Trade and competition policy in the framework of African countires

Abstract

The globalization and liberalization of the world economy have brought to the forefront the debate on the issues of fair competition in international trade. The opening up of economies and markets to inward foreign direct (FDI) and other forms of participation by transnational corporations (TNCs) can contribute directly towards increasing the contestability of host country markets in that these markets can now be entered by firms from other countries by establishing affiliates that produce goods and services for sale within the host country and thereby compete with domestic firms. Furthermore, TNCs may be better able than domestic firms in a host country to overcome some of the cost-related barriers to entry that limit the number of firms in some industries and thereby result in the collapse of the domestic based industries.