WORLD TRADE
ORGANIZATIONWT/WGTCP/W/238
24 July 2003
(03-3973)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM KENYA
The following is the final text of a statemen t received from the Permanent Mission of Kenya,
which was circulated as an advance copy for the Working Group's meeting of 26-27 May 2003.
_______________
Elements contained in Paragraph 25 of the Doha Ministerial Declaration
I. INTRODUCTION
This statement attempts to highlight some important issues and questions that have not
received satisfactory clarification in the course of discussions in the Working Group on the Interaction
between Trade and Competition Policy (WGTCP) on the elements contained in paragraph 25 of the
Doha mandate.  These views are without prejudice to Kenya's position on the relevance of continuing
discussions on competition policy at WTO.
Paragraph 25 lists the elements that need to be clarified. The paragraph goes on to state that
"full account shall be taken of the needs of developing and least developed country participants and
appropriate flexibility provided to address them".  It is therefore Kenya's understanding that such
flexibility would involve preserving the right of a country to choose whether and when to have a
competition law and the kind of competition policy to adopt.  In other words countries should
preserve the right to adopt a phased approach in terms of discussion, implementation and enforcementof a competition law.  Such approach will ensure that each country adopts a competition regime that
supports its industrial policy.
So far, sufficient clarification has not been provided as to whether the proposals made by the
proponents in this area would allow such flexibility to be preserved, or would restrict such flexibilityin the interest of promoting market access for developed country enterprises and harmonization of
competition regime.
II. CORE PRINCIPLES
The so-called core principles of transparency, non-discrimination and procedural fairness
were developed in the context of trade policy and they were not intended as universal principles
applicable to all issues including competition policy.  It is not self-evident that it is appropriate or
desirable to apply these principles to competition policy.  Sufficient clarification has not been
provided relating to such appropriateness or desirability.  Further, the proponents have argued that it is
not necessary to attempt a detailed description of  how the core principles would operate.  On theWT/WGTCP/W/238
Page 2
contrary, we believe that the manner in which the so-called core principles would operate in practice
in the area of competition policy is of critical importance in order to assess the effects on
development, and thus this issue requires more clarification.
A. TRANSPARENCY
It has been pointed out in the WGTCP that the application of transparency principle requires
careful consideration given that differences exist in national legal systems as well as on issues of
scope, coverage and the nature of obligations.  A realistic assessment of transparency therefore would
not be possible until all substantive issues have been satisfactory clarified.  Furthermore there are
concerns that transparency requirements would impose unnecessary burden on developing countries.
This observation calls for more studies and discussions to enable developing countries have a more
realistic assessment of the costs and benefits.
Questions also arise as to the applicability of transparency to case-specific information in
possession of national or regional competition authorities.  In addition, secret registers of export
cartels are kept in certain countries on grounds of confidentiality.  It would appear that the regulators
are bound by the transparency principle but not the firms they are supposed to regulate - vital
evidence on the practices of foreign firms are "protected" by their governments in the name of
commercial confidentiality.  This potential contradiction requires clarification.
B. NON-DISCRIMINATION
In trade policy context, 'non-discrimination' is normally taken to mean the application of
most-favoured nation (MFN) and national treatment principles on 'like products' and services.  The
application of non-discrimination principles, therefore, to competition analysis and enforcement,
which is case – specific, remains unclear.  For instance it has been pointed out that difficulties wouldbe experienced in determining whether de facto discrimination existed with respect to anti-trust
enforcement action given the individual focus of such action.  This needs to be clarified.  Even if the
application of non-discrimination principles were limited to  de jure  discrimination, as the proponents
had proposed, questions remained.  For example, how would sectoral exemptions to competition rules
be treated?  Would for example GATT Article XX exceptions be available in this area?
With respect to national treatment principle there is need to clarify how it will apply with
regard to anti-competitive practices or mergers among small and medium scale producers in
developing countries, meant to achieve efficiency vis-à-vis mergers among big firms and
multinationals in developed countries that promotes anti-competitive practices.  There is no doubt that
the application of national treatment principle could easily spill over and distort other areas such as
industrial policy leading to distortions in development strategies of a country.  Further analysis
through appropriate studies is therefore needed.
With respect to the application of MFN principle, so far, it remains unclear as to what will be
the status of bilateral and regional cooperation arrangements in relation to administration of
competition law.  This needs to be clarified.
C. P
ROCEDURAL FAIRNESS
During the WGTC discussions, the point was made that, currently, there is no broad
consensus on the meaning of procedural fairness in the context of competition law enforcement,
because notions of fundamental fairness different between legal systems, which were also influenced
by the political and legal cultures in which relevant agencies operated.  A number of specific
questions have been posed regarding how the principle of procedural fairness would work in practice,
including its implications for developing countries and the resources it would require.  It has beenWT/WGTCP/W/238
Page 3
stated that there was a need for more studies and discussions to enable developing countries to have a
more realistic assessment of the costs and benefits of such provisions; that, among other matters, it
would be useful to clarify whethe r Article X of the GATT was an appropriate reference for discussion
of this issue in the working Group or whether a more specific concept of procedural fairness would
have to be developed for competition policy.  We are not convinced that sufficient clarification hasbeen provided in response to these issues.  Th ere is need therefore to clarify these issues.
III. PROVISIONS ON HARD CORE CARTELS
On hard core cartels, there has been recognition among the members that their harmful effects
undermine the potential benefits of the multilateral trading system and therefore they should be
addressed on a priority basis.  However there is lack of consensus among the members on the
definition and scope of obligations in relation to hard core cartels, which need to be further clarified.
Detailed analysis on the definition of hard core cartels is needed in order to establish its relevance inthe case of developing countries.  Lack of such clarification would give rise to significant operational
problems and costs for developing countries with no potential benefits.  The appropriateness of the
WTO as the avenue for international action on hard core cartels also needs to be clarified taking into
account that these are being addressed in several bilateral, regional and plurilateral arrangements.
IV. MODALITIES FOR VOLUNTARY COOPERATION
With respect to modalities for voluntary cooperation, an important observation has been that
purely voluntary cooperation would be infective because more advanced competition authorities, with
greater information and capabilities, would have little incentive to provide information or assistance
to less developed authorities that were not in a position to offer reciprocal benefits.  Furthermore,
while the sharing of information by developed countries could not be enforced by developingcountries in voluntary cooperation arrangements, given the power asymmetry between developed and
developing countries, voluntary cooperation by de veloping countries' competition authorities would in
practice become mandatory.
The proponents should therefore clarify the precise cooperation tools that would be used and
the nature of potential obligations in this respect.   There is need to clarify further how developing
countries without competition law and competition authorities will have to participate in voluntary
cooperation arrangements at multilateral level.
V. CONCLUSION
Members may observe that complex questions that have arisen in our discussions so far
lacked satisfactory clarification and divergent views have also been expressed on such questions as
well as on other issues.  Further, the question of how a multilateral framework on competition policy
will address development needs and concerns of developing countries has not been sufficientlyaddressed.  Given the fact that there has not been sufficient convergence on many of the issues to
warrant a different level of discussion, the Group should continue working if necessary until such a
time when there is adequate understanding on the implications of these issues.
__________