution systems.

Competition policy has been identified as one of the new trade issues that the WTO will likely deal with in the near future. A number of proposals have already been made for the WTO Ministerial in Singapore to initiate work on competition issues, through the establishment of a working group. Given the overall thrusts of the two policy regimes, the competition implications of trade measures and the trade effects of competition measures will clearly need to be identified and defined in this proposed working group or in some other appropriate forum.

5. 2. The relationship between competition policy and industrial policy²⁵

In a broad sense, the term "industrial policy" may include the full range of measures that governments employ to promote an efficient industrial stricture on an economy-wide basis. Such measures can include the provision of direct support for R&D, training programs, as well as tax or other measures to facilitate desired structural adjustment. In a narrower sense, the term "industrial policy" is also used to describe a subset of economic policies that seek to provide special advantages or assistance to particular industries or firms. These may include direct or indirect subsidies as well as preferential government procurement and tariffs or other forms of trade protection.

Economists have long recognized legitimate theoretical rationale for government intervention in support of particular industries or activities. These include the infant industry argument and the existence of positive externalities (spillovers) in relation to labor force training and development.²⁶ However, economists have also expressed skepticism regarding the practical effects of industrial policies and their contribution to economic performance. A key reason for such skepticism relates to the concept of "rent seeking".²⁷ This concept recognizes that, in practice, government support for industries is extensively influenced by interest group pressures. As a result, legitimate efficiency-related objectives may be supplanted by naked protectionism and the artificial preservation of inefficient industries.²⁸

Besides the role of rent seeking and interest groups, doubts have been expressed about the ability of government agencies to systematically identify "winners" that merit support, given the uncertain outcome of economic change and innovation. When policy makers assess the costs associated with direct industrial subsidies as well as preferential government procurement, the claimed benefits of interventionist industrial policies are open to question.

In the latter part of the 1980s, the concept of industrial policy received fresh support from developments in the economic literature on international trade and industrial organization. A key development in this regard was the literature on "strategic trade and industrial policy."²⁹ This literature identifies a wide range of situations not dealt with in the earlier trade policy literature in which government intervention can theoretically improve national economic welfare. These situations typically involve imperfect competition, dynamic economies of scale and/or first mover advantages.³⁰ These conditions are widely postulated to be characteristic of many high tech and other "new" industries. Thus, on the surface, the strategic trade policy literature provides a rationale for extensive government intervention in the form of subsidies, tariffs or other measures as a means of promoting economic growth. But even here, it has been recognized that theoretically plausible rationales for limited intervention can all too easily lend themselves to rent seeking and protectionism.³¹

It might instead be more useful to take a broader, economy-wide concept of industrial policy. From this perspective, competition policy strengthens the incentives for continual innovation and enhances economic efficiency and thus should be viewed as a key element of an effective economic framework. Today this role of competition policy is widely recognized, nothing the key contribution competition policy can make to national economic welfare by ensuring that when market efficiencies are foregone for other policy objectives, the process recognises the competitive market implications and that the costs of doing so are transparent.

5. 3. Industry-Specific Regulatory Reform and Privatization

The subject of direct government regulation of particular economic sectors has long been recognized as having an important interface with competition policy. Economic regulation often serves to limit competition in particular industries.³² Conversely, the application of competition policy can in some cases ameliorate inefficiencies resulting from regulation. A key thrust of microeconomic policy reform in both developed and developing market economies in recent years has been to reduce the extent of industries covered by direct regulatory controls, while maximizing the scope for operation of competitive market forces within the context of surviving regulatory regimes.³³

With regard to regulatory reform issues, some of the key industries of interest include telecommunications, broadcasting, energy, financial services and agriculture. Reconsideration of the role of regulation in these sectors is being prompted by a combination of: (i) far-reaching technological changes; (ii) reduced concerns relating to perceived natural monopoly characteristics of the industry; and (iii) major changes in the international policy environment, such as the implementation of the Uruguay Round Multilateral Trade Agreement. Competition advocacy in these sectors can have a positive effect on the competitivess of key user industries and thus benefit global economic welfare while at the same time promoting the international competitiveness of national firms.

5. 4. The Competition Policy-Intellectual Property Interface

Intellectual property rights are another subject-matter which has long been recognized to have an important interface with competition policy. In the 1990s, this area is expected to give rise to increasingly complex issues requiring competition policy input.³⁴ A particular focus of attention will be on the efficiency implications of intellectual property rights that permit rights holders to segment international markets.³⁵ Other issues of interest relate to the treatment of domestic and international licensing arrangements and the availability of remedies for potential anti-competitive abuses of patents and copyrights. The resolution of these issues impacts directly on the allocation of economic resources and the incentives for efficient innovation and diffusion of new technology.

5. 5. Implications of Growing Policy Linkages

The growing links between competition policy and other economic policy fields clearly enhance the importance of competition policy as an aspect of the legislative and policy framework for a dynamic market economy. In addition, as competition policy grows in the range of its applications, it is inevitable that government departments and constituencies representing other major economic policies (e.g., industrial and trade policy) will take greater interest in the content and application of competition policy. In many respects, this will enhance the role of competition authorities and their ability to promote the efficient operation of markets. At the same time, however, a challenge will be to ensure that these policy linkages do not erode the necessary independence of competition agencies in their core investigative and prosecutorial functions. Competition authorities will thus be required to participate effectively in extending the scope and reach of competition policy principles while maintaining appropriate independence and impartiality in the core function of competition law administration.

5. 6. Conclusion

The emergence of regional trading blocs like APEC, the successful conclusion of the Uruguay Round and the establishment of the WTO, and the wide-ranging regulatory reforms currently underway throughout the world underline the need for a well-designed and judiciously-enforced competition policy. The pursuit of economic efficiency requires a well-functioning competition policy to:

• ensure that long term economic growth and consumer well-being are fostered by competition;

• ensure that the elimination of government-imposed trade barriers are not offset by private restraints on trade like cartels, horizontal and vertical arrangements that impede market access; and

• facilitate competitiveness in sectors which are not yet under the discipline of international market forces.