Linking competition and trade policies in Central and Eastern European countries

The authors explore options for Central and Eastern Europe (CEE) governments to make competition law enforcement more sensitive to trade and investment policy, thereby supporting liberal trade policy. The competition laws of these countries tend to resemble European Union (EU) competition disciplines (Article 85 - 86 of the Treaty of Rome), but give competition authorities great scope for discretion in interpreting the relevant statutes. Much can be done through appropriate wording of criteria and implementation guidelines within the framework of existing legislation to subject trade policy to competition policy scrutiny. A liberal trade policy and active enforcement of competition laws will be crucialnot only for national welfare, but also for eliminating the threat of contingent protection by EU firms. When CEE countries face antidumping threats or action from EU countries, the authors suggest that they seek a link between competition law enforcement and antidumping investigation in the context of the association agreements with the European Union. That is, the European Commission could be asked to apply competition policy criteria in antidumping investigations against products originating in CEE countries, ensuring that there is a threat to competition, not just a threat to a European Union competitor. This treatment could be sought informally during the transitional period. Generally, since the CEE countries have adopted competition legislation comparable to that of the European Union, it seems safe to assume that if they enforce their competition laws vigorously, EU consistent minimum standards will be respected. Until the association agreements are fully implemented, it is important to reduce to a minimum the risk of being treated as an"unfair trader."Safeguard actions will remain possible until EU membership has been attained. But safeguard protection is more difficult to seek and obtain if there is only a weak case for arguing that Central and Easter European firms are benefiting from trade barriers, state aids, or various government maintained entry barriers.