Consumers Get More Value In Competitive Business Environment – Prof. Mathis


Professor on international trade laws at the Amsterdam Law School in Holland, Dr. James Mathis has said that competition would deliver more value to consumers.
He argued that competition produced rivalry, which in turn forced manufacturers to lower their prices to the benefit of consumers. He noted however, that lower prices could lead to a cut in employment.
Dr. Mathis is in Jamaica on the invitation of the Fair Trading Commission as part of its 10th anniversary celebrations and to deliver this year’s lecture at the fourth annual Shirley Playfair Lecture series.
The international trade expert has been a consultant to the World Trade Organisation (WTO) and the United Nations Conference on Trade and Development (UNCTAD) for several years.
In arguing the case for competition, the Professor told JIS News that competition would force producers to be more efficient in order to successfully compete on the world market.
He added that with reduced tariff barriers across markets, producers would operate under a more global platform and not in a protected marketing arrangement, as previously obtained. As a result, he observed that the WTO trade discussions were extremely important to businesses and of less visible importance to consumers. “Producers know what is going on in these (discussion) rounds because their sectors are affected by the kinds of deals that are cut,” he stated.
Producers would be looking for opportunities to go into new markets and to have other countries lower their tariff barriers while having their own local market protected from foreign competition, he said.
As such, Dr. Mathis noted that a primary issue in the WTO trade round now taking place in Cancun, Mexico, was the agricultural negotiations and the kinds of deals that would be cut for this sector.
He further pointed out that with competition, businesses tend to act in a collusive manner to manipulate the market. “They get together with other companies to try to set the market (and) to try to reset the barriers so they can have the same prices they used to have with tariff barriers,” he explained.
The WTO consultant explained that over the past decade, several developing countries had called on international trading systems to address this kind of cartel activity. He said the WTO Conference in Cancun was looking at the issue of cartels as “we are learning in the modern era that there are massive international cartel problems in the global economy”.
He said the European Union (EU) would be pushing for WTO member countries to have legislative provisions that ban hard-core cartels. These include, “competitor horizontal arrangements that fix prices, rig markets, rig-bidding for government contracts, limit supply, cut output etc. in order to segment and close out markets”, the Professor pointed out.
“The EU wants each country to have the domestic legal capacity to try to enforce this prohibition according to the circumstances of their own markets,” he said.

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