Investment and Competition Policy in Developing Countries: Implications of and for the WTO
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Overview: This paper evaluates the impact on developing countries of the prohibition of Trade Related Investment Measures (TRIMs). The economic impact of implementing the TRIMs Agreement in GATT 1994, and more generally of liberalizing investment measures, is likely to be negative and significant for developing countries. Overall, the impact is likely to be significantly adverse. Competition measures would be required in any new round of trade negotiations under the WTO to mitigate these adverse impacts, and the implied impact of competition measures is significantly positive. However, multilateral competition policy would be difficult to agree and implement and the paper considers alternative strategies that developing countries could adopt. The optimal strategy proposed is that governments should adopt measures to promote competition -- between local firms and between multinationals investing in the economy.
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Format: HTML | Date: Mar 2000 | Pages: 1
