The Coherence of EU Trade, Competition, and Industry Policies in the High Tech Sector: The Case of the Telecoms Services Sector

This paper assesses the coherence of industrial policy, competition policy and trade policy in the European Union (EU). This assessment is undertaken from the perspective of the optimal deployment of economic policies as prescribed by economic analysis,. In doing so, it takes into consideration the legal mandate of and institutional constraints imposed by EU treaties and regulations. The analysis shows that, as a result of the limited policy tools available to the Union, trade and competition policies have to serve the pursuance of several competing goals. This multiplicity of objectives leads to sub-optimal interventions. Policy inconsistencies also arise between trade/competition policies and the industrial policies pursued by individual member states. Current practice leads to inefficient outcomes in both mature and sunrise industries. These inefficiencies could be reduced with a reinforcement of integration policies (notably, state aid control). Other policy conflicts, mostly between trade and competition policies, are also discussed. the paper argues that the current institutional arrangements allow for a strengthening of centralised industrial policy, which could be usefully utilised to achieve more efficient outcomes.

  • Authors: Dominique Foray, Pauline Rutsaert and Luc Soete
  • Year: 1995
  • Organisation: Tinbergen Institute
  • Publisher: Maastricht Economic Research Institute on Innovation and Technology
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