An official of the World Trade Organization (WTO) has underscored the need for developing countries like the Philippines to implement policies that lower risk to attract more foreign direct investments.

Robert D. Anderson, counsellor of WTO secretariat told participants of a seminar organized by the International Trade Centre in cooperation with the Universal Access to Competitiveness and Trade (U-ACT) that Asian and developing countries with free trade regime that promotes competition could maximize the benefits of foreign direct investments (FDIs).

Anderson noted that the business environment can affect both the magnitude and quality of FDIs, which are crucial for development and growth.

"Host countries with liberal trade policies more likely attract FDI that is export-oriented, in addition to seeking to supply the domestic market," he said.

"A foreign investor in a competitive business environment is more likely to bring in and maintain top quality bundle of productive assets such as state-of-the-art technology and entrepreneurial know-how."

Anderson said competition policy was included on the international trade agenda considering the ability of anti-competitive practices to hinder market access and undermine the intended benefits of trade liberalization.

However, while competition policy is important, Asian and other developing countries are against WTO negotiations on such policy.

Anderson traced this to concerns on costs of implementing a WTO agreement on competition policy and required domestic laws or institutions and the perceived intrusion on the developing countries' policy space.

Provisions on such policies in international trade and similar treaties should be structured to optimize their benefits for the participating countries.