RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/M/21
26 May 2003
(03-2805)
Working Group on the Interaction
between Trade and Competition Policy
REPORT ON THE MEETING OF 20-21 FEBRUARY 2003
Note by the Secretariat
1. The twenty-first meeting of the Working Group on the Interaction between Trade and
Competition Policy took place on 20-21 February 2003, under the Chairmanship of
Professor Frédéric Jenny.
2. As had been agreed at the informal meeting of the Working Group on 17 January 2003, the
agenda for the Working Group's meeting consisted of the following items:
- Elements contained in paragraph 25 of the Doha Ministerial Declaration, including
matters raised and questions posed in 2002 to which delegations wish to revert;
- The nature and scope of compliance mechanisms that might be applicable under a
multilateral framework on competition policy
- Possible elements of progressivity and flexibility that might be included in an
eventual multilateral framework on competition policy
- Technical assistance, as called for in paragraph 24 of the Doha Ministerial
Declaration;  and
- Other business, including stocktaking of national experience and legislation.
I. ELEMENTS CONTAINED IN PARAGRAPH 25 OF THE DOHA MINISTERIAL
DECLARATION, INCLUDING MATTERS RAI SED AND QUESTIONS POSED IN 2002 TO
WHICH DELEGATIONS WISH TO REVERT
3. The representative of Korea introduced a written submission relevant to this item
(WT/WGTCP/W/225). The Working Group also had before it an initial version of a Study being
prepared under the responsibility of the Secretariat, with the assistance of a consultant, on Issues
Relating to a Possible Multilateral Framework on Competition Policy (circulated in the form of a non-paper as JOB(03)/31)).   In addition, the representatives of China, Thailand
, the Czech Republic , India ,
Canada, the United States , the European Community and its member States,  Cuba , Chile ,
Hong Kong, China, Poland , Switzerland , Malaysia , Colombia  and Tunisia  made oral statements or
posed questions on this item (the texts of the interventions of Canada and China  were subsequently
circulated in documents WT/WGTCP/W/226 and 227, respectively).  The observers from the OECD
and UNCTAD provided updates on relevant activities of their organisations.
4. The representative of Korea, introducing document WT/WGTCP/W/225, stated that among
the elements contained in paragraph 25 of the Doha Ministerial Declaration, that concerning hardcore
cartels was the only area in which a multilateral framework on competition policy would require the
adoption of substantive provisions.  The reason for this was that hardcore cartels were the mostWT/WGTCP/M/21
Page 2
egregious form of competition law violation and that they imposed heavy costs on the economies of
countries, particularly developing countries, that lacked effective tools to deal with them. The
definition of hardcore cartels that could be f ound in the OECD Recommendation on Hardcore Cartels1
provided an approach that was also appropriate to  implementing the Doha mandate on this matter.  To
ensure the effective suppression of cartels, Members needed to adopt clear provisions againsthardcore cartels in their respective national legisl ation (or appropriate regional instruments) and to
establish enforcement authorities where these were lacking, although it was not strictly necessary to
establish a stand-alone, specialised agency or commission for this purpose.  Given that some
Members did not have competition laws or lacked sufficient expertise and resources to effectively
enforce competition rules, developing countries should benefit from appropriate transition periods
concerning this aspect of the proposed multilateral framework.  At the same time, given the enormous
damage caused by hardcore cartels in markets for goods and services in all parts of the world, it wouldnot be in the interest of Members to delay unduly the adoption of effective measures in this area.
5. Turning to the matter of modalities for voluntary cooperation, he stressed the importance of
this aspect of the proposed framework.  While recognising that significant discrepancies existedamong Members in terms of the extent of their e xperience in competition law enforcement, and that
effective cooperation required the development of mutual trust over time, he nonetheless maintained
that the proposed modalities for cooperation would contribute importantly to the success of the
proposed framework.  Indeed, promoting broader c ooperation in the enforcement of competition law
than existed at present was the necessary and appropriate response to the proliferation of cartels andother anti-competitive practices with a transnational dimension which could not be effectively
controlled by individual countries acting alone.  Over time, voluntary cooperation in the framework of
the WTO would also prove to be a tremendous stimulus to the cross-national learning and voluntary
convergence in Members' policies in this area.  The term "voluntary" had both a legal and an ethical
dimension.  In legal terms, "voluntary" meant that cooperation should not be binding, thus Membersshould not be forced to co-operate against their ow n interests.  Nevertheless, he intended to focus on
the ethical aspect, taking into account the purpose  of including voluntary cooperation among the
concepts listed by the Doha Development Agenda as elements to be clarified by the Working Group.
In terms of ethics, the word "voluntary" implied that countries, especially developed countries, should
respect a self-imposed obligation of cooperation in good faith, in particular voluntary cooperationshould not be so arbitrary that it contradict the reasonable expectations of other Members.  With
reference to the clarification exercise that was called for under the Doha Ministerial Declaration,
although in a literal sense, "cooperation" occurred  reciprocally between countries, it had to be
recognized that there were significant disparities between developed and developing countries in this
area.  Accordingly, countries with more experience in competition law enforcement had a duty to
assist other countries, especially developing countr ies, in getting started.  Although concerns had been
voiced by some countries as to whether developing  countries would actually benefit from voluntary
cooperation in this field, he stressed that such countries had the most to gain since developed
countries already had channels through which they could (in many cases) obtain the information
necessary to protect their interests; it was developing countries that largely lacked access to the
information that was necessary to protect their interests vis-à-vis cartels and other harmful practices.
Nevertheless, it would be important to monitor the implementation of the proposed cooperationmodalities, to ensure that information was flowing to the countries that needed it most.  Certainly,
cooperation was more likely to be provided with the leverage of a multilateral framework than on a
purely bilateral basis.
6. With regard to specific modalities for coopera tion, in the view of his delegation they would
include general sharing of information and experience, consultations, case-specific cooperation and
technical assistance.  Case-specific cooperation and technical assistance were particularly important.
                                                     
1 Recommendation of the OECD Council Concerning Effective Action against Hard Core Cartels,
adopted by the OECD Council at its 921st Session on 25 March 1998, [C(98)35/FINAL].WT/WGTCP/M/21
Page 3
The establishment of a WTO competition policy committee would facilitate the exchange of
information and experience among Members, and it ensure the efficient implementation of a
multilateral framework.
7. The representative of China, in an intervention the text of which was subsequently circulated
as document WT/WGTCP/W/226, said that the final version of the OECD paper on Core Principles in
a Trade and Competition Context (WT/WGTCP/W/221) was an important contribution to the
Working Group's discussions on this agenda item.  The core principles of transparency, non-
discrimination and procedural fairness were of fundamental importance to a possible multilateral
framework on trade and competition policy.  Those principles were already reflected in China's
existing domestic competition legislation, and would be fully respected in the future development of
China’s competition law.  Therefore, his delegation supported the incorporation of those three
principles into a future multilateral framework on trade and competition.  However, China was adeveloping country, with limited experience in the operation of a market economy.  While it already
had a set of legal instruments for the establishment, development and further improvement of its
economic system, its competition legislation was far from being comprehensive and complete.  There
was much room even for improving the implementation of the existing laws and regulations.  To meet
the needs of its national economic system and to implement its commitments made in the process of
acceding to the WTO, China had been accelerating the drafting of its Anti-Monopoly Law.  In the
near future, that work would focus on resolving problems related to monopolistic practices by
economic and administrative agents.
8. Continuing, he said that his delegation recognised that some developing country WTO
Members had more experience than China in the area of competition policy, since they had a longerhistory of reliance on a market economy.  At the same time, some developing country Members were
behind China in this area.  As a matter of fact, many developing countries did not yet have national
competition legislation.  This was a basic and fundamental issue, which the Working Group had to
fully take into account and accommodate when discussing and negotiating a set of multilateral rules
on trade and competition policy.  In its future work on possible negotiations on a multilateralframework, the Working Group should bear in mind the specific difficulties faced by developing
countries, such as the possible excessive burden arising from the requirements for transparency, the
problems with applying the principle of non-discrimination, in particular as regards national
treatment, the necessary protection of weak, small and infant industries as well as the interrelationship
between foreign investment policy and competition policy.
9. Turning to the individual core principles, his delegation supported the inclusion of the
principle of transparency in a future multilatera l framework, provided that there was an explicit
consensus before the Cancún Ministerial Conference on modalities for negotiating such a framework.
The principle of transparency was in line with China's Law on Legislation and its draft Anti-
Monopoly Law, both of which required the publication of all applicable laws, regulations and
administrative rulings in a comprehensive and timely manner.  Nevertheless, transparency covered a
wide range of areas.  He noted that the paper submitted by the OECD already covered five aspects.While it might be easy for developed countries to adhere to all those five aspects, for the foreseeable
future, for most developing countries, including China, it would be a great success to achieve the first
two aspects, i.e., transparency with respect to access to the law and implementing regulations, and
access to case decisions, including their legal basis.  Other aspects of transparency, such as the
transparency of theories and analyses applied, would entail too heavy a burden for developingcountries.  Therefore, his delegation supported the point made by Thailand in its submission
(WT/WGTCP/W/213/Rev.1, p. 3) that developing countries should be given sufficient time to build
up mechanisms for transparency and procedural fairness.
10. As to non-discrimination, he noted that China's existing Law against Unfair Competition
placed domestic and foreign firms on an equal footing, and thus observed this principle.  Further, hisdelegation believed in the philosophy that the purpose of competition law was to ensure theWT/WGTCP/M/21
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competitive nature of the market as a whole.  At the same time, his delegation was very much
concerned about the potential for conflict between competition policy and industrial and development
policy objectives.  Developing countries needed flexibility in introducing the principle of non-
discrimination – in particular its national treatment aspect – into their legislation and its enforcement.
Such flexibility should also be reflected in a future multilateral framework on trade and competitionpolicy.  The flexibility provided for developing country Members in existing WTO Agreements was
inadequate in the context of competition policy.  Given the differences between developing and
developed countries in terms of the system and size of their economies, economic structures, levels of
economic development, and the size and competitiveness of various industries and enterprises, many
of the specific de jure or de facto distinctions in the treatment of domestic and foreign enterprises
referenced by the submission of the OECD could not be completely avoided in developing countries.
11. Concerning the principle of procedural fairness, his delegation agreed that this principle
should be incorporated in any future multilateral framework on competition policy.  China had a Law
on Administrative Reviews, a Law on Administrative Litigation and a Law on Administrative
Sanctions to ensure procedural fairness in administration, including the administration of competition
policy.  However, procedural fairness related not only to legal provisions but also to many specific
and complicated technical practices.  It was not a simple matter to resolve, and the Working Groupneeded more detailed discussions on that.  In any event, his delegation believed that each Member
was entitled to design, establish and maintain its own procedural system that was suitable to its
specific national conditions and its level of development.  In conclusion, he said that if negotiations
on a multilateral framework on trade and competition were to be launched, the three core principles of
transparency, non-discrimination and procedural fairness should be incorporated into that frameworkwith a view to enhancing “the contribution of competition policy to international trade and
development”
2.  At the same time, adequate and effective special and differential treatment should be
accorded to developing countries, including least developed countries, in all related aspects.  In this
respect, as well, his delegation shared the concerns expressed by Thailand and other developing
country Members.
12. The representative of Thailand suggested that Members needed to prioritise the various issues
at hand by asking what was the single most important objective of having a multilateral agreement on
competition law policy.  Was it to ensure greater market access or to ensure fairer cross-border trade?
If the answer was the former, one would want to ensure that Members agreed on having a national
competition regime that would at least contain the basic substantive provisions (abuse of dominance,
collusive practices and mergers) and embrace the proposed core principles of non-discrimination,transparency and due process.  If the answer was the latter, Members needed to think about ways to
protect smaller economies from the abusive power of multi-national corporations (MNCs).
13. As a developing country, Thailand believed that it was time to shift the emphasis from the
“quantity” to the “quality” of cross border trade.  If MNCs were allowed to engage in anti-competitive
practices unrestrained, Thailand would be sceptical about further liberalising its economy and thus
subjecting it to the whims and exploitation of large multinational enterprises.  Since the WTO was a
rules-based organisation, and it was time to have a rule against the most offensive and damagingcross-border trade practices to date:  price-fixing cartels.  Such cartels had no redeeming virtue, and
were considered a “crime” in many national jurisdictions, including developed and developing
countries.  Accordingly, the Working Group should consider the possibility of developing a
multilateral rule against international cartels since – due to its extra-territorial nature – that problem
could only be addressed through broad-based international action.  Her delegation was not looking fora comprehensive international competition law, but rather for a multilateral rule that would prohibit
price-fixing cartels operating across borders.  It should be left to Members to decide in the light of
their own constitutional requirements whether or not they should enact a national competition law.
Enhanced levels of technical assistance and capacity building were important for the development of
                                                     
2 Doha Ministerial Declaration, para. 23.WT/WGTCP/M/21
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competition policy and competition culture in developing countries.  In this regard, she proposed that
the WTO implement dedicated capacity building programmes in cooperation with other relevant
organisations, such as UNCTAD, and donor countries.  In addition, the proponents of a multilateral
framework should provide long-term technical assistance and capacity building to developing
countries both before and after the adoption of their domestic competition laws.  Voluntarycooperation between competition authorities could certainly be useful.  However, in the context of
international cartels, only a binding commitment to a dhere to an international rule would be effective;
a voluntary arrangement or a peer review mechanism was not suitable to address such a serious and
widespread problem of global dimensions.
14. Continuing, she said that the various core princi ples that had been proposed for inclusion in a
multilateral framework on competition policy had universal merit.  However, the manner in which
each country established transparency and due process in its investigation and adjudication proceduresdepended on its legal, economic, institutional and social environment.  Developed countries should
unilaterally commit to those principles since most such countries would have few compliance
problems in this area.  However, developing countries should be allowed to adopt the principles on a
voluntary basis.  Further, technical assistance should be provided to help Members draft national
competition laws that would embody the relevant prin ciples and/or to develop guidelines that would
ensure greater transparency and due process in impl ementing the law.  Sectoral exemptions should be
allowed on the basis of national industrial policy.  However, she agreed that the process of granting
such exemptions needed to be transparent.  Othe r broad exemptions, such as “block exemptions” for
export and international cartels, could not be justified on efficiency grounds, and therefore should be
abolished from all national competition laws.  In that context, developed countries should moveunilaterally to show their genuine commitment to fairer conditions of global trade, free from anti-
competitive practices.  She supported inclusion of the principle of special and differential treatment in
the multilateral framework that had been envisioned as a fourth core principle.  In particular,
developing countries should be allowed to exempt export and international cartels and to adopt greater
transparency and due process in the administration and enforcement of national competition laws on avoluntary basis.  This would encourage less advanced Members to successfully cultivate and
strengthen their competition regimes over time.  In closing, she stressed that if negotiations on
competition policy in the Doha round were to bring genuine benefits to developing countries, they
should entail a binding commitment on the part of developed countries to remove the block
exemptions for export and international cartels from their national laws.  Further discussion might
involve the possibility of a WTO rule prohibiting hard core cartels and the adoption of core principles
in national competition laws.  Finally, it was not clear that Members were yet prepared to enternegotiations on competition policy since many Members did not yet have experience in this area.
15. The representative of the Czech Republic said that the adoption of effective provisions on
hardcore cartels in domestic legislation would be an important element of a multilateral framework on
competition.  Hardcore cartels, including agreemen ts on price-fixing, bid rigging, output restrictions
and market sharing, imposed heavy costs on consumers and the economic welfare of transition anddeveloping economies, and were rightly considered as the most serious breaches of competition law.
They raised the prices and restricted the supply of essential goods and services (including industrial
inputs), which made such goods and services unavailable to some users and unnecessarily expensive
for others.  Further, cartels reduced pressures on participating enterprises' cost control and propensity
to innovate. In his country, the Act on the Protec tion of Competition had explicitly prohibited such
practices since the beginning of the transformation process.  Legal provisions on the prohibition of
hardcore cartels had to be accompanied by efficien t enforcement authority with sufficient power to
investigate and punish cartel behaviour.  The actual organisational arrangements might vary from one
country to another;  nevertheless, the existence of a sufficiently robust investigative and enforcement
mechanism was a basic precondition of any action against hardcore cartels.  In the Czech Republic,the Office for the Protection of Competition was empowered to impose a fine of up to 10% of the
annual turnover of undertakings participating in a cartel.  In the course of investigations, the Office
had access to a number of investigative instrument s, including the power to conduct a so-calledWT/WGTCP/M/21
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"surprise inspection" on the premises of enterprises, which was a particularly useful instrument for
investigating cartels.  Further, to facilitate the disc losure of hardcore cartels, the Office had adopted a
"leniency programme".  The programme provided for a substantial reduction in, or the total
elimination of, sanctions imposed on the participan ts to a cartel that provided the Office with
information and evidence about the existence of a cartel.  To establish full transparency of this newinstrument, the leniency program had been introduced at a special press conference, and was regularly
mentioned in the press reports of the Office.  The program had proved to be an efficient tool in the
fight of cartels in a number of countries.
16. The representative of India noted that the Working Group had completed one round of
discussions on all of the issues that it had been asked to clarify by Ministers at Doha; his delegation
had been participating actively in those discussions in the study mode.  WTO technical assistance and
capacity building efforts in collaboration with UNCTAD had been more pronounced and concerted inthe field of competition policy than in other areas for which such activities had been mandated by the
Doha Ministerial Conference.  However, the requirements of Members differed;  in particular, a
number of WTO Members still did not have a competition law, and therefore needed a different type
of technical assistance and capacity building.  Furt hermore, it would be useful if greater attention
could be given to the implications, particularly in terms of limitations on development policy, that anagreement on principles such as non-discrimination might entail.  Continuing, he noted that a number
of Members had made the point that special and differential treatment should be a core principle of
any multilateral framework.  As for non-discrimination, the point had been made that this principle
might not be applicable to competition policy in the same sense and for the same purposes for which
it was used in trade policy.  Non-discrimination among unequals would be tantamount todiscrimination.  Moreover, non-discrimination under the GATT and GATS Agreements applied to
like products or to the provision of services under like circumstances.  The discussions on de jure
versus de facto approaches to discrimination had made it clear that a transparent and enforceable
competition law in WTO Members was an essential requirement for any effective framework on
competition policy as had been proposed.
17. With regard to hardcore cartels, the discussions on this point had revealed a substantial
divergence of views.  While addressing such arrangements was a clear priority, the measures to be
adopted needed to take into account the economic conditions and the stage of development of
participating countries, especially developing countries.  The definition in the OECD
Recommendation referred to horizontal agreements involving price fixing, bid rigging, market sharing
and quantity limitation as hard core cartels in that they did not bring any efficiency or other benefits to
economic players other than those who were parties to such arrangements.  Detailed analysis wasnecessary to see if this applied equally in the co ntext of developing countries.  For instance, the
delegation of Thailand had suggested in the meeting of 1-2 July 2002 that only bid rigging and price
fixing deserved to be considered as hard core cartels; the other arrangements mentioned might have
pro-efficiency effects in developing countries, and might thus need to be assessed under a rule of
reason (case-by-case) approach.
18. The Doha mandate was concerned with the role of competition policy in regard to
international trade. In fact, the Working Group itse lf had been set up at the Singapore Ministerial
Conference to study the interaction between trad e and competition policy.  Competition policy per se
did not have any place in the WTO, while competition policy as related to trade had to be evaluated
based on its merits.  As regards hardcore cartels, there had been suggestions that export cartels shouldbe excluded from any framework because of their pro-efficiency effects.  At the same time, it had
been argued that any framework should apply to domestic cartels.  The economic basis for this was
far from clear, particularly in the context of discussions on a possible multilateral framework where
the driving force was not only what was good for the national economy but what was also good from
a larger global perspective.WT/WGTCP/M/21
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19. For several Members, the way in which compliance mechanisms would work in a multilateral
framework on competition policy had not been made sufficiently clear.  For developing countries,
voluntary cooperation limited to case-specific matters might not bring any significant value added.  If
countries that were unwilling to co-operate, for whatever reason, could take refuge under
confidentiality or other grounds, developing countries lacking the required clout would be particularlyhandicapped.  A road map was required for addressing horizontal agreements and vertical
arrangements that were anti-competitive in nature  in a possible framework – while keeping in mind
the relationship with trade and the special circumstances of developing countries, notably through
incorporation of special and differential treatment as a core principle.  Flexibility in the form of
transition periods and sectoral exclusions on a time-bound basis and subject to periodic review, as
proposed by the proponents, might not be sufficient to provide the required flexibility to countries at
lower levels of development.  Flexibility with respect to provisions on non-discrimination wasparticularly important.  A GATS-type approach would only provide flexibility to developed countries,
where international hardcore cartels were largel y based.  Flexibility for commitment at their own
pace, consistent with their stage of development, should be limited to developing countries.
20. The representative of Canada, in an intervention the text of which was subsequently
circulated as document WT/WGTCP/W/226, said that her delegation supported the establishment of a
framework on competition policy which would provide important benefits for all Members.  In
particular, it would ensure that the gains from liberalisation were not undermined by anti-competitive
behaviour of private actors.  Developing countries that lacked the necessary legislation and/or enforc
enforcement powers were among the most vulnerable to the effects of anti-competitive activities,
notably international cartels.  A multilateral framework on competition policy would establish acoherent set of principles for sound competition policy among all Members, and would promote a
more transparent and predictable climate to encourage foreign trade and investment.  It would also
contribute to the building of institutional capacity in developing countries, and would assist Members
without a law in drafting an appropriate law and establishing an enforcement authority.  Further, an
agreement in the WTO would reduce the enormous costs of global anti-competitive practices, such ashardcore cartels, to the world economy and specifically to developing countries, and would benefit
consumers by promoting competitive prices and product choice.  Finally, an agreement would
encourage beneficial cooperation among Members which was important given the increasing
prevalence of cross-border anti-competitive activities.
21. Continuing, she recognised that to achieve the stated benefits of a multilateral framework on
competition policy, Members needed to address the challenges involved in reaching and ultimately
implementing such a framework.  These challenges  would be borne disproportionately by developing
countries which should, therefore, be at the centre of the Working Group's discussions.  Competition
law and policy aimed to ensure efficiency in the marketplace and helped to put scarce resources to
their best use.  Without competition law and policy, the scarce resources of developing countries
would be wasted.  She believed that each Member should have the capacity and tools to effectively
deter and remedy anti-competitive practices to ensure more competitive and efficient marketplaces.The Working Group needed to focus seriously on how to address the challenges faced by developing
countries, for example through firm commitments regarding capacity building and technical
assistance.  In addition, flexibility and progressivity were crucial for ensuring that international
commitments made by Members did not hinder their ability to pursue domestic policy objectives.
22. Paragraphs 23-25 of the Doha Ministerial Declaration provided a useful guide for defining the
elements of a possible agreement.  Regarding core principles, there seemed to be a broad degree of
agreement that a multilateral framework on comp etition policy should draw upon and be consistent
with the principles of non-discrimination, transparency and procedural fairness.  There had also been
much debate over how the principles could be tailored for the purposes of competition policy.  She
agreed with the European Communities and its member states that a multilateral framework wouldestablish a solid basis for dealing with competition policy issues which had an impact on international
trade and that a long-term goal might be to work towards greater convergence.  She also saw value inWT/WGTCP/M/21
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highlighting the principles of progressivity and flexib ility in regard to any commitments to establish a
competition law and authority (including at the regional level).  In particular, flexibility and
progressivity were important with respect to the substantive scope of a law, the powers of
enforcement authorities, and the ability to define the scope and modalities of exclusions and
exemptions.  Her delegation was strongly committed to a competition law and policy that did notmake distinctions on the basis of nationality.  To do otherwise would go against the principles of
competition policy in addition to those of the WTO.  At the same time, ability of competition
authorities to exercise discretion was a valid feature of the enforcement process which should not be
undermined by dispute settlement panels.  In this regard, her delegation had serious concerns with
subjecting competition obligations to binding WTO dispute settlement.  It supported a non-binding
mechanism, such as peer review, through which Members could address a wide array of issues of
mutual interest.
23. With regard to the scope and purpose of a multilateral framework, she agreed with a point
made in the submission by the European Communities and its member States (WT/WGTCP/W/222)
that, by making the operation of domestic markets more efficient and transparent, effective
competition policies enabled traders and investors to benefit from existing market access conditions
but did not necessarily confer greater access.  Nonetheless, it was clear that, if the application ofcompetition policy was ineffective, the benefits of existing market access concessions might not be
realized.  While binding core principles backed up by dispute settlement was not the solution, she
urged Members to explore how best to ensure that concerns regarding the application of the law could
be addressed in a non-binding way.  At the same time, it was clear that any multilateral framework
would need to provide sufficient flexibility to allow Members to pursue other national policies orstrategies.  From the perspective of Members that lacked a competition law or enforcement capacity, a
multilateral framework would encourage all Members to adopt the tools and capacity to effectively
address anti-competitive business practices within their markets, including the practices of
multinational corporations.  Non-discrimination provisions should not be extended to cover existing
or future cooperation agreements, in order to avoid possible MFN implications.  She noted, further,that the European Community and its member St ates had identified the need for transparency
commitments in terms of laws, regulations and guidel ines of general application.  She agreed that it
was important for those items to be made transparent through appropriate publication and notification
procedures.  Transparency was particularly important with regard to exceptions and exclusions.  She
recognised, however, that transparency obligations could place more burden on Members with less
experienced competition regimes.  Therefore, a multilateral framework on competition balance
progressivity in this area with the necessary degree of technical assistance.
24. Continuing, she suggested that certain basic provisions regarding procedural fairness should
be enumerated in a WTO agreement on competition policy.  Such provisions were necessary to
provide assurances to parties affected by competition investigations that the proper procedures were
followed in order to protect their rights and interests.  She agreed with other Members that notice of
charges, fair and equitable administrative proceedings, and an appeal process, could provide therequired checks and balances to the claims of relevant parties. Members should have the flexibility to
implement those elements differently to reflect their different legal traditions.  She also noted the need
to distinguish the obligations and commitments of signatories or Member countries from the rights of
private parties to recourse under a WTO agreement.  Similarly to other WTO Agreements, she
assumed that obligations in a competition agreement would be on Member states, as opposed toprivate parties.  She referred to certain compleme ntarities and linkages between core principles and
the other elements of the Doha Declaration.  For example, adherence to common principles would
enhance cooperation among Members and reduce the likelihood of conflicts between jurisdictions.
This was increasingly important in a world of international anti-competitive activities. Developing
common core principles could also help to improve the institutional capacity of competition regimesin developing countries.WT/WGTCP/M/21
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25. Turning to hardcore cartels and voluntary cooperation, another representative of the same
delegation said that the Doha Declaration and the discussions in the Working Group at its meeting in
July 2002 (WT/WGTCP/M/18) had confirmed that hardcore cartels had harmful effects on the
economies of Members and on international trade.  This concern underlay the need for a multilateral
ban on such cartels.  Certainly, cartels were not a phenomenon that should be of concern only todeveloped countries.  In fact, cartel members often tried to evade the authorities by carrying out their
activities in jurisdictions lacking competition laws or relevant enforcement experience.  In addition to
the harmful effects of cartels on developing countrie s in terms of the raising of prices for socially
important goods and services, other possible detrimental effects included inhibiting the international
transfer of technology.  Addressing the structure of provisions on hardcore cartels in a multilateral
agreement on competition policy, she noted that a clear prohibition was required.  In this respect,
Members needed to ensure a balance between a clear and precise definition of the types of cartels thatwere banned, and flexibility to allow pro-competitive arrangements or partnerships.  While there were
differences between domestic cartel laws and exemptions, there was a growing convergence in
thinking in the competition comm unity as to the types of agreements that were clearly anti-
competitive and should be banned. Canada was currently considering possible reforms to its
conspiracy provisions in order to ensure that truly egregious agreements between competitors wereprohibited outright under the criminal provisions, while other agreements that might have pro-
competitive aspects could be assessed pursuant to civil law provisions under a rule of reason
approach.  Such reforms were expected to provide more clarity and certainty to the business
community, and would ensure the compatibility of the Canadian Competition Act with the laws of
other countries.  The OECD Recommendation on Hardcore Cartels provided valuable guidance inregard to the definition of cartel practices that should be banned.  Any definition should be
sufficiently broad to include domestic and international cartels.  Domestic cartels were as harmful as
international cartels, not only to the domestic economy and consumers, but also to trade and the
interests of other countries.  The issues of effective sanctions to deter cartels, and enforcement powers
and investigative tools to detect secretive cartel activities, also merited consideration.  While theprosecution of cartels would be at the discretion of  each Member, Members could identify appropriate
investigative tools and effective sanctions for cartels.  The OECD Recommendation was also relevant
in this respect.  One possibility would be to supp lement the basic provisions on hardcore cartels in a
multilateral framework with voluntary guidelines elaborating on the types of enforcement powers and
penalties needed to ensure that the ban was effective.
26. Continuing, with regard to the matter of modalities for voluntary cooperation, she noted that
the scope of cooperation on competition policy in the WTO could extend beyond cartels.  As herdelegation had stated, hardcore cartels were best treated as part of a comprehensive national
competition law and policy.  Given the interrelations between different types of anti-competitive
activities, there were complementarities in having a broad law and enforcement regime.  Without
prejudging the outcome of any WTO agreement, her delegation believed that discussions on
modalities for voluntary cooperation did not need to be limited to cartels.  In any event, cooperationwas voluntary in nature, and while case-specific cooperation would be a component of any modalities
in a WTO agreement, cooperation at the WTO would to a large extent involve more general
exchanges of information and experiences at that tim e.  Discussions at the preceding meeting of the
Working Group had focussed on two levels of cooperation:  general and case-specific.  Concerning
the former, like some other Members, her delegation had suggested a number of roles for a possibleWTO Competition Policy Committee, including providing a forum for exchanging non-confidential
information, co-ordinating technical assistance,  examining the interac tion between trade and
competition policy issues, and providing a forum for non-binding peer review.  The role of any
Committee was primarily to enhance exchanges among Members to help improve an understanding of
competition policy issues faced in Member countries, and their potential relationship withinternational trade.  Through peer review, Members could share experiences about anti-competitive
practices that could affect the interests of other Members, and the kind of cooperation that would be
valuable to effectively address such activities.WT/WGTCP/M/21
Page 10
27. Turning to case-specific cooperation, at the preceding meeting of the Working Group a
number of Members had outlined their with regard to the types of cooperation mechanisms in bilateral
cooperation agreements.  The view had been expressed that any cooperation at the WTO would
complement, rather than replace, case-specific enforcement cooperation between agencies under
bilateral cooperation agreements, recognising that these bilateral relationships were based on mutualtrust and had developed over time. Nonetheless, it had also been recognised that many
anti-competitive practices were international in nature and could affect the interests of multiple
countries.  To successfully combat such activities, a collaborative effort was often required.  Many
Members, including Canada, relied on bilateral cooperation agreements to co-operate with foreign
counterparts, but such arrangements did not apply to all Members.  Like bilateral cooperation
agreements, cooperation in the WTO would need to be voluntary.  It was not any area where binding
commitments would be appropriate.  In addition to being voluntary, a framework for cooperation atthe WTO should be flexible.  Over time, cooperation could evolve from informal exchanges to formal
procedures.  Any WTO provisions on cooperation would need to be flexible in order to take into
consideration the differences in Members' competi tion regimes, and the fact that cooperation could
evolve over time as more experience was gained.  As a first step, provisions on the exchange of non-
confidential information could be a valuable cooperation mechanism among Members.
28. The representative of the United States, commenting on the submission of the European
Community and its member States for the Group's meeting of 20 November 2002
(WT/WGTCP/W/222), said that although the Group was not engaged in a process of negotiation, the
paper helped the Working Group do precisely what the Doha mandate called for it to do, which was to
clarify the core principles and other elements mentioned therein.  Regarding non-discrimination, heagreed that any provisions on this should apply only to domestic competition laws, and not to other
laws and policies.  He also agreed that bilateral antitrust cooperation agreements should not be subject
to review under non-discrimination provisions.  In particular, application of the MFN principle to
bilateral antitrust cooperation agreements could provide a strong disincentive for countries to enter
into such agreements.  He also posed a number of questions on the basis of the paper.  In the paper,the European Community and its member States had stated that it was proposing a binding core
principle only with respect to de jure  discrimination in the domestic competition law framework.  The
paper went on to state that non-discrimination prov isions would apply to the “treatment accorded to
firms according to the wording of the laws, regulations and guidelines of general application.”  He
requested further clarification on the following three related points: (i) what would be encompassed
by the term “guidelines of general application?”;  (ii) how would the proposal on non-discrimination
be interpreted in common law countries where the “law” consisted of both antitrust statutes written inbroad language and judicial decisions interpreting such statutes?; and (iii) would the European
Community and its member States contemplate use of individual cases as factual evidence of
compliance with the core principles?  In other words, if dispute settlement were to apply to non-
discrimination, would there be any circumstances under which a dispute settlement panel would look
to individual cases in order to consider how the domestic law had been interpreted or to determinewhether non-compliance had occurred?  Would a WTO Member be able to defend against a complaint
adequately without citing to past cases and patterns of enforcement? Was it even possible to prevent
review of individual cases in the WTO system, where it was common for a dispute settlement panel to
consider how a law had been interpreted? Finally, he noted with interest the observation of it being
difficult “to imagine any situation in which a competition law regime would establish a distinction onthe basis of the nationality of firms and that the discussions in the Working Group have shown no
such examples.”  If this was the case — and he tended to agree — then he would question the value of
an obligation that had the potential of exposing compliant competition law regimes to frivolous
claims.  In other words, if the competition experts in the Group agreed that the competition laws of
the Members did not discriminate, what was the problem that the Group was trying to solve, and whysubject any Member’s competition law to possible review by a dispute settlement panel on an issue
that did not seem to be obviously problematic?WT/WGTCP/M/21
Page 11
29. Continuing, he said that the paper raised sim ilar issues regarding the proposed principle of
transparency.  The European Community and its member States had proposed that WTO Members
“ensure public availability in a comprehensive and timely manner — be it in print or on a publicly
accessible web site — of all laws, regulations and guidelines of general application.”  Each WTO
Member would also be required to notify the WTO Competition Policy Committee of its “laws,regulations, and guidelines of general application.” Again, (i) what constituted “guidelines of general
application?”  (ii) How would the European Community and its member States envision this
obligation applying to common law countries?  Would they be required to notify the Committee of
every judicial decision relating competition policy?  In the United States alone, there were hundreds
of such cases each year at all levels of federal judiciary.  Even though these decisions were publicly
available, it would not seem  practical — or of much value — for the U.S. antitrust authorities to
notify the WTO of each and every one of them.  A subscription to one of the many antitrust tradepublications would probably be more cost effective and readily available to an antitrust agency than
such a cumbersome notification process.  Would common law countries be required to notify the
Committee of judicial decisions relating to competition policy?  With respect to procedural fairness,
he appreciated the clarification that confidential in formation would be protected.  Still, his delegation
was left with some of the same questions that were raised in document WT/WGTCP/W/219.  Whilethe elements proposed by the European Community and its member States seemed generally
reasonable, they did not seem specific enough fo r a binding, dispute-settlement based WTO system.
For instance, (i) what was a “fair and equitable procedure?”; (ii) would the European Community and
its member States envision rights extending solely to those subject to adverse decisions?  Or, would
there be any instances where the competition framework would include rights for third-parties?  (iii)would the proposed right to appeal administrative decisions by competition authorities include review
of decisions not to pursue complaints? As his delegation noted at September meeting of the Group,
this was a particularly difficult subject area, because notions of fundamental fairness in the context of
law enforcement disciplines such as antitrust differed greatly from legal system to legal system.
Devising provisions on procedural fairness that were sufficiently general to respect the differingapproaches of various legal systems but were specific enough to provide adequate guidance to
competition authorities and dispute settlement pane ls remained a challenging exercise for the WTO
Members.  If the provisions were not sufficiently specific, it would not only make fair adjudication of
disputes difficult, but it also would create dangerous uncertainty because no one could reasonably
predict what systems might be challenged or what a dispute settlement panel might decide.
30. The representative of the European Commission and its member States, reiterating the main
elements of document WT/WGTCP/W/222 , emphasized that, first of all, his delegation did not
envisage harmonization of competition laws across the globe. It was obvious that the Members had
different legal and administrative systems and different economies.  There was the large divide
between developed and developing countries and many other sub-divides.  One size fits all would not
work – perhaps even less so in competition policy than in other fields.  What was proposed by his
delegation was the establishment of a short and basic set of common principles. As the delegation ofThailand had mentioned, the proposed principles were of universal application.  It was difficult to
understand why any countries should be exempted from their application.  The way these principles
would apply would vary according to the respective administrative and legal systems of the Members.
That in itself was, perhaps, the most important basic element of flexibility.  Reflecting on the
comments of the representative of the United States, in his experience it was odd and, perhaps,unprecedented in the WTO to be asked to provide the answers to such a broad array of questions
concerning a prospective legal text before a negotiation had begun.  There were, however, a number
of questions which had been asked in the Group which were legitimate and important.  Regarding the
scope of the proposal, he said that it would be useful if all WTO Members had competition laws
which extended beyond the issue of cartels.  This was already the case with many legislations aroundthe world.  To be sure, there had not been enough consensus for going beyond the issue of hardcore
cartels in terms of assuming a collective obligation to do something about that particular practice.
This did not mean that a competition agreement would not be of assistance to Members in going
beyond the issue of hardcore cartels.  It just meant that they would not be obliged to do so.  As regardsWT/WGTCP/M/21
Page 12
non-discrimination, his delegation had tried to reduce this principle to something which was
manageable and yet useful.  Non-discrimination did not mean prohibiting different treatment of
different economic operators in different situations.  That was not what was proposed. Rather, what
was proposed was that everywhere, economic operators in similar situations be treated similarly.  That
was the meaning of non-discrimination in the WTO.  A different question was, could a countrylegitimately decide not to apply a piece of its legislation to a sector, a company, or a situation, even
though it could theoretically make sense to do so?  That was what document WT/WGTCP/W/222 had
tried to address under the section on exemptions and exclusions.  Although all countries had a need
for this kind of flexibility, developing countries had, perhaps, a greater need than others.  A basic
condition for the exercise of such flexibility was transparency.  Investors and traders needed to know
the situation if, in a particular country and sector, they would not be protected by the rules of
competition law for whatever reason.  Of course, it would not be acceptable if competition became theexception and exclusions the rule.  However, the converse was not only perfectly acceptable, it was
what happened in the real world in all countries with a competition law.  Regarding transparency, he
acknowledged that the negotiation of  the Urug uay Round had shown the amount of work that was
done to implement the transparency provisions.  However, it was not a good idea to swing back to the
opposite approach. There were ways of reducing transparency obligations to manageable proportions.Putting forward a proposal which looked like a lega l text before the Ministerial in Cancún would also
be premature.  Regarding procedural fairness, his delegation had tried to strike a balance that the
representative of the United States did not yet find convincing.  Until the Group started considering
draft legal language (i.e, in a negotiation), it would not be possible to foresee and propose soultions
for all contingencies. However, several illustrations were available.  For instance, several examples ofthe obligation to have a judicial review could be found in the WTO legal texts. An obligation to have
judicial review should not be a threat for any Me mber. Such a provision would not go into "how" but
into "by whom".  It would not talk about the type of  tribunals (ordinary courts or specialized tribunals)
or about the number of levels of judicial review. This was to be decided as an aspect of a country's
legal system.  His delegation only proposed that administrative decisions should be subject to someform of judicial review.  There were several such provisions in the WTO agreements and there had
never been any problem arising from them.
31. Continuing, and referring to specific questions posed by the representative of the United
States on document WT/WGTCP/W/222, he said that his delegation had chosen the formula of
"guidelines of general application" since the meaning seemed fairly clear. The word 'regulation' could
have different meanings.  Within Europe, it meant different things in different member States and for
the European Community as a whole.  Talking about laws and regulation alone would not besufficient to convey the meaning of what his delegation was talking about.  The question about
common law systems was a key point. Again, it was a qu estion of defining the scope of the principle
in a legal text that the Members would agree on.  On the question of individual cases, he said that the
main reason why his delegation had explicitly limited the proposal to de jure  non-discrimination was
precisely because even though it would make sense and even though it was a common occurrence inWTO agreements that the application of the law was subject to review de jure  and de facto, in the
particular case of competition policy, his delegation did not see how a review of de facto
non-discrimination could be achieved without looking at individual cases.  If the review was limited
to de jure non-discrimination, there would be no need to look at individual cases because the object of
the review by a panel would be to look at the letter of the law and not at the way it is being applied.That was precisely the reason why his delegation had drawn this distinction between de jure  and de
facto.  Finally, he said that the intervention by China (subsequently issued in document
WT/WGTCP/W/227) was particularly interesting in that China was a developing country which had
recently acceded the WTO and had set out clearly what it saw were the advantages and disadvantages
of proposals in this area.  There was nothing in the Chinese intervention which could not be fullyaccommodated in a sensible negotiation.
32. Another representative of the same delegation, commenting on the paper of the delegation of
Korea (WT/WGTCP/W/225), said that, as had been set out lucidly in this paper, hardcore cartels wereWT/WGTCP/M/21
Page 13
condemned in the competition legislation of virtually all countries with such legislation and affected
both developed and developing country economies. The Group was therefore dealing with a global
problem.  On the question of voluntary cooperation, he noted that "voluntariness" would not be an
exception to what was presently existing; in fact, it was the norm.  In other words, existing bilateral
cooperation agreements were of a voluntary and not binding nature. Notwithstanding this, they hadbeen shown in a number of instances to yield real results and benefits. He urged the Group not to see
this issue as a question of a glass only half full but rather as a question of how less could actually in
practice achieve more.  With regard to the definition of hardcore cartels, both the UNCTAD Set of
Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices
(the "Set"),
3 and the OECD Recommendation on Hardcore Cartels could be instructive.  At this stage,
he did not want to venture further into what the definition would be - this was a question that would
eventually be within the scope of negotiations:  As to whether there was a need for all countries to
have a specialised agency charged with implementing and enforcing competition law, his delegation
was not seeking to prescribe a formula that would be applicable to all countries in all circumstances.
What it had always stressed was that the agency - and this word was used in a generic way – needed
to have sufficient powers to actually implement and en force the law.  It also had to be an agency of a
nature that could actually be a credible and real partner for international cooperation.  Beyond this,there was nothing in what was proposed that would make it impossible or incorrect for a Member to,
for example, have a multi-purpose agency, perhaps one that dealt with consumer protection,
competition policy and possibly even a broader range of issues or to adopt other institutional forms.
Concerning whether or not it would be appropriate to have transitional periods in connection with
hardcore cartels, his delegation's contribution had already addressed the need for everybody to have acertain degree of flexibility in terms of exclusions and exemptions and there might well be a greater
need on the part of developing countries to actually have transitional periods.  Beyond this, it was
important to ask whether a country would be well served by having transition periods on the issue of
hardcore cartels?  In this regard, one had to bear in mind that these practices affected consumers
(including user industries) in both developed and developing countries and constituted a globalproblem.  A further point on the Korean paper concerned what cooperation would actually mean
under a multilateral framework agreement.  In this re gard, there should at least be an obligation on the
part of WTO Members to consult, to listen and to hear the nature of the grievance or concern of
another WTO Member.  The actual cooperation which would follow from this would be voluntary in
nature.  As had been pointed out by the delegation of Canada, there were more and more examples of
anti-competitive practices which affected not only one or two countries, but a bigger group of
countries.  This was a key element of the justification for cooperation on competition policy in theframework of the WTO.  Nonetheless, cooperation at the regional or bilateral levels could exist side-
by-side with a WTO framework.
33. The representative of Cuba said that her delegation recognized that cartels had a negative
impact on Members' economies.  As a form of special and differential treatment, cartels that harmed
developing countries should, perhaps, be punished more severely.  On the subject of modalities forcooperation, one of the essential conditions was the existence of national legislation and authorities.
However, this condition had not been met since a fairly large minority of developing countries and
LDCs still had not established relevant legislation or competition authorities.  Therefore, it seemed
that it was not feasible to establish an obligation in  this respect, at least until the developed countries
and LDCs had developed their competition policies.  In the same way, her delegation did not supportthe adoption of provisions on cooperation in specific cases.  A possible multilateral framework should
be limited to the more general forms of cooperation, which should remain voluntary in nature.  If
cooperation was made mandatory, indirectly there would be an obligation to set up institutions. The
establishment of these institutions should depend on the level of economic development of each
country and on its particular features. She also referred to the possibility of establishing mandatorypeer review in the context of the WTO; this would be burdensome for developing countries.  If the
                                                     
3 United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of
Restrictive Business Practices (Geneva:  1980).WT/WGTCP/M/21
Page 14
purpose of this type of review was to provide technical assistance to developing countries, then it
should be voluntary.  Alluding to the various ideas that had been presented by India on S&D, she
suggested that this principle should be included in the list of core principles and should not be
considered as an additional principle in the multilateral framework.  The provisions relating to this
principle should be set out in a specific way and should be given priority for the benefit of thecompetitiveness of developing country firms which were mainly SMEs. The objective should be to
provide access by these firms to the markets of the developed countries.  S&D should also involve a
lengthy transitional period for developing countries so that they could gradually adapt their
legislations on anti-competitive practices, in accordance with their needs, without necessarily copying
the legislation of developed countries.  S&D should also provide the possibility of making exceptions
from competition rules or competition itself in particular sectors for reasons related to the
developmental needs of countries.  Such exceptions should not be subject to time limits.
34. The representative of Chile, commenting on the contribution of the European Community and
its member States (WT/WGTCP/W/222), said that Chile agreed with key elements of the approach to
a multilateral framework that were outlined in that document.  In particular, it agreed that a
multilateral framework should not involve the harmonisation of national competition rules.  On the
other hand, Chile did not agree that everyone need competition legislation. This was a key area forflexibility; Members should decide when and how to implement such legislation over time. On
transparency, Chile shared some of the concerns that had been expressed by the representative of the
United States.  Regarding sectoral exceptions, there seemed to be a degree of consensus that these
would be needed by most countries, at least in some cases, for example with respect to SMEs, social
policy and development policy.  It was reasonable that exceptions be subject to review over time, butthe obligation to eliminate them should not be prejudged.
35. The representative of Hong Kong, China, introducing her delegation's submission
(WT/WGTCP/W/224), noted that several Members had emphasized the importance of providing
adequate flexibility to ensure that Members could pursue their national policy concerns while meeting
obligations which were consistent with their domestic situations and developments.  The delegation ofChina had suggested that “each and every Member of the WTO is entitled to design, establish and
maintain its own procedural system that is suitable to its specific national conditions and in
accordance with its level of development.” 
 This was in line with the messages highlighted in her
delegation's submission.  The contribution of Ko rea (WT/WGTCP/W/225) had suggested that each
Member should establish some sort of law and enforcement mechanism against hardcore cartels and
that a transition period could be provided for deve loping countries that lacked competition laws or
lacked sufficient expertise and resources.  This did not address the concerns of those Members whochose not to have a competition law in view of their economic situation or national interest/policy.
She welcomed the clarification by the European Community and its member States that it was not
calling for a harmonization of domestic competition laws and that “ the proposed framework would be
fully compatible with existing and future differences in national competition regimes”
(WT/WGTCP/W/222).  She was interested to know the views of the European Community and itsmember States on how the proposed core principles could be applied in these economies. On
voluntary cooperation, she noted that Korea had suggested that case-specific international cooperation
was needed due to the increasing incidence of international anti-competitive practices.  However, the
representative of Canada also suggested that case-specific international cooperation should be a
component of voluntary cooperation and other delegations were of the view that that this type ofcooperation might call for a high degree of similarity in enforcement approach and experience, in
addition to having resource implications.  She invited Korea to comment on these views, in particular
on whether a similar enforcement approach was indeed called for.  As regards Korea’s suggestion to
establish an “obligatory” peer review, did this mean  that it would be compulsory for every Member to
participate, or did it imply that the recommendations/conclusions of the review should be“obligatory”?  She also wanted to know whether, in Korea's view, the proposed peer review system
would be the sole compliance mechanism (i.e. not co-existing with other mechanisms)?  If so, how
would the peer review be conducted?  Did Korea envisage the establishment of a dedicated forum andWT/WGTCP/M/21
Page 15
a dedicated team for preparing and conducting the peer review of all members?  If so, had Korea
given thought to the resources requirements , both on the WTO and on individual Members?
36. The representative of the United States said that paragraph 25 of the Doha Declaration called
for full account to be taken of the needs of developing and least developed countries and appropriate
flexibility provided to address them.  There were many ways to achieve this kind of flexibility.However, some ideas that had been expressed earlier in the meeting, particularly in the area of cartels
and cooperation, raised concerns. With regard to cartels, the problem that needed to be addressed was
the lack of universal condemnation and enforcement of appropriate laws relating to these practices.
All developed countries already banned cartels and most enforced legal prohibitions against them in
an increasingly vigilant manner. The main gap to be addresses, therefore, was in anti-cartel
enforcement in developing countries.  Developing countries that recognized the harm caused by
cartels and wanted to enact prohibitions against them should be encouraged to do so.  In the earlierdiscussion, however, the suggestion had been made that developing countries should permit domestic
and international cartels.  This was surprising and troubling because there was no evidence whatever
that permitting the operation of cartels – whether domestically or internationally – conferred
economic benefits or supported development goals.  On the contrary, there was a growing body of
evidence that the operation of cartels imposed significant costs on developing and developed countriesalike.  Therefore, any suggestion to legitimate and ratify the entry of companies in developing
countries into domestic or international cartels would be a step backward, not forwards.
37. Continuing, with regard to the call for prohibit ion of so-called "export cartels", he noted that
these arrangements typically were conceived as mechanisms for domestic entities that lacked the
resources to engage in effective export activity acting individually.  As such, they often had pro-competitive effects in that they added another player to the relevant markets and might bring
innovation or lower prices. Moreover, they were not secret and therefore did not bear the hallmarks of
what was traditionally considered to be a hardcore cartel. Hence, blanket condemnation or per se
treatment of such arrangements was inappropriate. If the effects of this kind of cartels were anti-
competitive, there was no impediment today to any jurisdiction affected enforcing their competition
law to prosecute their anti-competitive effects.
38. Referring to the suggestion that cooperation should not be voluntary with respect to
developed countries but should be coerced, one rationale that had been offered was that otherwise,
developed countries would "take refuge" behind confidentiality.  Confidentiality was not a refuge but
a basic procedural fairness right that was also essential to effective law enforcement.  Information or
evidence that was submitted pursuant to a particular country's jurisdiction over firms and subject to
the legal protections of that regime should not be dispersed to other jurisdictions withoutconsideration of those countries' jurisdictions over the firms and practices, how the information would
be used and the confidentiality protections that would be accorded to the information.  To do so would
inevitably reduce compliance with domestic proceedings.  An obvious example would be the
protection of informants who come forward, for ex ample, to report cartels under national leniency
programs.  A requirement to share information regardless of confidentiality protections would have acounterproductive effect on competition enforcement, not enhance it.
39. Concerning peer review, he agreed with the views expressed by the delegation of Canada
regarding its potential benefits.  In addition, he shared the concerns that had been cited by that
delegation regarding the effects of binding dispute settlement in respect of core principles.  Regarding
S&D and whether it should be a core principle, one ha d to ask "core principle of what?"  In his view,
the Group was discussing the core principles of a competition regime which were principally a matter
of substance, not of procedure.  Without prejudging what might be appropriate flexibility in the
context of paragraph 25 of the Doha declaration, the Group should have serious pause before
characterizing a procedural provision such as S&D as a so-called core principle.WT/WGTCP/M/21
Page 16
40. The representative of Poland said that competition law and policy were necessary both for
development and for the protection of consumers.  An effective enforcement capacity was needed to
make the law work.  This had to be built up over time and required assistance.  Polish experience
clearly showed that liberalizing trade and encour aging foreign direct investment brought heightened
the dangers posed by anti-competitive practices such as cartels.  A multilateral framework would alsobe useful to reinforce the application of competition law and policy at the national level.  The
framework itself would require and contribute to ca pacity-building efforts and would be reinforced by
the growth of mutual trust between competition authorities over time. To achieve this, it was not
necessary to harmonize national laws.  Rather, the set of rules and basic principles must be worked
out in a clear and transparent way.  Once a country started to implement a competition regime, it
would gain a better appreciation of the role of competition policy as a whole, including as a means to
improve the consumer welfare.
41. The representative of Switzerland said that the contribution of Korea (WT/WGTCP/W/225)
provided the opportunity to come back to a core idea before the Group, namely the role of
international cooperation. Like Korea, Switzerland believed that cooperation was an efficient means
to combat international cartels.  With regard to export cartels, as these had little domestic effects, they
could not be efficiently controlled punished by the national authorities of the home countries.However, the countries that would be competent to pursue these cartels, namely those in whose
markets the cartels operated, often lacked the necessary tools and information since the participating
firms were located abroad. These considerations were important for small countries that had not the
ability to get information from firms with main offices abroad. Given this, international cooperation
was an appropriate means to fight export-related arrangements that had demonstrable anti-competitiveeffects.
42. The representative of the European Community and its member States, responding to the
intervention by Hong Kong, China, said that the concern about not imposing the harmonisation of
laws could not be pushed to mean that it was not necessary to have a law at all.  His delegation started
from the premise that Members could agree to a set of principles which would underpin a competitionregime in all WTO Member countries.  If Members agreed to that set of principles, the question was
whether Members needed a competition law to implement a regime that fulfilled those principles.  His
delegation's answer was that Members did need a competition law of one kind or another to
implement such a regime.  They might use different types of laws, administrative and judicial
arrangements, but fundamentally, Members needed a competition law at the domestic level to
implement the multilateral framework.  He noted that the question for countries like Hong Kong,
China, that were not persuaded about that, was how else could a Member implement such amultilateral framework?  He would not object to alternatives provided that he could be persuaded that
Members they would enable Members to implement the kind of framework that the Working Group
was contemplating.
43. The representative of Thailand, reverting to the issue of international hardcore cartels, said
that this issue was at the centre of the Working Group's discussions because of its importance for
developing countries.  As the representative of Cana da had said, this should be the core concern of the
Group.  Since there seemed to be a consensus that hardcore cartels were damaging to Members'
economies, two approaches to dealing with them needed to be considered.   First, as had been
suggested by the European Communities and its member States, Members could deal with cartels by
passing national competition laws, establishing competition institutions and engaging in voluntarycooperation.  However, her delegation was not sure that this would be a workable solution.  This was
why it had suggested an alternative approach:  the adoption of a multilateral rule banning hardcore
cartels.  The definition of such cartels would be limited to bid-rigging and price-fixing, which were
already treated as crimes in several national competition laws.  These two practices, which were
blatant unfair trade practices, should be outlawed, or at least should be subject to the disputesettlement mechanism in the same way as other unfair trade practices, such as dumping, subsidies or
the violation of intellectual property rights.WT/WGTCP/M/21
Page 17
44. Continuing, on the subject of export cartels, she agreed these could sometimes be pro-
competitive or have efficiency-enhancing effects.  Her suggestion was simply that export cartels
should not benefit from a blanket exemption from competition laws, which would exclude them even
from scrutiny under a rule of reason (case-by-case) approach.  She referred to evidence suggesting
that most export cartels involved multinational co mpanies, not small and medium-sized enterprises,
which might need to bind together for efficiency purposes.  This was the basis of her suggestion that
export cartels should at least be subject to review und er a rule of reason.  Finally, she recognised that
– with the exception of liner shipping conferences – few national competition laws exempted
international cartels.  However, even if national competition laws condemned export cartels or
international cartels, the problem of extraterritori ality remained, namely that a small country, such as
Thailand, could do nothing to resolve situations involving imports from overseas that were subject to
anti-competitive arrangements.  Her concern was that, even with a national competition law, Thailandwould not be able to do anything against interna tional cartels that originated beyond its borders.
45. The representative of Malaysia said that her delegation saw difficulties in implementing a
multilateral framework for countries like Malaysia that did not have a competition law and policy.
Most developing countries now acknowledged the need to implement a national competition law or
policy, out of their own self-interest.  However, th ose countries, including Malaysia, also believed that
there was a need to take into account a country's level of development when implementing
competition policy.  Furthermore, because markets and culture were inseparable, and differed from
country to country, the form of competition policy implemented in each country should be different.
Accordingly, a multilateral framework on competition should take cognisance of, and accommodate, a
degree of pluralism in national competition policies, especially among developing countries.Malaysia had implemented a host of development policies since gaining independence in 1957.  Some
of those policies had proven to be crucial to the country's economic growth and development,
including an export-oriented industrialisation policy, the New Economic Policy, selective heavy-
industry import substitution policy, industrial polici es that promoted SMEs and a privatisation policy.
Such policies had to define the constraints within which a competition policy was implemented inMalaysia.  In other words, to be implemented in Malaysia, competition policy would have to take
account of and be influenced by these policies.  Other issues to be considered when implementing a
multilateral framework included possible inadequacies of national judicial systems with regard to the
interpretation and enforcement of competition law, and differences in business-related laws, civil
codes, and constitutions.  Her delegation also had a concern that implementation of a multilateral
framework would have implications for market access, which also needed to be addressed.
46. Continuing, she said that a multilateral fram ework on competition policy should provide for
special and differential treatment, including the right to exempt certain sectors from fully-fledged
competition.  There was a need to accommodate the myriad of Malaysia's existing economic policies,
with each serving a different set of objectives, by allowing for exemptions and authorisations within
the national competition policy framework.  Further, the WTO dispute settlement was not well suited
to review individual case decisions under national competition laws.  Subjecting such decisions,which were based on national enforcement regimes, to the dispute settlement mechanism might
infringe upon Members' sovereignty.  As to cooperation, she noted that the trend of implementing free
trade agreements provided an avenue for bilateral cooperation that could address competition issues in
the jurisdictions involved.  This would provide a structured approach for cooperation and information
exchange on the development, investigation and enforcement of competition policies.  Through suchagreements, developing countries might be able to build capacity and eventually achieve a
competition regime which met their socio-economic needs.  Finally, the lack of capacity in countries
such as Malaysia in terms of human resources and institutions needed to be seriously considered.
Financial and technical assistance was indispensable for the successful implementation of competition
law and policy.
47. The representative of Colombia, reflecting on the interventions of the European Community
and its member States and the United States wondered what would be the incentive for a country likeWT/WGTCP/M/21
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Colombia to have a competition agreement in the WT O.   Earlier, the main rationale had been the
possibility of cooperation.  However, the facts that cooperation was foreseen to be voluntary, that
there were different standards and levels of cooperation, and the clear inconveniences flowing from
confidentiality suggested that the benefits were unclear.  He noted the concern raised by the
representative of Switzerland regarding the difficul ty of investigating firms or conduct originating
abroad;  nevertheless, it was not clear that this need would be solved by the kind of agreement that
had been proposed.   It was difficult for his delegation to come to an informed decision on the matter
without a better understanding of these questions.  He was also felt that there had been a lack of
clarity during the discussion on the three proposed core principles, and had not heard a convincing
rationale for bringing the implementation of domestic competition laws under the dispute settlement
mechanism.
48. The representative of Tunisia said that a multilateral framework on competition policy would
assist developing countries to deal with harmful anti-competitive practices by multinational
corporations and to protect their national interests.  Currently, without such a framework, they lacked
the capacity to investigate and deal with practices such as cartels which were clearly harmful to them.
Although having national competition laws was generally a prerequisite to establishing policies based
on multilaterally agreed principles, there could be exceptions, as illustrated by various fields of WTOlaw where Members did not have domestic laws or regulations.  Such Members did not need to
establish their own national regulations, and could simp ly adhere to the multilateral framework.  For
countries enforcing domestic rules, transparency and equity on the national level was perhaps the
most important issue.  Such countries engaged in  very few commitments in terms of competition
policies vis-à-vis  other countries.  Those rules were restricted to the domestic territory, while it
seemed necessary to envisage these issues from an international viewpoint because if Members
liberalised their economies they had to take into account the action of multinational corporations.
49. The representative of Korea, responding to some of the comments on his delegation's paper,
said that he shared the concern about an asymmetr y of information and knowledge in favour of the
private sector. Voluntary cooperation under a mult ilateral framework on competition policy would
help to reduce that asymmetry.  Experience had shown that voluntary cooperation was not a
meaningless concept; rather, it had much to offer developing as well as developed countries.  Indeed,
in the previous year the Korean competition authority had received substantial help from developed
countries in addressing an international cartel case, which illustrated that international cooperation
could indeed provide important benefits.  Reflecting on the intervention by the representative of Hong
Kong, China, his delegation recognized the need for transition periods, but remained concerned about
the harmful effects of cartels and other anti-competitive practices on consumers and the developmentprospects of poor countries.  It would not be in the interest of such countries to exclude themselves for
excessive periods from a framework that would help them to grapple with problems facing their
economies.  On the nature of peer review, he said that all WTO Members should eventually be subject
to peer review; however, the scope and methods of the review would be subject to negotiations.  His
delegation's proposal for mandatory reviews took into account that peer review was ultimately a non-binding exercise in the sense that countries were not required to change their policies based on the
outcome of the review.
50. The representative of the European Communities and its member states, responding to the
question by Colombia on the incentive for joining a multilateral agreement, asked what was the
incentive for not joining, and what was the advantage of maintaining the status quo ?  The present
situation was that developing countries suffered extensive harm as a result of international cartel
practices, and often lacked the tools to address them.  As had been reflected in the comments of Korea
and other delegations, cooperation had different levels and facets. Cooperation on individual cases
was of the most concern.  There were limits to what Members could agree upon in a multilateral
agreement.  Therefore, while a multilateral framework would provide a platform for basic forms ofcooperation, some Members would continue to engage in case-specific cooperation on a bilateral
basis because only this would provide a setting where they could go to the level of sophisticationWT/WGTCP/M/21
Page 19
necessary to deal with confidential information.  Nevertheless, much information of a non-
confidential nature could usefully be exchanged.  Furthermore, case-specific cooperation was not the
only useful aspect of cooperation.  A multilateral framework would also provide a forum in which to
discuss in an open-minded fashion how competition laws and policies were shaped and applied.  That
was also the first step to building deeper relationships.
51. Turning to the Study of Issues Relating to a Possible Multilateral Framework on Competition
Policy which had been circulated to the Work ing Group in preliminary form (JOB/03(31)), the
representative of the Secretariat, introducing the study, recalled that it had been requested by the
Working Group at the Group's meeting on 1-2 July 2002 (WT/WGTCP/M/18, paragraphs 96-98).  Ithad been prepared in the context of paragraph 24 of the Doha Declaration which referred to technical
assistance and capacity-building, including policy analysis and development, in order to assist
developing and least developed countries to better evaluate the implications of closer multilateralcooperation in this area for their development policies and objectives (WT/MIN(01)/DEC/1,
paragraph 24). It was intended, firstly, to examine the question of the relationship between
competition policy and industrial policy, in particular the issue of dynamic efficiency gains and
whether competition policy or a multilateral fr amework on competition policy would affect the
realization of these.  The study was also intended to consider possible resource implications of anymultilateral framework in this area, in addition to looking at the impact of competition law and policy
in tackling anti-competitive practices of firms in a developing country setting.  The Secretariat had
made it clear at the time that it did not have the in-house resources to do a major study of this sort and
that it would have to have recourse to the services of a consultant.  Subsequently, it had obtained the
help of Dr. Simon Evenett, Director of Economic Research at the World Trade Institute which was
part of the University of Bern, who had prepared the study.  The study had been circulated in a
preliminary form at this stage to enable delegatio ns to provide any initial comments.  It would be
circulated in its final form for the Working Group's meeting in May.
52. The representatives of Korea; China
; Chinese Taipei ;  Kuwait ; Hong Kong, China ; Thailand ;
Mexico; Australia ; the European Community and its member States ; Tunisia ; Japan  and the United
States said that, on an initial reading, the study contained useful information and offered much to
reflect upon.  A number of delegations provided corrections and suggestions of a factual or textual
nature regarding their own experience, for incorporat ion in the final version of the study.  Continuing,
the representatives of Korea, the United States;   M e x i c o  and Australia  said that competition and
competition policy contributed positively to the realization of dynamic efficiency gains over time.Although this was alluded to in the study, it would be useful if it could be brought out even more
clearly.
53. The representative of Kuwait said that investment subsidies or tax credits that had
implications for the government's budget would also  have implications for citizens; this should be
reflected in the study.
54. The representative of  Hong Kong, China said that the report had discussed in detail some
perceived benefits for developing economies of putting in place competition laws.  However,
horizontal competition law was not a panacea. Unique domestic situations in different economies
could call for different approaches to deal with the same underlying issues.  The choice of not having
a competition law did not mean that one did not have a competition policy.
55. The representative of Thailand questioned the robustness of the relationship between the
existence of a national competition law and the ability to deal with international cartels, which was a
key premise of the study.  More quantitative evidence on this point would be of interest.
56. The representative of Mexico said that, although competition policy was not a panacea, it had
many benefits:  greater efficiency of markets; promoting technological development and innovation;
greater access for consumers to products and services; and helping to stimulate and maximize theWT/WGTCP/M/21
Page 20
benefits of foreign direct investment.  Far from impeding the attainment of greater efficiency,
including innovation and the use of efficient production technologies, it promoted them.  A
multilateral framework on competition policy should draw on the experience of the WTO's Members,
including Mexico.  His country's experience showed that the introduction of competition policy
brought many advantages and few inconveniences.  Cooperation and the exchange of information andexperience with other countries were vital to progress in this area, and should be supported.
57. The representative of Australia  said that one of the most significant implications of the study
was the observation that the majority of industrial policy instruments will not affect competition.  For
this reason, the likelihood of conflicts between competition and industrial policy was much less than
had sometimes been suggested.  One topic which could be further developed in the study concerned
the relationship between competition policy and natural monopolies.  In this context, the question was
not so much what governments needed to do to address harmful behaviour as to consider whatconstructive roles they could play to enhance competitive environments where underlying economic
circumstances might not otherwise produce those outcomes. The issue of network industries also
merited consideration, on a similar basis.  In the context of network industries, it might be the case
that government regulatory or other policies that were necessary for efficiency-related reasons could
in some ways be considered competition policy and, in other ways, as aspects of industrial policy.  Hedid not consider that a multilateral framework on competition policy should be viewed as having
potential benefits only in respect of the control of private anti-competitive practices.  While this was
clearly a major focus, publicly owned enterprises coul d also engages in practices that were harmful to
competition.  The study could also give more attention to the wider aspects of the debate in the
Working Group, for example the role of peer review mechanisms and the useful input they canprovide to the evolution of government policies in a wider sense.
58. The representative of the European Community and its member States said that, in the further
development of the study, it was important to bear in mind various distinctions that had been drawn in
the discussions in the Working Group, for example that between de jure  and de facto aspects of
discrimination, which would moderate the impact of the proposed principles.  Also, the availability oftransparency mechanisms could, in a sense, be resource and time-saving, in that they might lessen the
need for more intrusive approaches in a multilate ral context.  Another representative of the same
delegation said that a key contribution of the study would be to provide greater clarity with respect to
some concepts that were at the heart of the Working Group's discussion, for example industrial policy,
developmental policy, efficiency, trade-offs, comple mentarities, etc.  The other key contribution, of
course, would be to provide a systematic assessment of the merits of an agreement, possible trade-offs
between an agreement and other objectives, and related matters.  A recurring theme in the study wasthat tools exist for managing any conflicts that may actually arise between competition and industrial
policy.  A multilateral framework would not limit the availability of those tools – and hence should
not be perceived as limiting the policy options available to developing countries.
59. The representative of Tunisia said that the study could have given more attention to the
current lack of tools in most developing countries to deal with the challenges posed by practices such
as hardcore cartels.  For the most part, currently, these countries had no means of fighting against
cartels or even an ability to access basic informat ion about their existence.  This was a key factor
underling the consideration of a multilateral framework.
60. The representative of Japan said that the discussion of Japanese experience in the study
illustrated a number of points that Japan had made in previous meetings of the Working Group.  In
particular, it showed clearly that the source of dynamic efficiency and growth in Japan had been
competition, not the limiting of rivalry. The automobile industry, which was the symbolic epitome of
Japan's strong economic growth, was a good exampl e of this.  In the 1950s, the government had
wanted to reduce the number of automakers in Japan, with the objective of having a single model
which would be called the "national car".  Fortunately, the industry itself had resisted these efforts,choosing a competitive rather than a monopoly approach.   As from 1966, nine auto makers had beenWT/WGTCP/M/21
Page 21
competing with each other in passenger cars.  The resulting fierce competition had ensured the
development of the car industry, promoted innovat ion and sustained international competitiveness.
He stressed, further, that Japanese competition po licy, and the Fair Trade Commission in particular,
had played a key role in promoting fair competition in the post-war era.
61. The Chairman said that any comments on the study could be sent to the Secretariat, which
would forward them to Dr. Evenett for inclusion.
62. The observer from the OECD reported that the OECD Competition Committee had adopted
its Second Report on Hard Core Cartels.4  This report followed  up on the OECD Council's
Recommendation concerning Effective Action Against Hard Core Cartels5 and supplemented a first
cartel report completed in 2000.  The report focused on five topics:  (i) identifying and quantifying the
harm from cartels;  (ii) progress in OECD member countries in fighting cartels since the issuance of
the first report;  (iii) enhancing effective sanctions against cartel conduct;  (iv) enhancing theeffectiveness of investigations of the conduct;  and (iv) international cooperation in cartel cases.  It
showed that the harm caused by hardcore cartels fell heavily on developing countries – perhaps
disproportionately so.  One study had shown that up to 10% of the products imported by developing
countries had been subject to a cartel agreement in the 1990s.  Moreover, it was likely that domestic
cartels operated with impunity in many developing countries because many such countries did nothave competition laws, and those that did might not have the necessary specialised tools and expertise
for the vigorous prosecution of cartels.  She referred to some examples of cartels in the report,
showing that the parties to cartel agreements, for the most part, were not honest businessmen who had
inadvertently become involved in a technical violat ion.  Rather, they had fully realised that their
conduct was harmful and unlawful, causing them sometimes to go to great lengths to keep theiragreements secret.  The recommendations of the report included: (i) quantifying and publicising
cartels results;  (ii) perfecting investigative tools, such as leniency programmes, lawfully securing oral
statements or testimony;  (iii) strengthening sanctions, including sanctions against natural persons in
countries where that was consistent with social and legal norms;  (iv) expanding the ability of cartel
victims to recover money damages;  and (iv) promoting international cooperation in cartelinvestigations and cases, including by expanding co-operative relationships to more countries and by
exploring ways to permit more exchanges of confidential information, with appropriate safeguards
against unauthorised or harmful disclosure.
63. The representative of UNCTAD said that, with the help of Professor James Mathis, the
UNCTAD Secretariat had produced a second draft of a paper addressing the question of core
principles, which touched upon some of the issues that certain Members had addressed.  The paper
paid particular attention to the needs of developing countries, and thus complemented the work ofsome Members in the Working Group.  The paper reflected on what existed in various legislations and
how this could be used as a framework for countries  that might wish to consider those issues.  It
would be discussed in a series of upcoming regional meetings.
II. THE NATURE AND SCOPE OF COMPLIANCE MECHANISMS THAT MIGHT BE
APPLICABLE UNDER A MULTILATERAL FRAMEWORK ON COMPETITION POLICY
64. The representatives of Australia, Canada
, the European Community and its member States ,
India, Japan , Norway , the Philippines , Switzerland  and the United States  made oral statements or
posed questions on this item (the text of the intervention of Canada was subsequently circulated in
document WT/WGTCP/W/226).  In addition, the observer from the OECD provided an update on
relevant activities of her delegation.
                                                     
4 To be approved by the OECD Council at one of its forthcoming meeting and subsequently published.
5 [C(98)35/FINAL].WT/WGTCP/M/21
Page 22
65. The representative of the European Community and its member States said that he could not
provide a complete statement on his delegation’s views on dispute settlement and peer review because
it was still working on a document which it hoped to submit for the meeting of the Working Group in
May.  As to dispute settlement, his delegation started from the principle that the WTO was a rules-
based organisation.  Although the WTO Agreements also contained a number of provisions which
were more of a soft law nature, such as best endeavour clauses and political commitments, all WTO
Agreements contained some rights and obligations , and all such rights and obligations could be
subject to dispute settlement under the Dispute Settlement Understanding.   His delegation did not see
how the WTO could do anything different without betraying its raison d'être .  The real question,
which had been raised by a number of Members in the Working Group, was how far to go.  Further to
this point, for his delegation, the real issue was not so much what was the scope of dispute settlement
but the scope of the obligations that Members would negotiate under a multilateral framework oncompetition, and to which therefore dispute settlement would apply.  The discussion earlier that day
had addressed the margins of those obligations;  and, as he had acknowledged, there remained
questions but those were questions on the margins, which could not be addressed until one actually
started drafting legal language.  There was a proposal for an obligation to have a ban on hardcore
cartels.  What dispute settlement would look at in that context was whether domestic laws prohibitedhardcore cartels.  Furthermore, his delegation was proposing a de jure non-discrimination clause.  In
that context, dispute settlement would assess what the law did on its face, on its letter, in particular
whether it discriminated on the basis of nationality.  Moreover, a number of procedural fairness
principles had been proposed.  For instance, there was a proposal for an obligation to guarantee
judicial review of administrative decisions.  In that  context, dispute settlement would look at whether
the domestic legal system foresaw the possibility of judicial review.  He noted that his delegation had
not proposed any WTO provision saying what exactly judicial review of administrative decisions in
the field of competition should look like.  As long as there was no such proposal, a panel would not
look at how the judicial review was carried out but simply at the fact whether or not that possibility
existed.  As to transparency, he noted that obligations on this were not new phenomena in WTO law.They had been a part of the GATT since 1947.  The problem with such obligations and dispute
settlement in the WTO was that, even if one tried to enforce such obligations, all a panel could do was
to say that a country should put itself in conform ity.  He noted that some of the questions that had
been asked earlier about the exact scope of specific obligations had become more relevant in the light
of the applicability of dispute settlement.  He proposed to address concerns about dispute settlement
having an excessive reach into the domestic legal systems through the appropriate design of the basic
obligation to which dispute settlement would appl y.  He acknowledged that, in certain cases, some
additional reassurances might be necessary.  For instance, as to the question about how a panel could
avoid not looking at individual cases.  The answer was simple:  if the obligation on non-
discrimination, for instance, was limited to the letter of the law, it was hard to imagine how it could be
argued that that decision could not be taken without looking at the way the law had been applied.
66. Turning to peer review, he noted that some Members had said that they had a preference for
this as a compliance mechanism.  His delegation was puzzled by such statements because it did not
see peer review as a useful instrument to ensure compliance with obligations in the strict meaning of
the word "compliance".  Peer review was a tool to help all WTO Members ensure that the way they
designed and operated their competition regimes was efficient – first and foremost for the Member
operating its competition regime, and only secondarily to reassure other WTO Members thatcompetition regimes operated according to certain principles.  Further, his delegation would not want
to see peer review developed into an adversarial m echanism.  It was, rather, a collective examination
mechanism, which ideally would result in recommendations on how a Member could have a more
efficient competition regime for its own purposes, instead of a system leading to a judgement whether
the competition regime of a Member was good or bad.  There were a number of practicalconsiderations that had an important bearing on how one designed a peer review system.  The
availability of resources was one of those issues.  There were also questions like whether peer review
would be binding, as Korea had proposed, and wo uld apply to all WTO Members.  Alternatively,
would it be totally voluntary?  Who were the peers?  Who undertook to carry out the review and onWT/WGTCP/M/21
Page 23
what terms of reference?  He noted that there was a lot to be discussed about such issues but his
delegation first wished to see a discussion on why Members would want to have a peer review.
67. The representative of the United States said that the position of the European Community and
its member States seemed to be that one was in the WTO so there had to be dispute settlement
because that was what other WTO mechanisms had as their compliance mechanism.  He waswondering whether Members should not approach this issue rather in an open-minded way, and ask
themselves what they were trying to achieve and what was the best way to get there without
prejudging the applicability or appropriateness of a compliance mechanism that was used in
completely different and unrelated fields.  He believed that some unique characteristics of competition
policy might distinguish that field.  In fact, as  one written contribution had pointed out, about a
quarter of the Members had no competition law.  Competition law inherently involved national
enforcement systems that were based critically on prosecutorial discretion.  Members had to considerthe appropriateness or inappropriateness of the application of traditional trade sanctions, which could
have effects that many Members might consider to be anti-competitive, to address alleged deficiencies
in a Member's competition regime.  He said that his delegation would probably come back to this
issue in more depth, but at that point he wished to stress that Members should approach the issue of
the adaptability of compliance mechanisms to the particular field of competition policy with a blankslate and an open mind, rather than starting with preconceived notions based on experience elsewhere
in the WTO.
68. The representative of Canada, said that when considering an appropriate compliance
mechanism it was important to consider – as the representative of the United States had said – what
objectives Members wanted to achieve in a multilateral agreement.  As her delegation had mentionedin its previous intervention, a WTO framework on competition policy could achieve a number of
objectives, for example, promoting sound competition principles, and more open and competitive
markets for trade and investment, as well as encouraging cooperation among Members to combat
global anti-competitive practices.  This would ensure that private anti-competitive practices do not
undermine the benefits of trade and investment liberalisation.  Those objectives were best achievedthrough the establishment of a multilateral framework for competition policy that would include a
commitment to the core principles, provisions to co mbat hard core cartels, a flexible framework for
cooperation and commitments to flexibility and progressivity to take into account the needs of
developing country Members.  Her delegation recognised the importance of, and the challenges to,
developing a compliance mechanism that would ensure free and open markets for companies to invest
and trade abroad, while preserving the discretion of domestic competition authorities and Members'
ability to pursue other policy objectives.  It supported a non-binding peer review process and lookedin particular to the existing WTO mechanism that provided for peer reviews of Members' regimes
through the Trade Policy Review Mechanism.  A peer review approach provided a non-adversarial
forum to query and better understand other Members’ policies and practices with the goal of sharing
best practices and improving domestic policies and institutions.  In the WTO, Canada had advocated a
peer review approach for two purposes: as a substitu te for dispute settlement, and as an ongoing, long-
term educative and information-sharing mechanism to allow Members to better understand each
other’s competition laws and policies, and their enforcement.  She acknowledged that questions
remained as to the appropriate scope and coverage of a peer review mechanism as well as whether it
should explore trends in the enforcement of a Member’s law, or be limited to ensuring conformity by
the Member with its obligations under the framework agreement.  Further, she was wonderingwhether such a process should be voluntary or mandatory, and whether a process for follow-up on
recommendations made by the peer group would be ap propriate.  Peer review could foster cooperation
among Members and contribute to institution-building for Members with newly established
competition laws and policies.  Further, with no binding obligations, peer review would ensure that
individual enforcement decisions be not reviewed or challenged;  at the same time, it might allow
Members to explore the systemic application of competition laws and policies over time.  In
conclusion, the challenge remained in crafting a compliance mechanism to achieve Members'
objectives.  She suggested that the Working Group explore the value of combining differentWT/WGTCP/M/21
Page 24
compliance options in an effort to develop the most appropriate and comprehensive compliance
system.
69. The representative of Japan said that he could envisage a couple of mechanisms to ensure
compliance under a possible multilateral framework on competition policy.  As the representative of
the European Community and its member States had pointed out, one option was dispute settlement as
it had been the case with other agreements under  WTO.  The second option would be peer review,
which had been put forward by the representative of Canada.  Nevertheless, he could also envisage a
hybrid approach comprising both dispute settleme nt and peer review.  His delegation had tried to
make a written submission but its draft was still under consideration and being commented upon by
various branches and agencies of the Japanese Gove rnment.  Therefore, he elaborated on the merits of
peer review, pointing out that he did not intend to pr aise peer review in order to completely replace
the dispute settlement mechanism, which was well established in the WTO.  His delegation wasthinking of all the three options outlined earlier.  In accordance with the necessity and the content of a
possible multilateral agreement, which would certainly stipulate very specific terms and obligations
that all Members would be subject to, he touched upon the possible model of peer review in a possible
WTO framework on competition policy.  He noted that in the discussions in the Working Group
several Members had proposed the adoption of peer review in a possible WTO framework.  Peerreview existed in international frameworks and fora, such as the WTO, the OECD and APEC, and it
served a wide range of purposes.  It could serve to give advice on compliance to an agreement;  in the
context of a multilateral framework on competition, perhaps on core principles.  It also served to
provide advice on competition policies in general, it expedited technical assistance and helped to
improve the transparency of national competition policies.  Peer review also allowed competitionauthorities to share information and experience, it enhanced international cooperation, and thus it
could contribute to maximising the benefits of international cooperation at the multilateral level.  In
addition to such benefits, peer review also had so me drawbacks, such as the burden on Members and
the Secretariat, and the uncertainty about its effectiv eness.  Therefore, when looking into the eventual
establishment of a peer review mechanism in a WTO framework on competition policy, it would be ofvital importance to adopt an efficient and effective mechanism.
70. Continuing, as to the design of peer review, he first touched upon the issue of participation,
which should be demand-driven and voluntary.  Independent review on a demand-driven basis would
be most efficient.  He noted that the periodic peer reviews under the WTO TPRM were regarded as
rather burdensome for Members.  Therefore, competition policy peer reviews should be conducted on
the basis of application by the Member to be re viewed and in accordance with the applicant's needs.
When indicating their wish to being peer reviewed, Members primarily intended to seek advice fromtheir peers.  Further, Members could seek advice through peer review in order to benefit from
international cooperation, such as technical assistance, capacity building or case-specific cooperation.
Furthermore, there was the question relating to the characteristics of the peer review forum.  In order
to enhance technical assistance, it would be important to establish a WTO competition policy
committee, which would replace the Working Group an d would serve as a forum to share information
and experience among Members.  A competition policy review mechanism would also be most
efficiently implemented by utilising such a competition policy committee.  For cases requiring
detailed examination, it would be useful to establish a peer group consisting of specific peer Members
and outside experts knowledgeable about such projects.
71. Further developing the idea of peer review, he suggested a sequence of phases in a peer
review exercise that would make peer reviews more efficient and less complicated than the TPRM.
The process would start by an application for review, followed by a submission of reports by the
countries to be reviewed, and where necessary a pre-review examination by the review group. That
would be followed by a reviewing meeting, where Members could have discussions in order to
prepare a review report, including policy recommendations.  A meeting of the competition policycommittee could be an appropriate forum for such a reviewing meeting. Finally, it would be important
to conduct a follow-up of the review 2 or 3 years following the review.  In conclusion, he noted thatWT/WGTCP/M/21
Page 25
the foregoing was an outline of the ideas considered by his delegation, and that his delegation would
make a written submission on those issues at a later stage.  In any event, it was useful to discuss this
matter, and – as the representative of the United States had mentioned – to do so in an open-minded
way.
72. The representative of Norway said that a multilateral framework with legally binding
obligations on Members would need some type of compliance mechanism.  As to the nature of such a
compliance mechanism at the international level, his delegation agreed with other Members that
including peer review under such a framework w ould be a good solution.  He noted that he did not
need to elaborate on the merits of peer review as other Members had already argued for it extensively.
His delegation shared the views of the representative of Japan in that it could envisage a hybrid
system where peer review existed in parallel with the application of certain provisions of the
multilateral framework being subject to the Disp ute Settlement Understanding.  The DSU had
enhanced the credibility of the international trading system, and on the balance it had performed well.
As to the role of the DSU under a multilateral fram ework, similarly to other Members advocating for
a role for the DSU, his delegation believed that it was important to allow national competition
authorities certain discretion in their enforcement of national competition law.  Thus, their
enforcement – or the failure to enforce the law in concrete cases – should not be subject to the DSU.Further, as emphasised by the representative of the European Community and its member States,
certain obligations of Members should be enforced under the DSU.  He noted that the representative
of the European Community and its member States had argued that all obligations of Members should
be enforced under the DSU.  He pointed out that that depended on how far one would stretch the
notion of obligations under the multilateral framework.  His delegation believed that enforcement onthe national level by competition authorities should also be an obligation under the agreement, but
that should not be enforced with regard to concrete cases.  What would have to be enforced would be
Members' failure to implement provisions on national treatment or other core provisions of the
framework.  Members might not wish to apply national treatment to certain well-defined and sensitive
sectors, and said that Members should be free to exclude such sectors from the provision of theagreement.  That implicitly m eant that when Members were allowed to exclude they should do so
explicitly, and they should not be allowed to breach the obligations of the agreement if they had not
requested such exclusion.  The role of the Dispute Settlement Understanding should be decided on the
basis of the outcome of possible negotiations on a multilateral framework.  It was difficult to make
abstract judgements as to the exact model without knowing the provisions of the agreement.
Moreover, Members should allow any role of the DSU be subject to progressive implementation as
regards developing countries.
73. Continuing, he said that the most importa nt compliance mechanism under a multilateral
framework would have to be found at the national level.  Thus, to ensure national compliance, a
credible national competition authority would be central. Although national competition authorities
had a number of additional tasks, including assisting Members that might be unfamiliar with
competition policies and developing a competition culture, effective national surveillance wouldremain a core task under a multilateral framework.  Reverting to the national level, regardless of
whether a multilateral framework on competition would give competences to the DSU or the extent to
which the DSB would have such competences, it was important that economic operators be granted
access to national courts according to national administrative and procedural law.  Earlier in the
meeting the representative of the United States had posed questions as to the extent to which differentactors should have that right.  He believed that Members should simply have to apply the national
administrative and procedural laws which were in operation to decide who would have legal standing
before national courts.
74. The representative of the Philippines said that the proposal by Japan appeared daunting.  He
did not believe his delegation would wish to engage in  the type of exercise that was practised in the
APEC forum.  As a matter of principle, his delegation believed that even if peer review was
voluntary, the time would come when all the volunteers would have volunteered already, andWT/WGTCP/M/21
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therefore volunteering for peer review became subject to peer pressure.  Further, he noted that his
delegation had always advocated the principle that there was only one peer review process in the
WTO:  the TPRM.  His delegation would not wish  to have a carve-out of the TPRM just for
competition policy.  In any event, there were competition sections already in the TPRM, so one could
build on that if and when there was an agreement to go ahead with a multilateral framework oncompetition policy, including an agreement on peer review.
75. Turning to the distinction between de jure and de facto non-discrimination, he said that he
was still perplexed – perhaps because he had grown to know dispute settlement and the principle of
non-discrimination in the WTO sense, that is in th e WTO culture where most of Members' rights and
obligations were based on adherence to WTO rules in law and in practice.  He found it difficult to
imagine a situation where a Member might have a wonderful law on competition and somehow still
managed to enforce or implement it inconsistently with  such law, and that this – as foreseen by some
Members – would not be contestable under dispute settlement in the WTO.  He noted that in its
submission (WT/WGTCP/W/221) the OECD pointed out th at in the stainless steel case the panel had
held that it had not been in a position to rule on the consistency of a Member's action against the
domestic law of that Member, but the panel went ahead an ruled on the consistency of that particular
action with the relevant provisions of the covered agreements.  If that was the case it was possible thateven if de facto non-discrimination would not be covered, any panel in the present dispute settlement
system of the WTO would be compelled to also look at those actions vis-à-vis the substantive rights
and obligations in any WTO agreement.
76. The representative of India, reflecting on the interventions by the representatives of the
European Community and its member States, the United States, Canada, Japan and the Philippines,
said that when the Working Group's study process on competition policy had been proposed, the
major argument had been that anti-competitive practices originating in certain jurisdictions had effects
in other jurisdictions, which should be handled in some way.  As the representative of the European
Community and its member States had stated, there were going to be rights and obligations in any
possible framework under discussion.  In that case, it was understandable that the rules should bebinding.  Peer review had an important role but it could not be a substitute for a compliance
mechanism.  It could also be helpful for countries to let their competition laws evolve over a period of
time.  If the purpose of peer review was simply to provide useful feedback to countries on their laws,
this could be done, perhaps, in UNCTAD.  In any case, peer review was not a substitute for a
complaints mechanism.
77. The representative of Switzerland said that as long as the exact content of a multilateral
framework on competition policy was basically not agreed upon, it was difficult to discuss details of
the nature of compliance mechanisms.  Nevertheless, he wished to share some general ideas on how
the issue of compliance could be addressed.  As a matter of principle, a competition framework which
was part of the WTO agreements should also have similar compliance mechanisms as the other
agreements.  Therefore, the WTO Dispute Settlement Mechanism should in principle apply.  It would
not fit well into the WTO system to completely exclude certain areas of the rules-based system fromdispute settlement, as the Dispute Settlement Mechanism was one of the core functions of the system.
At the same time, he recognised that one fundamental objective of a competition framework was to
promote a culture of competition throughout the world.  Since some countries had little or no
experience with the application of competition policy, a co-operative approach was preferable to a
confrontational approach, such as the Dispute Settlement Mechanism.  Convergence of ideas and bestpractices might be best achieved in a system which promoted the exchange of information and know-
how in a positive spirit.  Peer review had been mentioned as one form to reach those goals, and that
the representatives of Japan, Norway and some other Members could well imagine a hybrid system.
In such a system, compliance through dispute settlement should be limited to the fundamental cases.
He noted that it was an interesting idea to limit the dispute settlement mechanism to a de jure
compliance mechanism, which would only assess the wording of national laws and regulations vis-à-
vis the commitments undertaken multilaterally.  It would be useful to explore in detail what this wouldWT/WGTCP/M/21
Page 27
mean.  Further, Members should not focus too much  on issues in the Dispute Settlement Mechanism
that could not be effectively enforced following a panel's finding that an obligation had not been
complied with.  For instance, what would be the consequence if violation of a transparency obligation
was confirmed by a panel ruling but the Member in question was not ready to provide remedy?  There
was a danger of overburdening the Dispute Settlement Mechanism with such issues.  In a de jure
compliance mechanism, alleged de facto violations would not be part of dispute settlement but would
form part of peer reviews and discussions of a WTO body supervising the implementation of the
competition framework.  In conclusion, it might be useful to foresee a periodic review as to whether
the application of Dispute Settlement Mechanis m could be expanded as experience with a WTO
competition framework grew over time.  At the beginning, however, his delegation favoured a limited
application of dispute settlement in the context of competition policy.
78. The representative of the European Community and its member States, in response to the
comment by the representative of Norway, said that compliance was basically at the national level,
which was why his delegation was proposing a WTO framework on competition.  Members should
start from the principle that if they all agreed that they would have competition laws that respected
certain basic principles, they would all attempt to enforce them as best as they could.  At the moment,
he would not elaborate on the difficulties that a number of Members would have to enforce their own
laws because the Working Group would undoubtedly come back to that issue.  If there was that basic
principle, it was more reassuring to all WTO Members to know that they had assumed the same
obligation to have some basic design of their competition laws and that such basic design was backed
up by enforcement through dispute settlement.  He stressed the word "basic".  In some WTO
Agreements Members had gone further than the basic design, especially when it came to governmentmeasures that had trade as their objective.  In that context, Members had disciplined the way
governments acted – sometimes in extreme detail.  For instance, in the context of anti-dumping, from
Article VI of GATT through the first anti-dumping code in 1967 to the last anti-dumping code in the
Uruguay Round, the progression of how detailed the discipline of what governments could and could
not do was mind-boggling.  In that context, Members had also expanded the reach of disputesettlement.  However, that was not what his delegation was talking about in the Working Group, but
some basic design of competition laws to which disp ute settlement should apply.  His delegation had
been advocating for the application of the DSU not because it had a closed mind to the WTO doing
something different than what it had done before.  Rather, it did not see the use of having a WTO
agreement without obligations, and obligations required enforcement, which in the WTO system was
dispute settlement.
79. Continuing, on the question of de jure versus de facto  non-discrimination, he pointed out that
in the agreement on subsidies Members had used that distinction deliberately.  On the one hand, the
prohibition of export subsidies applied to subsidies both de facto and de jure  contingent upon export
performance.  On the other hand, the agreement specifically limited the prohibition of subsidies
contingent upon local content to de jure contingency upon local content.  There was no particular
economic or logical reason for that, it was a deliberate choice of participants in the Uruguay Roundnegotiation to ensure a greater degree of reach into domestic measures in one case than in the other
because most WTO Members were not prepared to a ccept that kind of reach into the way they applied
local content measures.  The situation was similar with regard to non-discrimination in the Working
Group.  His delegation did not see any opposition to Members designing their competition laws in a
non-discriminatory manner with the proviso that there might be good reasons for exceptions, whichhis delegation was ready to discuss.  At the same time, his delegation saw that there was not sufficient
consensus to go further because it led to the question of how one could avoid dealing with individual
cases which everyone wanted to avoid.  The distinction was a political choice which had some very
good factual basis and it was not new.  Members had used it in the past for precisely the same reason
and in very similar circumstances.  Further, in re sponse to the representative of the Philippines, he
agreed that panels did look at government action in the light of the rights and obligations of Members
under a specific agreement.  That was precisely what his delegation was talking about: MembersWT/WGTCP/M/21
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should design the rights and obligations in a way that made them comfortable with the outcome in
terms of dispute settlement.
80. Turning to the question by the representative of India as to whether the WTO was the right
forum for peer review, he said that while his delegation would not like to see an excessively
complicated peer review system, Members could explore how they could make peer review in theWTO context useful without making it excessively complicated.  Further, it was not really a question
of carving issues out from the TPRM.  Rather, it was a question of building on the necessary
exchange of views that Members would have in a WTO competition committee and seeing how they
could make that exchange of views more coherent and more useful.  That was an open debate and he
recognised that the question posed by Members whether peer review was really worth it if it became
that complicated, was a valid one.
81. The representative of Australia said that his delegation did not have an initial perspective on
compliance mechanisms and that the discussions had highlighted some interesting questions.  On the
one hand, the representative of the European Community and its member States had started drawing
attention to the direct linkages between the competition agreement components and the need to have a
definitive dispute settlement process – at least for some of those components.  On the other hand, it
had been argued that given the tremendous diversity among Members, the challenges of a competitionframework posed significant questions as to whether something so legally rigid could operate at least
in the early period of a possible agreement.  Initially, he could see logic on both of those sides, in
particular – as had been suggested by some Members – in exploring the scope for hybrid systems.
Given that this was an initial discussion, it would be important for all the Members to be able to
consider the item further, in particular the submissions mentioned by a number of Members, such asthe European Community and its member States and Japan.  He noted that the work that the OECD
had been pursuing through its Joint Group on Trad e and Competition suggested that Members would
soon have access to a further body of written work that could help to take this issue forward.  It would
be extremely useful if such work could be expedited.  He urged Members that were working on this
issue to seek to circulate materials as soon as possible.  Peer reviews could be a useful component ofthe future consideration of this issue.  While reco gnising that peer review could be resource-intensive,
he said that based on the models that he had seen operating in a range of fora, it would be particularly
attractive if perhaps through the WTO Secretariat or a WTO Competition Committee, a grouping of
individuals independent from Members carried through an initial assessment pursuant to an agreed
peer review template.  He believed that ensuring a degree of independence and even-handedness to
the preparation of such peer reviews was important.
82. The representative of the United States returned to the question of whether it could be
conceivable to have a WTO competition framework without it inherently having a binding dispute
settlement provision.  He noted that the representative of the European Community and its member
States had said that the reason for presuming that it should have a dispute settlement provision was
not just because it was in the WTO but because a competition framework without dispute settlement
would be useless.  In response to that argument, he pointed out that the United States was party to
about ten bilateral competition agreements, none of which contained dispute settlement, and –
contrary to finding them of no use – the United States had found those competition agreements
without dispute settlement provisions to be extremely useful.  As a matter or fact, the most useful
agreements of that nature were concluded with the European Community.  Further, the United States
had a plurilateral agreement, NAFTA, where all parties agreed to some basic competition disciplines.Again, for most of the competition provisions that agreement was not subject to binding dispute
settlement, yet all parties had found it useful to enter into such an agreement.  He believed that many
other Members that had ventured into bilateral and plurilateral competition agreements had seen the
value of doing so without having them subject to binding dispute settlement.  Therefore, he asked
what would it be about having a competition agreement in the WTO that made it inherently necessaryto have dispute settlement provisions.  Was it just an institutional question that it was in the WTO,WT/WGTCP/M/21
Page 29
and therefore it should include dispute settlement so as not to undermine the value of dispute
settlement in other bodies of the WTO, or was there some other reason that could be articulated?
83. In response, the representative of the European Community and its member States noted that
the concerns cited by the representative of the United States were precisely why his delegation was
not proposing binding cooperation.  His delegation did not think dispute settlement was appropriatefor cooperation, and since it was not proposing binding cooperation, dispute settlement would not
apply to cooperation.  He noted that more discussion might be necessary on that issue because he felt
that Members were still talking slightly past each other.
84. The observer from the OECD said that the meeting of the OECD Joint Group on Trade and
Competition the previous week had considered a number of new papers.  Two of those papers were
particularly relevant to the matter of complian ce mechanisms: a draft paper considering possible
compliance mechanisms for a multilateral fram ework on competition, and a paper considering
practical modalities of peer review in a multilateral framework on competition.  The OECD Joint
Group on Trade and Competition had decided to declassify that latter paper, while the first paper,
which provided an overview of compliance mechanisms, was being revised, and thus had not yet been
declassified.
85. As a short overview of the paper on compliance mechanisms, she noted that the paper's
objective was to canvass a range of compliance methods that might be suitable to be transposed into
an eventual multilateral framework on competition.  It considered a number of existing methods that
featured in regional and multilateral agreements, including trade-related agreements.  It looked at:  (i)
consultation, conciliation, good offices and mediation;  (ii) arbitration;  (iii) peer review;  and (iv) de
jure compliance – either through the Dispute Settleme nt Body or through an independent dedicated
institution that would be established in the WTO.  The paper discussed the advantages and
disadvantages of each of those in the context of a multilateral framework, and it raised some questions
that might be further reflected upon in a fuller version of the paper.  In line with the comments by
several Members of the Working Group, the paper pointed out that while each method could be
considered individually, a combination of methods, e.g., consultation and arbitration, or peer review
plus the Dispute Settlement Body might be the be st option.  She noted that the OECD Joint Group on
Trade and Competition had requested the OECD Secretariat to develop its analysis in accordance with
the input to be submitted by OECD delegations.  The revised paper should be ready for circulation at
the OECD Joint Global Forum on Trade and Competition to be held in Paris in May.
86. The paper on practical modalities of peer review in a multilateral framework on competition
considered practical options for implementing a peer review mechanism in a future MFC.  It built on a
previous paper by the OECD entitled “Peer Review: Merits and Approaches in a Trade andCompetition Context”, which had focussed primarily on the WTO Trade Policy Review Mechanism
and the OECD Country Reviews of Regulatory Refo rm.  Multilateral peer review mechanisms had
three common characteristics:  (i) they involved a committee of experts;  (ii) they represented a
collegial form of monitoring compliance and progress;  and (iii) they entailed interactive
investigation.
87. As the representative of Japan had mentioned, the objectives of such mechanisms might
include providing policy advice, encouraging policy co-ordination and cooperation, gathering and
disseminating information and best practice models, and providing technical assistance and aid.
Several existing and proposed multilateral peer review mechanisms provided guidance on possible
approaches to a competition policy review mechanism.  In particular, the paper considered thefollowing relevant mechanisms:  (i) the peer revi ew of Individual Action Plans in the APEC System;
(ii) the OECD Country Reviews of Regulatory Reform (specifically the Competition Policy Reviews);
(iii) the WTO Trade Policy Review Mechanism (TPRM);  (iv) the OECD Economic and
Development Review Committee Economic Surveys;   (v) the IMF Country Surveillance Mechanism
(Article IV Reports);  (vi) the IMF-World Bank Financial Sector Assessment Program (FSAP);  (vii)WT/WGTCP/M/21
Page 30
the OECD Bribery Convention monitoring progra m;  and (viii) the Competition Policy Review
Mechanism in the proposed Free Trade Area of the Americas.  The paper noted that a competition
policy review mechanism would have to resolve certain key issues, for example:  (i) size, scope and
coverage;  (ii) definition of peers;  (iii) participation;  and (iv) costs and resource implications.
88. Another observer from the OECD provided further comments on peer review.  The whole
history of cooperation in the OECD in the field of competition policy was based on the tradition of
voluntary compliance and peer pressure.  None of the OECD instruments were binding, none of the
OECD peer reviews were forced.  The countries vo lunteered to be examined and examining countries
agreed to be examiners on a rotating basis.  So far, eighteen countries had been reviewed from the
viewpoint of regulatory reform, and two major co untries would be reviewed in 2003.  Countries
volunteered to be peer reviewed because they expected to benefit from peer review in terms of both
policy advice from other competition authorities, and support from OECD countries in implementing
the reforms that could be identified as necessary.  Further, competition authorities could attract the
attention of the media, and enhance their opportunities of competition advocacy.  Based on the
conclusions of the peer review, they might also be given more resources than what they had – as had
been the case with a number of peer reviews in the past.  In the future, the OECD peer review exercise
would reconcile more the macroeconomic with the microeconomic approach, and peer review expertswould be working more closely with the OECD Ec onomic Department.  In conclusion, she mentioned
the peer review of South Africa at the OECD Global Forum on Competition on 11 February.  It was
the first time ever that a non-member and non-observer country of the OECD had volunteered to be
peer reviewed.
III. POSSIBLE ELEMENTS OF PROGRESSIVITY AND FLEXIBILITY THAT MIGHT
BE INCLUDED IN A MULTILATERAL FRAMEWORK ON COMPETITION POLICY
89. The representative of Hong Kong, China introdu ced a written submission relevant to this item
(W//WGTCP/W/224).  In addition, the representatives of Japan, Canada , Thailand , the European
Community and its member States, Norway , South Africa , Chile , Switzerland  and Venezuela  made
oral statements or posed questions on this item.  The observer from the OECD provided an update on
relevant activities of her delegation.
90. The representative of Hong Kong, China,  introducing document WT/WGTCP/W/224, said
that its purpose was to share some initial ideas on possible flexibility arrangements to address the
needs and concerns so far expressed by Members.  She stressed that these were just initial ideas and
hoped to stimulate discussions in a positive manner.  To enable Members to make an informed
decision on whether or not they would be ready to undertake any multilateral obligations in the area of
trade and competition policy, it was necessary for them to know the “breadth” and “depth” of possibleobligations as well as the provision of any flexibility in areas they had limited capacities or
difficulties.  Only with such knowledge would Memb ers be in a position to assess realistically the
costs and benefits of a possible multilateral framework on trade and competition policy (MFC) and its
practical implications to their economies. In document WT/WGTCP/W/224, her delegation hoped to
(i) highlight the needs and concerns of developi ng Members as well as Members without horizontal
competition laws regarding a possible MFC; and (ii) share ideas on how to address those needs and
concerns.  Regarding the first item, she said that past discussions in the Working Group indicated that
the practical implications of a possible MFC on WTO Members, developed or developing alike,
would depend on the breadth and depth of the relevant obligations versus the regimes of Members.
Given the extensive diversity among Members of their economic development, industrial policies,socio-economic circumstances, legal traditions, competition approaches, institutions, culture, etc., it
was natural that a possible MFC would not be entirely consistent with the present regimes of certain
Members.  Obligations under a possible MFC would therefore carry implications in terms of policy,
legislative and institutional changes, and resources requirements. Since Doha, the Working Group had
examined in depth the various core principles listed in paragraph 25 of the Declaration.  Pastdiscussions had fully demonstrated that the practical implications of implementing these principlesWT/WGTCP/M/21
Page 31
could be different for Members.  Paragraphs 5 – 9 of the paper briefly recapitulated some of the major
concerns expressed by Members on the practical implications of implementing the core principles and
the elements listed in paragraph 25 of the Doha Declaration.  Putting aside the question of whether the
above elements should be included in a possible MFC under the WTO, obligations in respect of all the
elements would possibly require changes in different extents to the laws and institutional regimes ofcertain Members.  New multilateral obligations would add certain compliance costs in many cases.
As regards the concerns of Members without  horizontal competition laws, she said that apart from the
developmental considerations, Hong Kong, China had maintained that the domestic policies and
concerns of Members should be fully respected in deliberating and designing any possible multilateral
obligations.  One of the domestic policies and concerns that Hong Kong, China hoped to highlight in
the paper related to the absence of a horizontal competition law.  As suggested by Japan, flexibility in
the form of S&D should be considered for those economies without competition laws, irrespective ofwhether the country was developing or not.  One quarter of WTO Members did not have a
competition law.  Some of them might have capacity constraints, while others might choose not to
enact competition laws because of valid domestic policy concerns.  There was no reason why the
concerns of these economies should be sidelined.  A consensus for any MFC could not possibly
emerge without addressing these concerns.  As highlighted by Hong Kong, China in previousmeetings, many of the past discussions in the Working Group had focussed on proposals requiring
Members to have a competition law.  Yet, from the economic point of view, there was little, if any,
systematic evidence indicating that there had been significant improvements in the performance of
developing economies that have adopted a generic competition law.  Similarly, economies without
competition laws were not necessarily less competitive than the others.  In this connection, theSecretariat had pointed out that "[i]n cases where no such law exists or the law is not effectively
applied, or where competition rules are applied through sector-specific legislation, the relevance of
the fundamental WTO principles to competition rules is unclear" (document WT/WGTCP/W/209).
Moreover, even among Members with a competition law, the scope and application of their laws
varied considerably.  All these Members would face compliance problems should there be an MFCimposing an obligation to enact competition laws or introducing requirements inconsistent with their
existing regimes.
91. Concerning the need for flexibility to addre ss these concerns, she said that time and again,
discussions in the Working Group had underlined the difference between this subject and more
traditional trade issues.  The above analysis also indicated that any possible MFC would inevitably
carry with it substantive and substantial implications which stretched out and straddle Members’
domestic policy, legislative and institutional regimes.  Certain new obligations might also bringcompliance problems due to inadequate capacity or domestic policy considerations.  In the light of the
above and in recognition of the diversity among Members, sufficient flexibility had to be incorporated
into any possible MFC to make it workable and acceptable to the wide membership. Sharing her
delegation's initial ideas on flexibility arrangements, she said that flexibility could be built into both
the “breadth” and “depth” of obligations.  In terms of “breadth”, obligations under different coreprinciples or major issues could be divided into two types of building blocks: (i) common obligations;
and (ii) optional obligations.  Common obligations could encompass general obligations and
disciplines as well as any best-endeavour provisions (e.g. on the core principles and capacity building)
that were to be subscribed by all Members.  Optional obligations could include non-binding
guidelines or specific commitments that were to be adopted by each Member individually andvoluntarily.  In her view, detailed elements under the core principles as well as other elements set out
in paragraph 25 of the Doha mandate (i.e. hardcore cartels and voluntary cooperation) should be under
this category.  Individual Members were free to choose what optional obligations they agreed to abide
by and what specific commitments to undertake, when they were ready to do so.  This approach
provided adequate flexibility for Members to undertake specific commitments commensurate with
their needs and circumstances, without impeding their pursuit of other domestic policy goals.  This
could also help minimise the compliance proble ms of Members, including those without horizontal
competition laws.  What’s more, the process of putting new building blocks to the structure could be
an on-going one when Members were ready to take on more obligations. In terms of “depth” of eachWT/WGTCP/M/21
Page 32
building block, i.e. how detailed/burdensome each type of obligations should be, Hong Kong, China
believed that a consensus on a satisfactory out come was only achievable by avoiding overly
prescriptive and burdensome provisions that entailed significant adjustments to domestic regimes.  To
address the concerns about onerous obligations and compliance problems, it was most important that
any possible MFC should avoid prescribing the means through which relevant obligations were to befulfilled by Members.  It should focus on the ends, not the means.  One had to accept the reality that
the community of trading nations was very diverse with different domestic circumstances and levels
of development.  The appropriate means for implementing the obligations were therefore no better
than left to a domestic policy decision by each Member.  A Member should be free to choose how to
apply a competition regime in a way that reflected its economic situation and development/policy
objectives.  Allowances had to be made for differences in domestic regimes provided they were not
contradictory to or in conflict with the underlying consensus expressed in the fundamental WTOprinciples.  Finally, a Member must be satisfied that its concerns had been adequately addressed and it
would not have compliance problems before that Member could readily accept the final package of an
MFC.
92. The representative of Japan reiterated the importance of some element of flexibility, in
response to requests and concerns raised from some Member countries in the Group, given the
diversity of competition legal institutions and a different level of development among WTO members.
Firstly, as the representative of Hong Kong, China mentioned, flexibility should be given to Member
countries without a competition law, or regulation against hardcore cartels.  A diversified approach of
competition law and policy should be fully noted, in order to avoid excessive burden to develop or
adopt regulation of hardcore cartels, for example.  Some S&D treatment should be incorporated in aMCF. Secondly, most of Member countries had ex emption or exception systems to the application of
their national competition law, either in developing or developed countries, in accordance with their
government priorities for the industrial policy and development policy objectives.  The right of
adopting exemptions to national competition law should be ensured, as one of flexibility measures, in
a MCF, as many delegations suggested.  In this regards, concerns raised by some developing countriesof a possible negative implication on national competition and industry policies should be
accommodated.  Thirdly, with regards to core principle provisions, Hong Kong China's paper also
touched upon Japan’s proposal in the last September meeting of the Working Group.  Japan's proposal
of two-layer approach was that general obligation principles would be supplemented by illustrative
guidelines or menu, with a variety of options, to he lp Member countries to adopt and/or review their
national competition law. As for the telecommunication reference paper that Hong Kong, China had
also mentioned in its written contribution, he said that in addition to the general provisions containedin GATS, the reference paper had been produced to suggest Member countries what they should do in
regulating telecom sector.  Lastly, flexibility should be ensured, for both developing and developed
countries.
93. The representative of Canada said that he endorsed the details and concepts embodied in the
Doha Declaration that "Full account shall be taken of the needs of developing and least-developed
country participants and appropriate flexibility provided to address them."  Going further, he said that
flexibility was central to competition and that it was something that both the developed countries with
competition law and developing countries required.  He believed that competition policy and rules
should apply to most of the economy.  This led to the question of exceptions.  Exceptions had been
central to competition policy for a variety of reasons. Exception dealt with sectors, types of conduct orrelationship such as R&D joint ventures.  There were also exceptions that dealt with economic entities
such as state-owned enterprises and exceptions in favor of special groups such as SMEs. Some
Members even had constitutional type provisions with legal doctrine which allowed for certain types
of exceptions.  There were a variety of classifications of these exceptions. The OECD, for example
had produced one which was a four fold classification: (i) partial exclusions, meaning that some of thegeneral competition law provisions would not apply and the gaps were not governed by any other
competition law rules, including regulations; (ii) partial exclusions with substitution, meaning that a
dedicated competition law or rules were developed; (iii) total exclusion, meaning that none of theWT/WGTCP/M/21
Page 33
general competition law provision applied, (iv) total exclusion with substitution, meaning that special
laws or rules applied.  Such a literature was not terribly helpful in the sense that it provided a sense of
the classificatory system, of how one could organise  the exceptions and exclusions, but it did not say
why they arose.  Competition policy balanced many goals and objectives.  In many countries,
competition policy was a trade-off between a variety of objectives, usually classified as efficiencyversus fairness concerns.  Exceptions were part of the doctrine of competition policy.  One had to
figure out how to design obligation in the Group to take account of this tradition.  It was important
that one distinguished between exceptions in competition policy and exceptions in trade policy. There
were exceptions in  competition policy that had an effect on market access and investment issues.
Nonetheless, it was important to point out that the goals of competition policy dealt with a wide
variety of objectives and trade goal was only one of the many goals that competition policy was
dealing with.  One had to put the whole question of exclusions into a broader socio economic publicpolicy perspective but trade policy was but a minor element in the play.  Starting to think about how
to design criteria in a multilateral agenda, one had to start with two basic concepts. The first one was
self interest.  It had been labelled in the Group as "one size does not fit all".  Every WTO Member
would need to define its own economic self interest within a MFC. Then, the competition policy that
was designed was a trade-off between efficiency concerns and other public policy concerns.  This wasa given and an important part of the policy. For developing countries, there was a strong development
dimension and for other countries, there might be other dimensions of a historical or cultural nature.
The second point to the policy mix was the issue of harmonisation/convergence. Harmonisation  of
the substantive elements of competition law was not a good idea. Convergence was a good goal.  The
Group should over time seek to achieve a reasonabl e degree of analytical and operational coherence
through discussion and examination of papers.
94. When thinking of the design of these obligations, there were two options. First, one could
develop standards or common approaches. Standards referred to detailed and specific commitments
by countries.  Standards usually refered to how to apply the manner in which these rules should apply.
The common standard approach measures well with per se  rules.  It did not fit well with the rules of
reason approach where decisions were essentially made in a balancing of complicated interests.  One
of the fundamental goals of the rules of reason approach was not to chill legitimate business activities.
The other way of approaching the issue of how to develop substantive obligations was the common
approach which had been used in the OECD. It was basically much less detailed and flexible and it set
how certain criteria would be applied and the way to be assigned to these criteria.  The OECD
recommendations on hardcore cartels were essentially an embodiment of the concept of common
approach.  It listed prohibited categories, reflecting the most egregious practices in this area and itidentified the hardcore cartels but it did not define them.  Therefore, they did not say exactly how to
deal with exceptions.  It was left to each country to take on its commitments on its own.  This was a
very good approach for a group that was as heterogeneous as the Working Group, meaning that there
were countries that had laws of a very long standi ng and there were others who had laws but who had
just been learning how to apply them and many othe rs that did not have laws.  The flexibility would
be built into the negotiations and into the design of each provision.  The Group would have to come
up with what was an industrial policy, what was to be exempted.  The flexibility would be designed at
the heart of the discussion and the common approaches assumed flexibility.  Therefore the way one
treated developing countries and their goals would be part of a conscious process.  This was important
because if one went down the root of harmonising exceptions or even if one attempted to harmonisethem, this would be doomed to failure.  There were too many exceptions and legal doctrines and the
objectives of competition policy around the world were not really harmonised and should not in any
way be harmonised. It was unlikely that it was harmonised overtime because it reflected historical
trends.  There were certain aspects though that could be improved.  For example, with total exclusion
(sectors which were completely exempted from general competition law provisions and the resultinggaps were not governed by any other competition laws, rules or regulations), one could develop
guidelines for when that total exclusion might be invoked.  In addition, these guidelines would define
how total exclusion would be invoked, such as non-discriminatory basis, with the idea that one wasWT/WGTCP/M/21
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not creating new barriers to trade in invoking such total exclusions.  This was totally different from an
attempt to harmonise any exclusion or exception.
95. Referring to the study that had been conducted by Dr. Evenett (JOB(03)/31), he said that his
delegation did not see exceptions only as part of industrial policy.  They reflected a wide variety of
public goals, be they cultural policy or social policy or income distribution policy, which had little todo with trade.  There was nonetheless obviously an implication for trade but it was hardly the
parameter dominant in most exceptions.  In each of these situations, the calculation of the public
benefit outweighed any anti-competitive effect.  It was important that in the design of competition
policy, each country made the same calculation on its own needs. In conclusion, a common approach,
which meant a very general description of what was prohibited, could be developed.  This approach
built flexibility into the design of each provision.  Under this approach, it was not necessary to discuss
exceptions.  Exceptions were therefore national parts of the process and were accepted as a core ideaof competition policy. It would not be necessary to exempt industrial policy development because
they would be part of the design.  In this way, it would be possible to achieve a more harmonious and
balanced approach.  On total exclusion, guidelines could be discussed.  The general approach was
based on the concept that exceptions and exclusions were part of a competition process.
96. The representative of Thailand said that before proposing what developing countries wanted
in terms of progressivity and flexibility, the Group needed to check why such provisions were
necessary.  Was it because the compliance to the envisioned multilateral framework agreement was
likely to impose tremendous costs on Members economies.  If so, could progressivity and flexibility
lessen the compliance burden?  Thailand believed that delaying the obligation did not reduce costs
that needed to be incurred – it simply deferred it to a later date.  What was needed to defray these
costs was committed technical assistance.  If properly designed and adequately funded, technical
assistance and capacity-building could contribute to developing countries' progressivity in complying
to WTO rules.  Unfortunately, while obligations were bound, commitments to technical assistance
were never binding in the WTO and the Group needed to spend more time in talking about technical
assistance.  But, before asking what kind of progressivity and flexibility would help alleviatecompliance costs to LDCs or before limiting to scope of Members obligations, the bigger question
was whether these costs or obligations were justified and consistent with the goals the Group would
like to achieve.  On this note, she said that there were still some confusion on what the Group was
trying to achieve. Was it trying to pass national competition laws, or to have Members pass national
competition law that comply with core principles, or to tackle unfair trade practices in the form of
hardcore cartels?  Trade was a major element in the discussion here (after all this was the WTO and
the Working Group was focussing on the interaction between trade and competition policy, notcompetition law and policy per se , as India had correctly pointed out).  If trade was at the centre of the
discussion, then the major objective of the discussion at hand should be to deal with unfair trade
practices, in particular hardcore cartels.  In this regard, it was not clear how having national
competition law and core principles could help but defy unfair trade practices that were damaging to
domestic economies.  There had not been a clear case where a small open economy could providesanctions to multinational companies in practice.  The proposal on the table not only would not solve
these problems and stop these transfers of rents, but seemed to be imposing additional costs on
developing countries to comply with the requirement of national competition laws and core principles.
Her delegation had suggested an alternative approach that would not impose such unduly obligations
and compliance costs to developing Members, in particular those without competition law. Shetherefore made two proposals.  A genuine intent to deal with international cartels would imply the
removal of exemptions to export and international cartels that existed in national competition law.
Unlike other types of exemptions which were based on economic, social and efficiency or cultural
grounds and were acceptable, exemptions for export or international cartels typically lacked any valid
justification.
97. To guarantee that developing countries would be protected from the abusive power of
multinational companies, it was also important to have a multilateral rule that would ban the mostWT/WGTCP/M/21
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blatant and damaging trade practices, which were price-fixing and bid-rigging.  Her delegation was
not proposing a supra-national competition body, but ju st an international rule on hardcore cartels.
With such a rule developing countries could addre ss their complaints to the WTO to be subjected to
the dispute settlement mechanism.  In conclusion, she said that if the framework for a multilateral
agreement on competition did address developing countries' concerns and needs, as the Doha agendahad intended, then the need for progressivity and fl exibility would be minimal, but if it did not, then
Members would need to try to find flexibility and progressivity or try to opt out as much as possible to
minimise the burden that would fall on them.
98. The representative of the European Communities and its member States, responding to the
comments of the Thai delegation, said that Thailand was proposing an original approach:
concentration on domestic enforcement of competition law and policy and the creation of a limited
and simpler form of international enforcement.  The criteria proposed by Thailand in terms of howone would go about to enforce it (price comparison), reminded him of the discussion on antidumping.
If it was possible to take this kind of decision, then it would be sufficient to just enact a rule
prohibiting dumping.  This would be of great interest for several Members because dumping was not
prohibited by WTO rules. Referring to the comments of the Hong Kong, China paper (document
W//WGTCP/W/224), he said that the first point that had struck him was the question of a competitionstructure and the difficulty developing countries might have in establishing a competition policy
regime and implementing it in the absence of a competition culture.  This question had been addressed
by the Group several times and there had not been brilliant ideas in this respect. But there was one
basic point that came out of the discussion: he  did not see how countries which did not have a
competition policy regime would ever develop a comp etition culture.  He said that Hong Kong, China
pointed out that they had no competition law but they did have a competition policy regime.  They
had deliberately forced competition through other public measures.  They had an open trade regime.
However, it usually worked the other way round.  Competition culture did not get born in a country if
the government did not take certain actions to create an environment where a competition culture
could flourish.  Establishing a competition policy regime was one of the most useful elements that agovernment could put in place to force a competition culture.  The second point made by Hong Kong,
China was that what was competitive or anti- competitive varied according to the economic
circumstances of the different countries.  He agreed with this but said that he would go further by
saying that it varied according to the economic circumstances in the same country over time. It was
inherent in any competition policy regime to allow for that difference.  What the Group was
discussing here would not affect that basic fact. Countries should set up a competition regime that
suited their economic situation at a particular point in time and should retain the flexibility to change
that when the economic situation changed.  If the same principles were applied to the kind of proposal
that his delegation had made on core principles, obviously, a country should be allowed to treat
different situations differently.  If one looked at  how the principle of non-discrimination was applied
in the WTO, non-discrimination did not mean indiscriminatory equal treatment for all products, all
economic operators and all countries.  Discrimination was treating the same situation in a differentmanner without an objective justification.  When si tuations were different, when economic operators
were different, with different market power, different impact on the market, when they behaved
differently, it was rational to treat them differently.  The notion of non-discrimination proposed in the
context of competition was not equivalent to absolute non- differentiation of treatment of all
economic operators. It was on this basis that his delegation made the distinction between de jure  and
de facto non-discrimination.  The nationality of a firm was not in itself a valid reason for
discrimination. It was often used as a proxy. Big multinationals had more market power, but some
domestic operators had just as much market power.  On transparency, he said that this element was an
important requirement, one that would provide greater flexibility in other areas of a competition
agreement.  At the same time, transparency itself could not be without limitations.  The object oftransparency should be defined clearly. Procedures for transparency that were not overly-burdensome,
should also be defined, but that was not new to the WTO. What Hong Kong, China called the first
level of transparency was clearly part of the notification requirement that his delegation was
envisaging.  If a government enacted competition provisions, for instance in sectoral regulatoryWT/WGTCP/M/21
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frameworks, they would have to be made transpar ent in the same manner.  What Hong Kong, China
called the second level, however, was completely outside the scope of a competition framework.  In
some countries what was referred to by Hong Kong, China was part of industrial policy.  It included
measures affecting the entry into a sector.  They were part of the way a government chose to regulate
or not any particular sector of economic activity – competition law took this regulation as a given, thatis, there might be no regulation affecting an economic sector – there might be plenty of regulation –
there might be a very differentiating universe but that was a given – that was what the economic
sector looked like and on which competition law was applied.  This would not be subject to
transparency requirements in a competition context.  It might be subject to transparency requirements
somewhere else in the WTO (there was an extensive transparency requirement in Article X of
GATT), but this would have nothing to with the competition agreement.
99. Continuing, with regard to procedural fairness, he agreed with the point made by Hong Kong,
China that a system of procedural fairness had to fit in the deep, legal, judicial administrative tradition
of a given WTO Member.  It was perhaps an obvious point but one worth making.  This was not just a
question of costs - it was because it was an essential requirement for all the Members that
international agreements did not overrule the structure of their legal and constitutional system. His
delegation had never proposed that in order to achieve basic principles of procedural fairness, WTOMembers would need to set up a special system - administrative or judicial - for competition.  Some
countries might choose to do so and some countries had indeed chosen to do so.  Others had resorted
to the ordinary system of reviewing administrative decisions. What had to be done was to identify the
core of this procedural fairness principle and identify its essential elements and not go into what in a
way were the peripheral elements, the details that had to be left to individual countries.
100. Continuing, with regard to voluntary coopera tion, he said a tension existed between the
concern that developing countries might be called upon to offer a cooperation they were not able to
offer, which had been highlighted by some delegations, Hong Kong, China, and the concern
expressed by the delegation of Thailand and others that developing countries might not obtain as
much cooperation as they actually needed.  There was not an absolutely perfect way to solve thattension and developed country authorities also suffered from that tension, although to a lesser degree.
The only solution would be a balanced and articulate system with different levels of cooperation,
starting with the basic levels of exchanges of views in a multilateral framework with minimum
requirements of listening to requests/to answering requests for cooperation, even in the negative but
explaining the reason why a request could not be fulfilled or could not be fulfilled entirely and then
building up on that. The purpose was to achieve a situation where Members got to know each other,
got to agree on what the minimum requirement for this exchange of views were, and on that basis tobe able to build a more stable, in-depth, sophisticated relationship, perhaps on a bilateral or regional
basis, which were the only things that were working to enable cooperation, for instance in individual
cases.
101. On the question of institutional upgrades to competition policy, the points that had been made
by Hong Kong, China were well taken but at the same time the valid comparison was not necessarilythat between a country with a competition law and a country without a competition law.  A valid
comparison, especially with a country at a certain level of development, was a comparison with itself.
Would a country be more or less competitive with or without a competition regime?  The point made
by Hong Kong, China implied that they were competitive because they had a competition regime inter
alia and they would not be more competitive with a competition law.  It was not clear whether that
point applied more widely than Hong Kong, China.  The points on the reference to the average OECD
country were just in passing since the Community and its member States today represented half the
OECD membership and soon would be close to two-thirds.
102. His delegation did not necessarily have a prob lem with the two-tier approach suggested by
Hong Kong, China.  But he was not sure what exactly was the level of prescriptiveness which wasconsidered to be too much. Hong Kong, China's paper did not address this point.  It seemed that thereWT/WGTCP/M/21
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were different levels of prescriptiveness.  If the proposal of his delegation was whittled down to what
was really the bare bones of prescriptiveness defined as the notion of the core principle, he would be
open to listen to arguments that demonstrated that it was possible to usefully go below but this did not
seem to be possible.  Then the question became, could a country without a competition law of some
sort actually implement the basic core principles?  He had not been able  to figure out how that was
possible.  As to the question of second-tier, non-binding guidelines, that was fine for his delegation.
He had not proposed it because it was difficult enough to agree on the basic commitments of the first
tier, let alone on a more complicated second tier, even though it was not binding.  Countries would
have those options available anyway, for instance if countries wanted to go beyond hardcore cartels,
or wanted to have provisions on abuse of dominance, monopolies or even mergers.  There was
absolutely nothing that stopped them from doing so; a competition policy committee could be formed
to discuss that as well on a non-binding and voluntary basis.  Technical assistance would be geared tothe need of a country and not to the basic elements of a competition agreement.  So the options were
there but the membership would not have the time and the energy to go into the non-binding elements
of a framework.  Continuing, he emphasized that transitional periods should be tailored to the needs
of different countries.  The Group might want to go beyond the traditional categorisation that the
WTO had used and maybe agree on transitional periods which were more targeted to specific groupsof countries or even to individual countries if this was possible.  The Group might also want to work
on implementation plans and make sure that countries came out of a negotiation with an idea of what
they needed to do to implement instead of being given a lump period of time and saying "see you in
ten years time and let's see what you have done in the meantime".  This had to be linked with the
question of technical assistance but clearly transitional periods were part of the exercise.
103. He also recalled what his delegation said in the past about regional approaches.  There was a
valid argument to say that countries with economies below a certain size might not find it useful at all
to have a national competition regime.  On the other hand, the development of regional approaches
and regional competition authorities had been helpful to promote regional integration and regional
trade and that was a perfectly valid way of implementing the kind of competition framework that hisdelegation had proposed.
104. On the question of exemptions and exceptions where governments must have the flexibility to
decide that there were good reasons for not subjecting to the general competition regime certain
sectors, certain economic activities, his delegation had a completely open mind.  He also recalled that
a situation in which a competition regime became the exception itself would not be acceptable and
that transparency was essential.
105. Regarding implementation, he said that for countries who chose to have a competition
authority, there were administrative options different than establishing a single purpose agency – the
function of a competition authority could be merged with other regulatory functions – could be
located somewhere else in the government. Some countries had chosen not to have a competition
authority at all and trust the courts.  There was a variety of solutions and an agreement should be
flexible enough to allow for those solutions to be adopted.
106. Finally, he referred to one preoccupation which had been expressed several times: there were
some constitutional requirements, the best example being the requirement in the South African
constitution to rebalance the economic situation which was a legacy of the past regime.  Somehow,
not only a competition framework but any agreement which would be reached had to leave countries
the flexibility to protect and implement those kinds of policies.  His delegation's proposal did notimpinge on those policies, but if at the end of the day WTO Members needed reassurance on that
score, that would be an important point that the Group should look at.
107. The representative of Norway said that, given the wide variety of differences which existed in
Members’ economies, where some members had compet ition laws, while others did not, a multilateral
framework should allow for sufficient flexibility and progressivity.  These should be basic principlesWT/WGTCP/M/21
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under any multilateral framework.  The central element in the concept of progressivity was the need to
safeguard developing countries’, including LDCs’, ability to implement a multilateral framework in
stages.  This included the possibility to maintain, af ter the entry into force of the agreement, of certain
additional arrangements such as exceptions or exemptions.  Indeed, the Doha Declaration required to
take full account of the needs of developing countries and LDCs. Also, the WTO secretariat’s note(WT/WGTCP/W/182) correctly pointed to the fact that progressivity was important in order "to take
into account differences in levels of development”.  Certain core principles such as transparency – but
also procedural fairness – should not be subject to progressivity, but should be applicable from the
time of entry into force of the framework for the Member concerned. Also, provisions on MFN and
national treatment, should, unless specific exceptions  had been granted, enter into force along with the
framework itself.  Moreover, as part of the concept of progressivity, a multilateral framework on
competition policy should allow for gradual and selective introduction of enforcement mechanisms,taking into account different Members’ needs.  As to the concept of flexibility, a multilateral
framework should allow a member to implement national rules in a way that best reflected its
economic situation and development objectives.  One must therefore avoid too detailed provisions as
to what a national competition regime should look like. In particular, he underlined the importance of
flexible institutional designs, depending on the situation of each particular Member.  Thus, amultilateral framework would also be flexible in na ture, as to national enforcement mechanisms.  As
regards developing countries, and LDCs in particular, they should be granted the opportunity to
exclude certain sectors and grant exemptions to certain types of enterprises or their anti-competitive
behaviours.  Any such exceptions or exemptions should in principle follow similar procedures of
notification to the WTO as those that existed und er other WTO agreements.  Also, even developed
countries might have sectors that would call for exceptions or exemptions.  Thus the concept of
flexibility could also point to certain special needs of developed countries.  Finally, he underlined the
important role which technical assistance and capacity building would play in establishing a
multilateral framework. With reference to paragraph 24 of the Doha Declaration, Norway was fully
committed to providing its share of support.
108. The representative of South Africa said that his delegation supported the sentiments that had
been raised about the need for progressivity and flex ibility, in the form of exemptions and exceptions,
to be considered in a multilateral framework.  Competition law could be used to achieve many
objectives. Some objectives could be related only to economic efficiencies.  Others could be related
socio-economic goals.  Therefore, the question was how these divergent approaches could be
accommodated in a multilateral framework?  Such a framework should accommodate these
approaches in the realisation that each jurisdiction was entitled to determine its own approach basedon its needs.  On the study by Dr. Simon Evenett (JOB(03)/31), he pointed to pages 11 and 12,
paragraph 22 and 23 of the study which referred to the South African example in illustrating the
various objectives that a competition law could be designed to achieve.  There were objectives related
to economic efficiencies and others were related to purely socio-economic goals like the promotion of
employment and the advancement of social and economic welfare.  It was a pity that the study did notgo beyond this.  These objectives were only in the preamble of the statute itself.  They were further
developed in the Act, in both measure review and restrictive business practice prohibitions,
specifically in the form of exemptions and other factors that must be taken into consideration in a the
evaluation of a merger.
109. Then, focussing on flexibility requirements, he said that the statute in South Africa prohibited
restrictive business practices, particularly cartels and other anti-competitive practices.  The statute had
provided for exemptions and these exemptions  constituted grounds on the basis of which an
exemption might be granted to individual firms.  These provisions on exemptions provided that an
agreement or a category of agreements could be exempted.  Thus, the approach adopted in South
Africa was not to exempt a particular sector but to exempt a specific agreement or a category ofagreements.  Parties must show that their agreement or categories of agreements sought to be
exempted contributed to anyone of the four criteria that had been identified to be important in South
Africa, e.g. maintenance and promotion of exports, ability of small businesses owned or controlled byWT/WGTCP/M/21
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historically disadvantaged persons to become competitive, ability of South African firms to compete
in international markets and the economic stability of an industry or sector designated by the minister
of Trade and Industry in consultation with the responsible minister.  Now there were still a question of
interpretation about what some of those objectives related, for example the one that dealt with the
ability of South African firms to compete in international markets.  The question was whether or notthat meant that anti-competitive practices of national champions could be exempted. South Africa also
supported the other views that where exemption and exceptions were to be provided for, it was useful
to have a criteria by which such exemptions and exceptions were exercised so that everybody knew.
The element of transparency in the context of this debate was therefore important.  The four grounds
upon which an exemption could be granted indicated the extent to which the process was transparent.
Everybody knew what were the requirements that had to be met in order to get the exemption as
applied for.  It was up to the authority to specific ally decide whether or not to grant the exemption.
Turning back, for the sake of illustration, to the fourth criteria, i.e. the economic stability of an
industry or sector, he said that a particular sector might go to the minister of Trade and Industry and
request that he designated that particular sector.  The minister would issue a statement saying that this
sector was designated.  It would not mean that it was exempted. It would mean that any firm in that
sector could ask the authority for an agreement or category of agreements to be exempted.  It thusappeared that the designation of the sector by the minister was a signal given to the competition
authorities that the sector was important.  When an exemption request would come before them, they
would have regard to the fact that there was industrial policy considerations involving that particular
sector.  The parties still had to show that the agreement or the category of agreements sought to be
exempted contributed to economic stability of the particular sector.  This procedure had been usedonce, for a variety of agreements in the petroleum industry and when one looked at the agreements
concerned one could find that there was a question of stability involved in the distribution
arrangements in this sector. The exemption was granted only for 18 months.  This example was given
to show how in practical terms some of the provisions within the flexibility element could be
accommodated within any type of jurisdiction that required to used them.  Such arrangements did notnecessarily have a negative impact on the best practice implementation of competition law.  The
question, in this context, would be whether a multi lateral framework be such that it made exemptions
inconsistent with the objectives of such a framew ork.  If so, the developing countries would have
concerns because they would certainly want to have consideration of certain issues specific of their
jurisdiction within their law.  The discussion within the Group showed that this did not seem to be the
issue.  The Group seemed to agree that flexibility was important and therefore a cornerstone for any
future multilateral framework.  The question of transparency in the form of a criteria for exercisingexemption would also be important, but it would no t be appropriate for the multilateral framework to
try to impose or suggest a criteria that could be used.  This was best left to each jurisdiction.
110. Continuing about export cartels, he referred to what a delegate said earlier about the
participation of large international firms in these practices.  He said that this fitted with South Africa's
experience.  Then, why did they need protection fr om competition laws?  They probably did not need
such a protection, but for some reason, some countries did grant them that particular exemption.
What was interesting to note was that, in the c ountries where they originated, they were actually
banned to operate.  Therefore they were a licence to hurt another economy.  Should therefore a
multilateral framework ban export cartels?  Or, should not the challenge lie in the respective
authorities that sought to enforce their competitio n laws, to have provisions within their laws that
enabled them to deal with any type of cartel within their particular economy?  In other words, the
question was would it be so difficult within a multilateral framework to not having a specific ban on
export cartels, but each jurisdiction ensured that within its laws, there was sufficient provision given
to the authorities to deal with practices engaged by  export cartels.  Experience showed that if a law
was sufficiently permissive for the authority to investigate, this authority would be in a position todeal with export cartels.  It would be useful if that particular authority could get the necessary
assistance from the authority of the country where the export cartel came from.  The question around
export cartels, therefore, seemed to suggest that there was a question to be considered on the specific
provisions of competition laws in the jurisdictions that were passing them and the technical expertiseWT/WGTCP/M/21
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to enforce that particular law.  Another way of putting the question was (i) would an authority be
prevented from enforcing its law simply because an export cartel was not banned in a multilateral
framework or (ii) will any effective implementation of a domestic competition law be purely
dependent on that particular authority's ability to conduct an investigation in the first place?  This
seemed to raise a question of technical competence, resources and cooperation. Experience suggestedthat it was better that an authority had the necessary tools to enforce the law itself, using its own
means to deal effectively with these types of practices.
111. Continuing on technical assistance, he supported the comments made by the representative of
Thailand.  He said that it was strange that the Group was arguing about adopting a multilateral
framework and core principles but at the same time, the question of technical assistance did not seem
to be one of the key principles to underpin a multilateral framework.  A multilateral framework could
create rights and obligations, it would put Members of the WTO in a position to put in place at leastcompetition laws based on those principles which might very well be binding.  One area was critical,
i.e. the area of enabling the developing countries wi thin that type of framework to effectively enforce
their laws.  The Group needed to try and provide, within the multilateral framework, a provision that
would create a structured framework where technical assistance was provided in a structured way on a
regular basis to developing countries by either the WTO or developed Members of the WTO.Otherwise, one would give the impression of prov iding for a framework with core principles that
would be binding without providing the necessary support that would determine whether or not
developing countries could effectively enforce this particular law.  A balance needed to be struck on
those types of issues. But whether this could be achieved or not, the question still remained whether or
not a developing country could enforce its laws because it was dependent on something else beingdone elsewhere.  Referring to how Interpol worke d, he said that countries' criminal laws could be
enforced effectively, even dealing with international syndicates.  But one country could not say that it
could not enforce its criminal law because it was dealing with a syndicate from so far away and
therefore, without the assistance of the country, the law could not be enforced.  When dealing with
activities like export cartels, what was important was the effects in a domestic economy.  No matter ifthey used agents or a common subsidiary, if the law enabled the authorities to get sufficient
information on the activity within their economy, then  this country should be able to enforce its laws.
The point, as mentioned by the representative of the European Communities and its member States,
seemed to be that there was a common belief that developing countries would be able to deal with
export cartels only the country where this cartel originated provided the necessary assistance. South
Africa's experience showed that this was not necessarily so. Some of the technical assistance that
would be required to deal with an export cartel  might be from a jurisdiction different from the
jurisdiction where the export cartels members came from. Therefore, even if this did not answer the
question of whether cooperation should be binding or not, there was a need for some form of
cooperation
.  The type of cooperation that was needed was less in the form of documents from a
particular authority on a particular cartel.  What was required was the tactic used by another
competition authority in dealing with a particular arrangement. for example, what was considered to
be the relevant market?  This technical information was not of a confidential nature.  The requesting
country would be able to investigate this particular market as well.  There was also the false
perception that only a developing country was most likely to request assistance.  Experience showed
that developed countries also required assistance from a developing country.
112. The representative of Chile said that Hong Kong, China's contribution was important because
it addressed issues that had been raised by several developing countries whilst pointing out different
approaches of flexibility.  As regards transparency, the contribution presented two levels, levels that
had been presented in earlier meetings to date.  The majority of Members had indicated that they had
no major problem with the first level of transparency i.e. notification of laws, regulations and
decisions.  As regards, the second level i.e. govern ment action, it would be necessary to look in more
detail into the scope of said notification.  As regards transparency in general and its flexibility, it
analysis should depend on the objectives pursued and other obligations.  Another point mentioned in
the contribution was the cost of procedural fairness including in those countries which already hadWT/WGTCP/M/21
Page 41
such procedures because these procedure differed from country to country.  Nevertheless, if the idea
was not that of harmonising procedures, the implementation of multilateral rules should not generate
greater costs since the different practices could meet the procedural fairness commitment undertaken
under the framework.  As regards cooperation, the approach adopted by Hong Kong, China was
interesting because its contribution did not speak of types of cooperation but rather of levels ofcooperation.  There were three levels. Dialogue for the dissemination of information, peer review and
case specific cooperation.  As regards the two first levels, it was easy to conceive a multilateral
framework.  As regards the third, which was of interest to many developing countries, bilateral
cooperation seemed to be the most appropriate.  It  would be necessary to analyse how to insert this
bilateral cooperation in a possible multilateral framework or how a multilateral framework could
strengthen bilateral cooperation.  Lastly and though flexibility was an interesting idea raised in the
document of Hong Kong, China, giving different options for obligation (general obligations, best
endeavours and non-binding guidelines), it would be necessary to go into greater detail into what
would be included under each category and what relationship they would have with the DSU.
113. The representative of Switzerland said that he wanted to elaborate on the area of exemptions
and exclusions, which were to be part of progre ssivity and flexibility elements.  Switzerland had
pointed out in earlier meetings that it was important that countries kept their sovereignty in definingexclusions even if they resulted in some restriction of competition, and this held as long as exclusions
were dealt with in a transparent and non-discriminatory manner, and as long as they were established
in a process which had the public interest as a guiding principle.  There seemed to be a large
consensus in the Group on the importance of exemptions.  As an illustration, he said that the
delegation of India mentioned, in the meeting of September 2002, that if exemptions and exclusionsbecame part of the general framework of the agreemen t, there would be less of a need for special and
differential treatment.  He also drew attention to a recent publication in the "UNCTAD Series on
Issues in Competition Law and Policy", titled Exemptions and Exceptions. He felt that the thoughts
therein could give some guidance for a WTO competition framework.  UNCTAD described the
exemptions used in selected countries, and made a sort of categorization of exemptions.  In itsconclusions it stated that exemptions from the application of competition laws might be justified on
grounds such as reducing risk and uncertainty, facilitating innovation, collection and dissemination of
information, and counterbalancing unequal bargaining power.  Many of these justifications seemed
predominantly pro-efficiency-related.  What was also interesting was that the UNCTAD publication
specified a number of principles and safeguards regarding procedures which should be adopted before
granting exemptions. For instance: (i) all interested and affected parties at the national level should be
involved when granting exemptions ; (ii) exemptions should be as least restrictive of competition as
possible; (iii) exemptions should be time-limited and periodically reviewed.  The reviews should
clearly identify winners and losers and their impact on economic efficiency and broader economic
interests, etc.  Finally, the UNCTAD publication also stated that competition law should be of general
application, that is the law should apply to all sectors and to all economic agents in an economy. And
it drew the attention to the fact that exemptions in one sector might perpetuate or induce distortionsthat could affect the efficiency of economic activity conducted in other sectors.  In other words,
exemptions should be used with caution so as to not undermine the overall functioning of
competition.  Competition should be the rule, and exemptions should remain the exception to the rule.
Exemptions should be possible where pro-efficiency effects outweighed anti-competitive effects.  It
was in that sense that his delegation believed that exemptions and exceptions were an important areacontributing to progressivity and flexibility under a multilateral framework on competition policy.
Referring to the contribution from Hong Kong, Ch ina (WT/WGTCP/W/224), he said that Hong Kong
China had alluded to the cost and burden of adjustment which lay with those WTO members which
had not yet put in place basic legislation and enforcement authorities.  It was certainly true that there
was a basic cost, and this fact was not to be neglected.  But he added that (i) it was not necessarily anissue of dividing between developed and developing countries, since many developing countries also
had competition regimes in place; (ii) transitional periods, maybe very long ones for poor countries,
might help smoothening the cost; (iii) technica l assistance and know-how from more experienced
countries contributed in lowering the cost; (iv) there was not only a cost, but obviously there wouldWT/WGTCP/M/21
Page 42
appear to be something to gain from establishing a functioning competition in an economy, a point
which had also repeatedly been stressed in the study by Dr. Evenett. He finally said that the ideas
presented by Hong Kong, China (for instance the section on "flexibility arrangements") were
constructive and deserved serious consideration.  He also specified that it would seem appropriate that
a minimum of standards should be binding for everybody, and it would seem appropriate that a ban ofhardcore cartels should be part of such binding obligations.
114. The representative of Venezuela highlighted the oral comment of the delegation of Hong
Kong, China as to the need to clearly understand all the aspect which might be involved in a possible
multilateral framework on competition.  He felt that the best understanding of these components was
indispensable as a first step before a decision was taken. Venezuela was not asking for a multilateral
framework on competition. Venezuela had a regulatory regime and was aware of the fact that
effective control of anti-competitive practices through voluntary cooperation would be one of thebenefits of a multilateral framework.  However, certain doubts had not been dissipated and certain
imbalances must be resolved in order to get the full understanding of all the implications of a
multilateral framework on competition for countries such as Venezuela.  Venezuela believed that
before taking a decision, there should be a clear understanding of the implications in order for
Members to reasonably take a decision on the basis of how the Members' duties and obligationswould be increased above and beyond existing WTO instruments that were already complied with a
lot of efforts.  This was not a single problem which would be limited to capacity building and
technical assistance in order to meet these specific differences of developing countries.  The
establishment of a multilateral framework in this field was an internal decision which required the
allocation of resources in the long run and legislative changes as well.  If a multilateral agreement wasto the benefit of the least developed countries, full account of the needs of the developing countries
should be taken, as the Doha mandate imposed. This meant that positive consideration should be
given to a flexible and progressive regime.  Several of its elements had been addressed in the Group,
especially by the delegation of Hong Kong, China.  They included, among other elements, a regime of
exceptions and exemptions. Moreover, S&D should be one the central principles to be included in amultilateral agreement on competition.  This would contribute to creating further incentive which
would assist developing and least developed countries to give positive consideration to this option in
an international economic environment which was different from that which gave birth to the
Uruguay Round agreements.  Notwithstanding the difficulties, Venezuela was making major efforts in
order to ensure full awareness of the implication of such a framework as well as its consistency with
the national development programmes. In addition to  participating to the discussion in the Working
Group, Venezuela was carrying out different activities at the national level, with the precious help ofthe WTO Secretariat and UNCTAD.
115. The observer from the OECD indicated that the OECD Joint Group on Trade and
Competition was currently working on the issue of coverage of competition laws.  A list of current
exclusions in domestic competition laws was being developed that was not intended to be exhaustive
or overly detailed and technical. Instead, it was to pr ovide illustrations of the kind of exclusions likely
to be of interest to developing and least developed countries that might wish to use exclusions as a
means of obtaining flexibility in regard to any possible future multilateral agreement on competition
policy.  The results of this work would be shared with the Working Group, once declassified.
116. The representative of Hong Kong, China said that she was happy that quite a number of
Members found that the initial ideas presented by Hong Kong, China were constructive.  In the
process of discussions, she also found a number of innovative and interesting ideas that were worth
discussing, for example the idea raised by Canada concerning the distinction between common
approach and common standards.  Another area which was worth discussing was the question of how
prescriptive and detailed a possible multilateral framework could be.WT/WGTCP/M/21
Page 43
117. The Chairman drew attention, inter alia , to the following points, emphasizing that they were
not in any way implied to be comprehensive and were simply personal impressions which had no
official standing:
- One characteristic of the discussion which perhaps made it different from previous
meetings was that it had been hard to avoid the impression that the Group wasmaking progress.  There had seemed to be a better understanding of the issues and of
the respective positions of Members.
- There had been a useful discussion of terminological matters such as, for example,
the definition of a hard core cartel and the need to distinguish such arrangements
from other inter-firm arrangements which could be efficiency-enhancing or even pro-
competitive.
- Building on the foregoing distinction, the status of export cartels had been discussed.
The desirability of exemptions from competition law for such arrangements had been
questioned.  In response, the argument had been made that, at least in many cases,
export cartels were not analogous to hardcore cartels; they were, rather, arrangementswhich helped to make it possible for firms which otherwise might not be able to do so
to engage in exports.  At that stage, the clarification had been provided by one
delegate that she had not intended to suggest that export cartels should be prohibited
per se ; the suggestion was merely that such arrangements should not be exempt from
review under a rule of reason standard.
- With regard to the discussion on core principles, the most difficult aspect had been
non-discrimination.  The proponents of a multilateral framework had made it clear
that, in their mind, the non-discrimination principle would apply only to competition
law and not to other laws or policies which might have an incidental impact oncompetition.
- The discussion of transparency had, in some respects, been easier.  All sides of the
debate had upheld the importance of transparency as a basic value of both the WTO
and competition law.  At the same time, there was clearly a concern that, in any
possible multilateral framework, any provisions on transparency must be practical,
useful and must not entail disproportionate resource costs.
- As for procedural fairness, several countries representing diverse viewpoints on the
issues had said that this principle should be addressed with care by Members and that
any possible core principle on this subject must take account of the wide diversity of
legal systems be interpreted with reference to the system of the country in which itapplied.
- There had been a further useful discussion on the nature of cooperation in the field of
competition law and policy.  A range of views had been expressed on questions such
as whether cooperation should be voluntary or mandatory.  A possible trade-off thathad been mentioned was that mandatory cooperation might indeed have benefits in
some cases, but might also entail increased (and perhaps unpredictable) costs.
- With regard to the matter of compliance mechanisms, the Group had had a useful
exchange of views regarding both the potential contribution of peer reviews and thepros and cons of any possible application of the WTO dispute settlement mechanism
in this area.  No doubt, this was an issue that would receive further discussion at the
Group's meeting in May.WT/WGTCP/M/21
Page 44
- On S&D, flexibility and progressivity, the Group had been reminded of the
importance of those matters and the fact that they have many possible dimensions.
This, too, was an issue that would no doubt receive further consideration at the
Working Group's meeting in May.
IV. TECHNICAL ASSISTANCE AND CAPACITY BUILDING, AS CALLED FOR BY
PARAGRAPH 24 OF THE DOHA MINISTERIAL DECLARATION
118. The representative of the European Community and its member States introduced a written
submission on the topic of technical assistance programmes and projects undertaken by the European
Community and its member States (WT/WGTCP/W/223) in the field of competition law and policy.
In addition, the representative of the Secretariat provided an update on the Secretariat's  technical
assistance programme in this area.  The representatives of  Thailand, Lesotho , China , Tunisia  and
Korea made oral statements or posed questions on this item.
119. The representative of the European Community and its member States, introducing document
WT/WGTCP/W/223, highlighted the main goals of that written contribution.  The submission sought
to offer a snapshot of what had been done recently, what was currently being done and what was in
the planning phase in terms of technical assistan ce and capacity building activities in the field of
competition.  He stressed that these included activities taking place both pursuant to paragraph 24 of
the Doha Declaration as well as activities which for the large part would take place regardless of
paragraph 24, and which often took place also in a purely bilateral context.  As to the preceding
discussions in the Working Group on technical assistance and capacity building, he believed that there
were two conclusions that all participants could draw.  First, in terms of technical assistance andcapacity building offered in the context of domestic competition laws, there was no "one size fits all".
Second, technical assistance and capacity building had to be demand-driven.  In other words, the
donors or the providers of assistance should not force it on recipients, but it should be the other way
around.  Both points were clearly reflected in the written contribution by his delegation.  For instance,
it used the expression "upon the request of" stressing the demand-driven aspect, and one could alsofind that the types of activities described in the do cument varied significantly both in terms of the
agencies providing and receiving assistance, and the amounts involved.  All the amounts mentioned in
the contribution were indicated in Euros.  It was worth noting that the very specialised technical
assistance that had been offered to the ten c ountries joining the European Union within the
foreseeable future and the amounts associated with that should be seen in the context of the obligation
incumbent upon these countries to take on board various obligations, in particular to adopt the so-
called " acquis communautaire " in the area of competition law and policy.  Finally, he pointed out that
his delegation foresaw that at some point it would update the contribution to reflect the regular
developments in the context of assistance provid ed both by the European Commission and by its
individual member states.
120. The representative of the Secretariat noted that the Secretariat's overall plan for technical
assistance on competition policy in the period be tween the Doha and Cancún Ministerial Conferences
called for it to organise regional workshops for all parts of the developing world, and eventually also
for the transition economies in Central and Eastern Europe.  In the second half of 2002, the Secretariat
organised a regional workshop in Guatemala for Central America in cooperation with the Inter-
American Development Bank.  This had been followed by similar regional workshops for French-
speaking and English-speaking African countries in Gabon and Mauritius, respectively.  Continuingwith this work programme, in January 2003 the Secretariat had organised a regional workshop in
Bangkok for Members and observers from the Asia-Pacific region in cooperation with the
Government of Thailand.  The Secretariat was in the process of organising similar regional workshops
for the Arab countries, as well as an additional regional workshop for African countries and one for
the countries of Central and Eastern Europe.  Furthermore, the Secretariat was organising – incooperation with the Inter-American Development Bank – a regional workshop for the Caribbean
region and one for Latin American countries.WT/WGTCP/M/21
Page 45
121. As to national workshops, he noted that resource constraints required the Secretariat to take a
more selective approach, although the Secretariat did attempt to organise such workshops when a
particular need was expressed.  In particular, in July-August 2002 a national workshop had been
organised for China, and in December 2002 the Secretariat had organised a national workshop for
Lesotho in Maseru.  Another aspect of the Secretariat's technical assistance activities concerned thecourses organised by the WTO Secretariat for senior officials in particular regions.  These courses
dealt with the full range of subjects in the WTO, and each included a specific module on competition
policy.  The Secretariat had been providing the instructor for that module.  For instance, in January
2003 the Secretariat had provided an instructor for a WTO course for senior Arab government
officials in Cairo, and in the subsequent months the Secretariat would provide an instructor for similar
kinds of courses for senior officials in the CEEC countries and Central Asia, in French speaking
African countries and English speaking African countries.  Further, on a regular basis the Secretariatcontinued to provide lectures for the module on competition policy as part of each regular WTO trade
policy course held in Geneva.
122. Continuing, he stressed that close cooperation with UNCTAD continued to be a hallmark of
the Secretariat's technical assistance programme in the area of competition policy.  He mentioned that
at one point it had been anticipated that the Secretariats of the WTO and UNCTAD would attempt toorganise joint technical assistance events.  The two Secretariats had found through experience that it
was more efficient for either one or the other of the two organisations to have the responsibility for
organizing each particular event, while having the benefit of the other's participation in each event.
This had been the approach that was followed, and to that end, UNCTAD had been invited to, and had
participated actively in, all of the regional and national workshops that the WTO Secretariat hadorganised recently.  Similarly, the WTO Secretariat had participated in a large number of workshops
organised by UNCTAD throughout the developing wo rld.  For instance, in 2003 the WTO Secretariat
would participate in regional workshops organised by UNCTAD for Africa, for the Asia-Pacific
region, for Central and East European countries, and for Latin America.
123. He mentioned that the Secretariat's plans called for the organisation of two intensive training
courses on trade and competition policy for officials from Africa and from Asia after the Cancún
Ministerial Conference.  The Secretariat hoped to deliver these courses in cooperation with the World
Bank, albeit this was subject to ongoing discus sions.  In any case, UNCTAD would be invited to
participate in these courses.  In all of the technica l assistance activities that the Secretariat organised,
and particularly in the regional workshops, in addition to Secretariat officials, the Secretariat had
sought to involve experts from both within and outside the given region as speakers.  In particular, he
thanked Professor Jenny, the Chairman of the Working Group, for having participated as a speaker inmany of the Secretariat's regional workshops.
124. The Working Group requested that Secretariat to prepare a document summarizing the
information that had been provided on technical assistance and capacity building, and any additional
details that were relevant.
125. The representatives of Thailand, Lesotho  and China  thanked the Secretariat for holding a
workshop on trade and competition in their countries. Continuing, the representative of Thailand said
that the workshop in Bangkok had been attended by 23 WTO Members and a number of observers
from the Asia-Pacific region.  It provided an opportunity to share views and exchange experiences on
many aspects of competition policy, as well as to pave ways for further discussion in the Working
Group.  Given the complexity of the issues, she understood that the Doha Declaration extended theeducational process of the Working Group until the 5
th Ministerial Conference to decide with an
explicit consensus on the appropriate modalities for negotiations.  The additional time would allow
Members to further assess the implications of competition policy and help to ascertain the needed
consensus and universal participation in these negotiations.  Her delegation believed that one of the
key tools for achieving the objectives of that extended time frame would be technical assistance andcapacity building.  Technical cooperation activities would assist developing and least developedWT/WGTCP/M/21
Page 46
countries not only in developing their national competition laws, competition authorities and
regulatory bodies, but also in better evaluating the need for a multilateral agreement on competition
policy.  Most importantly, technical assistance would allow developing and least developed Members
to participate in the discussions with their developed partners at an equal footing.  In order to ensure
that least experienced countries be well-informed and have an in-depth understanding about whatmultilateral cooperation in competition policy would bring about, technical assistance and capacity
building should be tailor-made, continuous, and av ailable on the long term.  In that regard, her
delegation strongly supported close co-ordination between the WTO and other international
organisations, such as UNCTAD and the World Bank. She noted that Thailand was looking forward
to welcoming a single arrangement both at regional and multilateral level.
126. The representative of Lesotho said that a political decision had been taken by the Government
of Lesotho to develop a competition law and policy, and to set up an authority to deal with
competition issues in Lesotho.  The workshop in Maseru had come at an opportune time because it
provided different perspectives on formulating competition law and policy.
127. The representative of China said that, as a more general comment, he had noted that most
developing country Members were at the first stage of developing their domestic competition laws
and policies, and their special needs should be fully  taken into account in a multilateral framework on
competition policy.  Therefore, the development of such a multilateral framework had to be done in a
realistic, practical and progressive approach.  His delegation favoured an idea put forward by the
representative of New Zealand at a previous meeting that flexibility should be preserved at the
national level, and it believed that the principle of flexibility should also be reflected in a multilateral
framework, particularly for developing countries.  He noted that the representative of New Zealandrecommended that in the context of international cooperation, priority be given to the concerns of
developing countries, for instance, concerning export cartels.  At the same time, in order to increase
the confidence of developing countries, capacity building should be carried out in the cooperation
process.  Technical assistance and capacity building should be the focus of the work of international
cooperation, and it should be an integral part of  a future multilateral framework on competition
policy.  The 5
th Ministerial Conference in 2003 would decide  whether to launch negotiations on the
subject of trade and competition policy.  Bearing this in mind, his delegation believed that before the
Conference, technical assistance and capacity building activities should be intensified to help
developing country Members understand the basic concepts and principles of competition policy, to
analyse their domestic legislation, to provide basic training to government officials, to establish a
culture of competition, to analyse the relationship between competition policy and market economy,
and to assist the exchange of information and experience among WTO Members.  His delegationsolicited more focussed and well-targeted technical assistance activities.  To promote voluntary
cooperation among WTO Members, Members needed to better understand other Members'
experience, and the challenges in implementing competition law and policy.  Technical assistance on
this topic could take the form of national and regional seminars or short-term training workshops.
China wished to co-operate with experts from th e WTO and other organisations in carrying out joint
studies on the possible impact of future multilateral competition rules on China's trade and economic
development.  His delegation was also prepared to contribute to discussions by sharing China's
experience in the application of competition policy with other Members.
128. The representative of Tunisia highlighted the importance of technical cooperation for
developing countries in helping to strengthen and enhance their capacity in competition law and
policy.  Tunisia had benefited from, and was grateful for, technical assistance by France, the WTO
and UNCTAD.  He noted that in addition to technical cooperation, the promotion of competition
policy in developing countries was useful in enhancing the capacity of such countries.   He suggested
that the WTO and other international organisations expand technical cooperation beyond organising
seminars and training courses.  Further, he suggested that WTO technical cooperation go beyond tradepolicies, for instance it could be specialised in competition policy because trade specialists were not
always the people who were dealing with competition policy.  Given that the subject was so large, itWT/WGTCP/M/21
Page 47
would be worth having a specialized course on competition in addition to the existing course that was
a module of seminars on trade and trade-related matters.  Such course would prevent technical
cooperation in competition policy from remaining a subsidiary activity for the WTO and for other
organisations providing technical cooperation.   There was a need for a new program independent of
the existing one.
129. The representative of Korea noted the importance of technical assistance as it reduced the
burden of countries without competition laws or  with limited experience in competition law
enforcement.  He pointed out that when Korea had started to enforce its competition law, it had
received much assistance from developed countries, which had helped Korea to enforce its
competition law successfully.  Turning to the technical assistance activities provided by Korea, he
noted that Korea had been co-organising annual in ternational workshops on competition policy with
the OECD since 1996, with the subsequent international workshop being held in Seoul from 29 Aprilto 2 May 2003.  The workshop included three days of lectures and one day for social activities.  The
first and the last day of the workshop focused on basic competition issues, whereas the second day
would be focussing on the WTO.  Almost forty countries, including transition and developing
countries, were being invited to that workshop.  In addition to the annual international workshops, in
the previous year Korea launched a competition forum to be held every other year in order todisseminate competition culture globally.  Further, Korea planned to organise a special session for
Chinese working-level competition officials in July 2003.  An additional event was planned for
working-level officials from developing countries and transition economies in November 2003.
These technical assistance events served to contribute to a global competition culture and to reduce
the burdens for some countries.
130. The representative of the Secretariat, responding to the suggestions by the representative of
Tunisia, noted that, as he had mentioned, the Secretariat was exploring the possibility with the World
Bank of presenting an intensive course on competition policy and its trade-related aspects for the
countries of Africa and Asia.  To some extent, this might go in the direction of the suggestion.
Further, he mentioned that in all of its regional and national workshops, the Secretariat tried toinvolve both trade and competition officials, and to that end, the Secretariat generally stipulated in the
invitations that each country participating in a regional workshop was invited to send one delegate
from its trade ministry and one delegate from its competition authority or another ministry with
competence in that area.  Thus, the Secretariat was trying to reach both the competition and the trade
communities in developing countries, although he realised that this probably did not fully respond to
all of the suggestions that had been made, and welcomed further dialogue with Tunisia on that.
V. OTHER BUSINESS, INCLUDING STOCKTAKING OF NATIONAL EXPERIENCE
AND LEGISLATION
A. 
STOCKTAKING OF NATIONAL EXPERIENCE
131. The representative of Poland presented his country's experience in developing its competition
policy.  Poland had decided to transform its inefficient centrally planned economy into a market-based
economy in 1990.  The first post-communist government had introduced the EconomicTransformation Program, which had been designed to stabilise the economy, promote structural
reforms and put the country on the right path to become a market economy.  The rapid liberalisation
of many aspects of the economy, and building the institutions essential for a market economy had
created the foundation for a vibrant private sector that had grown to account for two-thirds of the
Polish economy.  What had always been at the heart of Polish reforms was to improve enterpriseperformance and competitiveness of our economy.  For that purpose, Poland enhanced competition in
various ways: (i) privatising of state-owned firms; (ii) facilitating the establishment of new firms; (iii)
encouraging competition between new and existing firms; and (iv) gradual withdrawal of government
subsidies.WT/WGTCP/M/21
Page 48
132. At the beginning of its economic transformation, Poland had also decided to adopt a
competition law and to establish a competition agency.  When the Polish Government had started to
encourage enterprises to compete with each other, to improve their efficiency, to increase their output
and to develop new products, the Antimonopoly Office had become an important player.
Encouraging competition had been possible only on the basis of a framework of understanding amongthe government, enterprises, financial institutions and individuals, which allowed to deal with each
actor closely and transparently.  The Antimonopoly Office had strengthened that framework by
making speeches, being present in the media, issuing information bulletins and promoting
transparency – in other words, by promoting competit ion culture.  At the outset of its activities, the
Antimonopoly Office had focussed on: (i) public awarene ss activities; (ii) participation in the process
of forming legislation in order to prevent new laws  from introducing anti-competitive solutions; (iii)
participation in the privatisation process in order to eliminate the possibility that state-ownedmonopolies become private monopolies; (iv) identification and elimination of barriers of competition;
and (v) international cooperation and technical assistance in order to develop sound and  reasonable
policies.
133. In the context of competition law enforcement, the Antimonopoly Office had given priority to
addressing practices restricting entry or expansion.  Rather than devoting resources to investigatingcases which had not had a significant impact on competition, there had been a focus on the most
important cases, such as cartels and acquisitions.
134. After the first decade of competition advocacy and enforcement, competition in Poland was
maintained by incorporating competition principles  in all policies.  Thus, a liberal trade policy,
relaxed foreign investment and ownership requirements, as well as further deregulation andprivatisation enhanced competition.  Although there had been tensions between competition policy
and other government policies, such tensions had been managed in a manner that would not
compromise the fundamental objective of enhancing competition in the economy.
135. He concluded that the experience of Poland in terms of both economic development and the
role of a competition authority showed that competition had a positive impact on development.Poland had been implementing competition gradually, that is in a progressively and flexible manner.
The role of competition had been different in different periods of economic transformation;  however,
competition had existed during the whole process of economic transformation.
136. Following a suggestion by the Chairman, the Working Group requested that the Secretariat
prepare an updated version of the document entitled Overview of Members' National Competition
Legislation (WT/WGTCP/128 and 128 Revs. 1 and 2, last updated on 4 July 2001).
B. REQUESTS FOR OBSERVER STATUS FROM INTERNATIONAL INTERGOVERNMENTAL
ORGANIZATIONS
137. The Working Group agreed to revert to requests made by SELA, the Organisation of the
Islamic Conference, the South Centre and the United Nations Economic Commission for Latin
America and the Caribbean (ECLAC) at its next mee ting, having regard to the ongoing consultations
on related matters in the framework of the General Council.
C. ORGANIZATION OF WORK FOR THE WORKING GROUP MEETING OF 26-27 MAY 2003
138. The Chairman, addressing the organisation of work for the subsequent meeting of the
Working Group on 26-27 May, encouraged Members to submit written contributions, which would be
of tremendous help to the work of the Working Group.  He suggested a firm deadline of Friday,
9 May for the receipt of written submissions, to ensure their timely translation and circulation.
__________