RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/M/18
20 September 2002
(02-5069)
Working Group on the Interaction
between Trade and Competition Policy
REPORT ON THE MEETING OF 1-2 JULY 2002
1. The eighteenth meeting of the Working Group on the Interaction between Trade and
Competition Policy took place on 1-2 July 2002, under the Chairmanship of Professor Frédéric Jenny.
2. As had been agreed at the informal meeting of the Working Group on 27 February 2002, the
agenda for the Working Group’s meeting consisted of the following items:
- elements contained in paragraph 25 of the Doha Ministerial Declaration.  In
particular, focused attention was given to the following two elements:  (i) provisions
on hard core cartels;  and (ii) modalities for voluntary cooperation.
- technical assistance and capacity-building, as called for by 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, WITH FOCUSED ATTENTION ON THE FOLLOWING TWO
ELEMENTS:  (A) PROVISIONS ON HARDCORE CARTELS;  AND(B) MODALITIES FOR VOLUNTARY COOPERATION
A.
PROVISIONS ON HARD CORE CARTELS
3. The representatives of the European Community and its member States, Switzerland , Mexico ,
Australia, Korea , Canada , the United States  and Thailand  introduced written contributions relevant to
this item (documents WT/WGTCP/W/193, 194, 196, 198, 200, 201, 203 and 205, respectively).  In
addition, as had been requested by the Working Group at its informal meeting on 26 February, the
Working Group had before it a background note by the Secretariat (document WT/WGTCP/W/191)on the matter of provisions on hard core cartels.  The note provided a synthesis of the issues raised
and points made by Members on this topic in previous meetings of the Working Group, drawing
principally on the Group's annual reports for the past four years and on written submissions by
Members.  UNCTAD and the OECD also provided written materials relevant to this item
(subsequently issued, with the assent of the Working Group, as document WT/WGTCP/W/197 anddocument WT/WGTCP/W/207, respectively).  The representatives of Argentina;  Brazil
;  Cuba ;
Guatemala;  Hong Kong, China ;  India ;  Indonesia ;  Japan ;  Malaysia ;  New Zealand ;  Pakistan ;
Romania;  South Africa ;  and Venezuela  as well as the observer from the Russian Federation  made
oral statements or posed questions on this matter.
4. With regard to the harm caused by hard core cartels and the importance of effective measures
to address them, whether at the national or international level, the representative of the European
Community and its member States, introducing relevant parts of document WT/WGTCP/W/193,
noted that greater emphasis had been given in the document to the harmful effects of international as
opposed to domestic cartels.  This was not because one was considered to be less harmful than theWT/WGTCP/M/18
Page 2
other.  Rather, international cartels were those whose effects were most directly harmful to trade as
well as development and therefore to the mandate of the Working Group.  Evidence before the
Working Group, including the recent World Bank background paper which had been referred to on
several occasions1, showed clearly that such cartels had a substantial detrimental impact on
developing countries.  However, purely domestic cartels could also have a harmful impact oninternational trade and on the interests of countries outside those in which the cartel activity took
place.  The impact of cartels needed to be seen in a broader context.  As one example and possible
avenue for further discussion in the Working Group, recent investigations in various jurisdictions had
shown that one of the tools used by firms to achieve their aims was the restriction of the transfer of
technology, especially to developing countries.  In so doing, firms could to an extent control access
and new entry to the market, which could have a particularly detrimental impact on developing
countries.  In that connection, he suggested that the Working Group mandate the Chairman to contactthe Chairman of the Working Group on Transfer of Technology, in order to establish whether any
discussion in that Working Group was relevant to the work of the Group, or vice versa.
5. Another representative of the same delegation said that an Annex to his delegation's
submission provided detailed information on the nature of and the damage caused by hard core cartels
having an international dimension in a number of actual cases.  In 2001, the European Communityhad imposed fines totalling €1,836 million on 56 companies, 38 of which were from the Community,
and 18 from other countries.  For each cartel discussed therein, the Annex provided information on
the overall value of the EEA (European Economic Area) markets affected by the cartel arrangements.
If available, information had also been provided on the magnitude of the price increases imposed.  For
example, the graphite electrodes cartel, which had lasted at least seven years and covered productsworth a total of about €2.5 billion, had fixed prices at about 50 per cent above the competitive market
price, implying illegal gains for the cartel members of about €1.2 billion within the European
Community alone.  Therefore, the fine imposed (about €280 million) represented a relatively small
proportion of the gains.  Under current practice in his jurisdiction, information relating to the harm
resulting from the activity of the cartels outside the EEA had not been included in the published
decisions.  Nevertheless, it was apparent that the cartels discussed in the Annex to his delegation's
submission had imposed heavy costs on jurisdictions outside the European Community, including
developing countries – costs that were not adequately addressed at present.  At least four of the
cartels, namely those in the markets for vitamins, graphite electrodes, citric acid, and sodium
gluconate, had been truly global in scope.  In this regard, it would be useful if other Members of the
Working Group that had prosecuted or investigated these cartels could compare notes and provide
information that would provide a more complete picture of the activities and harm caused by thesecartels around the world.  In addition, he noted that his delegation would be in a position to share
more specific information on cartels that it had prosecuted when certain pending decisions were
published.
6. The representative of the United States, introducing relevant parts of document
WT/WGTCP/W/203, noted that, in the United States, the detection and prosecution of hard core
cartels had always been, and remained, a top priority for antitrust enforcement.  Indeed, there
appeared to be a growing consensus among countries  with experience in this area that hard core
cartels were among the most or indeed were the most egregious of antitrust violations.  Cartels raised
prices, restricted supply, and enriched producers at the expense of consumers.  These effects were not
limited to developed countries:  the evidence indicated clearly that cartels were a problem fordeveloping countries as well.  Current thinking and related evidence including from the World Bank
background study was summarized in the background paper on this topic which had been prepared by
the Secretariat for the meeting (WT/WGTCP/W/191).  This evidence indicated that the harm caused
                                                     
1 Levenstein and Valerie Suslow, Private Intern ational Cartels and Their Effect on Developing
Countries (Background Paper for the World Bank's World Development Report 2001, 9 January 2001)(available on the Internet at http://www-unix.oit.umass. edu/~maggiel/WDR2001.pdf).  Referred to henceforth as
"World Bank background study").WT/WGTCP/M/18
Page 3
by international hard core cartels to developing countries was more extensive than had previously
been thought.  Hardcore cartels impeded economic performance, promoted inequality, and
impoverished consumers.  This was why the United States was one of the leaders in prosecuting
international cartels and encouraged other countries to do the same.  Since 1996, over 50 companies
had been prosecuted in the United States for participating in international cartels affecting more thanUS$10 billion in domestic commerce.
7. The representative of Korea, introducing relevant parts of document WT/WGTCP/W/200,
said that the harmful effects of hard core cartels on international trade and development were clear
and justified that the issue be dealt with in the WTO context, through the adoption of an appropriate
multilateral framework.  Another representative of the same delegation noted that, as had been
pointed out in the Secretariat background paper (WT/WGTCP/W/191), hard core cartels tended to
operate wherever there was a lack of effective legislation and other necessary tools to deal with themsuch as cooperation mechanisms.  The damage caused by hard core cartels appeared to be more
serious in developing countries than developed countries, perhaps due to the lack of effective laws
and enforcement machinery in many such countries.
8. The representative of Switzerland, introducing document WT/WGTCP/W/194, said that the
harmful effects of hard core cartels on both local markets and on international trade were clear.  Both
developed and developing countries were affected by them. Although in theory each country could
address cartels and other anti-competitive practices on its own, globalization had created new and
particular challenges for combating them, in that in creasingly the relevant practices were international
in scope.  In contrast, competition law in most countries was usually exercised only within the
confines of a national territory.  There was a need to better link the purely national approaches.  It wasdifficult for a single competition authority to effectively address the impact of cartels that operated
across multiple economies, particularly where the competition regime had only recently been
established or the domestic authority had few resources.  Therefore, countries needed to cooperate in
prosecuting those infringements considered to be most harmful.  Cooperation could be undertaken
either bilaterally or through a multilateral agreement.  However, the negotiation and implementationof such agreements was time-consuming, and international cartels or other practices often affected
countries other than those covered by particular bilateral agreements.  Many countries were excluded
from the benefits of such agreements.  For these reasons, Switzerland favoured a multilateral
approach to cooperation in the framework of the WTO.
9. The representative of Thailand, introducing relevant sections of document
WT/WGTCP/W/205, said that her delegation recognized the need for mutual assistance in the fight
against international cartels, the potential damage associated with such cartels and the urgent need toeradicate cross-border collusive practices.  As had been pointed out in the Secretariat background
paper on this topic (WT/WGTCP/W/191), cartels tended to operate in countries with weak or non-
existent enforcement of competition laws.  Her delegation was concerned that closer cooperation in
the enforcement of competition law among more advanced economies might divert cartel activities to
economies with weak competition law enforcement.  The World Bank background paper which hadalready been referred to at various points in th e Working Group's discussions indicated that imports
affected by the cartels described in that study comprised approximately 6.7 per cent of all developing
countries' imports.  Moreover, these estimates were based only on the known cartels described in the
study whose existence had been disclosed by competition authorities in the United States and Europe;
therefore, the actual figures could be much higher.  For these reasons, her delegation considered thatcooperation at the multilateral level must guarantee developing countries better protection against
international cartels.  In the past, only cartels affecting developed economies, in particular those of the
United States and the European Community, had been systematically exposed and prosecuted.  While
the breaking up of cartels in these jurisdictions might, in some cases, impair their operations in
developing economies as well, other cartels operating exclusively in developing countries might neverbe discovered or prosecuted.  The international steel cartel was an example of a cartel that had been
known to be in existence for over a decade and was undoubtedly harmful to developing countries butWT/WGTCP/M/18
Page 4
had never been prosecuted.  Thailand believed that the cooperation arrangements that were currently
in place at the bilateral level were helpful in e nhancing capacity, but were insufficient to protect
developing countries from international cartels, because countries with more advanced competition
regimes would have little incentive to cooperate wi th countries whose enforcement of competition law
was considered inadequate.  Thus, a multilateral cooperation framework would be a favourablealternative for developing economies.
10. The representative of Canada, introducing document WT/WGTCP/W/201, said that hard core
cartels had a substantial harmful impact on internat ional trade and the trading system.  Reaffirming
his country's commitment to fighting hard core cartels both domestically and at a global level, he
added that Canadian authorities were prepared to commit significant resources to this struggle.  The
prohibition of hard core cartels was a clear priority for any WTO agreement on competition policy
and was urgently required for both developed and developing countries.  The fact that, due to theimpact of international cartels, developing countries had to use valuable exchange to pay higher prices
for their imports had clear and obvious implications for their development and competitiveness.
Another aspect of the harm caused by cartel activity was the impact that it could have in impeding
entry to certain markets by developing country suppliers, something which had also been noted in the
World Bank background paper to which reference had been made.  His delegation also fully endorsedthe suggestion of the European Community with regard to investigation of the harmful effects of
cartels on international transfer of technology, in cooperation with the Working Group on Trade and
Technology Transfer.
11. The representative of Australia, introducing document WT/WGTCP/W/198, said that, in
Australia's view, curbing hard core cartels had beco me an important global challenge.  One of the
most insidious forms of anti-competitive behaviour, they imposed significant costs on developing and
developed economies alike.  Dealing effectively with the deleterious effects of hard core cartels
required enhanced cooperation between competition authorities;  hence the importance of linking
these two subjects in the Working Group's discussions.  Her delegation agreed with those delegations
that had stressed the importance of action on this issue at the multilateral level.  While bilateral
agreements were useful, only a relatively small number of countries were party to such agreements;
moreover, the impact of many cartels and other anti-competitive practices was multilateral in nature
and therefore called for solutions at the multilateral level.
12. The representative of Indonesia said that international hard core cartels were among the most
harmful arrangements affecting Members' economie s.  The companies involved implemented the
relevant arrangements in order to gain profits for themselves at the expense of consumers, other
competitors and economic welfare in general.  By exercising market power, international cartels fixedprices above the levels that would prevail under competitive market conditions.  As a consequence,
importing countries, including developing countries, had to pay higher prices for the goods or services
concerned.  Moreover, in developing countries, the goods and services in question could often be
basic needs for economic development.  For these reasons, his delegation was inclined to agree with
the suggestion that hard core cartels created a barrier to economic development and growth byhampering trade creation and flows.  However, it was also important to recognize that not all inter-
company arrangements amounted to fixing prices and exercising market power;  some had no harmful
effects and indeed could yield valuable efficiencies.  For example, cooperation among small and
medium enterprises, which was common in developing countries, could be important for
development-related purposes.  Since cartels had the potential to undermine the benefits resultingfrom trade liberalization, Indonesia was of the view that it would be more effective if regulations
governing such arrangements were considered hand-in-hand with efforts to eliminate protective
measures and increase flows of international trade.WT/WGTCP/M/18
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13. The representative of South Africa said that the harmful effects of cartels on the welfare of
developing countries were widely recognized.  While the Working Group's attention had focused
primarily on international and export cartels, cartel s also existed within the domestic environment of
many developing countries.  These could have the same negative consequences as international cartel
activity.  Therefore, South Africa believed that domestic cartels should not be excluded from thepurview of work undertaken in the Working Group or related efforts at the national level.  A broad
definition of cartels encompassing both international and domestic arrangements would allow
authorities to deal with cartels in whatever shape they arose, while a more restrictive definition could
create practical difficulties.  On the other hand, the definition of cartels and measures should focus on
arrangements involving price-fixing, market allocation and collusive tendering (whether domestic or
international) as opposed to other types of inter-firm arrangements since it was generally recognized
that the former arrangements were harmful or at least could never be pro-competitive, whereas thiswas not true of the latter.
14. The representative of Brazil said that hard core cartels were damaging to consumers and
economic efficiency in general.  Moreover, the effects of such cartels were increasingly being felt in
developing countries.  Such countries were vulnerable to this sort of anti-competitive practice due to
the lack, in many such countries, of appropriate legislation and implementing machinery.  Brazilian
legislation dealt strictly with hard core cartels;  joint actions by the Brazilian Ministries of Finance
and Justice had already led to the investigation of several such cases.  Due to the internationalization
of cartel activity and the negative effects it had on developing countries, Brazil considered that there
was merit in the discussion of the issue.
15. The representative of Argentina agreed that hard core cartels imposed significant costs on
developing countries.  A particular concern involved  the impact of cartels and the role of competition
policy in times of economic crisis (see related discussion in Part III, below).
16. The representative of Romania said that the number of cartels having cross-border effects was
growing, and that the magnitude of harm from such cartels had to be considered.  The representative
of the Russian Federation said that the harmful effects of hard core cartels on national economies
were clear.  Russian competition law contained specific provisions concerning hard core cartels.  The
representative of Korea said that the comments focused on this issue had confirmed the need to
address the pernicious effects of hard core cartels through an appropriately designed multilateralframework that would not hamper the interests of developing countries.
17. With regard to the measures needed to address hard core cartels and the nature of possible
provisions on such cartels in the framework of the WTO, the representative of the European
Community and its member States said that his submission (document WT/WGTCP/W/193) provided
a detailed description of what his delegation believed were the key elements relating to hard corecartels that ought to be included in a WTO agreement on competition policy.  The two main elements
were:  (i) a ban on such cartels;  and (ii) measures to promote the exchange of information between
WTO Members in relation to such cartels.  The submission sought to specify what were considered to
be the essential key elements of provisions relating to hard core cartels without going into the type of
detail that would be appropriate only in the context of a negotiation.  Furthermore, the ideas put
forward in the submission by his delegation were not intended to be exhaustive.  However, the
following aspects could be noted at this stage:  first, a WTO agreement should incorporate a clear
statement that hard core cartels were prohibited.  There should be a clear definition of such cartels; a
mechanism allowing countries to grant exclusions from the definition for domestic policy purposes,while ensuring appropriate transparency regarding such exclusions;  and guidance should be provided
regarding the deterrence of cartel activity through appropriate sanctions.  Elaborating on these
elements, he pointed out that the part of his delegation's contribution relating to the definition of
cartels contained a list of what were considered to be obvious elements of a definition.  The exact
contours of a definition of hard core cartels could only be determined through negotiations.  In regardto sanctions, while these were inherently a matter for domestic law and were closely linked to theWT/WGTCP/M/18
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domestic legal system, a WTO Competition Policy Committee could provide guidance to countries
wanting to introduce sanctions in terms of identifying what had proved effective in various
jurisdictions (related points by representatives of the European Community and its member States
regarding the role of cooperation in addressing the impact of cartels are summarized below in
paragraphs 51-52).
18. The representative of the United States said that the proposal to address hard core cartels in a
WTO agreement raised a number of issues requiring clarification.  A first and most obvious issue was
definitional.  What was a hard core cartel?  This question had been the subject of considerable debate
and discussion when negotiating the 1998 OECD  Recommendation on Effective Action Concerning
Hardcore Cartels2, which had been referred to in the background note by the Secretariat on possible
provisions on hard core cartels.3  In particular, would a definition of hard core cartels be limited to
price-fixing, bid-rigging, market allocation, and output restrictions, as was the case with respect to theOECD Recommendation?  Alternatively, shoul d the OECD Recommendation constitute only a
"starting-point", and, as the submission of th e European Community suggested, would the Group
consider supplementing the OECD definition by further elements or practices?  Her delegation
believed that such issues ought to be discusse d in the Working Group, as an aspect of the Doha
mandate to clarify the issues, and should not be reserved exclusively for negotiations.  A second issuethat would require consideration, which had also been faced in the course of negotiating the OECD
Recommendation, related to the treatment of exemptions from cartel prohibitions.  Virtually every
country had such exemptions, either in connection with industry-specific regulations, or because a
choice had been made not to apply competition law to certain conduct or sectors.  A related issue
involved export cartels, and ways of dealing with cartels that might not be formally exempted, but thatwere either not covered by a country's cartel  laws , or were sanctioned by a government.  A third area
that required discussion concerned additional features of any commitment that Member countries
might undertake with regard to hard core cartels, beyond the commitment to adopt a law.  In
particular, would WTO hard core cartel provisions include reference to penalties and if so, what
would be the content of the provisions in that regard?  What would be the situation if a Member wereto enact a law but did not enforce it?  How would an agreement be crafted that provided the necessary
discretion for enforcement authorities not to bring an action where supporting evidence was lacking or
where an action would be against the interest of justice?  The OECD's experience in negotiating the
Recommendation on Hard-Core Cartels provided invaluable lessons for the work of the Working
Group in regard to these matters.  Given the nature of WTO, reaching a consensus on the treatment of
hard core cartels might be even more challenging than it had been in the OECD.
19. The representative of Korea said that, in order to effectively address the impact of hard core
cartels at the multilateral level, it was important to consider the definition and scope of hard core
cartels.  As had been pointed out in previous meetings, the absence of a definition could pose
problems in the application of competition laws.  The contribution of his delegation (document
WT/WGTCP/W/200), in Part II, considered and compared the characteristics of the OECD
Recommendation, and the UN Set.  It was the preliminary thinking of his delegation that thedefinition in the OECD Recommendation could become a practical guide to the multilateral
framework.  Reasons for this included its focus on the effects of cartels, such as blatant price-fixing,
rather than on particular forms of cartels.  At the end of the comparison effected in the contribution, a
number of questions had been enumerated that woul d help the Group to consider aspects of the scope
and definition of hard core cartels, for example, the criteria to be used for authorizing a cartel.  Heasked whether it would be appropriate to set principles, or whether this should be left to the discretion
of each Member under its national laws.  Continuing, he said that the paper then considered possible
obligations of Members in regulating hard core cartels.  Members would be required to introduce
                                                     
2 OECD Council Recommendation on Concerning Effective Action Against Hardcore Cartels (adopted
by the OECD Council at its 921st Session on 25 March 1998 [C/M(98)7/PROV]).
3 Background note by the Secretariat on Provisions on Hardcore Cartels (WT/WGTCP/W/191),
Annex II.WT/WGTCP/M/18
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domestic legislation for an effective regulation of hard core cartels;  however, in the light of diverse
jurisprudence, and differing levels and experience relating to competition rules, Members would be
allowed to have flexibility in adopting their domestic rules on hard core cartels.  The importance of
flexibility was noted.  Exceptions should be allowed for economies having special characteristics, for
example mono-crop economies, or economies dependent on very few commodities or goods.   Therecould be a possible exemption for a certain number of R&D cartels, or cartels made up of small
businesses which did not have a significant negative impact on competition.  As to how hard core
cartels could be regulated internationally, domestic legislation alone would not be sufficient. The
enforcement of legislation would have to be improved.  In this regard, a peer review process could
provide an opportunity to exchange experience and contribute towards a common understanding and
interpretation of competition laws among Members.  Secondly, the efficiency of regulating hard core
cartels could be improved through voluntary cooperatio n.  Thirdly, he drew the attention of the Group
to the development aspect of the issue.  In that regard, under the heading 'Flexibility', the contribution
of his delegation noted the importance of a transitional period for developing countries that had not
yet established competition laws to adopt such disciplines.  During the transitional period, technical
assistance and capacity-building relating to the adop tion of legislation, as well as the enforcement
process, should be provided.  The representative of Guatemala said that his delegation agreed with the
observations made in the submission of Korea with respect to the importance of flexibility.
20. Another representative of Korea said that Member countries should be assisted to develop
institutions with investigative and authority to request information, so that hard core cartels could be
abolished through appropriate enforcement proceedings.  With regard to definitional issues, his
delegation supported the definition of hard core cartels contained in the OECD Recommendation, and
particularly its focus on arrangements involving price-fixing, output restrictions or quotas, market
sharing and bid rigging.  The role of export-import cartels should be distinguished from that of
domestic cartels in a multilateral framework.
21. The representative of Switzerland said that, for countries to be able to cooperate in the fight
against international cartels, the basic legal approaches should be broadly similar, in the sense that
Member countries should ensure that their competition regimes effectively tackled hard core cartels.
The required minimum standard could and should be designed in such a way that it did not put in
doubt countries' sovereignty to regulate and to fully apply their own competition laws.  In that
context, the OECD Recommendation, described in the background note prepared by the Secretariat
(WT/WGTCP/W/191) provided for explicit exemption of certain types of practices and agreements on
efficiency and related grounds, as authorized under national laws.  While this was appropriate to give
due weight to national economic policy considerations, his delegation also believed that it wasappropriate that all such exclusions and authorizations be made transparent and notified.  A minimum
standard designed in such a way would address concerns relating to flexibility.  It should also be taken
into account that not all countries, especially LDCs, were at a stage of institutional development
where they could commit to rapidly building new institutions for an effective competition regime.
Further elements of explicit or implicit flexibility and progressivity, in combination withcapacity-building and technical assistance efforts, could be provided to respond to these needs.
However, it needed to be said that all economies, regardless of their state of development, could
benefit from implementing measures against hard core cartels since they were undoubtedly affected
by such cartels and developing countries were in all likelihood the most vulnerable.
22. The representative of Thailand indicated that specific proposals on cooperation mechanisms
to address international cartels would be put fo rward by her delegation in the related debate on
Modalities for Voluntary Cooperation (see Part I(B), below).  Reflecting on presentations made by
other delegations, she suggested that the definition of hard core cartels as they were dealt with in
domestic competition law should not be unduly restricted.  The international scope of many cartels
was at odds with a focus only on purely domestic arrangements.  Second, her delegation questionedwhether the definition of hard core cartels would include a per se  or rule of reason approach.  The
national laws of Thailand took into account the four key elements of cartel activity that were set out inWT/WGTCP/M/18
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the OECD Recommendation:  namely, price-fixi ng, bid rigging, market allocation, and output
restrictions.  It adopted a  per se  approach in regard to price-fixing and bid rigging, while determining
quantity fixing and market allocation activities was based on a rule of reason.  If a rule of reason
approach was preferred, the question of wide-ran ging prosecutorial discretion would have to be
discussed.  A rule of reason approach could probably justify certain activities on an efficiency-relatedbasis, if the domestic law was based on the size of the domestic market, whereas in the international
context, output restrictions and market allocation were unlikely to be justifiable.  On these grounds,
her delegation questioned whether there should be a separate section on international cartels divided
from the rest of the domestic competition law.  These concerns regarding the definition of hard core
cartels were considered important by her delegation, and were believed to be the initial step that
should be taken in trying to cooperate at a deeper level of commitment in enforcement of the law.
23. Responding to the query posed by the delegation of Thailand regarding the pros and cons of
per se  and "rule of reason" approaches, the representative of Korea said that the KFTC (Korea Fair
Trade Commission) had used the rule of reason approach for more than 15 years to check whether
cartel activities were acceptable or not.  He noted that, although efficiency was the key criterion for
application of the rule of reason, this was a flexible concept and depended on individual
circumstances.  Therefore there had been several controversies regarding the use of the rule of reasonand efficiency.  As a result Korean competition law provisions that used the rule of reason were
repealed, and ' per se  illegal' approach adopted instead.
24. The representative of Canada said that provisions on hard core cartels should be part of a
national legal or policy framework that was horizontal or economy-wide in scope, at least in principle.
This was important to achieve consistency methodologically and analytically and to build on thecomplementarities involved in attacking other types of anti-competitive practices.  The most effective
approach was through a horizontal competition law.  Second, Canada believed that it was vital that
WTO Members established appropriate enforcement authorities.  Without a dedicated authority, it
would be impossible to adequately investigate and prosecute anti-competitive practices.  This was the
broad framework at the national level in which Canada saw the fight against hard core cartels takingplace.
25. Continuing, he said that his delegation's submission (document WT/WGTCP/W/201), like
that of some other delegations, inquired as to what  lessons could be learnt from the  OECD experience
with reference to the Recommendation on hard core cartels, and how this might enlighten the work of
the Group.  He noted that a key objective of the OECD's work in this area was to promote
convergence in its members' policies in regard to ha rd core cartels over time, to facilitate effective
coordination and cooperation in addressing the costs that they imposed on members' economies.  TheOECD's work and the related Recommendation were also relevant to the legal issues broached by
consideration of provisions on hard core cartels in the framework of the WTO.  In that connection, the
OECD had left ambiguous the question of per se  as opposed to rule of reason approaches.  The OECD
Recommendation referred, as well, to the significance of cartels for entry into markets and covered, in
a general sense, the trade dimension and other social dimensions.  In a trade-related organization suchas the WTO it would be important to understand the nature of the interaction with market access, and
how authorities needed to weigh various considerations, be they of a commercial or social nature.
Cooperation in the enforcement process should be a centrepiece of discussion in the context of the
WTO.  The independence and autonomy of enforcement authorities as well as their ability to exercise
prosecutorial discretion needed to be protected, because these were fundamental to sound enforcementprocesses.  The design of the OECD Recommendati on was relevant to the concerns that had been
expressed by some developing countries.  The approach it took was flexible, and involved setting out
lists of criteria and objectives to be considered, without necessarily delineating how these criteria
would be applied or what precise weight should be assigned to any particular elements of the criteria.
Flexibility was also ensured with respect to exemptions.  Canada believed that this was a goodapproach in dealing with a subject such as competition policy.  First, it would allow both developed
and developing countries to share a unified set of commitments and would place considerableWT/WGTCP/M/18
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emphasis on a convergence process to complement any provisions.  This convergence or 'learning
process' was fundamental to sound enforcement practices and to creating a global approach in the
fight against cartels.  In sum, Canada believed that there was a great deal to be learned from the
OECD's work in this area, in particular with regard to definitional issues and the scope for
exemptions.  The OECD's experience suggested that these issues, while requiring focused attention,were not insurmountable.
26. The representative of Indonesia said that the proliferation of international hard core cartels
required cooperation among competition authorities, for example through the sharing and exchanging
of non-confidential information.  Such cooperation could be institutionalized in order to develop more
formal arrangements, but should also provide due flexibility to respond to the needs of each individual
Member.  The institutionalization of cooperation should take into account different levels of
development among competition authorities.  Even where there was no such institutionalizedcooperation, authorities could conduct coordination which would be in their mutual interest.
27. The representative of Romania said that international cooperation between competition
authorities was growing, in cases where a close working relationship and a certain level of trust had
been established.  Transparency was, especially at the moment, an essential element of a framework
of competition.  Exchange of information could take a number of forms and could be of great benefitto WTO Members.  In the view of his delegation, WTO Members would need to reach consensus on
the following issues:  definitions of hard core cartels, because not all agreements among competitors
were competitively harmful;  investigative tools, which became more important as cartel operators
became more sophisticated;  the availability of programmes creating uncertainty within the cartels;
successful approaches with regard to sanctions agai nst hard core cartels and natural persons for their
participation in the conspiracy;  and enforcement cooperation, starting from the common interest in
negotiating a single set of provisions on hard core cartels in the WTO as a basis for addressing the
needs of all countries, while taking into consideration the specifics  of the WTO.
28. Providing details on national experience and approaches to competition law enforcement in
the area of cartels, the representative of Switzerland said that his delegation's contribution (document
WT/WGTCP/W/194) explained the legal basis in Switzerland for dealing with hard core cartels and
how the law was implemented.  More than half of the investigations carried out by the Swiss
competition authority in 2001 had dealt with hard core cartels.  Also, the submission explained the
intentions with regard to further development of Swiss competition law, for instance by introducing
direct sanctions for the harmful effects of agreements like hard core cartels.  Although at a basic level
the law had the effect of prohibiting hard core cartels, it also embodied a certain flexibility in the
sense that, while there was a presumption that horizontal agreements, such as cartels, led to theelimination of effective competition, this presumption could be rejected by the firms investigated, if it
could be proven that competition continued to exist despite the agreement.  Therefore, under Swiss
law, only horizontal agreements intending to restrict competition were qualified as "hard core cartels".
An  example of this would be where the only intention was to prevent other competitors from entering
the market and thus benefit from mark-up of prices.  The case would be different in regard to aspecialization agreement on production.  Such an agreement could take place for example between
small firms that individually lacked sufficient resources to produce a good and therefore sought to
cooperate with each other and possibly with foreign companies.  The intention of such an agreement
would not be to eliminate "outside competition" (m eaning competition outside of the cartel).  Rather,
the intention would be to improve the quality of a product, and such a case would probably thereforenot be considered a "hard core cartel".  These examples were given in order to illustrate the
importance of maintaining a certain flexibility, even if basic minimum standards against cartels were
to be introduced in a multilateral competition agreem ent.  Flexibility in this sense meant that every
single case had to be judged on its own merit.   Flexibility also meant taking into account public
interests.WT/WGTCP/M/18
Page 10
29. The representative of Mexico, introducing document WT/WGTCP/W/196, said that that it
reflected the experience gathered by his countr y's national competition authorities (the Federal
Competition Commission) during the previous nine years.  There were three main parts to the
document. First, information of a general nature was provided relating to the definition of absolute
monopolistic practices and how to detect such practices.  Second, sanctions applicable to economicagents planning such practices were considered.  In this regard he noted that a limitation in the
Mexican legislation was the limited applicability of sanctions of a penal nature.  Third, several cases
of absolute monopolistic practices were discussed:  five national cases, and three international cartels
having national effects (the lysine, citric and vitamin cases).  Continuing, he suggested that three
issues merited consideration of the Group.  First, Mexico agreed that in a multilateral context there
should be rules to sanction these practices. Second, attention should be drawn to the fact that
recommendations issued by business organizations, though intended to favour consumers andbusiness by providing them with elements to determine prices, occasionally had the effect of
promoting collusion among suppliers;  as an illustration, the representative of Mexico referred to
recommendations issued by the Mexican Chamber of Commerce. Finally, in the context of
discussions on a multilateral framework, it should be considered to what extent an amnesty or
leniency programme could increase the possibilities of being able to detect these practices.  Therepresentative of Guatemala said that the case examples mentioned in the submission of Mexico were
particularly illuminating.
30. The representative of Australia said that her delegation's submission (WT/WGTCP/W/198)
provided details on her country's regulatory framew ork for dealing with cartels.  A short case study
was presented that indicated how the law worked in practice.
31. The observer from the Russian Federation said that agreements aimed at fixing prices and
dividing markets were strictly prohibited in her country.  However, since provisions of national
legislation were not sufficient to combat cartels efficiently, other tools were needed, such as the
proper responsibilities of monopoly authorities, methodological documents, and high penalties for
violations of the law. Unfortunately, such elements were still not developed fully in the RussianFederation.  That was why national enforcement practice in this area was still rather limited.  In recent
years, there had been only a few cases concerning hard core cartels.  Despite the fact that in national
economic life there were, from time to time, some quite evident signs of such kinds of cartels, it was
difficult to testify to their existence.  She gave the recent example of a parallel rise in prices for oil
products and internal markets.  Despite active discussion of this fact in the mass media and at the
governmental level, it had still not been possible to  testify to the effect of cartels.  To increase
efficiency, the Ministry for anti-monopoly policy had undertaken the following steps.  First,modernization of the law had been proposed, and the hearing of this proposal should take place soon
in Moscow.  Second, plans had been made to carry out some amendments to the general code for
administrative violations, so as to make penalties higher for violations in this area.  Further, she noted
that methodological recommendations were being prepared  in this area so as to testify to the existence
of hard core cartels.  Foreign experience was being used in the course of this work, for example themethodological documentation of the OECD as well as other materials.  She emphasized in this
regard that more broad cooperation was needed in this area.
32. Commenting on the issue of exemptions fr om national anti-cartel provisions, the
representative of Japan noted that his delegation concurred with the need for a ban on hard core
cartels as had been proposed by a number of delegations.  On the other hand, as had been noted in the
background note prepared by the Secretariat (WT/WGTCP/W/191), concerns had been expressed by
some Members that hard core cartel provisions should not entail an undesirable degree of
harmonization of competition laws and institutions, nor should it entail undesirable costs in terms of
limiting countries' options in the area of industrial policy in the development stage.  A previous paper
submitted by his delegation (WT/WGTCP/W/177) on the matter of exemptions from national anti-cartel provisions, was relevant to this matter.  The argument of the delegation of Japan in this regard
was twofold.  First, the provisions on hard core cartels to be incorporated in a multilateral frameworkWT/WGTCP/M/18
Page 11
on competition policy should themselves entail a signif icant degree of flexibility with respect to the
content of substantive competition law.  Second, exemptions, as a specific instrument of flexibility,
should be narrowly defined in their sectoral coverage and should be of a temporary nature, with the
objective of being ultimately phased out.  Continuing, he said that, in most Member countries that had
competition laws, cartel regulations were equipped with exemption or sectoral exclusion systems,where the application of a general competition law might not be appropriate, or where different
aspects of economic policy needed to be prioritized.  These were represented, for example, by cartels
involving small and medium-sized enterprises and export and import cartels, as well as by cartels in
specific industry sectors.  As stated, such exemptions should be transparent and legally authorized.
He pointed out, as well, that the OECD Recommendation on Effective Action Concerning Hardcore
Cartels distinguished such cartels from arrangements which were authorized in accordance with a
Member country's law in order to achieve its overriding policy objectives.  However, it also needed tobe recognized that exemptions or sectoral exclusions were not always an effective or efficient tool for
a country to strengthen the competitiveness of domestic industries.  By way of example, as had been
pointed out by his delegation on various occasions, Japanese experience indicated that industries with
strong international competitiveness such as automobile and semi-conductor sectors had achieved
their competitiveness through experiencing intense competition in the domestic market, rather thanbeing granted sweeping exclusions from competition law.  In the light of this, it was important that
exemption systems be limited in coverage, be reviewed periodically and be abolished when no longer
necessary.
33. A number of questions, concerns and reservations were raised by delegations regarding the
foregoing proposals and observations.  The representative of India said that there was no generally
accepted definition of hard core cartels.  The OECD Recommendation referred, in this regard, to "an
anti-competitive agreement, anti-competitive concerted practice, or anti-competitive arrangement by
competitors to fix prices, make rigged bids (collusive tenders), establish output restrictions or quotas,
or share or divide markets by allocating customers, suppliers, territories, or lines of commerce".  The
focus here was on enterprise practices, and not on governmental measures having an impact on tradewhich were already covered under existing WTO Agreements.  It was believed that the effects of such
cartels were per se  anti-competitive and therefore required an outright ban.  The OECD
Recommendation, however, acknowledged that the utility of the term "hard core cartels" was limited
in the sense that countries had differing definitions, prohibitions, and exemptions relating to cartel
agreements.  He observed that international cartels were largely a developed country phenomenon, in
that low-income countries and LDCs were home to none of the notorious international cartels that had
been discussed in the Working Group and that had inflicted heavy losses on countries in various partsof the world as had been documented in the submissions of various delegations.  An essential
ingredient of any strategy to combat cartels wa s cooperation between the competition authorities of
the countries affected in relevant investigative processes.  This would require the sharing of relevant
information whether confidential or not.  However, the existing practice of major competition
authorities with regard to the sharing of confidential information did not give much hope at least forthe near future.  The clarification of issues relating to various elements which was mandated in
paragraph 25 of the Doha Ministerial Declaration directed that "full account shall be taken" of the
needs of developing and least-developed country participants and appropriate flexibility provided to
address them".  He asked how this would be possible with regard to the issue of hard core cartels.  His
delegation believed that the United Nations Set of Multilaterally Agreed Equitable Principles andRules for the Control of Restrictive Business Practices (the "Set") was an important source of
guidance.  The Set had, as its primary objective, to ensure that restrictive business practices did not
impede or negate the realization of benefits flowing from trade liberalization, particularly those
affecting the trade and development of developing countries.  It had universal applicability to all
enterprises and all countries, as well as being applic able to transactions involving goods and services.
As described in the Set, there were two main types of restrictive business practices that enterprises
should refrain from.  These were horizontal restraints and abuse of dominant position.  Enterprises
should refrain from horizontal arrangements such as  price-fixing agreements, including export and
import agreements;  collusive tendering;  market or customer allocation arrangements;  allocation ofWT/WGTCP/M/18
Page 12
sales and production quotas;  collective action to enforce arrangements, e.g. by concerted refusal to
deal; concerted refusal of supplies to potential importers;  and collective denial of access to an
arrangement, or association that was crucial to competition.  Paragraph D.4 of the Set provided that
enterprises should refrain from practices which "limit access to markets or otherwise unduly restrain
competition through an abuse or acquisition and a buse of a dominant position of market power ...".
Such abuses might be committed through practices such as predatory behaviour towards competitors;
discriminatory pricing or terms of conditions, including by means of the use of transfer pricing
policies in transactions between affiliated enterprises;  mergers, joint ventures and other acquisitions
of control; and certain vertical practices, namely, fixing the prices at which goods exported may be
resold in importing countries, restrictions upon parallel imports of trademarked goods and, when not
for ensuring legitimate business purposes, refusal to deal, exclusive dealing, restrictions upon resale
or export and tying restraints.  The major shortc oming of the Set was that, while it provided for
facilitation of consultation among Members, it did not envisage any binding commitment.  Rather, it
was voluntary in nature and its implementation depended upon the willingness of the States that had
adopted it.
34. Continuing, he said that the development dimension was reflected in numerous provisions of
the Set.  It contained a specific provision providing for "preferential or differential treatment fordeveloping countries".  Paragraph C(I)(7) provided that "in order to ensure the equitable application
of the Set of Principles and Rules, States, particularly developed countries, should take into account in
their control of restrictive business practices the development, financial and trade needs of developing
countries, in particular of the least-developed countries, for the purposes especially of developing
countries in:  (a) promoting the establishment or development of domestic industries and theeconomic development of other sectors of the economy;  and (b) encouraging their economic
development through regional or global arrangements among developing countries".  His delegation
believed that the development dimension had been kept at the core of the agenda for the Working
Group when the Ministers directed that full account "shall be taken  of the needs of developing and
least-developed country participants and appropriate flexibility provided to address them".  Thefollowing questions, inter alia, needed to be answered by the Wo rking Group in this regard:  first,
how was the concept of a "hard core cartel" to be defined?  Would it not be more appropriate to
follow the definition of cartels and other agreements prohibited by the Set rather than the terminology
of the OECD Recommendation?  Second, the Set ex emplified how the development dimension could
be built into the provisions by effectively exempting developing countries from the provisions and by
providing that special efforts should be made by developed countries to control anti-competitive
practices affecting developing countries.  Similar provisions should be studied by the Working Group.Third, his delegation believed that the futility of voluntary cooperation was clear, going by the record
of cooperation among investigating authorities thus far.  In that connection, could mechanisms such as
'peer review' or extended 'trade policy review' be expected to make any difference?  Fourth, what was
the appropriateness of a per se prohibition of hard core cartels?  His delegation believed that it would
be advisable to think in terms of per se prohibition in the case of developed countries and that
developing countries should be exempted from the purview of such provisions altogether.  The
reasons were that more than half the WTO Membersh ip did not have a competition law, that Members
having such laws did not have sufficient experience in cooperation in the enforcement process, and
finally that international cartels, especially those of the hard core variety, were largely a developed
country phenomenon.  Fifth, a number of exceptions were provided by most countries, especially inrelation to export cartels.  Did any justification exist for continuing such exceptions?
35. The representatives of Venezuela, Malaysia
 and Cuba  supported the statement by India.
Continuing, the representative of Venezuela said that despite the importance that Venezuela attached
to the OECD and the interest it had in some of  the questions discussed at that organization, he
underlined that Venezuela did not necessarily believe that the definition and concepts in the OECDRecommendation on Hardcore Cartels were the best starting-point for carrying out the Doha mandate
on competition policy.  The standards set out in the Set could provide a more appropriate starting-
point.  The representative of Malaysia, while expressing concern at the apparent impact ofWT/WGTCP/M/18
Page 13
international cartels on developing countries, said that, without prejudice as to the form or content of
any possible multilateral framework, Malaysia shared the concerns expressed by several Members
relating to the need to have a clear definition of what constituted a hard core cartel.  Even if a clear
definition was reached, Malaysia remained concerned about how a multilaterally agreed definition
could be reconciled with the need to take into consideration the needs and objectives of developing
countries.  The idea of having a provision in any multilateral framework that required developed
country Members to explicitly bar or prohibit international hard core cartels originating in their
territories from operating in developing countries was of some interest.  However, Malaysia had no
competition policy or law, and therefore did not have any experience in identifying or combating hard
core cartels.  The needs of developing countries such as Malaysia had to be given due consideration,
particularly the flexibility needed to achieve developmental objectives.  He recalled, as well, that an
explicit consensus was required on the so-called modalities for negotiations before negotiations couldbe launched.  The representative of Cuba said that the definition of a hard core cartel was important
since if sanctions and measures were to be established and adopted, the prohibited behaviour wouldhave to be clear and transparent to all countries.  Regulations to deal with cartels must give effect to
the principle of special and differential treatment giving priority to dealing effectively with cartels that
were prejudicial to developing countries.
36. The representative of Hong Kong, China said that, while his delegation did not question the
benefits that could result from collaborative efforts to address cartel practices, it remained
unconvinced that a multilateral agreement on competition policy in the WTO was the appropriate way
forward.  He noted the existence of a number of bilateral and regional arrangements that addressed
problems relating to international hard core cartels.  Moreover, the International Competition Networkwas a fast-evolving forum in which national competition authorities could address competition issues;
some considered it to be a promising forum for cooperation and the promotion of best practices.
Some Members had argued that the WTO was a be tter forum in which to address international
competition issues, including hard core cartels, because the Organization had a broad Membership
and could require Members to implement a law.  However, his delegation had strong reservationsagainst imposing a WTO obligation on all Members to introduce laws to prohibit hard core cartels.
Some 50 or more Members of the WTO still did not  have a competition law.  Even among those
developing country Members that had competition laws, it remained uncertain whether all of them
fulfilled the standards set out in the OECD Recomm endation in terms of having effective sanctions
and enforcement procedures and institutions.  Developing country Members needed technical
assistance and encouragement rather than a burdensome obligation backed up by WTO dispute
settlement machinery.  Recalling that some proponents of a multilateral competition agreement hadsuggested that the Dispute Settlement Mechanis m need not apply to a multilateral framework on
competition policy, he asked whether, if such an approach was adopted, what would be left would be
no more than some best-endeavour commitments, technical cooperation and perhaps a peer review
mechanism.  In that light, it might be preferable for such a framework to be developed by a
specialized forum such as the International Competition Network instead of the WTO.  The ICNwould be a more natural forum for peer review and t echnical assistance activities in this field, given
that its membership was limited to existing co mpetition authorities, and the WTO remained an
Organization focused on trade negotiations and the implementation of trade rules.
37. Continuing, he said that, for many developing country Members, to introduce a competition
law and to put into place the enforcement institutions would be costly and burdensome.  Hisdelegation had heard with interest the experiences of some OECD Members and of Thailand on how
they had tackled hard core cartels.  However, he would also appreciate it if developing country
Members that had had experiences in tackling hard core cartels through competition law shared their
experiences and assessments of the costs and benefits that competition law and enforcement had
created.  Furthermore, while there appeared to be broad agreement that international hard core cartels
had caused harm to developing economies, the magnitude of such harm remained far from clear.
Many calculations at this stage seemed to consist of rather crude estimates.  In this regard, he asked
whether international cartels were indeed prevalent to the extent that collaborative efforts under theWT/WGTCP/M/18
Page 14
WTO framework were warranted, and whether there existed any comparative study on the merits and
demerits of the WTO route vis-à-vis other possible solutions such as the International Competition
Network.  Additionally, he suggested that presumably the definition of hard core cartels was meant to
exclude any cartel that could be defended on efficiency-enhancement grounds.  To what extent could
a distinction between a hard core and a non-hard core cartel actually be made operational, and wasthere any scope for an efficiency defence of hard core arrangements?  If  scope existed for an
efficiency defence, what would be its extent?  He noted, in this regard, that differences existed in the
approaches adopted by some Members as described in their written contributions.  For example, in the
case of Mexico, it seemed that cartels were deemed to always harm competition, economic efficiency
and the consumer, and were forbidden per se .  In the case of Australia, price-fixing agreements were
per se  prohibited, whereas agreements to restrict dealings (e.g. agreements to limit output or
production) were assessed against a "substantial lessening of competition" test.  In the case ofSwitzerland, it appeared that an economic efficiency defence was available to all cartel agreements,
i.e. defendants could prove that such an agreement would not in any way allow the enterprises
concerned to eliminate effective competition.  In regard to export cartels that limited prices or outputs
in the participating firms' export markets, he noted that these could certainly have distorting effects on
trade;  therefore why had it been suggested that such cartels be exempted from a multilateralagreement under the WTO?
38. The representative of South Africa said that certain issues needed to be addressed to ensure
that a multilateral framework on competition policy wa s in the interest of developing countries.  First,
how would any potential definition, particularly a restrictive one, influence domestic provisions in a
competition law that attempted to address public policy issues?  He gave in this regard the example ofcollusive tendering by small businesses for government contracts.  If a multilateral agreement
recognized a country's prerogative to make public policy, any definition of a cartel would then have to
take into account this particular aspect.  The po ints made about the need for flexibility in the
contributions by Switzerland, Japan and Korea were important in this regard.  Another issue that
warranted  consideration related to the approach that courts had taken in some countries when dealingwith prosecutions on cartelization.  Would a definiti on of a cartel in a multilateral framework be of
any relevance if courts tended to use a rule of reason approach in analysing cartels or similar conduct?
This issue could arise, for example, where an authority was prosecuting a collusive tendering cartel
before a court and the court concluded that the arrangement was pro-competitive under a rule of
reason standard.  The Working Group was an appropriate venue to reflect on these questions.
39. The representative of Pakistan, noting that most speakers had acknowledged the pernicious
effects of international cartels on consumer welfare and the efficient functioning of markets, recalled
that the delegation of India had referred to the fact that most of the international cartels were
headquartered in developed countries, and that these cartels imposed heavy costs on developing
countries.  As had been mentioned by various delegations and in an expert presentation at the
Symposium prior to the Working Group's meeting of 23-24 April, the World Bank background study
by Levenstein and Suslow indicated that in the 1990s developing countries imported a total ofUS$81.1 billion in goods and services from industries that were subject to price-fixing conspiracies
involving firms headquartered mainly in developed c ountries.  The mark-up attributable to the cartels
was as much as 45 to 50 per cent in several cases.  Therefore the cost of such cartels was immense,
especially for developing countries.  Pakistan agreed with the delegation of India that the endeavour
in this Group should be to address enterprise practices and not government policies which developingcountries felt they must pursue to increase economic efficiency, as well as to protect their
development interests.  However, many developing countries did not have competition policies, and
therefore lacked relevant experience at the national level.  It was important to clarify what would be
expected of them at the multilateral level, in rega rd to voluntary cooperation, given that they did not
have any experience at the national level.  Given this lack of experience, Pakistan would be reticentabout discussing cooperation at the multilateral level at this stage.  As had been pointed out by India,
the Doha mandate also referred to taking fully into account the concerns and needs of developing
countries, something to which the Set was clearly relevant.  As had been pointed out by the delegationWT/WGTCP/M/18
Page 15
of Hong Kong, China, in view of the deficit of ex perience felt by many developing countries in this
field, targeted technical assistance and capacity-building efforts might be more appropriate than
commencing discussions related to a multilateral framew ork at this stage.  The extent of need in this
area underscored the importance of the educational work undertaken in the Working Group.
40. The representative of New Zealand noted the useful questions that had been raised by
delegations including those of India and Hong Kong, China.  The Group was at a fairly early stage in
its work under this section of the Doha Mandate;  however, on the strength of the discussions that had
taken place so far, he was struck by the fact that at least two possibilities before the Group could be
teased out.  One such possibility was that the Group proceed with the negotiations for the
development of a comprehensive competition framework after the next Ministerial Conference.  The
other, given the profile that the cartel issue had had, and perhaps the more limited interest in the
Working Group in relation to other aspects of the Agenda, was that there might be a disposition tofocus more narrowly on the cartel issue alone.  In this context, the questions of institutional efficiency
that had been raised could become particularly important.
41. The representative of the United States noted that several delegations had expressed concerns
regarding the implications of a WTO commitment with  respect to hard core cartels for the ability of
developing countries to promote their domestic industries.  In the United States, this issue had beendealt with, in part, through the doctrine of state action.  Under this doctrine, each State was free to
enact legislation that would authorize activity that would otherwise be prohibited by the antitrust laws.
The doctrine required that the conduct in question be the subject of a clearly articulated state policy
adopted by the legislature, and that there be active supervision of the conduct by the State.  Something
of this nature might be considered in the context of discussions on a possible prohibition on hard corecartels in the framework of the WTO.   A second important issue related to whether there could be an
effective prohibition of cartels at the national level that was free-standing and not part of a broader
competition law.  When the US antitrust laws were first enacted in 1890, at which time the US was
still a developing country, the initial enforcement effort had been directed against hard core cartels,
which triggered the first great merger wave, as industries that had previously been engaged in cartelactivities found they were no longer able to do that and therefore they engaged in mergers.  This cast
doubt on the likelihood that a prohibition on hard core cartels could stand effectively without a
corresponding prohibition of mergers to monopoly.  A third issue was whether there could be an
effective prohibition on hard core cartels without the institutional expertise to enforce that prohibition,
in the form of a specialized competition agency.  When the US antitrust laws were passed in 1890,
authorities did not create a special antitrust agency.  The Federal Trade Commission was not formed
for another 24 years, and even then was intended as an advisory body initially, while the AntitrustDivision of the Justice Department was not form ed until 1933, over 40 years later.  There was
therefore a period of time in which the US antitrust laws, including the prohibition on cartels, were
enforced without the benefit of a specialized enforcement agency.  A fourth important issue related to
whether any commitment with respect to hard core ca rtels should be limited to international cartels, or
should also address domestic cartels.  Here, the experience of the United States was that the vastmajority of cartel activity was domestic in nature, and typically affected industries such as
construction, commodities, and other similar sectors which were important inputs to user industries.
Therefore he hoped that, as the discussions continued, serious consideration would be given to
making any prohibition on cartels applicable to domestic as well as international cartels.  A fifth issue
related to the question of whether some body other than the WTO, possibly the InternationalCompetition Network (ICN), might be a more appropriate forum for peer review.  As one of the
founding Members of the ICN, the United States had great expectations for it.  However, at this point
the Network remained a new body;  its first annual conference would be held in September, in Naples.
42. Responding to the foregoing concerns and observations, the representative of the European
Community and its member States said that it was doubtful whether the questions of what criteria
would be used in a definition of hard core cartel s in a WTO agreement and how these would relate to
domestic laws and institutions could be settled in the Working Group.  Nonetheless, it was importantWT/WGTCP/M/18
Page 16
that they receive further discussion.  His delegation believed that, however defined, hard core cartels
remained hard core cartels and no great distinction should be made between domestic and
international cartels.  A definition based on the nature of the behaviour to be addressed would apply to
both.  In addition, although international cartels had great potential for causing widespread harm to all
countries, domestic cartels also had an impact on international trade and harmed consumers beyondthe borders of the country concerned as well as being harmful to domestic consumers.  With regard to
the role of per se  prohibitions as opposed to a rule of reason approach, at this stage there were a
number of options.  Some jurisdictions used both approaches, evidence of which was contained in
some of the submissions before the Group.  In such cases, certain more easily-identifiable forms of
cartels were prohibited per se , while other inter-firm arrangements were subjected to a rule of reason
approach.  In the European Community, an effect-based rule was followed under which the effects of
the arrangements on competition were considered.  However, ultimately, if the actual enforcement ofcompetition law was observed, it was evident that certain types of behaviour were consistently
prohibited or disciplined by all jurisdictions.  Two possible options could be foreseen regarding
possible negotiations on this issue:  either a minimum standard of prohibition for all countries could
be established, beyond which scope would be left for a rule of reason or equivalent approaches, or
multilateral guidance for domestic provisions could be defined.  His delegation doubted, however,that the result would be much different in either case, if guidance was based on empirical evidence of
the effect of these cartels.  On the question of the wider effect of international cartels, in particular
with regard to effects reaching beyond consumers a nd producers, he recalled the suggestions by his
delegation earlier in the meeting that it would be helpful if the Chairman contacted the Chairman of
the Working Group on Trade and Transfer of Technology Transfer, which Canada had supported.  Aswell, Canada had made a similar point concerning the waste of foreign exchange that developing
countries suffered in paying inflated prices for imports as a result of cartels.  In that connection, it
might be helpful if the Chairman contacted his counterpart in the Working Group on Trade, Debt and
Finance, in order to establish whether there coul d be any synergy between the activities of the two
Groups.  As had been pointed out by India, the Set had as much relevance for the work of theWorking Group as the OECD Recommendation.  As to whether cartels were mainly a developed
country phenomenon, it depended on how one looked at it.  To date, cartels had mainly been
investigated in developed countries which, in any cas e, in the present state of competition laws and
policies, were principally concerned with the effects of cartels on their own market.  However, a
growing body of evidence, including the World Bank background study which had been referred to by
various delegations, indicated that cartels imposed heavy costs on developing countries.  He disagreed
with the view that had been expressed that voluntary cooperation was a futile exercise.  Most or allcountries that were party to existing cooperation agreements had found that they indeed conferred
important benefits, notwithstanding that the arrangements in question were non-binding.  Regarding
the appropriateness of the WTO as a forum for the adoption of provisions on hard core cartels,
accompanied by voluntary cooperation and peer review, it was not clear at this point that work in the
WTO would be limited to this result.  In addition, it appeared to come out clearly from manysubmissions that it was difficult for a country to enforce provisions on cartels without having an
enforcement structure, which usually assumed the fo rm of a competition authority with investigative
powers.  His delegation considered that once the requisite enforcement capacity had been built, it
would be strange if countries limited its scope of operations to cartels although it could not be
excluded that the interests of some countries resided exclusively in a discipline on cartels.  What theGroup ought to aim for, in the view of his delegatio n, was to enable countries that wanted to equip
themselves with competition law and policy to pursue whatever anti-competitive behaviour they
decided to, irrespective of how limited the substantive provisions of a WTO agreement would be.
That point would be returned to at the next meeting when the Group would focus on core principles,
which by definition had a horizontal application to  whatever aspects of competition a country's law
applied to.  Another point which was worth further clarification concerned the question of
intergovernmental activities, and the question of whether these were subject to competition laws or
not.  On this point, his delegation did not have particular concerns, and in any event agreed with India
that there were many other provisions in the WTO rulebook that disciplined governmental activity.
Finally, one point which, in the opinion of his delegation had been overlooked in discussions, was theWT/WGTCP/M/18
Page 17
question of regionalization.  It was clear that many countries believed that their domestic markets
were limited in size and that the composition of economic activity therein might be too small to justify
a full-fledged enforcement competition law enforcem ent capacity.  In such circumstances, it might
well be appropriate to implement competition policy and to fulfil the requirements of relevant WTO
disciplines through appropriate regional arrangements.  The European Community, in its bilateralagreements, often tried to pursue a regional or region-to-region approach to cooperation and
competition policy and in fact the EC competitio n law enforcement institutions embodied a regional
approach of a kind.  Certainly, the Community was a witness to the fact that there could be effective
enforcement of competition law at the regional level even where some of the Members felt that they
had no need for a national competition authority.
43. The representative of Canada reiterated that the problem of hard core cartels was a global
phenomenon and not the exclusive preserve of developed countries.  Such arrangements were
generally recognized as the most harmful type of anti-competitive practice, although certainly there
were others.  In addition to the direct, negative impact of cartels for consumer welfare and user
industries, they could impact adversely on market access.  For example, the allocation of national
markets among cartel members had an adverse impact on market access opportunities that Members
would be expected to realize as a consequence of the work done by the WTO and GATT before it.
44. The representative of the United States said that, despite the explicit invitation in the OECD
Recommendation on Hardcore Cartels for non-Member s of the OECD to asso ciate themselves with
the Recommendation, few non-Members had availed themselves of this opportunity.  It might be
useful to inquire why this was the case.  Whether it was a question of the substantive provisions of the
Recommendation, its non-binding nature or whether it was an institutional issue was unclear.  If theissue was institutional in nature, it would be interesting to ask whether the WTO would have any
institutional advantage over the OECD and other bodies in addressing hard core cartel practices.  In
the paper submitted by Canada there was an interesting discussion of entry barriers which raised the
issue of differences between trade and competition-based approaches.  In particular, it referred to the
competition approach based on what the US delegation would term consumer welfare as opposed to amarket access-driven approach.  It could be important to clarify the benefits of a competition or
consumer welfare based approach as opposed to a market access driven approach to cartels and other
practices.  Concerning the references that had been made to export cartels, as many of the speakers
had pointed out, a key consideration would be to exclude from a definition of hard core cartels types
of  arrangements that had a significant potential to enhance efficiency.  Export cartels, despite their
pejorative name, included a variety of possible arrangements the competitive effects of which were
uncertain.  For example, the origin of what were termed the 'export cartel wars' in the United Stateswas simply to facilitate the ability of firms that might not otherwise have had the ability to engage in
export activity to do so.  In these cases, such arrangements clearly had pro-competitive effects.  Care
was therefore required in discussing arrangements currently characterized as export cartels which did
not, in fact, necessarily have the same effects as hard core cartels.  Regarding the suggestion that a
multilateral framework might place an obligation on developed countries to enforce prohibitionsagainst hard core cartels with respect to their effects outside their domestic markets, in other words on
commerce and consumers completely outside their own jurisdictions, this would extend beyond the
framework of existing legal systems and even the furthest reaches of the US effects doctrine.
Furthermore, it was strange to suggest that a multilateral instrument could place responsibility on one
group of countries, while others in which the ill effects of cartel practices were felt would have noobligation to enact or apply their own laws to address those practices.  In regard to the possible role of
a WTO Competition Committee in exploring anti-competitive practices beyond hard core cartels, he
said that in this area the WTO would have to tread delicately.  The reason the Doha Ministerial
referred specifically to hard core cartels, in addi tion to their pernicious effects, was the consensus that
there were deleterious activities that ought to be prosecuted and banned.  Once consideration extendedbeyond hard core cartels into areas such as mergers, vertical restraints, even dominance, there was a
singular lack of consensus even among competition authorities, and it was not clear to his delegation
that the WTO would be an appropriate place to attempt to provide guidance on the questions.WT/WGTCP/M/18
Page 18
45. With regard to the nature of the Working Group's mandate, the representatives of India and
Malaysia said that the Working Group continued to be engaged in the study phase and not in a
negotiating phase, as had been implied by some delegations.  Specifically, the mandate of the
Working Group was to clarify certain issues that had been identified in the context of "enhancing the
contribution of competition policy to international trade and development".  Furthermore, the focus ofthe discussion in the Working Group had to be on competition policy as it related to trade and
development.  The Set was of obvious relevance to  this mandate.  Any negotiations would take place
only after the 5
th Ministerial Conference on the basis of a decision to be taken by explicit consensus
on the modalities for negotiations.  There was no automaticity to proceed to this phase.  Furthermore,
the Group must take the technical assistance and capacity-building commitments in the Declaration in
the same light.  There was no support for the notion that after one round of seminars and workshops to
improve understanding the Group would proceed to the next phase.   The representative of the
European Community and its member States said th at the Doha Declaration did not contain the words
"study Mandate", and observed that the delegation of Pakistan had more correctly referred to
"clarification".
46. The observer from UNCTAD, referring to the document that he had made available for the
meeting (circulated as document WT/WGTCP/W/97 with the assent of the Group), noted that
references had been made, in the course of discussion, to the United Nations Set of Multilaterally
Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices.  The Set had
been adopted in 1980 and had been the subject of several review conferences, most recently in 2000,
when its importance was affirmed by delegations.  It contained a number of provisions, definitions
and related explanations relevant to the subject of cartels, including import cartels, export cartels andprice-fixing arrangements.  He noted that many developing countries had price-stabilization
mechanisms or agreements relating to commodities and/or energy (i.e., oil).  In this regard, concerns
sometimes arose about the status of such agreements under a possible WTO agreement on
competition policy.  In fact, he had been asked this question several times in various seminars and had
given the reply that intergovernmental or state-to-state arrangements would not likely be covered by aWTO agreement on competition policy, which would be aimed at anti-competitive practices of
enterprises.  In support of this, he drew attention to the fact that in the UN Set there was a specific
provision (Paragraph B.9) which made it clear that the Set did not apply to intergovernmental
agreements nor to restrictive business practices directly resulting from such agreements.  This clause
ensured that intergovernmental agreements were not covered by the Set.
47. Concerning the harm caused by hard core cartels, more and more information was available
on the damage that these caused not only to developed countries, but in particular to the weakest ofthe developing countries.  Whereas important cases like those relating to the vitamins or lysine sectors
had become widely known due to the initial investigations in the United States and/or the European
Community, which were well equipped to defend themselves in such cases, in most cases developing
countries were completely unable to defend themselves.  In the series of seminars and regional
meetings that had been organized by UNCTAD in cooperation with the WTO in the first half of theyear in various parts of the developing world, the negative effects of cartels for the welfare of
developing countries had been repeatedly noted.  Details were provided in the report that had been
prepared by UNCTAD on the basis of the various workshops (document WT/WGTCP/W/197).  The
problem was particularly acute in today's situation in which many developing countries still did not
have competition legislation.  Even for those having such legislation, there was a need forstrengthened international cooperation arrangements to be put in place, if developing countries were
to be in a position to protect themselves from the harmful impact of cartels.WT/WGTCP/M/18
Page 19
48. The observer from the OECD, introducing a non-paper by her organization (subsequently
issued, with the agreement of the Working Group, as document WT/WGTCP/W/207), said that a
recent OECD survey had addressed 145 cases inve stigated in OECD member countries and about
20 non-member countries between 1996 and 2000.4  The magnitude of harm from cartels was many
billions of dollars annually.  Most of the reported cases were domestic cartels, though internationalcartels had received a great deal of attention because of their size and visibility.  Purely domestic
cartels probably did even more harm than the big global ones.  These cartels were more common in
some sectors, including construction, construction materials, sales to government institutions, bulk
food, electrical equipment, as well as the services sector, particularly local transport, professional
services and health care.  From discussions that had taken place so far in the OECD Global Forum on
Competition, where about 20 non-members had taken part, it seemed that developing countries would
benefit immensely from taking effective actions against cartels occurring within their borders becausethey caused a great deal of damage to their consumers and businesses in sectors often crucial for
development.
5  She then referred to the 1998 OECD Council Recommendation on Effective Action
against Hard Core Cartels.6 The Recommendation presupposed the existence of domestic competition
laws and contained a list of agreements generally considered to constitute hard core cartels.  It also
provided for exclusions or authorizations;  they should, however, be transparent and countries shouldreview them periodically to ensure that they were both necessary and no broader than necessary to
achieve their overriding policy objectives.   While of a voluntary nature, the Recommendation had
been widely implemented because of a large convergence of analysis on the pernicious effects of
these cartels and a strong common desire to fight them.  She described some enforcement tools and
sanctions used for the implementation of the Recommendation.  Notably, she referred to a new anddramatically successful investigative tool against cartels:  the "leniency programmes".
7  A leniency
programme promised amnesty from punishment or sanctions to the first cartel participant who
confessed and implicated its co-conspirators with first-hand evidence about their clandestine meetings
and communications.  Countries with the most refined leniency programmes had experienced a
substantial increase in the number of cartels uncovered, the number of successful prosecutions and thelevel of average fines.  She also said that there was a need to broaden international cooperation in the
fight against cartels, especially in involving competition agencies from countries that were just
beginning to enforce anti-cartel laws
8 and in establishing legal frameworks to facilitate exchanges of
information while safeguarding confidential business information.  International cartels harmed
developed and developing countries alike and the enhancement of the ability to cooperate across all
countries would contribute to effective prosecution of such agreements.
B. MODALITIES FOR VOLUNTARY COOPERATION
49. The representatives of the European Community and its member States, Japan , Australia ,
Korea, Canada , the United States  and Thailand  introduced written contributions relevant to this item
(documents WT/WGTCP/W/193, 195, 199, 200, 202, 204 and 205, respectively).  In addition, as had
been requested by the Working Group at its informal meeting on 26 February, the Working Group had
before it a background note by the Secretariat (document WT/WGTCP/W/192) on modalities forvoluntary cooperation.  The note provided a synt hesis of the issues raised and points made by
Members on this topic in previous meetings of the Working Group, drawing principally on the
Group's annual reports for the past four years and on written submissions by Members.  UNCTAD
                                                     
4 Fighting Hard-Core Cartels – Harm, Effective Sanctions and Leniency Programme , OECD, 2002.
5 The documentation of the October 2001 and February 2002 Global Forum on Competition was
available on the web site.
6 Reproduced in document WT/WGTCP/W/207 .
7 The OECD Competition Committee had adopted a report on Leniency Programmes in 2001.  It was
now published in " Fighting Hard Core Cartels – Harm, Effective Sanctions and Leniency Programmes ",
OECD, 2002.
8 The Recommendation invited non-member countries to associate themselves with it and to implement
it.WT/WGTCP/M/18
Page 20
and the OECD also provided written materials relevant to this item (subsequently issued, with the
assent of the Working Group, as document WT/WGTCP/W/197 and document WT/WGTCP/W/208,
respectively).  The representatives of Colombia;  Cuba ;  Egypt ;  Hong Kong, China ;  India ;
Indonesia;  Malaysia ;  Norway ;  Singapore ;  South Africa ;  Switzerland ;  Tanzania ;  and Zambia  made
oral statements or posed questions on this item.
50. With regard to the need for enhanced cooperation between WTO Members to address the
harm caused by hard core cartels and other anti-competitive practices and the design of possible
modalities on cooperation in the framework of the WTO, the representative of Japan, introducing
document WT/WGTCP/W/195 said that, as had been poi nted out by the Chairman in the last meeting
of the Working Group, it was important to distingu ish between the phrase "technical assistance and
capacity-building" in paragraph 24 of the Doha Ministerial Declaration and the phrase "support for
progressive reinforcement of competition institutions in developing countries throughcapacity-building" in paragraph 25 of the Declaration.  The former, in particular, was of a short-term
nature and called for assistance aimed at helping developing countries to better evaluate the
implications of closer cooperation on competition policy at the multilateral level.  The latter, in
contrast, was of a long-term nature and involved an examination of measures needed to support the
strengthening of national competition policies and institutions in ways that would promote the welfareof developing countries.  With the globalization of business activities, anti-competitive business
practices increasingly occurred across a number of countries or in some cases even globally.  Under
such circumstances, it was difficult for a single government to correctly assess the effects of these
practices and effectively prevent or remedy them.  His delegation believed, therefore, that it was
necessary to establish a multilateral framework aimed at strengthening cooperation on competitionbetween WTO Member governments.  Continuing, he said that the WTO, which currently had 144
Members, was the pre-eminent multilateral organization with responsibilities in the area of
international trade and, therefore, was an appropriate forum for discussing a multilateral framework
on competition policy, given the clear importance of competition policy in combating practices that
undermined both trade and development.  In the view of his delegation, it was neither reasonable norfair to force all WTO Members to introduce a comprehensive domestic competition law.  Each
Member was at a different stage of development, and while some Members already had significant
experience in the enforcement of competition law, others did not yet even have their own competition
laws.  Therefore, a flexible approach was needed in order to accommodate these differences between
countries.  Given this, his delegation's submission highlighted the possibility of combining bilateral,
regional and multilateral frameworks in the field of competition policy.  A  framework of cooperation
would be built up gradually at the multilateral level while, at the same time, countries could continueto pursue closer cooperation at the bilateral and regional levels.  At the bilateral and regional levels,
the focus would be on case-specific cooperation.  At the multilateral level, the main focus would be
on the exchange of information and experience as well as on policy reviews based on agreed core
principles.  In this regard, the submission of  Japan highlighted the unique example of the
Japan/Singapore economic partnership agreement which had been signed in January 2001 and wasdue to come into force in autumn 2002.  This agreement, which was annexed to his submission, was
essentially a free trade agreement, but it included, among other things, provisions on cooperation in
the field of competition policy.  The agreement ensured that each party could take measures against
anti-competitive activities in accordance with its applicable national laws and regulations in order to
facilitate trade and investment flow s between the two countries.  It also provided that, though starting
with a rather limited scope of application - i.e., only to sectors in which Singapore currently had legal
institutions related to competition, both Japan and Singapore would engage in bilateral cooperation,
including notification and enforcement through information exchange and consultation, subject to
their available resources.  In addition, it provided for technical assistance between the two countries.
The agreement thus provided a unique example of a cooperation framework between two countrieshaving different systems of competition law and policy.  It was hoped that this would serve as a useful
reference for the Working Group's discussions on the modalities for international cooperation as
mandated by the Doha Declaration.  The representative of Singapore said that his delegation was not
in a position to comment on the statements made regarding the competition policy provisions of theWT/WGTCP/M/18
Page 21
Singapore-Japan free trade agreement and might come back with some comments at a later date.
Singapore remained committed to the work of the Working Group and was open to all views and
suggestions in this regard.
51. The representative of the European Community and its member States, introducing relevant
sections of document WT/WGTCP/W/193, stressed that it was not foreseen by his delegation that the
voluntary cooperation modalities to be implemented in the context of a WTO framework agreement
would be exclusive or would in any way replace existing bilateral or regional arrangements.  In other
words, it was not a question of "either/or" but of "the more the merrier".  Two principal types of
cooperation were foreseen in the framework of the WTO:  firstly, the general exchange of
experiences, views, etc. among competition authorities and their officials;  and secondly, the more
specific forms of cooperation that would take place between competition authorities in regard to
individual cases.  As indicated in the current submission of his delegation, a WTO Committee onCompetition Policy would play a key role in regard to the first category of cooperative activities.
Activities of this nature would include exchanges of information on domestic competition laws,
domestic practices and developments that could happen ideally through the establishment of national
contact points within the competition authorities of WTO Members.  Another activity which could be
usefully undertaken would be exchanges of experiences and discussions on specific competitionpolicy issues that had an impact on international trad e.  This tied in with the reason why the Working
Group was discussing the particular issue of competition law and policy in the context of the WTO.
A third activity that could be undertaken in the context of a WTO Committee on Competition Policy
would be voluntary peer reviews of the WTO Members' competition laws, policies and perhaps even
their enforcement record.  A fourth activity that could be undertaken would be joint analysis anddiscussions on global competition issues which affected international trade and global economy.
With regard to the second category of cooperation, i.e. case-specific cooperation, two distinct types of
activities were foreseen under this heading.  The first would be the exchange of information and
evidence relating to particular cases, while the second would comprise consultations and exchanges of
views on cases which affected the important trade interests of other WTO Members.  He stressed thathis delegation did not see the proposed modalities for case-specific cooperation as being limited
merely to the investigation of hard core cartels.  Rather, the cooperation modalities might be invoked
by WTO Members in cases regarding, for instance, abuse of dominant position, vertical restraints and
other anti-competitive practices that had an impact on international trade in addition to hard core
cartels.  The difference would be that, unlike in the case of hard core cartels, his delegation was not
proposing the adoption of a substantive standard dealing with these other matters.
52. Another representative of the same delegation said that the tools for cooperation which were
enumerated in his delegation's submission had all come from experience with cooperation at the
bilateral level.  A first essential tool was notification, whereby one country would inform another of
certain cases which affected the other country's important interests.  Second, there was the exchange
of information other than the notification to facilitate enforcement activities on either side.  A third
tool involved the provision of mutual assistance in the enforcement process.  Finally, the proposedagreement could provide for:  (i) negative comity, meaning that one country would take into
consideration the important interests of other affected countries when taking a decision on a case;  and
(ii) positive comity, which would involve a country taking enforcement action upon a request from
another country which suffered from anti-competitiv e practices originating in the territory of the
requested country.  All these tools of cooperation were already found in a number of agreements atthe bilateral level;  regrettably, however, for the most part, developing countries were excluded from
the benefit of such agreements.  Nonetheless, in  the view of his delegation, such agreements were
only a starting-point for the discussion in the Wo rking Group, which was free to devise other tools
that were better adapted to the multilateral environment.  One question that sprang to mind about
case-specific cooperation was in what circumstances it would take place.  His delegation's submission(WT/WGTCP/W/193) identified two such situations:  firstly, cases involving practices affecting two
or more jurisdictions;  and secondly, cases of anti-competitive practices carried out in one country and
affecting another country.  With regard to the types of information that would be exchanged, inWT/WGTCP/M/18
Page 22
previous discussions the Working Group had discussed a range of possibilities going from
information available on a website to information which must remain buried forever in case files.
Various kind of information between these extremes could be candidates for exchange.  For example,
information on the type and nature of illegal activities, like price-fixing cartels, could extend to
information regarding the sector involved and th e key players in the sector.  Another type of
information that could usefully be exchanged relate d to the procedural steps that the authority in one
country had already taken, or envisaged taking in the future, including such steps as investigations or
inspections.  Thirdly, the types of information to  be exchanged could include other information that
came out during court hearings which was available to the public in principle but not in practice
because it was not posted anywhere on the Internet or published in an official journal.  Such
information could indeed be useful in enforcement activities undertaken in other jurisdictions.
Information which was confidential or for which confidential protection had been claimed by aprivate party might also be exchanged to the extent permitted by national law if the relevant
procedures and safeguards were scrupulously followed.  In closing, he noted that meaningful
cooperation was not merely a question of what was possible on the basis of written legal instruments,
but also depended importantly on mutual interest and trust on all sides, which took time to develop.
Thus, it would be overly optimistic to expect that cooperation on a multilateral level wouldimmediately function as smoothly and efficiently as it did with the existing bilateral agreements.
Rather, effective cooperation of a case-specific nature, at the multilateral level, would be built up over
time, on the basis of capacity-building and more general forms of cooperation to be undertaken in the
proposed Competition Committee.
53. The representative of Canada, introducing document WT/WGTCP/W/202, said that new
cooperation mechanisms were needed to respond to the growing incidence of anti-competitive
practices with a  cross-border impact.  As had been explained by the representatives of Japan and the
European Community and its member States, the necessary expansion of cooperation had a bilateral
and regional dimension, but also a multilateral dimension through the OECD, UNCTAD and other
institutions.  A WTO agreement on competition policy would facilitate the sharing of information anddialogue among Members and would promote the development of institutional capacity for those
Members with less experience in the enforcement of competition laws.  Canada’s experience showed
that cooperation was an integral part of the implementation of competition law and policy, particularly
in dealing with cross-border anti-competitive behaviour.  Another representative of the same
delegation said that, in Canada's view, a multilateral agreement on competition policy would provide
a flexible framework for cooperation in the WTO, which would be a long-term and incremental
process and could include a variety of activities, e.g. related to developing institutional capacity,sharing information among competition authorities and administering the agreement.  Two sets of
issues for the Working Group to consider were as follows:  (i) mechanisms for exchange of
information;  and (ii) the role of a WTO Committee on Competition Policy.  Exchange of information
was valuable in a number of ways, for example by contributing to developing institutional capacity in
Member countries and also by facilitating more timely investigations and effective enforcementactions.  Given the level of development of compet ition institutions in many WTO Member countries,
it was likely that information exchange would have mainly educative purposes, at least initially.
Information of this type could include national legislation, reports of competition authorities,
guidelines and other enforcement policies, speeches, presentations and any bilateral cooperation
agreements that had been concluded.  All these would be useful to the participating Members andwould contribute to the capacity-building process.   The Working Group should consider not only the
types of information to be exchanged, but also the parameters for such exchanges.  For example, as
many delegates had said, the exchange of information must be consistent with national laws,
especially provisions that guarantee the confidentiality of information.  A number of specific
functions for such a Competition Policy Committee were outlined in his delegation's submission,including:  (i) coordinating and monitoring technical assistance, given that capacity-building was a
key component of any multilateral agreement;  (ii) examining the interaction between competition
policy and international trade policy issues, by discussing and sharing research and analysis in this
area, for example on anti-competitive practices that af fect international trade;  (iii) providing a formWT/WGTCP/M/18
Page 23
for non-binding peer reviews which would facilita te convergence of laws and analysis over time;
(iv) developing a long-term vision of enhanced cooperation, once a greater level of mutual trust was
reached between Members;  and (v) discussing pr ocedural or substantive convergence issues.  As
elaborated in Canada's submission, the Workin g Group on Trade and Competition Policy that was
established under chapter 15 of the NAFTA agreement provided an illustration of how a WTOCommittee could help to strengthen the scope for cooperation between Members, for example by
improving understanding of the similarities and differences among each party’s laws, and any
potential effects on trade in the free trade area.
54. The representative of Thailand, introducing relevant sections of document
WT/WGTCP/W/205, emphasized that her delegation supported the ongoing work on competition
policy at the multilateral level and felt that any modalities for cooperation that were implemented
should guarantee developing countries better protection against international cartels.  Thailand'sproposal concerning modalities for cooperation diff ered from other Members' proposals in that her
delegation believed that the initial commitment on cooperation should be binding.  A purely voluntary
framework would be ineffective because more advanced competition authorities, with greater
information and capabilities, would have little incentive to provide information or assistance to less
advanced authorities that were not in a position to offer reciprocal benefits.  Therefore, in place ofthis, her delegation proposed a narrow but binding cooperation framework.  The initial commitment in
such a framework would be focused purely on fighti ng international cartels and would consist of the
following elements:  firstly, there would be mandatory notification by authorities that were currently
investigating and prosecuting international cartels to  promptly alert competent authorities in other
countries where these cartels could be operating.  The notification should include at least thebackground and the preliminary analysis of the particular case.  Authorities should also be kept up to
date on a regular basis with regard to progress in the investigation.  The second element would be a
mandatory consultation.  This would require governments that were investigating an alleged cartel to
engage in discussions with other Member countries whose interests could be affected.  The third
element would be assistance in the enforcement process, whereby competition authorities would berequired to provide analytical assistance and share experience and suggestions concerning
enforcement techniques.  Requests for information ga thering should also be facilitated.  Due to the
overwhelming disparities in financial and technical resources between competition authorities in
developed and developing countries, special and differential treatment for developing Members would
be necessary.  In this regard, her delegation proposed that competition authorities in developing
countries be financially compensated for delivering requested services and be allowed to cooperate to
the extent possible, subject to technical and financial constraints.  It also proposed that themedium-term goal in cooperation should be focuse d on establishing mutual legal assistance.  A
plurilateral legal assistance treaty against cartels would help to eliminate the dual criminality
requirement.  Antitrust law in Thailand was crim inal legislation and her delegation advocated that
companies, as legal entities, be treated as criminals when they violated the law.  While the current
legal environment in some Member countries did not provide for extraterritorial jurisdiction based onthe effects doctrine, it was worth exploring the possibility of a positive comity agreement to address
the harm to developing countries by foreign anti-competitive conduct.  The exchange of confidential
information would facilitate effective enforcement of relevant laws.  Thailand had passed an
administrative law with respect to the classification and handling of confidential information in 2001.
The law also guaranteed public access to government documents.  A committee had been establishedto consider requests for disclosure of public documents.  While there were no explicit prohibitions
with regard to exchange of confidential informati on in Thailand's law, the idea of sharing confidential
information on a multilateral basis was, at this point, hardly feasible.  However, possibilities for the
exchange of confidential information should be worked out in the medium term.  She understood that
differential sanctions and substantive procedural rules as well as leakage of confidential informationwere major concerns for some delegations.  Nevertheless, she believed that these elements could be
worked out if national industrial and trade policies did not get in the way.  Countries that wished to
cooperate and were eligible would have to meet minimum requirements in terms of the quality of their
procedures and handling of confidential information.  Without a positive comity agreement,WT/WGTCP/M/18
Page 24
developing countries would likely continue to be victimized by international cartels.  She felt that the
proposed cooperation modalities were practical and feasible, and would lay the ground for closer
cooperation in the future.
55. The representative of the United States, introducing document WT/WGTCP/W/204, said that
the Working Group was engaged in an important discussion because the notions of voluntary
cooperation, hard core cartel prohibitions and core principles were concepts that had inherent merit
and for which there had been demonstrated benefits.  However, the Working Group needed to focus
on them in the unprecedented context of how they would translate into a multilateral framework in the
WTO.  The Working Group's previous discussion s on cooperation and the submissions presented
earlier by the United States (documents WT/WGTCP/W/48 and 116) and other delegations on this
topic provided ample demonstration of the benefits that voluntary cooperation offered and its
successful application in various formats - e.g., through bilateral agreements and through multilateralarrangements of a non-binding sort.  The question on how voluntary cooperation might work in a
multilateral framework in the WTO needed careful examination and clarification.  In this spirit, he
briefly reviewed the United States experience with cooperation in competition law enforcement.
Cooperation had taken place under several frameworks.  At the bilateral level, the United States had
entered into a number of "soft" or "first generation" agreements, that is agreements that did notprovide for the sharing of confidential information.  It had also entered into one agreement devoted
specifically to elaborating a framework for positiv e comity and one agreement that provided for the
exchange of confidential information in the render ing of mutual legal assistance, including requesting
that the other enforcement agency obtain informa tion for the requesting party.  In the multilateral
context, he referred to experience und er the OECD Recommendation on Cooperation
9 and to the
NAFTA agreement, already referred to by the representative of Canada.  The benefits flowing from
these arrangements included the avoidance or at least the minimization of conflict in antitrust
enforcement in addition to case-specific enforcemen t benefits, for example in the area of cartels and
mergers, which in turn encouraged policy convergence.  The formal cooperation arrangements had
also proven to be a catalyst that had brought about closer relations and a cooperative spirit among thestaff of the participating agencies.  With regard to the issues raised by trying to translate this
experience into the framework of the WTO, he raised the following issues for discussion:  firstly,
there was the question of definitions, of what cooperation was and of what voluntary cooperation
meant in this framework.  In the report on the Working Group's discussions in 2001, the term
"cooperation" was used to refer to several different types of activity, ranging from technical assistance
or cooperation to notification and sharing of information, both on a policy level and in specific cases,
and to the coordination of parallel investigations.  The Working Group needed to clarify which ofthese tools, or others, were covered by the term "cooperation".  Another term the Working Group
needed to clarify was the word "voluntary".  Previous discussions in the Group had noted that
cooperation, as conceived by most countries active in this area, was an inherently voluntary activity
and it would be futile to try to coerce it.  Nonetheless, in the context of discussions on voluntary
cooperation, the Working Group had considered whether there would be any obligation on the part ofthe requested jurisdiction to, for example, "give sympathetic consideration" to a cooperation request;
whether a requested jurisdiction that for one reason or another was not in a position to cooperate
might have to provide reasons or justification for not doing so;  whether there would be any obligation
for consultations that could arise in that context, etc.  An important related question was the extent of
discretion a requested jurisdiction would have, e.g. in the area of notification, if it was looking into asensitive secret area such as a cartel and it did not see fit to engage in extensive notification for fear of
compromising the investigation.  Still another issue concerned the scope of any obligation relating to
cooperation, for example whether it would apply only to substantive conduct encompassed by
disciplines that the Working Group would agree to or if it would go beyond these.  For example, a
substantive discipline was adopted only with respect to hard core cartels, would cooperation extend
                                                     
9 OECD, Revised Recommendation of the Council Concerning Co-operation Between Member
Countries on Anti-competitive Practices Affecting International Trade adopted on 27 and 28 July 1995,C(95)130/Final.WT/WGTCP/M/18
Page 25
only to hard core cartels or to other aspects of co mpetition enforcement.  Referring to the suggestion
made by the representative of Thailand for a cooperation obligation that would encompass positive
comity, this merited careful consideration.  In the experience of the United States, positive comity
came only at a later stage in the evolution of cooperation relationships, once the agencies involved
had established a track record based on trust and confidence, and was not an initial aspect of acooperative relationship.  It would also be relevant  to reflect on how the principle of MFN treatment
would relate to a cooperation discipline.  If a jurisdiction cooperated to a greater extent with some
countries than with others, would this raise MFN issues or would each bilateral relationship be treated
as separate and distinct?  The question of what circumstances would trigger an obligation to notify
also merited attention.  Some delegations had made reference to cases affecting another jurisdiction's
important interests, but this term also needed to be defined.  Yet another question was how a
notification would be carried out.  Would it be carried out by one jurisdiction directly with another orwould it be done through the WTO as an intermedia ry?  Would there would be a responsibility, as had
been suggested by the representative of Thailand, to update other Members on a regular basis, based
on subsequent developments after the official notification?  Another question concerned resource
implications.  From the United States perspective, while cooperation in general was extremely
beneficial, it was not without its costs, which could be significant.  He hoped that further discussionsin the Working Group would shed light on these and other questions about what, specifically, would
be implied by modalities for voluntary cooperation in the framework of the WTO.
56. The representative of Korea, introducing relevant sections of document WT/WGTCP/W/200,
said that the modalities for voluntary cooperation and fighting hard core cartels were closely linked.
He believed that voluntary cooperation could become an important vehicle to assist developing andother countries to address the harmful impact of hard core cartels.  He discussed various rationales for
enhancing voluntary cooperation.  A strengthening of international cooperation mechanisms was
needed in light of the increasing incidence of anti-competitive practices having cross-border effects.
Another representative of the same delegation said that participants in international cartels were
typically located in various countries, but usually the company was located in developed countries andnot in developing ones.  In such circumstances, cooperation mechanisms could be particularly useful
to developing countries.
57. The representative of Australia, introducing relevant parts of document WT/WGTCP/W/199,
explained that cooperation was important because anti-competitive conduct increasingly transcended
national borders, often with impunity.  Identifying and investigating such behaviour required access to
information that was often located overseas.  National competition rules and criteria for assessing
impacts on competition could vary widely, creating trade and investment distortions and increasingcosts and uncertainties for governments and compan ies.  Cooperation was the logical response.  For
example, in international merger cases, cooperation among agencies could expedite processes, lower
costs and identify any negative impact.  This was equally applicable where hard core cartels chose to
prey on the weak, in other words, to set up in those countries that did not have adequate competition
regimes.  Australia had several cooperation agreements, the most far-reaching of which was a formaltreaty with the United States.  It had also entered into a tripartite cooperation agreement with New
Zealand and Canada and into bilateral agreements with the Chinese Taipei Fair Trade Commission,
New Guinea and Fiji.  However, for cooperation to be effective it had to go beyond legal frameworks.
A key factor was the establishment of strong personal relationships and mutual trust among
authorities.  Knowing each other’s capacities and limitations helped to ensure realistic expectations.Australia had found that, in many cases, informal cooperation was valuable and productive.  This
involved discussions on investigations, exchanges of non-confidential information, sourcing relevant
information, etc. Australia also relied on its formal agreements where particularly sensitive,
confidential or high-profile issues were at stake.  Generally, the task of establishing appropriate
frameworks to protect confidential information made the exchange of such information a long-termgoal.  Informal cooperation involving the exchange of non-confidential information was a more
achievable target which would still yield useful outc omes.  The submission of Australia also described
how Australia had participated in the high-profile vitamins case in 1999 through 2001 without havingWT/WGTCP/M/18
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to invoke any formal arrangements.  It highlighted  the importance of informal contacts and networks
among agencies in reaching results and positive outcomes in such cases.
58. The representative of Norway referred to the benefits achieved through cooperation in the
field of competition law enforcement among the five Nordic countries.  These five countries,
Denmark, Finland, Icela nd, Norway and Sweden, had, for centuries, had a close relationship in
political, economic and legal matters.  Despite this, cooperation in competition matters was a rather
recent phenomenas.  It developed gradually in response to practical needs, and in order to match the
trade routes and the expansion of commerce of the Nordic enterprises.  Three of the five Nordic
countries were members of the European Community.  The other two were part of the Community's
common competition regime through the European Economic Area agreement, which made all these
five countries members of the same area, legally speaking, as far as competition policy was
concerned.  It was also worth noting that all five Nordic countries had more extensive commitmentson the exchange of information in competition matter s, including confidential information, in relation
to the European Commission than amongst themselves.  Nordic cooperation on competition matters
evolved in three separate phases.  The first dated back to the late 1970s and early 1980s when the five
countries started implementing modern competition laws.  Cooperation developed gradually and
informally over a period of many years through trust and personal relationships between the heads ofthe relevant authorities.  In the past ten years, a much more structured type of cooperation had
developed, but until a few years ago this cooperation had no formal legal basis.  Originally, there were
exchanges of views on general competition matters but also on specific cases, for instance mergers
and assessments of market shares and structures.  Non-confidential information was also shared, as in
hard core cartel cases.  As the integration of the Nordic markets developed during the latter part of the1990s, the Nordic competition authorities felt a strong need for a more formalized basis for
cooperation.  Therefore, in the year 2000 the five Nordic competition authorities, plus those of the
Faroe Islands, had established a set of informal guidelines whose purpose was, inter alia , to establish
a legal basis for cooperation.  The guidelines provid ed for the exchange of information, both of a non-
confidential and of a confidential nature.  However, not all Nordic countries had the legal authority toexchange confidential information.  In these ca ses, if such confidential information was to be
exchanged, it had to be done by the express consent of the parties involved.  Also, information passed
from one competition authority to the other could only be used for the purpose of enforcing
competition law and could not be passed on to any other authorities.
59. Continuing, he said that the guidelines also included methods for coordination of information
and the exchange of facts, legal and economic analysis and positive and negative comity .  T h e
guidelines were basically of a voluntary nature, but some of these elements clearly involved legalresponsibility on the part of the competition authorities.  For example, they had to inform the other
Nordic competition authorities whenever there was a concrete suspicion that anti-competitive
activities "which may harm competition" were taking place.  Shortly after these guidelines were
implemented, a third phase entered into force when the Nordic countries established a formal
agreement between themselves in the year 2001.   Only three of the Nordic countries were able toadhere to that agreement and the guidelines therefore continued to apply in other cases.  However, this
agreement fell short of some of the elements that could be found in the European Community treaty
and the European Economic Area agreement, in the sense that the Nordic agreement did not allow for
assistance at the request of another competition authority in the investigation of cases ("dawn raids").
Nor did the agreement enable national competition au thorities to request information from their own
subjects at the request of a national authority in another Nordic State.  Clearly, the Nordic countries
had their own particular experience, they were rather homogeneous and had developed mutual trust
over extended periods.  In the view of his delegation, any multilateral framework would benefit from
supplementary cooperation regimes at the regional level between countries which were sufficiently
homogeneous for such an exercise to be useful.  Th is would be entirely consistent with the spirit of
the exercise.  He added that, in order to participate usefully in a regional network of this nature, a
country needed an effective enforcement structure at the national level.  All cooperation regimes
needed to be developed gradually.WT/WGTCP/M/18
Page 27
60. The representative of Zambia said that cooperation was one possible element that made the
proposal for a multilateral framework attractive to his delegation.  Recent developments in Eastern
and Southern Africa had helped Zambia to see the importance of cooperation and it was, therefore,
trying to collaborate with a number of national agencies in the region.  Cooperation was particularly
useful in detecting and investigating anti-competitive practices in cross-border cases and cases of amulti-jurisdictional nature.  This was the view not only of Zambia, but of other members of
COMESA, the Common Market for Eastern and Southern Africa.  As had been mentioned in the
Background Paper prepared by the Secretariat for the meeting (WT/WGTCP/W/192), countries in the
region were in the process of formulating a regional policy in this area, establishing a mechanism for
exchanging information between themselves a nd a mechanism under which they would jointly
investigate cases of anti-competitive practices within the region.  By the end of August, the draft
policy would be ready and would be put before policy decision-makers in the region.  Zambia andother countries in the region were also looking at the issue of a multilateral framework under the
WTO.  They were inclined towards the kind of proposal made by the Thai delegation.  However, they
did have concerns with regard to the scope of obligations that might arise from a binding multilateral
framework.  Currently the capacity of most developing countries in this area was fairly limited, not
only in relation to new obligations that might arise but also in relation to existing obligations undercurrent WTO agreements.  It was an accepted universal fact that these countries were not able to fulfil
or implement some of the requirements that had been placed on them as a result of their participation
in the WTO framework.  Moreover, these countries did not feel that, currently, they derived sufficient
benefits from the multilateral trading system.  Given this, Zambia and other COMESA countries who
supported a multilateral framework on competition policy on its merits wanted to be assured, beforeany new obligations became operational, that suitable  mechanisms were put in place to ensure that
excessive burdens were not put on developing countries.
61. The representative of Colombia said that the competition authorities in her country lacked
financial resources to use modern information technology in the analysis of markets and to obtain
necessary concrete information.  This prevented them from efficiently investigating allegations of
anti-competitive practices.  In this context, Colombia attached great value to the prospect of enhanced
international cooperation.  It wished to share th ree preliminary ideas in this regard:  firstly,
cooperation should have a broad coverage.  The document presented by Canada (document
WT/WGTCP/W/200) was a useful input in this regard.  She found the idea of cooperation in the sense
of exchange of information and experience on issues related to the relationship between trade and
competition policy to be particularly interesting.  Secondly, a multilateral framework should not
impede other forms of cooperation, whether of a bilateral or regional nature.  Thirdly, the maininterest of the Colombian competition authority was to give shape to the concept of positive comity.
After listening to the comments made by some other delegations, she was worried that this element of
cooperation, which was of great interest for countries like hers and would be important to effectively
confront current anti-competitive activities, might only be viewed as a long-term goal, whereas her
delegation saw it as a more pressing necessity.
62. A number of questions, concerns and reservations were raised by delegations regarding the
foregoing proposals and observations.  The representative of Cuba said that a national competition
law and administering authority were a prerequisite to international cooperation and therefore he didnot see how it would be possible to achieve international cooperation in the framework of the WTO,
taking into account the fact that many Member countries, especially developing countries and LDCs,currently lacked such laws and authorities.  He was also concerned by the proposal to include, in a
multilateral agreement, provisions relating to cooperation in concrete cases.  For many small countries
with small companies, strategic alliances for importation were important to achieve economies of
scale;  yet these could be considered as harmful practices or import cartels.  On the other hand, Cuba
defended the principle of voluntary cooperation.  Taking into account that a number of countries didnot have a competition authority, mandatory cooperation would indirectly force all countries to have
such an institution.  He emphasized that it was necessary, taking into consideration the different levelsWT/WGTCP/M/18
Page 28
of development, for each individual country to evaluate whether and at what stage a competition
policy or competition authority was justified.
63. The representative of India said that, in the study process in which the Working Group was
engaged, a first question that arose with respect to the topic of cooperation concerned the experience
gained at the bilateral and regional levels.  It was heartening, in this regard, to note the experiencesthat had been referred to by other delegates,  for instance the arrangement between the Nordic
countries and other arrangements between countries at similar levels of development.  However, his
delegation was concerned about the workability of such a system in an organization with the broad
membership of the WTO.  Competition policy might, in reality, turn out to be one area where
convergence of economic and political issues could be discussed essentially to persuade countries to
restrain their ‘beggar thy neighbour’ policies a nd share information with foreign competition
authorities to investigate the practices of domestic enterprises which generate anti-competitive effectsin foreign markets.  If this was indeed so, he would be happy to know how voluntary cooperation was
an option to address these issues.  The extent to which voluntary cooperation on information sharing
and other areas would be effective was anybody’s guess.  The Indian delegation would be happy to
engage in bilateral contact with any delegation which could help India in dispelling that impression.
Best-endeavour clauses appeared to serve little purpose for developing countries.  He understood that,based on specific agreements, confidential information could be shared between Australia and the
United States.  It was not clear to him, thoug h, what would happen if one competition authority
refused to share confidential information involving one  of its own firms.  He would like to know what
action could be taken by another country under a bilateral agreement if such a case arose.  Lastly,
voluntary cooperation in the form of positive comity was unlikely to benefit developing countries.Rather, it would harm them because of the power asymmetry between developed and developing
countries.  As an illustration, the sharing of information by developed countries could not be enforced
by developing countries in voluntary cooperation arrangements.  On the other hand, the voluntary
obligation of developing countries' competition authorities would in practice become mandatory.
Concluding, he said that his delegation would like to know what safeguards the proponents of amultilateral framework on competition policy would propose to address these concerns.
64. The representative of Hong Kong, China said that, while there was no lack of practical
suggestions to enhance cooperation between competition authorities, there were still a number of
issues that needed to be addressed before proceeding to negotiations on a possible WTO framework.
The Japan-Singapore economic partnership agreement which had been referred to by the
representative of Japan was an interesting example of how countries with different competition
policies or systems could cooperate within limited coverage or specific sectors.  In this context, heoffered the following suggestions as to how progress could be achieved in the WTO context.  First,
his delegation considered it important to clarify the meaning of the term "voluntary cooperation".
From paragraphs 20 and 26 of the background note by the Secretariat (WT/WGTCP/W/191), he noted
that "voluntary" could be interpreted as meaning that cooperation obligations could be drawn up, but
would not be subject to dispute settlement.  In that case, there could still be a commitment byMembers to consult and to seek mutually acceptabl e solutions in cases involving international anti-
competitive practices.  In the view of his de legation, any cooperation arrangement that might be
established in the WTO context must be based on the notion of voluntary participation, meaning that
before a cooperation agreement was put in place, each Member should retain freedom to choose
whether or not to engage in consultations leading to such arrangements, and whether or not to join thearrangement at the end of the consultation.  Forcing a Member to cooperate was bound to undermine
mutual trust, which was the cornerstone of meaningful cooperation.  In this regard, he agreed with the
delegation of the United States that there was little point in trying to coerce one jurisdiction to
cooperate with another.  Moreover, in a practical sense, every party to a cooperation arrangement had
to fulfil at least some basic obligations in exchange for its rights under this arrangement.  Still, giventhe vast membership of the WTO and the evident diversity in competition regimes across economies,
voluntary participation was probably the least frictio nal and the most effective route to kick-start a
cooperation arrangement.  In this regard, his delegation was not sure if it could agree with theWT/WGTCP/M/18
Page 29
representative of Thailand on the idea of a binding commitment for multilateral cooperation.  Such a
mandatory approach that might be backed by a dispute settlement mechanism in the WTO could not
take into account and respect the different approaches taken by WTO Members in the field of
competition policy.  Another important aspect the Working Group needed to consider was the
different levels of cooperation arrangements.  As he understood it, the types of internationalcooperation arrangements in the competition field were numerous and varied.  At the basic level,
cooperation might seek to open up dialogues between competition authorities to foster greater
understanding of one another and to promote di ssemination of general information of common
interest.  Cooperation at this level would require few, if any, preconditions.  At a slightly higher level,
cooperation might entail the establishment of a dedicated forum to facilitate peer review of
competition policies and/or joint analysis of glob al condition issues.  Such cooperation would require
more resource commitments from participants compared  to cooperation at the lower level.  At a more
sophisticated level, cooperation could extend to case-specific collaboration among competition
authorities to tackle cross-border anti-competitive practices.  For cooperation to take place at this
level, a high degree of similarity in enforcement approach and experience was called for.  The
delegation of Hong Kong, China did not question the benefits that might arise from international
cooperation arrangements at various levels.  Rather, its primary concern was to discern which of thesearrangements could realistically be pursued in the WTO context.  Specifically, it believed that any
cooperation arrangement that could be developed under the WTO framework would have to take into
account the divergent needs and circumstances of WTO Members and the costs involved.  Such an
arrangement should be based on standards that were acceptable to all Members.  High-level
arrangements involving case-specific cooperation or stringent preconditions for participation shouldbe for international forums or bilateral arrangements other than the WTO.  In this regard, he also felt
that cooperation in the WTO was a long-term process, and only in the light of more experience could
the WTO Members consider a step-by-step, more advanced form of multilateral cooperation.  As to
whether international cooperation arrangements should be established in the context of a WTO
agreement, he did not dispute that an intricate cooperation arrangement encompassing abundantprocedural details would have to be preceded by an intensive negotiation process.  Yet, he did not
think that the examination of practical options for cooperation must necessarily be linked to a possible
negotiation process to be initiated after the Cancun Ministerial.  Hong Kong, China felt that the WTO
could contribute to further international cooperation on competition policy, provided this was pursued
with the right approach, and if it was prepared to engage in dialogue with Members to identify the
best way forward.
65. The representative of Egypt inquired as to what kind of cooperation could be considered
between a country with a competition authority and another country without such an authority?  Most
probably, he suggested, a country without a compe tition authority was a country without a law or a
policy, or was in the process of adopting its policy and law.  At the present stage, it would be useful if
the Working Group could focus more on capacity-bu ilding activities, particularly for developing
countries without competition authorities and laws, in order for such countries to be better prepared toevaluate the implications of enhanced cooperation in  this field, for example with respect to the types
of information that could usefully be exchanged.
66. The representative of Malaysia agreed that a WTO framework on competition policy would
presuppose the existence of domestic competition legislation.  However, this approach would not be
in the interests of developing countries and their ability to promote their own development, especiallyif core WTO principles like national treatment and MFN were applied to the modalities of
cooperation.  He also questioned whether the WTO was the most appropriate body to promote
cooperation among competition authorities.  He reminded Members that paragraph 25 of the Doha
Declaration contained the key words "voluntary", "cooperation", "modalities" and "appropriate
flexibility" and that developing countries required a long time-frame to build the capacity required tocompete successfully in the global economy.  Any modality of cooperation that resulted from the
Working Group's discussions must provide exemptions in favour of developing countries and must be
within the provision of the key words of paragraph 25.  Besides, there should be no binding rulesWT/WGTCP/M/18
Page 30
governing competition laws in developing countries.  In this regard, he shared the concerns expressed
by the representative of the United States about maintaining the voluntary nature of cooperation,
avoiding problems flowing from application of th e MFN principle, what should be notified, and the
extensive resources that would be involved in enforcing cooperation.  He also shared the view,
expressed by the representative of Japan, that cooperation was possible even if the participatingcountries had different systems of competition law, and even if a particular country did not have a
comprehensive competition law.  Cooperation might even be possible if all Members did not
incorporate all the WTO principles in their national legislation.
67. Responding to the foregoing interventions, the representative of the European Community
and its member States suggested that two aspects needed to be considered.  One concerned general
cooperation, general discussion and joint analysis.  This kind of cooperation could be carried out at
multilateral, regional and bilateral levels.  At the multilateral level, the creation of a WTO Committeeon Competition Policy would be an important step.  In the context of such a Committee, under
established WTO rights and procedures, Members would engage in dialogue and would have the right
to ask for discussions on particular issues.  This in itself would be an important contribution to
promoting mutual understanding among Members and building capacity.  The other main aspect of
cooperation was case-specific cooperation, which was basically a bilateral process.  He did not see
how this could work effectively other than in a voluntary manner.  Voluntariness was important for
two reasons:  firstly, because of the limits to the capacity to cooperate which were felt by all
authorities, including the most sophisticated ones.  Secondly, cooperation was a two-way process.  If
one of the two authorities had nothing to contri bute, it would be difficult to envisage how an
obligation to cooperate would actually work, and if both authorities had something to contribute itwould be difficult to envisage how an obligati on to cooperate would add value to the exercise.
Besides, an authority might have valid reasons not to want to cooperate in a particular case, for
example due to considerations of sovereignty and the confidentiality of the investigations.  The ability
to decline to cooperate in particular cases was not solely a concern of developed countries'
competition authorities;  statements by various Members in the Working Group had indicated that thiswas shared by developing country authorities as we ll.  Note should also be taken of the fact that
authorities that had been established for some time and were used to cooperation with their colleagues
in other countries virtually without exception spoke enthusiastically about the benefits of voluntary
cooperation, independent of their country's level of development.  Once a competition authority was
established in any country, its capacity and willingness to cooperate built up rapidly.  As to the
question of how the proposed framework for cooper ation would apply in the case of countries that
lacked a competition authority, two points needed to be made.  First, as already noted, his delegationwas not necessarily suggesting that each Member of the WTO ought to have a competition law and a
competition authority;  rather, the requirements of the framework might be satisfied through regional
authorities and legal instruments.  Second, as had been pointed out in the current meeting, there were
different ways of enforcing competition law which depended on the legal and administrative tradition
of each country.  It was not strictly necessary to have an administrative body called a competitionauthority, although in the end he felt it made sense to have one.  All countries with a developed
competition law moved in that direction eventually.  However, all that would be necessary under the
proposed framework was an identified and sufficient ly equipped enforcement capacity of some kind.
Subject to those qualifications, it would be difficult, indeed impossible, to envisage case-specific
cooperation if one of the parties to the proposed cooperation did not have such an enforcementcapability.  Such a party would have no competition law, no cases and no ability to engage in
case-specific cooperation.  There was, however, scope for other kinds of cooperation between
established authorities and countries that were in the process of establishing such an authority, for
example with respect to capacity-building, the drafting  of legislation and so forth.  With respect to the
points made by the representative of Colombia, he agreed that cooperation was a means to overcomeresource constraints.  Of course, cooperation in itself required a minimal expenditure of resources, but
for most authorities it was an efficient way to obtain help.  He also agreed that:  (i) cooperation ought
to have wide scope;  (ii) cooperation at the multilateral and bilateral levels should be complementary;
more specifically, cooperation at the multilateral level should encourage and certainly not come in theWT/WGTCP/M/18
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way of cooperation at the bilateral level.  When two authorities sought to deepen their level of
cooperation, they would need to tackle issues such  as the treatment of confidential information,
collection of evidence, etc. which would be difficult to tackle at the multilateral level;  and
(iii) positive comity was of interest to both developed and developing countries.  Although his
delegation had not proposed at this stage to include provisions on positive comity in a WTOframework on competition policy, he would be pleased to discuss the matter further.
68. The representative of the United States agreed that cooperation should be a voluntary process,
and with the reasons for this that had been noted by the representative of the European Community
and its member States.  It was something that should be encouraged but not mandated.  Making
"voluntary cooperation" obligatory would create a "v oluntary obligation", whic h did not make sense.
Delving further into specific modalities for cooperation, he pointed out that one type of cooperation,
namely case-specific cooperation, was about individual investigations and merger reviews.  By itsnature, this was likely to be more often bilateral than multilateral.  For that type of cooperation to take
place, both parties needed to have competition laws and responsible authorities.  There were,
however, a number of other modalities for cooperation, for example with respect to helping to build
relevant institutions and to provide resources for them, especially newly created competition
authorities in small and developing economies.   This could take place through a variety of vehicles.The OECD and UNCTAD were already doing a good job in this area, in the case of the OECD
through its outreach programme.   Another vehicl e that merited discussion was the newly-created
International Competition Network (ICN), in which 60 competition authorities worldwide were
members.  Initially, the ICN was focusing on two areas.  The first was competition advocacy.  In this
regard, it was developing a toolkit for competition authorities in developing countries to espouse thevalue of competition law and policy in promotin g economic development and economic growth.  The
second area was merger review, on which three subgroups were working.  One, which was looking at
procedures for notification and merger review, had already developed a set of proposed guiding
principles including transparency, non-discrimination and procedural fairness.  The work of this
subgroup would be reviewed at the first ICN annual conference which would take place in Naples inSeptember.  The subgroup was now moving on to developing a set of best practices with respect to
merger notification.  Another subgroup was looking at the analytical framework for merger review.
The third subgroup was putting together an educational seminar on investigative techniques for
merger review that was targeted at new competition authorities.  The idea, put forward earlier in the
meeting, of establishing a Competition Policy Committee in the WTO merited discussion.  However,
in discussing it, it should be borne in mind that other multilateral vehicles already existed.  He also
agreed that cooperation at the regional level was valuable, and that this should be encouraged by theWTO.
69. Another representative of the same delegation asked those who had raised the possibility of
positive comity provisions in the framework of the WTO whether they envisaged something broader
than the concept of positive comity as it was curre ntly used in the context of existing cooperation
agreements.  Under current agreements, positive comity potentially kicked in only:  (i)  where anti-competitive practices taking place in the requested country were affecting the export commerce of the
requesting country or, in trade terms, denying market access;  or (ii) where there were effects in both
jurisdictions but the requested country was in a better position to address them.  This reflected
inherent limitations in the jurisdiction of particip ating countries.  For example, the United States
simply could not prosecute a cartel if there were no effects on its commerce, of one kind or another.Even where an international cartel did have effects in the United States, the United States would not
have the legal authority to take action against the participating firms on the basis of effects that
occurred in another jurisdiction.  This suggested a need for further reflection on the scope and
application of positive comity provisions in the context of a possible multilateral framework on
competition policy.  With regard to the provisions on notification and information exchange that hadbeen proposed by some delegations in the contex t of cartels, the United States knew from its
experience that, for cartel investigations to be effective, it was important that targeted firms or
individuals not know what the next procedural st eps would be, the details of the evidence againstWT/WGTCP/M/18
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them, etc.  This was why, in the United States, virtually all of the evidence in conspiracy cases was
treated as confidential.  In fact, this information was considered to be so sensitive that agency staff
members working on cartel cases did not even discuss their investigations with colleagues not
working on these cases down the hall.  Other competition authorities had similar concerns and
constraints.  On this basis, disclosure of evidence to 144 WTO Members could significantly impairanti-cartel enforcement worldwide.  On the matter of  information sharing, it was true that during the
course of investigation of international cartels the competition authorities of the United States often
uncovered information of a general nature that coul d be helpful to other jurisdictions investigating
such cartels.  However, this type of information was not detailed enough ever to substitute for a
substantial investigation on the part of the receiving jurisdiction.  On the basis of these comments, she
asked the Working Group to consider how cartel cooperation and notification provisions could be
structured so as to be of value to Members without undermining the effectiveness of currentenforcement programmes.
70. In response to the foregoing comments, the representative of Thailand referred to two reasons
why, according to her delegation's proposal, cooperation on competition policy in the framework of
the WTO should focus initially on dealing with internat ional hard core cartels.  First, because of its
cross-border nature, the problem merited a multilateral solution.  Second, the impact of suchbehaviour clearly undermined the benefits of trade liberalization and therefore the objectives of the
WTO.  Calls for broader forms of cooperation seemed to overlap, in part, with technical assistance
and capacity-building.  In any case, a WTO framework on competition policy would guarantee
developing and developed countries alike, particularly, those with weaker enforcement capacity,
better protection against international hard core cartels.  With adequate and timely information,
developing countries such as Thailand would be much better equipped to deal with international
cartels than they were currently.  While a voluntary framework might work in countries with
comparable levels of development, such as the members of the OECD, the same result could not be
expected in a multilateral environment that was made up of the most advanced nations and less
developed ones, in which the expected benefits from cooperation were not mutual.  This was why herdelegation proposed that the initial commitment be limited to the exchange of information which
consisted of notification and consultation regarding international cartel activity, and that this
commitment be binding.  Giving the requested party the ability to refuse requests would not guarantee
any kind of response.  She did not see why the WTO should duplicate the voluntary mechanisms that
were available in bilateral and regional cooperation regimes.  Without the assurance of concrete
benefits arising from cooperation, developing nations would have less interest in the promotion of
competition law and policy at the multilateral level.  She realized, though, that important detailsregarding the operation of the proposed binding fram ework would have to be worked out.  She agreed
that the information which would be exchanged w ould be limited to information of a non-confidential
nature, at least initially;  this should alleviate some of the concern that had been expressed regarding
her proposal.  In particular, the submission of her delegation (WT/WGTCP/W/205) was not intended
to  suggest that the information to be exchanged would go beyond what was publicly available.  Whendeveloping countries, or those countries with weak laws and enforcement regimes, had more
systematic access even to non-confidential information concerning the operations of cartels,
particularly international hard core cartels, they would begin to see the type of benefit that could be
achieved from engaging in other forms of cooperation at the multilateral level.
71. The representative of Switzerland said that his country's experience with cooperation,
especially with case-specific cooperation, was lim ited.  Accordingly, for Switzerland, the current
discussions had an important learning and capacity-building component.  He noted that meaningful
cooperation involved a two-way exchange.  The concern expressed by Thailand that some countries
might receive limited benefits from voluntary cooperation because of differences in their legislation
and enforcement regimes should not be overlooked.  He was not sure if it was a "North South" issueas the representative of India seemed to suggest because power asymmetries also existed among
developed countries and presumably among developing countries as well.  However, to make
cooperation binding would raise a range of practic al problems as had been mentioned by otherWT/WGTCP/M/18
Page 33
representatives and might not be feasible simply because of resource constraints on all sides.  He
doubted whether firm rules at the outset were the ideal approach to address the issue of potential
discrimination.  A more flexible approach, for instance a form of monitoring to check whether
systematic discrimination occurred, could be considered.  More discussion would be necessary to
clarify whether it was feasible to establish a commitment to respond to all requests for case-specificcooperation.  One approach would be for the requests and the answers to be passed on to the
Secretariat, which could maintain relevant statistics.  Over time, it might be possible to evaluate
whether some countries or groups of countries provided cooperation to some, while systematically
refusing requests made by others in similar circumstances.  In any case, at the initial stage, his
delegation expected greater benefit from other aspects of cooperation involving informal exchanges of
information, regular meetings and possible peer reviews, which would make an important
contribution to capacity-building.  In this respect, the main challenge could be to get all countriesinvolved in peer reviews and the exchange of information - something which merited further
discussion.
72. The representative of South Africa said that rece nt experience of his country provided insights
into the actual nature of cooperation in the field of competition law and policy and how cooperation
which was voluntary could still work effectively and be profitable from a developing countryperspective.  Each country could tailor its cooperative activities in the way that it deemed most
suitable to its interests.  For South Africa, cooperation in the field of competition law and policy had
two principal objectives:  firstly, to create greater understanding of competition issues, in order to
strengthen South Africa's own enforcement capability.  Secondly, to learn about how colleagues
around the world dealt with cases of a similar nature to those with which South Africa wasconfronted.  In the context of these two objectives, it was clear that any country wanting cooperation
must have a competition issue to deal with in th e first place and a commitment or resolve to deal with
it.  In fact, he endorsed the suggestion that cooperation could work well between countries that had
similarly constituted enforcement authorities, whereas it would be difficult to cooperate with countries
that lacked a competition authority since this would mean dealing with a government department thatmight not have the same appreciation of technical issues.  With respect to the voluntary nature of
cooperation, he wondered whether making it binding would really yield any advantage.  Firstly, it was
unclear that developing countries had the resources to meet all requests for cooperation that came to
them.  His country did not want to be in the position of having to find information to assist another
jurisdiction when it scarcely had enough capacity to deal with its own domestic issues.  However,
since South Africa would undoubtedly desire assistance from other countries on a recurring basis,
there was a clear incentive for it to cooperate with the authorities of other countries that requestedassistance, be it case specific or just of a general nature, provided that the assistance requested was
consistent with South African laws and practices and did not involve the exchange of confidential
information.  South Africa had engaged in the exchange of information of a non-confidential nature
with Norway, Australia, the United States, the European Commission, India, Kenya, Zambia and
Zimbabwe.  In fact, such cooperation did not necessarily require the existence of a formal agreement;it was largely a matter of making phone calls, exchanging e-mails and meeting colleagues in relevant
forums.  Therefore, the question before the Working Group was what was the appropriate design and
content of a multilateral framework on competition policy that would facilitate and encourage
voluntary cooperation without needlessly encumbering existing practices.  He felt that it should be
enough to put in place a framework that committed Members to cooperating with authorities of otherMembers that required assistance on a specific case or a general issue.  As well, a peer review
mechanism would assist in ensuring that countries lived up to their commitments.  But it was
unnecessary and could be counter-productive to make the instrument binding.  He also felt that any
request for assistance from a developing country should be sympathetically considered since such
countries had much greater needs.  In a related vein, he noted that under South Africa's competitionlaw, the national authorities had jurisdiction only if any particular activity, irrespective of where it
originated, had an effect in South Africa.  For this reason, in a particular case, he had had to turn
down a request for cooperation because the case did not produce an anti-competitive effect in South
Africa.  Therefore, in this case, he had invited th e requesting country to set up a competition authorityWT/WGTCP/M/18
Page 34
at which point the two countries could discuss how best to address the problem.  If the country in
question established a competition authority, it would be basically a matter of exchanging information
about how similar problems had been addressed in South Africa.  South Africa could even consider
sending an official to go and assist the new authority.  However, it would not be realistic or consistent
with South African law to expect South Africa to prosecute the firms in question for conduct affecting
the other country.  Even if an agreement provided for binding cooperation, he did not see how South
Africa would be in a position to respond to requests of this nature.  Another example where
cooperation had worked well was when other countries in the region asked the South African
authorities whether they had experience with a partic ular company.  Similarly, South Africa had asked
other countries for information on how they had dealt with particular situations, and the information
had been willingly provided.  Efforts to promote cooperation in the WTO should be built around
practical examples of this nature, which showed how  cooperation could be voluntary in nature and yet
still bring important benefits to the participating countries.
73. The representative of Tanzania, supporting the comments made by the representative of South
Africa, said his country had benefited extensively from its cooperation with South Africa, bearing in
mind that his country's competition authority was young.  At the moment, Tanzania was in the process
of replacing its 1994 Fair Trade Practice Act with a new law, with the assistance of the UnitedKingdom which was providing funding for legal assistance.  The World Bank was also assisting with
resources for institution building, and Tanzania had benefited from seminars conducted by UNCTAD.
This assistance had helped Tanzania to choose the legal system which would suit it best. For example,
in the merger area, there were instances where mergers were encouraged because small firms in
Tanzania needed to achieve economies of scale.  As had been noted by the representative of Zambia, acommon competition policy was expected to be in place in COMESA in a few months time.  Noting
that different levels of development called for different levels of assistance, he stated that
capacity-building was a prerequisite to dealing with hard core cartels.  For example, currently, the
Tanzanian competition authority lacked the necessary staff expertise to effectively make its case to
the political leaders of the country.  In the light of  this, the ability to engage in competition advocacy
was vital for developing countries, since in many cases the public did not understand how market
mechanisms worked and the role of a competition authority.
74. Further reflecting on the foregoing points and observations, the representative of the
European Community and its member States, with re spect to positive comity, pointed out that his
delegation did not propose anything less or more than what was currently incorporated in existing first
generation bilateral cooperation agreements.  On the other hand, the issue was not just about
responding to requests for information where this  information was located in the territory of the
requested authority.  On confidentiality, while affirming that his delegation was not calling for the
exchange of confidential information, it was important to avoid an over-extensive concept of
confidentiality that would make everything that wa s in an investigation file impossible to exchange.
On the one hand there were business secrets, which should not and would not, under his delegation's
proposal, be exchanged without the express consent of the parties concerned.  On the other hand,information which consisted mostly of work products of the authorities might be exchanged in
appropriate cases.  Also, in appropriate cases, if the two authorities had a strong mutual interest, there
was the possibility of coordinating their investigations in order to maximize their chances of having
successful outcomes.  Regarding the incentives of competition authorities to cooperate, the views
expressed by the representative of South Africa suggested that there were ways to promote practicalforms of cooperation that could be of considerable benefit to developing countries without going so
far as to impose a binding commitment to cooperate.  The best incentive was not a legally binding
text; it was the mutual interest of enforcement agencies to assist each other where this was reasonably
possible.  It was also the competition agencies' objective, as pursued in the ICN and elsewhere, to
enhance cooperation because with more cooperation the chances that hard core cartels would gounpunished would be reduced.  He said, further, that different formulations could be considered to
encourage sympathetic consideration of cooperation requests, for example "best efforts to give a
response" or merely "give sympathetic consideration".  Safeguards relating to the availability ofWT/WGTCP/M/18
Page 35
sufficient resources and relevant enforcement interests could also be considered.  A second
representative of the European Community and its member States said that the MFN principle was not
relevant to the question of voluntary cooperation, at least according to the proposal of his delegation,
since it was not proposing binding commitments with  respect to the matter of cooperation.  He also
made the point that the suggestion that all WTO Members ought to have a competition law (orparticipate in a regional regime of some kind) did not imply that such laws had to cover all types of
anti-competitive behaviour.  The only practice that would have to be addressed, in some way, was that
of hard core cartels.
75. The representative of India said that it was evident from the World Bank background study
that most of the cartels investigated by the Un ited States had originated in advanced economies,
although some of the participating firms would also originate in the developing countries.  Insofar as
the impact on the domestic market of the United States was concerned, how this was addressed wasentirely up to the US.  He wondered, however, whether requests for cooperation from developing
countries would be honoured by the developed countries, as they also started investigating cartels
which increasingly had effects in their domestic markets, given the apparent asymmetry of interests.
With respect to the explanation of the limits of po sitive comity given by the representative of the
United States, he suggested that there could be situations in which developing countries' outbound
(export) trade was perceived not to have gained market access because of certain problems or
practices in the domestic markets of other countries.  This would call for a request for information and
would therefore again raise the issue of asymmetry.  Having listened to the representative of the
European Community and its member States, he remained unclear as to whether positive comity
provisions would or would not be included in a possible multilateral framework.  The current meetinghad failed to bring clarity or consensus on the definition of hard core cartels in a possible multilateral
framework (in particular, whether it would deal only with international cartels or also with other kinds
of cartels).
76. The representative of Indonesia reiterated that the cooperative arrangements currently in place
were helpful in contributing to capacity-building but were insufficient to protect developing country
from international cartels because countries with more advanced competition regimes had weak
incentives to cooperate with countries whose enforcement of competition law was considered
inadequate.  Therefore, he supported the statements by the representatives of Thailand and Malaysia
that binding multilateral cooperation based on mutual benefits would be a favourable alternative for
developing countries.  He also believed that the initial binding commitments in a multilateral
framework relating to hard core cartels should be subject to technical and financial cooperation.
77. The representative of the United States said that the Working Group should use the term
"cooperation" in the sense of providing information or investigative assistance as opposed to "positive
comity", which was a relatively sophisticated concept that had evolved in a number of bilateral
arrangements enabling one jurisdiction to request another to undertake investigation on the first
jurisdiction's behalf.  It seemed that, in the last intervention of the European Community and its
member States, the latter had said his delegation's current proposal did not encompass an explicitpositive comity provision, but that the cooperation mechanism in a multilateral framework would still
incorporate the concept of positive comity to the extent that it was reflected in existing soft
cooperation agreements.
78. In response, the representative of the European Community and its member States said that
his delegation's proposal encompassed positive comity in the sense that the representative of the
United States had inferred, but that there was no implication that this would take the form of a binding
obligation.  Rather, as had been stated, the proposed commitment with respect to all forms of
cooperation would be voluntary.WT/WGTCP/M/18
Page 36
79. The representative of Thailand reiterated that she felt that a degree of confusion had arisen
between case-specific cooperation and more general forms of cooperation which overlapped with
technical assistance and capacity-building.  The type of cooperation that she had been talking about
had nothing to do with capacity-building or technica l assistance;  it concerned cooperation in dealing
with international hard core cartels.  With regard to the concern raised by the representative of South
Africa about the resource constraints, her delegation had addressed this issue in its submission
(document WT/WGTCP/W/203) in which it had called for special and differential treatment for
developing countries.  Competition authorities in developing countries with limited financial
resources should be financially compensated for delivering requested assistance but be allowed to
seek assistance to the extent needed, subject to technical and financial constraints.  Regarding the
issue that had been raised by the representative of Malaysia about respect for national sovereignty
when dealing with a domestic cartel, her delegation believed that the substantive provisions againstinternational hard core cartels in a WTO framework should be separate from provisions relating to
collusive practices in the domestic market in individual countries' competition laws.  Domestic and
international cartels should not be treated alike, for two reasons:  first, rules designed to deal with
collusive practices among small firms in a small country like Thailand need not necessarily be the
same as those used to deal with multinational enterprises operating in a global market, in whichcollusive conduct could not be justified on efficiency-related grounds.   Second, domestic rules on
collusive practices should be subject to the particular development needs of the individual country,
whereas international cartels were not subject to a development dimension and thus would not merit
exemptions, exclusions or development-related defen ces.  Hence, while individual countries needed to
be free to develop their own regimes to deal with domestic cartels, the fact remained that they hadmuch to gain from measures that would address the adverse impact in their markets of international
cartels.
80. In response to the representative of Thailand, the representative of the European Community
and its member States clarified that his delegation had never said that these two categories of cartels
had to be treated in the same manner.  His delegation's proposal was concerned with cartels having an
effect or an impact on international trade.  This would not include purely local or domestic cartels.
He still felt that if a country had a competition law, it could be useful in addressing both types of
cartels, but what was important for the WTO was the first category of cartels affecting international
trade.  Turning to the concern expressed by the representative of India with regard to asymmetry, in
the majority of cases, truly international cartels were harmful to all economies in which they operated;
in such circumstances, there would be a symmetry  of interest between, for instance, India and the
European Community.  If there was no effect whatsoever on outbound or inbound trade in a thirdjurisdiction, an asymmetry would exist, but this would not be the general case.
81. The observer from UNCTAD, referring to document WT/WGTCP/W/197, said that
UNCTAD believed that cooperation in the implementation of competition legislation was essential in
most or in a growing number of transborder cases.  Without meaningful cooperation, it was difficult if
not impossible for many countries even to implement national competition legislation.  Countries thatdid not have national legislation would simply not be able to address the adverse effects of anti-
competitive practices on their consumers and development prospects.  Where the relevant practices
originated abroad, the situation was even more challe nging.  One third of the United Nations Set dealt
with the matter of cooperation, whether bilateral, regional or multilateral.  All of the concepts that
were now being discussed in the Working Group, including consultations, positive and negativecomity, exchanges of information, etc., were reflected in the Set.  Referring to the example of
COMESA, he suggested that cooperation at the regional level was a useful way to advance the
interests of smaller developing countries in particular regions, although it did not preclude the
necessity for cooperation at the multilateral le vel.  Document WT/WGTCP/W/197 comprised a
Consolidated Report prepared by UNCTAD based on workshops that had been held, in cooperationwith the WTO Secretariat and other relevant organizations, in various regions during the first half of
the year.  The objective of these meetings, as reflected in paragraph 24 of the Doha Ministerial
Declaration, was to assist developing and least-developed countries and obviously the countries inWT/WGTCP/M/18
Page 37
transition "to better evaluate the implications of closer multilateral cooperation in this field for their
development".  However, as stated in the report , UNCTAD's participation in the post-Doha process
should in no way be interpreted as prejudging the outcome of the decisions that the WTO Ministers
would take at the Fifth Ministerial Conference in Cancun in 2003.  The purpose, rather, was to clarify
the possibilities, to bring forward the concerns of developing countries, and to reflect on the pros and
cons.  Regarding the possibility for developing countries to cooperate if they had no competition
legislation, the point had been made in a number of meetings of the Working Group that one could
imagine a multilateral framework on competition policy without an obligation to adopt a domestic
competition law.  The framework would still be available as a source of assistance for countries in the
process of developing and/or implementing a law, and would facilitate cooperation in dealing with
cartels and other matters in the case of countries with established competition regimes.  The document
provided by UNCTAD delved into what kind of cooperation could be envisaged in a multilateralframework and observed that it would be subject to c onfidentiality rules.  In this regard, the following
paragraph from the Set was relevant:  "where for the purpose of the control of restrictive business
practices, a State obtains information from enterprises containing legitimate business secrets, it should
accord such information reasonable safeguards normally applicable in this field".  Regarding peer
review mechanisms, the Report contained a sugges tion for voluntary reviews to be undertaken for
those who wished to undergo them.
82. The representative of the OECD, introducing a non-paper by her organization (subsequently
issued, with the assent of the Working Group, as document WT/WGTCP/W/208), suggested that  the
OECD’s experience with peer review might be of  assistance in considering how this form of
voluntary cooperation could be incorporated into  the WTO in the competition area.  There was no
single OECD peer review mechanism.  The Competition Committee itself used different forms.  Most
of the cooperation in the Competition Committee consisted of very informal discussions where
high-level officials learned about others' policies and practices, explained their own, sought advice,
and received feedback and recommendations.  According to a recent paper prepared by the OECD
Joint Group on Trade and Competition, the Committee's "regulatory reform review" provided benefitsin terms of independence and comprehensiveness, though it might need to be adapted to be suitable
for the WTO, given its associated costs and the higher number of WTO Members.
10 She noted that the
peer review system that was used in the Competition Committee's first forty years (and still used in
many OECD Committees) was more informal and less costly and had nonetheless facilitated
voluntary convergence on various important matters.  That approach primarily consisted of
discussions with members based on their own descriptions of their laws and policies.  Such reviews
could be productive if there was a climate of confidence and a willingness on all sides to cooperate.Peer review should be seen as a flexible concep t and, within the WTO, it could be used both to
encourage convergence and to provide transparency.  This could facilitate the voluntary resolution of
disputes.  She stressed that successful cooperation did not necessarily require the same level of
country development, as illustrated by the successful experiences of the Competition Committee with
its six non-member observers and of the Global Forum on Competition involving about 20 non-members (the next Global Forum would organize a peer review of South Africa).  Voluntary
case-specific cooperation was facilitated by the 1995 OECD Council Recommendation concerning
Co-operation between Member Countries on Anti-competitive Practices Affecting International Trade
(reproduced in document WT/WGTCP/W/208).  The voluntary nature of the Recommendation
stemmed from two facts:  (i) it was non-binding;  and (ii) no country was expected to cooperate insituations where doing so would be contrary to it s laws or important interests.  The Recommendation
encouraged three forms of voluntary cooperation:  (i) traditional comity, often called "negative
comity";  (ii) investigatory assistance;  and (iii) positive comity.  In practice, OECD Member
countries regularly notified each other when their investigations might affect each other’s important
interests.  Assistance was requested and provided, subject to applicable national laws and importantinterests, including resource constraints.  She concluded with three remarks on how the OECD
                                                     
10 Peer review: Merits and Approaches in a Trade and Competition Context ,
COM/TD/DAFFE/COMP(2002)4/FINAL, OECD, 2002.WT/WGTCP/M/18
Page 38
instruments interfaced with the debate about voluntary cooperation in the context of a multilateral
agreement on competition.   First, voluntary cooperation in the OECD's experience should not
necessarily be seen as negative in the WTO context: the very reason why cooperation was currently
working well in the competition field was because it was voluntary.  Making it compulsory would
only result in a bulk of national exceptions that would actually greatly decrease cooperation flows.Second, it had been suggested that if a multilatera l agreement were adopted, a country without a
competition law or a competition authority could not make or receive cooperation requests.  In fact,
cooperation agreements were normally government-to-government instruments so that cooperation
could be provided at least in theory by an agency  or Ministry other than the competition authority.
Third, even OECD economies with long histories of working together had been unwilling to give up
the advantage of being able to decline requests contrary to their national interests.  This was one of the
reasons why OECD Recommendations were non binding.  Cooperation among them still worked welland had dramatically increased over the last 10 years or so, even if exchange of confidential
information was still a problem ahead.  Therefore, according to the OECD's experience, it seemed that
there was no reason to believe that a voluntary approach would not be preferable from a global
perspective as well.
83. 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:
- There had been a rich and penetrating discussion of both topics, namely provisions
and hard core cartels and modalities for voluntary cooperation, exploring the potential
significance of these issues for developing as well as developed countries.
- There seemed to be a broad degree of agreement that, regardless of whether or with
what particulars the problem called for action in the WTO, hard core cartels were a
particularly serious anti-competitive practice which imposed heavy costs on the
economies of both developed and developing countries.  Delegates from both
developed and developing countries had made the point that international cartels, inparticular, impoverished consumers, promoted inequality and undermined the
development prospects of poor countries.  There had also seemed to be broad though
not necessarily universal agreement that hard core cartels tended to proliferate
wherever countries lacked effective laws and enforcement regimes to deal with them.
- Some delegates had thought that there was no need for a precise definition of hard
core cartels because they were easily recognizable.  Other delegates, on the other
hand, had insisted that it was important to be rather precise about the types ofarrangements that would be dealt with as hard core cartels, particularly if it came to
negotiations on an agreement in the WTO.
- There had been a wide recognition that Member countries might need to exempt or to
exclude some types of cartels from their national competition laws, in order to take
into account their specific national circumstances.  Nonetheless, the point had alsobeen made that exemptions needed to be tr ansparent and that it was desirable to limit
the number of exemptions, over time.
- A broad degree of support had been expressed for the view that international
cooperation, at one level or another, was critical to success in the fight against
international cartels.  Nonetheless, a range of views had been expressed both as to theappropriateness of the WTO as a forum for cooperation in this field and the specific
modalities of cooperation that would be entailed.WT/WGTCP/M/18
Page 39
- An aspect of the debate that had received much attention was whether cooperation in
the WTO should be voluntary or binding.  On one side, the view had been expressed
that it was important that an agreement be binding, since otherwise the scope for
cooperation would be limited because countries with well-developed competition
regimes would have little incentive to cooperate with countries with less-developedregimes.  On the other hand, the view had been expressed that it was unnecessary and
indeed could be counter-productive for cooperation to be made mandatory, insofar as
this would permit countries to tailor their cooperation activities to their own particular
needs.
- A number of delegations had made the point that it was important to consider the
interrelationships between the various elements of a possible multilateral framework
on competition policy.  For example, there appeared to be an important relationshipbetween the two subjects that had been the main topics for the meeting, namely
provisions on hard core cartels and modalities for voluntary cooperation.  A number
of delegations had made the point that there was also an important relationship
between these elements and the need for enhanced levels of technical assistance and
capacity-building.  Finally, the need to consider the interaction between modalitiesfor voluntary cooperation and core principles, especially transparency and
non-discrimination, had also been noted.
II. TECHNICAL ASSISTANCE AND CAPACITY-BUILDING, AS CALLED FOR BY
PARAGRAPH 24 OF THE DOHA MINISTERIAL DECLARATION
84. The representatives of Egypt, the European Community and its member States
, Guatemala ,
India, Kenya  and Malaysia  made oral statements or posed questions on this item.  In addition, the
observer from the Russian Federation made a statement and the representatives of UNCTAD and the
OECD provided an update on relevant activities of their organizations.
85. The representative of the Secretariat provided an update on the Secretariat's activities relating
to technical assistance since the Working Group’s meeting of 23-24 April.  These had comprised:
(i) participation in a regional workshop organi zed by UNCTAD for the countries of Central and
Eastern Europe and the Black Sea region;  (ii) presentation of a module on trade and competition
policy in an OAS-WTO-Georgetown University course for Latin American trade officials, in
Washington, D.C.;  (iii) participation in an ECA-WTO regional workshop on various issues, held in
Addis Ababa;  and (iv) participation in various ongoing training activities organized by the WTO in
Geneva, including presentation of a competition policy module in the WTO Trade Policy Course
which was held during this period.  He noted that a key feature of the Secretariat programme oftechnical assistance and capacity-building in the area of trade and competition policy had been
cooperation with other intergovernmental organizations in the organization and presentation of
workshops and seminars particularly at the regional level.  Discussions with UNCTAD had led to the
conclusion that the most efficient and practical approach at least for the current year was to have
coordinated events, but with one or the other organization having the lead role in organizing a givenevent and the other organization being invited to participate.  In this context, the WTO Secretariat had
participated in a first round of regional meetings organized by UNCTAD in the first half of the year;
in the second part of the year and spilling over into 2003, the Secretariat would organize a series of
regional workshops to which UNCTAD would be in vited.  This would include two workshops in
Africa, one for the French-speaking and another fo r the English-speaking countries;  a workshop for
countries of the Caribbean region;  a workshop for Central America and one for Latin America, to be
organized in cooperation with the Inter-American Development Bank;  and a workshop for the
countries of Asia, to be held in 2003.  A major problem in organizing and delivering activities of this
nature thus far had been the very limited Secretariat staff resources in this area.  However, an
additional staff member would be recruited shortly, which would enable the Secretariat to step up the
level of activities in the second half of the year.WT/WGTCP/M/18
Page 40
86. The representative of Guatemala thanked the Secretariat for efforts that were under way to
organize a regional workshop for Central America in conjunction with a national workshop for
Guatemala.
87. The representative of Malaysia said that his country did not yet have a competition authority
but needed capacity-building in this area.  In particular, his country was looking for help in the
following areas (a more comprehensive list had been provided to the Secretariat of UNCTAD):
(i) training programmes for key policy and enforcement officers, especially on general competition
policy and legal matters (theoretical and practical);  (ii) aspects of competition policy that were
important for developing countries;  (iii) investigation and prosecution procedures;  (iv) conducting
benefit-cost analysis of proposed mergers, acquisitions and takeovers;  (v) determining appropriate
M&A threshold levels, both in terms of market share and turnover;  (vi) legal and policy drafting;
(vii) administration of a competition commission;  (vii) assistance in competition advocacyprogrammes;  (ix) clarification on the core principles of the Doha Ministerial Declaration;
(x) attachment of competition experts in Malaysia;  and (xi) technical assistance in the infancy stage
when the Fair Trade Office and the Commission was set up.  In response to a question from the
representative of the European Community and its member States as to who would be the beneficiary
of technical assistance in a country like Malaysia which did not yet have a competition authority, therepresentative of Malaysia indicated that Malaysia was in the process of adopting some kind of
domestic competition law and that technical assistance would be necessary if this law was actually
adopted.
88. The representative of Indonesia said that his country desired a continuous or long-term
commitment to technical assistance and institution-building, to achieve concrete results.  Such
assistance needed to focus on the implementation of  competition policy, which implied the transfer of
investigative skills as well as developing the impl ementation regulations for the law itself.  Technical
assistance should address the needs of all authorit ies involved in the administration of competition
law, including courts, and should be tailored to  the needs of Members rather than following a
one-size-fits-all approach.  It should be adapted to the level of development of each participatingMember.  Finally, while recognizing the importance and benefits of having competition policy,
Indonesia recalled that many other developing countries still had no legislation;  moreover, those that
had adopted a law often lacked appropriate human and institutional resources to administer it.  The
lack of capacity of many countries remained a major constraint on the scope for case-specific
cooperation in the framework of the WTO.
89. The observer from the Russian Federation observed that technical assistance that had been
provided to the Russian antimonopoly ministry had promoted capacity-building, modernization of the
legislation and effectiveness of enforcement.  An important bulwark of Russian antimonopoly policy
was the bilateral relations that existed with Eastern European countries, France, Finland, Korea and
other countries.  Continuing exchange of experience had been an important feature of these
agreements.  On the basis of the agreement between Russia and the European Union, a project had
been undertaken a couple of years ago and a new programme, including the modernization of theantimonopoly legislation and capacity-building in the area of state aids, would be launched soon.
Cooperation with international organizations such as the OECD and UNCTAD as well as the
discussions in the WTO Working Group had also been useful.  As the Russian Federation and other
CIS countries were in the process of accession to the WTO, the insights acquired, within the Group,
on the relationship between trade and competition policy was of great importance for these countries.She expressed the hope that financial resources would be available for more regional seminars and
training programmes, and mentioned that the Ru ssian Federation had asked the WTO, UNCTAD and
the OECD to involve the CIS region more deeply in the post-Doha cooperation and capacity-building
process.WT/WGTCP/M/18
Page 41
90. The representative of Egypt recalled that the importance of provisions on technical
cooperation and capacity-building in the Ministerial Declaration had been highlighted in his
delegation's submission to the last meeting of the Working Group (document WT/WGTCP/W/177).
So far, the Working Group had focused on multilateral programmes and initiatives;  he suggested that
developed countries inform the Working Group of their current programmes in order to make betteruse of them.
91. The representative of Kenya highlighted the importance of good competition legislation at the
national level and the necessary skills to implement it, as the backbone of competition policy in
developing countries.  More resources were needed to help not only agencies, but also the private
sector, to have a better understanding of competition policy.  Debates on the merits of competition
law, though important, should be followed with concrete action.  The fact that the majority of the
members of COMESA had no national competition le gislation had affected the development of the
regional arrangement.  The experience in COME SA underscored that technical assistance and
capacity-building were a prerequisite to efficient cooperation.  The representative of India said that
the concepts of capacity-building and technical as sistance needed to be clarified before the next
Ministerial.
92. The representative of the European Community and its member States said that the European
Community was in the process of developing a list of experts from its member States' authorities who
would be available to participate in various initiatives, included those organized by the WTO and
UNCTAD.  The objective was to try to increase the pool of governmental experts that were available,
though it might not be enough to cover all the needs.  With regard to the suggestion by the
representative of Egypt regarding a questionnaire on the needs of the developing countries withrespect to capacity-building and technical assistan ce, he wondered how this questionnaire would fit
with the efforts that the Secretariat was doing at a broader level on the development of a database on
technical assistance activities.
93. The representative of UNCTAD said that hi s organization had been pleased to cooperate
closely with the WTO in the post-Doha period.  Currently, UNCTAD was involved in two main
activities relevant to this item of the agenda.  The first were the so-called post-Doha activities which,
as already explained, had been conducted in cooperation with the WTO Secretariat and consisted in
assisting developing countries to better understand and evaluate the implications of a possible
multilateral framework on competition policy.  A second type of activity, of a longer-term nature,
involved efforts to help all developing countries to create a competition culture.  This implied efforts
going beyond competition advocacy as it was usually understood.  These efforts might include, for
instance, a wider preparatory work to help countries that were far from understanding the need forcompetition legislation.  The website of his organization contained a list of meetings that were
programmed for the near future.
94. The representative of the OECD invited participants to consult that list on the website of her
Organization.11 The next meeting of the Global Forum on Competition would be held in
February 2003.  OECD Ministers and their counterparts of the five member countries of the NEPADLeading Committee met on the occasion of the May meeting of the OECD Council at Ministerial
level.  It was hoped that enforcement of agreed actions would actively enhance cooperation of OECD
with Africa, including in the competition field.  She also recalled the results of a survey of
beneficiaries' needs in terms of capacity-building.  This survey of responses of non-member invitees
at the second Global Forum found that technical assistance was most effective if its providerspossessed the following qualities:  (i) technical expertise in the field;  (ii) experience as competition
enforcement officials;  (iii) good working knowledg e of the environment in the beneficiary country
within which their advice was to be given;  and (iv) some experience in providing technical assistance
to developing and transition countries.  These results tended to suggest that, subject to funding,
                                                     
11 http://www.oecd.org/competition.WT/WGTCP/M/18
Page 42
national or regional competition authorities and members of international organizations with
enforcement experiences might be better suited than private companies for capacity-building.
95. The Chairman recalled that, at the last Working Group meeting, a request had been made by
India that a study be undertaken concerning certain elements that might shed further light on the
issues before the Working Group, particularly regarding the possible costs and benefits for developingcountries of adopting a multilateral framework on competition policy in the WTO.  In this regard, the
Working Group had asked the Secretariat to consult with India and other interested delegations
(WT/WGTCP/M/17, paragraph 57) and to report back to the Group.
96. The representative of the Secretariat said that, as a result of discussions with interested
delegations, possible terms of reference for a study had been developed.  The terms of reference,
which had been circulated to the Working Group, were the following:
"Possible study of issues relating to a multilateral framework on competition policy
The study would aim to summarize available information that might facilitate an
assessment of the costs and benefits of proposals that had been put forward for development
of a multilateral framework on competition policy.  It would be based on existing literature
and public sources, including studies and other documentation prepared by or for UNCTAD,the OECD and the World Bank, and would address the following three main elements:
(a) Examination of issues concerning the relationship between competition policy as it
relates to trade and industrial policy, including:
- any trade-offs and complementarities that may arise between the application 
of competition policy and the attainment of dynamic efficiency gains in 
developing countries;
- historical experience regarding the relationship between competition and 
industrial policy;
- the implications of possible provisions relating to non-discrimination, 
transparency, procedural fairness and hard core cartels for national 
industrial/economic policy options, and national experience in this regard;
(b) Examination of issues and compilation of available empirical data relevant to the
resource implications of adopting and effectively implementing a multilateral
framework on competition policy, including provisions relating to hard core cartels,
transparency, procedural fairness and responding to requests for voluntary
cooperation.
(c) The impact of competition law and policy in tackling anti-competitive practices of
firms in a developing country setting."
97. Continuing, he said that the study would be based on existing literature and public sources,
including documentation prepared by other intergovernmental organizations.  The assistance of aconsultant would be sought in the conduct of the study.
98. The Working Group agreed that the Secretariat be asked to undertake the study, according to
the terms of reference that had been outlined.WT/WGTCP/M/18
Page 43
III. OTHER BUSINESS, INCLUDING STOCKTAKING OF NATIONAL EXPERIENCE
AND LEGISLATION
A. NATIONAL EXPERIENCE
99. The representative of Argentina, introducing document WT/WGTCP/W/206, said that it
discussed the recent experience of his country and illustrated the importance of competition policy
even in times of economic crisis.  Such policy was important both in good times and in bad.  In times
of economic difficulty, the temptation was great for governments to intervene directly in markets or to
fix prices.  Indeed, the market system itself was sometimes called into question.  Currently, there was
much discussion of these issues in Argentina.  Extensive privatization and deregulation, particularly in
the early 1990s, often carried out without due attention having been given to the need for competition
and other public disciplines, had led to a concentration of the economy with many undesired results.
Competition safeguards had always been introduced late and there were many shortcomings.  Forexample, a new law on mergers and split-ups had been adopted but was then found not to apply in the
petroleum and gas sector, in which there were im portant competition issues.  In many sectors,
concentration had facilitated cartelization.  After the original boom resulting from deregulation and
privatization, between 1997 and 2000 the economy did not grow and productivity was negative.  This
experience showed what happened when there was insufficient attention to the introduction ofcompetitive disciplines and a lack of clear and legal control and monitoring.  Continuing, he said that,
today, the Republic of Argentina was faced with different challenges.  Two options could be
considered:  (i) to overlook past experience and once more undertake ill-advised intervention in
markets;  or (ii) to undertake the structural reforms necessary to restore stability.  Fortunately, the
population was in favour of reforms that were we ll-conceived and the establishment of institutions
that would effectively represent their interests.  The consolidation of ME RCOSUR was also important
for the economy of Argentina.  It would result in more efficient economic structures and better
exchange rates.  Firms located in Argentina would have to face competition from firms located in the
whole region.  This situation provided a real oppo rtunity for revising and reviewing certain set
concepts and taking a better course of action in solving them.  To restore macroeconomic stability,Argentina could not avoid a microeconomic revolution both in the public as well as the private
sectors.  Strengthening the efficient operation of markets and promoting the adoption of new
technologies were vital to future success.  Argentina had to set up a court for the defence of
competition which would help to implement and shape the competition law.  It also had to ratify the
MERCOSUR protocol for the defence of competition th at had already been signed.  An overall lesson
from the country's experience was that macroeconomic balance was a necessary condition but was not
a guaranty for the well-being of consumers.  Efficiency at the microeconomic level, based on soundlegislation and institutions, was also required.
B.
REQUESTS FOR OBSERVER STATUS FROM INTERNATIOANL INTERGOVERNMENTAL
ORGANIZATIONS
100. 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 m eeting, having regard to the ongoing consultations
on related matters in the framework of the General Council.
C. ORGANIZATION OF WORK FOR THE NEXT MEETING OF THE WORKING GROUP
101. The Chairman noted that the next meeting of the Working Group would take place on
26-27 September.  As had been agreed at the informal meeting of the Working Group held on 26
February, in addition to the standing item relating to technical assistance and capacity-building as
called for by paragraph 24 of the Doha Ministerial Declaration, the meeting would consider another of
the substantive elements included in paragraph 25 of the Doha Ministerial Declaration, namely core
principles, including transparency, non-discrimination and procedural fairness.WT/WGTCP/M/18
Page 44
102. The Working Group agreed that Members would provide written contributions to the
Secretariat not later than Friday 6 September, to permit their translation and circulation to other
delegations in advance of the meeting.
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