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WTO: Reduce Unfair Trade Practices

December 19, 1997

GENEVA (AP) _ With growth in world trade expected to slow next year, countries should do more to reduce unfair trade practices, the World Trade Organization says.

Nations need to coordinate their competition laws or maybe even create an international watchdog to reduce so-called ``beggar thy neighbor″ trade practices, said a WTO report released Friday.

``There seems to be a widespread view that enhanced international cooperation is desirable,″ said Adrian Otten, a WTO director.

With the financial turmoil in Asia, some economists expect a slowing of world trade. Asia has been a key source of growth for Western economies, and the crisis is expected to curb demand for Western goods and investment.

The WTO study cited the dispute between photo film giants Fuji of Japan and Eastman Kodak of the United States as the sort of trade fight that could be resolved by stricter or better enforced national trade laws.

The WTO has tentatively ruled in favor of Fuji in the case, rejecting claims that Fuji conspired with the Japanese government to keep Kodak products out of Japan.

The report said the Geneva-based trade body had ``limited provisions″ to deal with these cases.

Some 70 countries, including the United States and the 15 countries of the European Union, have competition laws to guard against restrictive practices by firms or national governments, the study said.

China introduced national legislation in 1993 and a raft of Central European, African, Asian and Latin American nations have done the same during the 1990s.

The extension of international trade rules into a number of new areas is promoting fair competition between countries and their firms, the report said.

``It is unlikely this process will slow down or go into reverse,″ it said.

But it said the effectiveness of fair trade laws was limited because a large number of countries still do not have them.

Moreover, it said questions also have been raised about the extent to which national regulators respond to foreigners’ complaints.

And although there are a growing number of regional trade arrangements promoting fair trade, for example within Europe and the Americas, most are non-binding.

In the United States, Japan, EU countries and Sweden, farming is among the sectors which enjoy some type of exemption from national competition policy. Manufacturing, transportation, communications and energy industries are also exempted in some countries.

``There is growing recognition internationally of the need to review the extent of such exemptions,″ the report said.

Among its recommendations were establishing a global body to set internationally recognized norms and making enforcement authorities more responsive to complaints from foreigners.

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