WORLD TRADE
ORGANIZATIONWT/WGTCP/7
17 July 2003
(03-3876)
REPORT (2003) OF THE WORKING GROUP ON THE INTERACTION BETWEEN
TRADE AND COMPETITION POLICY TO THE GENERAL COUNCIL
TABLE OF CONTENTS      Paragraph  Nos.
A. INTRODUCTION 1-3
B. PROCEDURAL INFORMATION ON THE WORKING GROUP'S 4-7
ACTIVITIES
(a) Sources and materials used in the Group's work 4
(b) Meetings held in 2003 5
(c) Cooperation with other intergovernmental organizations 6-7
C. SUBSTANTIVE ELEMENTS OF DISCUSSION IN THE 8-115
WORKING GROUP
I. ELEMENTS CONTAINED IN PARAGRAPH 25 OF THE DOHA 11-78
MINISTERIAL DECLARATION, INCLUDING MATTERS RAISED
AND QUESTIONS POSED IN 2002 TO WHICH DELEGATIONS
WISH TO REVERT
II. THE NATURE AND SCOPE OF COMPLIANCE MECHANISMS 79-100
THAT MIGHT BE APPLICABLE UNDER A MULTILATERAL
FRAMEWORK ON COMPETITION POLICY
III. POSSIBLE ELEMENTS OF PROGRESSIVITY AND FLEXIBILITY 101-115
THAT MIGHT BE INCLUDED IN A MULTILATERALFRAMEWORK ON COMPETITION POLICY
D. TECHNICAL ASSISTANCE AND CAPACITY-BUILDING, AS 116-123
CALLED FOR BY PARAGRAPH 24 OF THE DOHA
MINISTERIAL DECLARATION
E. STOCKTAKING OF NATIONAL EXPERIENCE AND LEGISLATION 124-127
ANNEX 1: TEXT OF THE DOHA MINISTERIAL
DECLARATION, PARAGRAPHS 23-25
ANNEX 2: CONTRIBUTIONS PROVIDED TO THE WORKING
GROUP ON THE INTERACTION BETWEEN TRADEAND COMPETITION POLICY IN 2003WT/WGTCP/7
Page 2
A. INTRODUCTION
1. In the year 2003, the Working Group continued its work under the Chairmanship of
Professor Frédéric Jenny (France), pursuant to the mandate provided in paragraph 25 of the Doha
Ministerial Declaration (WT/MIN(01)/DEC/1).  Paragraph 25 reads as follows:
25. In the period until the Fifth Session, further work in the
Working Group on the Interaction between Trade and Competition
Policy will focus on the clarification of:  core principles, including
transparency, non-discrimination and procedural fairness, and
provisions on hard core cartels;  modalities for voluntary
cooperation;  and support for progressive reinforcement of
competition institutions in developing countries through
capacity-building.  Full account shall be taken of the needs ofdeveloping and least-developed country participants and appropriate
flexibility provided to address them.
2. In 2003, the Working Group, in responding to the mandate given in paragraph 25, sought to
build upon and complement the work that it completed in 2002.
1   As agreed at an informal meeting of
the Working Group which took place on 17 January  2003, the Group had a focus, at each of its
meetings in 2003, on the following three substantive elements:  (i) elements contained in paragraph 25
of the Doha Ministerial Declaration, including matters raised and questions posed in 2002 to which
delegations wish to revert; (ii) the nature and scope of compliance mechanisms that might be
applicable under a multilateral framework on competition policy; and (iii) possible elements of
progressivity and flexibility that might be included in an eventual multilateral framework oncompetition policy.  In addition to the work mandated by paragraph 25, the Working Group had a
focus, at each of its meetings in 2003, on the ma tter of technical assistance and capacity-building as
called for by paragraph 24 of the Doha Ministerial Declaration.
2  Following the Working Group's
practice in previous years, at each meeting, consideration was also given to the matter of "Stocktaking
of national legislation", as an aspect of "Other business".
3. This report provides an overview of the work done by the Working Group in 2003, in relation
to the above-noted agenda items.  It constitutes a complement to the Working Group's previous
reports on its activities in 1997 (WT/WGTCP/1), 1998 (WT/WGTCP/2), 1999 (WT/WGTCP/3), 2000
(WT/WGTCP/4), 2001 (WT/WGTCP/5) and 2002 (WT/WGTCP/6).
B. PROCEDURAL INFORMATION ON THE WORKING GROUP'S ACTIVITIES
(a) Sources and materials used in the Group's work
4. As was the case from 1997 through 2002, the work of the Working Group in the year 2003
was based on written contributions by Members and on oral statements, and questions and answers by
Members during the Group's meetings.  These inputs were supplemented by background notes
prepared by the Secretariat and information received from observer intergovernmental organizations
(see subsection (c) below).  A tabular summary of written contributions to the Group in 2003 is
attached as Annex 2.
                                                     
1 See Report (2002) of the Working Group on the Interaction between Trade and Competition Policy to
the General Council (WT/WGTCP/6).
2 Paragraphs 23-25 of the Doha Ministerial Declaration are reproduced in Annex 1.WT/WGTCP/7
Page 3
(b) Meetings held in 2003
5. The Working Group held two formal meetings in 2003.  The dates of the meetings were:
20-21 February and 26-27 May.  Each of these meetings dealt with all of the work items mentioned in
paragraph 2, above.
(c) Cooperation with other intergovernmental organizations
6. The Singapore Ministerial Declaration (paragraph 20) encouraged the Working Group to
undertake its work in cooperation with UNCTAD and other appropriate intergovernmental fora, to
make the best use of available resources and to ensure that the development dimension was fully
taken into account.  In this regard, the IMF and the World Bank have continued to attend the Working
Group's meetings in an observer capacity, pursuant to the cooperation agreements concluded between
the WTO and these organizations.  UNCTAD and the OECD have also continued to attend the
meetings as observers, on the basis of an invitation from the Working Group.  In the course of theGroup's meetings, they have kept the Group updated on relevant activities of their organizations and
contributed to the debate.  The Working Group is highly appreciative of the valuable contributions to
its work made by observer organizations.
7. As a further aspect of cooperation, the Secretariats of the WTO and UNCTAD have
cooperated closely in the organization and presentation of a number of regional workshops on aspectsof the Doha mandate on trade and competition policy during the year.  Cooperation has also occurred
with the OECD Secretariat, in the form of participation by representatives of each Secretariat in
workshops or other events organized by the other organization.  In addition, the World Bank
contributed a speaker to a workshop organized by the Secretariat for the benefit of countries of the
Asia-Pacific region, in Bangkok, in January 2003.  Additional information regarding these activities issummarized in Part D, below.
C. SUBSTANTIVE ELEMENTS OF DISCUSSION IN THE WORKING GROUP
8. This section of the Report provides an overview  of the substantive work done in the Working
Group in 2003, pursuant to the mandate given in the Doha Ministerial Declaration
(WT/MIN(01)/DEC/1, paragraph 25).  By its very na ture, such an overview cannot reflect everything
that was said and capture all nuances of the discussion, such as can be found in the detailed records of
the Working Group's meetings during the year (WT/WGTCP/M/21 and 22) and in the written
contributions of Members (see Annex 2).
9. This section is organized in accordance with the way in which the Working Group structured
its discussion of the issues, on the basis of paragr aph 25 of the Doha Declaration.  It should be noted
that the discussion which took place on some issues cut across more than one of the subheadings used
below.  This means that, in order to have a full appreciation of the discussion that took place on someof the issues, it may be necessary to refer to more than one subsection of this section of the report.  It
also means that some degree of repetition has been unavoidable in the preparation of the various
subsections.
10. As noted, in 2003, the Working Group, in responding to the mandate given in paragraph 25,
sought to build upon and complement the work that it completed in 2002.  Consequently, for a fullerappreciation of the views expressed and points made in relation to the elements contained in
paragraph 25 of the Doha Ministerial Declaration, it may be helpful also to refer to the Working
Group's Report for 2002 (WT/WGTCP/6, issued 9 December 2002).WT/WGTCP/7
Page 4
I. ELEMENTS CONTAINED IN PARAGRAPH 25 OF THE DOHA MINISTERIAL
DECLARATION, INCLUDING MATTERS RAISED AND QUESTIONS POSED IN 2002
TO WHICH DELEGATIONS WISH TO REVERT
11. This matter was discussed by the Working Group at its meetings of 20-21 February and
26-27 May.  Written submissions on this item were provided by the delegations of Australia(WT/WGTCP/W/232), Canada (W226), China (W227 and W241), Kuwait (W237), Kenya (W238),
Korea (W225), Malaysia (W239) and by the observers from the OECD (documents
WT/WGTCP/W/240, 243 and 244, to be issued).  In addition, the Group had before it a Study
prepared under the responsibility of the Secretariat, with the assistance of a consultant, on Issues
Relating to a Possible Multilateral Framework on Competition Policy (documentWT/WGTCP/W/228) and a background note by the Secretariat on  Provisions on Procedural Fairness
in Existing WTO Agreements (WT/WGTCP/W/231).   The representatives of Canada; China ;
Colombia; Cuba ; Chile ; Czech Republic ; Egypt ; the European Community and its members States ;
India; Indonesia ; Hong Kong, China;  Malaysia ; Morocco ; Nigeria ; Norway ; Poland ; Switzerland ;
Chinese Taipei; Tanzania ; Thailand ; Tunisia ; and the United States ; as well as the observers from the
OECD, UNCTAD and the World Bank made oral statements or posed questions on this item.
12. The discussion on this item spanned a wide range of issues, including:  (i) general
considerations relating to the pros and cons of developing a multilateral framework on competition
policy incorporating the elements referred to in paragraph 25;  (ii) the potential scope and application
of the core principles listed in paragraph 25 of the Doha Ministerial Declaration, namely transparency,
non-discrimination, and procedural fairness; (iii) possible concerns relating to incorporation of the
principles in a multilateral framework on competition policy, including with respect to theirimplications for national competition law enforcement processes and for national industrial and other
policies of developing countries; (iv) the harm caused by international hardcore cartels and the
measures needed to address them; (v) the nature and scope of possible modalities for cooperation
between WTO Members in this area; (vi) alternative approaches to cooperation on competition policy
at the multilateral level and other matters.
13. With regard to general considerations relating to the pros and cons of developing a
multilateral framework on competition policy incorporating the elements referred to in paragraph 25,
the view was expressed that a multilateral framework would provide important benefits for all
Members, and would ensure that the gains from liberalisation were not undermined by
anti-competitive behaviour of private actors.  Developing countries that lacked the necessary
legislation and/or enforcement powers were among the most vulnerable to the effects of
anti-competitive activities, notably international cartels.  A multilateral framework on competitionpolicy would establish a coherent set of principles for sound competition policy among all Members,
without imposing a harmonized approach, and woul d promote a more transparent and predictable
climate to encourage foreign trade and investment.  It would also contribute to the building of
institutional capacity in developing countries, and would assist Members lacking a competition law in
drafting an appropriate law and establishing an enforcement authority.  Cooperation in the context of
a multilateral framework offered the prospect of shortening the time frames that developing countries
would need to build and embed competition laws and policies that would support their development
goals; a key consideration in this regard was the more supportive environment it would provide for
better-targeted assistance and capacity building.  Finally, an agreement would encourage beneficial
cooperation among Members which was important given the increasing prevalence of cross-borderanti-competitive activities.
3
14. Further to the above, the point was made that competition law and policy aimed to ensure
efficiency in the marketplace and helped to put scarce resources to their best use.  Without
                                                     
3 WT/WGTCP/M/21, paragraphs 4, 15, 20, 32, 41 and 48; WT/WGTCP/M/22, paragraphs 5 and 44.
Henceforth in this Report, documents in the series WT/WGTCP/M/- are referred to as M/-.WT/WGTCP/7
Page 5
competition law and policy, the scarce resources of developing countries would be wasted.  To
prevent this, each Member should have the capacity and tools to effectively deter and remedy anti-
competitive practices to ensure more competitive and efficient marketplaces.  A core purpose of a
multilateral framework should be to address the challenges faced by developing countries, for
example through firm commitments regarding capacity building and technical assistance.4  Experience
had shown that liberalizing trade and encouraging fo reign direct investment heightened the dangers
posed by anti-competitive practices such as cartels.  A multilateral framework would reinforce the
application of competition law and policy at the national level and thereby strengthen Members'
ability to address these challenges.5
15. With regard to the relationship between a multilateral framework on competition policy and
market access, the view was expressed that, by making the operation of domestic markets more
efficient and transparent, effective competition policies enabled traders and investors to benefit fromexisting market access conditions but did not necessarily confer greater access.  Nonetheless, it was
clear that, if the application of competition policy was ineffective, the benefits of existing market
access concessions might not be realized.
6
16. The point was made that harmonization of national competition laws was not an objective of
the proposed multilateral framework. In this regard, it was obvious that Members had different legaland administrative systems and different economic circumstances.  No useful purpose would be
served by attempting to impose a one-size-fits-all appr oach in these circumstances.  In place of any
such effort, what was proposed was a set of principles that would embody common values and
promote cooperative approaches to competition law enforcement that were in the interest of all
Members, while respecting the extensive differences that prevailed in economic and legalcircumstances and cultures.
7  The point was also made that the need for flexibility and progressivity in
the implementation of such a framework was obvious.8 Indeed, there was a wide recognition that
these elements could involve an administrative burden for developing countries currently lacking
competition legislation and institutions; the solution to this was in appropriate flexibility and
progressivity elements supported by continuing commitments with regard to technical assistance andcapacity building.
9
17. The view was expressed that developing countries were reticent about the development of a
multilateral framework on competition policy, for a variety of reasons. These included not only the
fact that, for some countries, competition policy was overshadowed by higher priorities but also a
concern as to the extent to which the current proposals would allow for the preservation of policy
space in regard to developmental objectives; perceived difficulties arising from disparities between
countries and/or their firms in respect of levels of development and competitiveness, experience in theadoption or implementation of competition laws and the capacity to implement such legislation; and
the direct resource costs of a multilateral framework.  Moreover, concerns were expressed regarding
the relationship between existing WTO principles of transparency, non-discrimination and procedural
fairness and the proposed multilateral framework on competition policy.  Beyond this, concerns and
reservations were voiced regarding a number of specific, in some cases technical, aspects of thecurrent proposals.  The suggestion was also made that further clarification was needed regarding the
responsibility of exporting countries to take action in respect of export or international cartels;
modalities and experiences relating to voluntary cooperation; the relationship between cooperation in
a multilateral framework and efforts to facilitate cooperation at the bilateral and regional levels; and
the balance and sequencing of commitments regard ing the adoption of competition legislation and
                                                     
4 M/21, paragraph 21.
5 M/21, paragraph 40.
6 M/21, paragraph 23.
7 M/21, paragraph 30; M/22, paragraph 12.
8 M/22, paragraphs 5, 12.
9 See M/21, paragraphs 21, 22, 68 and 97; M/22, paragraphs 5, 6, 7, 9, 11, 12, 15 and 49.WT/WGTCP/7
Page 6
international cooperation in relation to exports, imports and the role of bilateral competition or trade
pressures.10
18. The view was also expressed that implementin g the proposed multilateral framework could
pose significant difficulties for countries that lacked a domestic competition law and/or policy.  Most
developing countries now acknowledged the need to implement a national competition law or policy,out of their own self-interest.  However, such countr ies also believed that there was a need to take into
account a country's level of development when implementing competition policy.  Furthermore,
because markets and culture were inseparable, and differed from country to country, the form of
competition policy implemented in each country should be different.  Accordingly, a multilateral
framework on competition policy would have to take cognisance of, and accommodate, a substantial
degree of pluralism in national competition policies, especially among developing countries, in
addition to other, sometimes more interventionist, policies that existed to support development.  Otherimportant issues to be considered when implementing a multilateral framework included possible
inadequacies of national judicial systems with regard to the interpretation and enforcement of
competition law, and differences in business-related laws, civil codes, and constitutions.
11  Concerns
were also expressed regarding possible resource burdens that would be involved in implementing a
multilateral framework and the net benefits of such a framework.  The point was made that a Membermight choose not to establish a national competition framework for valid policy-related reasons
relating to the Member's economic situation or other circumstances, rather than resource concerns.
12
19. The view was expressed that, before commencing any possible negotiations, Members needed
to have more precise information on the breadth and depth of possible obligations that they were
being asked to assume.13  The view was also expressed that it was difficult or impossible to provide
the kind of clarity which was desired before a negotiation had begun.14
20. With regard to the general relevance of the core WTO principles referred to in paragraph 25
of the Doha Ministerial Declaration, namely transparency, non-discrimination and procedural fairness,
the view was expressed that these principles were vital to the credibility and effectiveness of
competition policy15 and had universal merit.16  While operational details remained to be worked out,
no one had argued that competition law and policy were fundamentally consistent with these
elements; on the contrary, they were widely viewed  as being central to any effective competition
regime.  Adherence to these principles was also important to give confidence to traders and investors,
and thereby to promote trade, development and growth.17
21. The point was also made that these elements could involve an administrative burden for
developing countries currently lacking these tools; the solution to this was in appropriate flexibility
and progressivity frameworks supported by contin uing commitments with regard to technical
assistance and capacity building.  A key aspect of the current proposal for a multilateral framework
that would limit any unforeseen repercussions was that  it would deal only with obligations concerning
general laws and regulations, and would not seek to limit Members' discretion in respect of individual
cases.  In particular, it would be concerned only with de jure  as opposed to de facto violations of the
referenced principles.  Nonetheless, the concern was also voiced that sufficient clarification had not
                                                     
10 M/22, paragraphs 14, 30, 31 and 42.
11 M/21, paragraphs 14 and 45.
12 M/22, paragraph 11; see also M/21, paragraph 90.
13 M/22, paragraphs 6 and 11.
14 M/21, paragraph 30.
15 M/22, paragraph 7.
16 M/21, paragraph 14; see also M/21, paragraph 7.
17 M/22, paragraph 36.WT/WGTCP/7
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been provided with respect to operational aspects of the proposed principles and their implications for
development.18
22. Delving into specific aspects of the potential application of the proposed core WTO principles
in this area, the view was expressed that the manner in which each country ensured transparency and
due process in its investigation and adjudication procedures depended on its legal, economic,institutional and social environment.  For this reason, the proposed multilateral framework would not
seek to regulate the manner in which the principles were implemented, but would merely be
concerned with ensuring adherence to certain basic elements.
19  The view was also expressed that
developed countries should unilaterally commit to those principles since most such countries would
have few compliance problems in this area.  However, developing countries should be allowed to
adopt the principles on a voluntary basis.20
23. The view was expressed that, while there was no disagreement with the importance of
transparency at a broad level, a number of operational aspects of the proposal needed to be clarified.
For example, what constituted "guidelines of general application?" How would the proponents
envision this obligation applying to common law countries?  In the United States alone, there were
hundreds of relevant cases each year at all levels of federal judiciary.  Even though these decisions
were publicly available, it would not seem  practical - or of much value - for the authorities to notifythe WTO of each and every one of them.
21
24. The concern was also expressed that transparency requirements could impose an unnecessary
burden on developing countries.22  In addition, application of this principle might open the door for
pressures on developing members to change their legislations or enforcement practices or even the
scope of exemptions within their domestic laws.  Some developing country Members lacked domestic
laws/regulations/policies relating to competition  per se ; this compounded the complexities that could
be involved.  The following were some specific questions to be answered:  (i) what was the nature and
scope of the transparency commitments or obligations of countries which lacked competition
regimes?; (ii) how and to what extent would transparency commitments on home country obligations
be satisfied?23
25. In response to these concerns, the point was acknowledged that the Uruguay Round
negotiations had shown the amount of work that could be involved in implementing transparency
provisions.  However, it was not a good idea to swing back to the opposite approach.  Transparency
was a core value of the multilateral trading system, which promoted trade, investment and good
governance.  Moreover, there were ways of reducing transparency obligations to manageable
proportions.24
26. With regard to the principle of non-discrimination, this was a core value of the multilateral
trading system and was also vital to the credibility and effectiveness of competition policy.  Two
components were involved:  most-favoured-nation treatment and national treatment.  The proposed
multilateral framework would be concerned with de jure  as opposed to de facto instances of
discrimination, recognizing that any effort to deal with de facto instances of discrimination could
introduce a host of problems.25
                                                     
18 M/22, paragraph 36.
19 M/21, paragraph 30.
20 M/21, paragraph 14.
21 M/21, paragraph 29.
22 M/21, paragraphs 8 and 23; M/22, paragraph 37.
23 M/22, paragraph 34.
24 M/21, paragraph 30.
25 M/22, paragraph 33.WT/WGTCP/7
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27. The suggestion was made that non-discrimination provisions should not be extended to cover
existing or future bilateral cooperation agreements, in order to avoid possible MFN implications.26  In
particular, application of the MFN principle to bilateral antitrust cooperation agreements could
provide a disincentive for countries to enter into such agreements.27 Sectoral exemptions should be
allowed on the basis of national industrial policy, although the process of granting such exemptionsshould be transparent.
28
28. With regard to problems that might arise as a result of incorporating the principle of non-
discrimination, particularly national treatment, in a multilateral framework on competition policy,
reference was made to the potential for conflict between competition policy and industrial and
development policy objectives.  The view was expressed that the national treatment principle, in
particular, was inappropriate and was likely to lead to undesirable effects where applied in the context
of a multilateral framework on competition policy.29  National treatment, if applied to competition
rules, would give large multinational corporatio ns unlimited access to the developing countries'
domestic markets. Therefore, a uniform application of this principle in relation to competition would
be to the detriment of local host country firms which, if unable to sell and produce domestically on a
competitive basis, would, ultimately, exit the market.30 The point was also made that the principle of
non-discrimination might not be applicable to competition policy in the same sense and for the samepurposes for which it was used in trade policy.
31
29. In response to the suggestion that only de jure  violations of non-discrimination would be
prohibited under a binding obligation in the proposed multilateral framework, clarification was
requested on the following points: (i) what would be encompassed  by the term "guidelines of general
application?"; (ii) how would the proposal on non-discrimination be interpreted in common lawcountries where the "law" consisted of both statutes written in broad language and judicial decisions
interpreting such statutes?; and (iii) did the proponents of this approach contemplate the use of
individual cases as factual evidence of compliance with the core principles?  For that matter, was it
even possible to prevent the review of individual cases in the WTO system, where it was common for
a dispute settlement panel to consider how a law had been interpreted?
32  Questions were also posed
as to the compatability between national treatment and the pursuit of certain economic or other
policies, particularly when they were articulated so as not to be facially non-discriminatory, but could
be applied de facto in a way that would only benefit national firms, e.g. special regimes for SMEs
based on sales thresholds.33
30. The view was also expressed that if, as the proponents had argued, it was difficult to imagine
any situation in which a competition law regime w ould establish a distinction on the basis of the
nationality of firms, then the need for a principle to address this point was unclear. 34
31. In response to these views and concerns, the point was made, firstly, that, to a large extent,
concerns about possible conflicts between competition policy and industrial or development policy
objectives could be resolved through the use of appropriate exceptions or exemptions from
competition law.  For example, provision should be made for exemptions for small and medium-sized
enterprises for industrial development purposes.35  In fact, under the current proposals, Members
would generally be free to establish exceptions and exemptions that they considered necessary, with
                                                     
26 M/21, paragraph 23.
27 M/21, paragraph 28.
28 M/21, paragraph 14.
29 M/22, paragraph 30.
30 M/22, paragraph 31; see also M/22, paragraph 30.
31 M/21, paragraph 16.
32 M/21, paragraph 28.
33 M/22, paragraph 29; see also related questions in M/22, paragraph 38.
34 M/21, paragraph 28.
35 M/22, paragraph 43.WT/WGTCP/7
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the only constraint being the requirement of transparency.  Other tools were also available to manage
potential conflicts between competition and industrial policy.36
32. In addition, the view was expressed that competition policy was itself an important
component of a successful industrial policy or de velopment strategy, in that, properly applied, it
contributed directly to improved productivity, innovation and growth.37 In this regard, empirical
analysis contained in the 2003 World Bank Report on Global Economic Prospects ("GEP Report")38
and other research conducted by the Bank suggested that the level and the rate of growth of per capitaGDP of countries were positively correlated with the degree of competition in their respective
economies:  the more intense was competition in the domestic economy, the greater were the levels
and rates of increase in per capita income.
39  Evidence of a positive relationship between competition
and dynamic efficiency was also presented in a Study prepared by the Secretariat on Issues Relating
to a Possible Multilateral Framework on Competition Policy (WT/WGTCP/W/228) discussed below.The view was also expressed that empirical experience in many countries belied the suggestion that
competition policy could not co-exist with other po licies intended to achieve particular industrial or
social goals.  For example, the suggestion was made that Australia, the European Community and its
member States and other jurisdictions provided concrete examples of how competition policy and
industrial policy operated in a complementary fashion,  and thereby helped to show that the concerns
that had been expressed on many occasions in the Working Group about possible conflicts between
competition policy and industrial policy were, in fact, not justified.
40
33. As to the concerns expressed regarding how the distinction between de jure  and de facto
violations would work in practice, the point was made that it was difficult or impossible to provide
definitive answers to the kinds of detailed questions which had been posed concerning a prospectivelegal text before a negotiation had begun.  However, the intent of the proposal was to provide
something which would be useful and yet manageable.  It was important to recall, in this regard, that
non-discrimination in the WTO did not mean prohibit ing different treatment of firms in different
situations; rather, it meant that operators could not be treated differently and suffer adverse
consequences purely on the basis of their nationality.
41  On the question of individual cases, if the
review was limited to de jure violations of non-discrimination or the other proposed principles, there
would be no need to look at individual cases becaus e the object of the review by a panel would be to
look at the letter of the law and not at the way it is being applied.  That was precisely the reason why
the distinction had been drawn between de jure  and de facto violations.42
34. With regard to the principle of procedural fairness, the view was expressed that basic
provisions regarding procedural fairness in a multilateral framework on competition policy were
important to provide assurances to parties affected by competition investigations that the properprocedures were followed in order to protect their rights and interests.  For example, requirements
relating to matters such as notice of charges, fair and equitable administrative proceedings, and an
appeal process, could provide the required checks and balances to the claims of relevant parties.
However, Members should have the flexibility to implement those elements differently to reflect their
different legal traditions.
43
35. The view was also expressed that procedural fairness involved many technical issues and was
not a simple matter to resolve; in any case, each Member was entitled to design, establish and
maintain its own procedural system that was suitable to its specific national conditions and its level of
                                                     
36 See paragraph 67, below.
37 M/21, paragraphs 56 and 57; M/22, paragraphs 4 and 18.
38 World Bank, Global Economic Prospects and the Developing Countries (Washington DC: 2003).
39 M/22, paragraph 68.
40 M/22, paragraph 10.
41 M/21, paragraph 30; see related point in M/22, paragraph 32.
42 M/21, paragraph 31.
43 M/21, paragraph 24.WT/WGTCP/7
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development.44  While the elements that had been proposed seemed generally reasonable, they might
not be specific enough to be the subject of binding disciplines in the WTO.  For instance, what was a
"fair and equitable procedure?"  Would the proponents envision rights extending solely to those
subject to adverse decisions?  Or, would there be any instances where the competition framework
would include rights for third-parties?  Would the proposed right to appeal administrative decisionsby competition authorities include the review of decisions not to pursue complaints?  Indeed, this was
a particularly difficult subject area because notions of fundamental fairness in the context of law
enforcement disciplines such as competition law differed across legal systems.  Devising provisions
on procedural fairness that were sufficiently general to respect the differing approaches of various
legal systems but specific enough to provide adequate guidance to competition authorities and
dispute settlement panels would be a challenging exercise.
45
36. The Secretariat Background Note on Provisions on Procedural Fairness in Existing WTO
Agreements (WT/WGTCP/W/231) indicated, first, that  certain broad principles of procedural fairness
which could be found in each of the three main WTO agreements (the GATT, the GATS and the
TRIPS Agreement); the main characteristics of these principles were summarized in
subparagraph 16(a) of the paper.  Secondly, a number of more detailed provisions on procedural
fairness could be found in certain WTO agreements, notably the Agreements on Anti-dumping,Subsidies and Countervailing Measures, Safeguards, TRIPS and Government Procurement.  Much of
the paper was concerned with summarizing those more detailed provisions.  The paper focused on
provisions that were relevant to situations in which there was an allegation that a private party was
engaged in conduct that involved some measure of wrongdoing (e.g., infringement of intellectual
property rights) or was otherwise actionable (e.g ., dumping or subsidization) and where remedies
were being sought.
46
37. The point was made that the Note (WT/WGTCP/W/231) made it clear that there was there
was no single model of procedural fairness in the WTO which was applicable to all subject-matters.
Rather, in regard to each of the agreements which were surveyed in the Note, basic principles of
procedural fairness had been adapted as Members had seen fit, having regard to the requirements ofthe particular subject-matter addressed by the agreement.  The view was expressed that the
Agreements in which relevant provisions had been incorporated dealt with subject-matters that were
as complex as that of competition policy.  These provisions set certain basic guidelines while taking
account of the reality of diverse legal and political cultures and not attempting to enforce a
harmonized approach across different legal systems.  The particular issues that were addressed in the
various agreements were similar to those that were  likely to come up in the context of a multilateral
framework on competition policy.  These included, for example, issues regarding access to justice byprivate parties; procedures for informing the targets of an investigation; the protection of confidential
information and other legitimate interests of parties; and the rights of defendants in relevant
proceedings. In other words, appropriate reference points on procedural fairness that were relevant to
competition policy existed in relevant WTO Agreements and there was no need to start from scratch.
What remained to be done was to identify the releva nt elements and adapt them  to the subject-matter
of competition policy, as needed.  The point was also made that the elements discussed in the Note
were basically elements of good governance, which should be reflected in one way or another in any
legal system.
47
38. The view was also expressed that the relevance of some of the provisions in existing WTO
agreements that were set out in the Note was unclear and needed to be considered carefully in thecontext of the work of the Working Group.  Given the diversity in legal or legislative infrastructures
among Members, it was important that any possible multilateral framework on competition policy
                                                     
44 M/21, paragraphs 11 and 35; M/22, paragraph 35.
45 M/21, paragraph 29; M/22, paragraph 39.
46 M/22, paragraph 25.
47 M/22, paragraphs 26 and 27.WT/WGTCP/7
Page 11
avoid prescriptive provisions  and retain Members' discretion to choose the appropriate instrument in
implementing any obligations.  In this connection, the point was made that the Note (paragraph 31)
indicated that the GATT and GATS required that "judicial, arbitral or administrative tribunals or
procedures" be available for the prompt review and correction of administrative action relating to
customs matters and matters affecting trade in servic es, respectively.  The fact that these provisions
did not specify the means through which individual Members implemented the obligation did not
hamper the effectiveness of their enforcement.  Confidence was expressed in the practicability and
desirability of such general and non-prescriptive multilateral obligations on procedural fairness.   On
the other hand, some of the more specific provisions in existing WTO Agreements would be too
prescriptive and burdensome if applied in the context of a possible multilateral framework on
competition policy.  This would be the case, for example, with regard to provisions prescribing the
types of information to be contained in public notice s of the initiation of investigations, specifying the
kinds of factors to be taken into account and criteria to be used, and requiring the preparation of non-
confidential summaries of confidential information.48
39. With regard to additional principles that might be incorporated in a multilateral framework on
competition policy, the view was expressed that special and differential treatment should be a core
principle of any multilateral framework.49  The suggestion was also made that meaningful special and
differential treatment would need to involve non-reciprocity on the part of developed Members.50
40. In response, the view was expressed that a first question to be asked with regard to the
proposed inclusion of special and differential treatment as a core principle was "core principle of
what"?  The Group was discussing the core principles of a competition regime which were principally
a matter of substance, not of procedure.  Without prejudging what might be appropriate flexibility inthe context of paragraph 25 of the Doha declaration, the Group should have serious pause before
characterizing a procedural provision such as S&D as a so-called core principle.
51
41. With regard to the role of provisions on hardcore cartels in a multilateral framework on
competition policy and the harm caused by such arrangements, the view was expressed that these
arrangements were the most unambiguously harmful kind of competition law violation and imposedheavy costs on the economies of countries, particularly developing countries, that lacked effective
tools to deal with them.
52  They raised the prices and restricted the supply of essential goods and
services (including industrial inputs), which made such goods and services unavailable to some users
and unnecessarily expensive for others.  Further, cartels reduced participating enterprises' incentive
for cost control and propensity to innovate,53 and could also have the effect of impeding the transfer of
technology to developing countries. 54  They should, therefore, be addressed on a priority basis.55
42. The view was also expressed that international hardcore 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, although their harmful effects
were certainly felt by such countries.56   While addressing hardcore cartels was a clear priority, the
measures to be adopted needed to take into account the economic conditions and the stage of
development of participating countries, especially developing countries.57
                                                     
48 M/22, paragraphs 28, 39 and 42.
49 M/21, paragraphs 14, 16 and 19; M/22, paragraph 58.
50 M/22, paragraph 56.
51 M/21, paragraph 39.
52 M/21, paragraph 4; see also paragraph 25.
53 M/21, paragraph 15.
54 M/21, paragraph 25.
55 M/22, paragraph 40.
56 M/22, paragraph 45.
57 M/21, paragraph 17.WT/WGTCP/7
Page 12
43. With regard to the measures needed to address hard core cartels at the national level, the view
was expressed that what was called for was the adoption and vigorous enforcement of well-crafted
national competition laws. To ensure the effective suppression of cartels, Members needed to adopt
clear provisions against hardcore cartels in their respective national legislation (or appropriate
regional instruments) and to establish enforcement authorities where these were lacking, although itwas not strictly necessary to establish a stand-alone, specialised agency or commission for this
purpose.
58  In addition, international cooperation in the form of the ability to share basic non-
confidential information between national competition agencies was critical to effective enforcement
in regard to international cartels.  The detection and punishment of hardcore cartels could also be
facilitated through specific enforcement tools such as the use of "dawn raids" and leniency
programmes.59
44. Concerning the requirements of a multilateral framework in this area, the view was expressed
that these would involve: (i) a clear prohibition of such arrangements in Members' national legislation
and (ii) provision for cooperation between Members in relevant investigations.  As to whether there
was a need for all countries to have a specialised agency charged with implementing and enforcing
competition law, the view was expressed that the proponents of a multilateral framework were not
seeking a formula that would be applicable to all countries in all circumstances.   At a minimum, whatwas necessary was that all countries should have sufficient powers to actually implement and enforce
the law and to be a credible and real partner for international cooperation.  Beyond this, there was
nothing in what was proposed that would make it impossible or incorrect for a Member to, for
example, have a multi-purpose agency, perhaps one that dealt with consumer protection, competition
policy and possibly even a broader range of issues or to adopt other institutional forms.
60
45. The view was expressed that the main problem that needed to be addressed in this area was
the lack of universal condemnation and enforcement of appropriate laws relating to these practices.
All developed countries already banned cartels and most enforced legal prohibitions against them in
an increasingly vigilant manner. The main gap to be addressed, therefore, was in anti-cartel
enforcement in developing countries.  Developing countries that recognized the harm caused bycartels and wanted to enact prohibitions against them should be encouraged to do so.  In this regard, it
should be recalled that there was no evidence whatever that permitting the operation of cartels –
whether domestically or internationally – conferred economic benefits or supported development
goals.  On the contrary, there was a growing body of evidence that the operation of cartels imposed
significant costs on developing and developed countries alike.  Therefore, any suggestion to legitimate
and ratify the entry of companies in developing countries into domestic or international cartels would
be a step backward, not forwards.
61  The view was also expressed that countries should not be forced
to adopt competition legislation before they were  ready; this was a key area for flexibility and
Members should decide when and how to implement such legislation over time.62
46. With regard to definitional issues that would arise in the context of a multilateral framework
on competition policy, the view was expressed that the OECD Recommendation on Hardcore
Cartels63 and the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the
Control of Restrictive Business Practices ("the Set")64 provided valuable guidance in regard to the
definition of practices that should be banned.65  The view was also expressed that a detailed analysis
                                                     
58 M/21, paragraph 4.
59 M/21, paragraph 15.
60 M/21, paragraph 32.
61 M/21, paragraph 36; see also M/22, paragraph 20.
62 M/21, paragraph 43.
63 OECD Council Recommendation Concerning Effective Action Against Hardcore Cartels (adopted
by the OECD Council at its 921st Session on 25 March 1998 [C/M(98)7/PROV]).
64 United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of
Restrictive Business Practices (Geneva:  1980).
65 M/21, paragraph 32; M/22, paragraph 7.WT/WGTCP/7
Page 13
was necessary to see if the approach to defi nition of cartels in the OECD Recommendation and
related sources applied equally in the context of developing countries.  For instance, it might be the
case that only bid rigging and price fixing deserved to be considered as hard core cartels; the other
arrangements mentioned might have pro-efficiency effects in developing countries, and thus might
need to be assessed under a rule of reason (case-by-case) approach.66  Lack of such clarification
would give rise to significant operational problems and costs for developing countries while
jeopardizing the potential benefits.67
47. The suggestion was made that any definition of cartels in a multilateral framework should be
sufficiently broad to include domestic and internatio nal cartels.  The former were as harmful as the
latter, not only to the domestic economy and consumers, but also to trade and the interests of other
countries.68  The view was also expressed that it should be left to Members to decide in the light of
their own constitutional requirements whether or not they should enact a national competition law; thefocus of efforts in the WTO should be on international rather than domestic cartels.
69
48. The view was expressed that it was noteworthy that a large and growing proportion of WTO
Members had by now adopted or were in the process of adopting competition laws and enforcement
capabilities; moreover, no Members were going in the opposite direction in the sense of abolishing
such laws.  Supporting reasons for this trend were the significant net welfare gains that could accrueto countries from adopting such legislation as was reflected, for example in the Study of Issues
Relating to a Possible Multilateral Framework on Competition Policy (document
WT/WGTCP/W/228; discussed below).  Support for the adoption of such legislation was already
being provided by various international organizati ons and individual Members.  The proposal for a
multilateral framework on competition policy offered the opportunity to endorse and enhance thistrend.  For those Members that currently lacked such laws, the question was whether there was any
evidence of adverse effects from the adoption of such laws that would cause them to oppose a
commitment in this area, particularly if due provision was made for flexibility and progressivity in its
implementation.
70
49. As an alternative approach to this matter, the view was expressed that merely passing national
competition laws, establishing competition institutions and engaging in voluntary cooperation might
not be an effective solution to this problem.  An alternative approach would involve the adoption of a
multilateral rule banning hardcore cartels.  The definition of such cartels would be limited to bid-
rigging and price-fixing, which were already treated as crimes in several national competition laws.
These two practices, which were blatant unfair trade practices, should be outlawed, or at least should
be subject to the dispute settlement mechanism in the same way as other unfair trade practices.71
50. The point was made that, as export cartels had little domestic effects, they could not be
efficiently controlled or punished by the national authorities of the home countries. However, the
countries that would be competent to pursue these cartels, namely those in whose markets the cartels
operated, often lacked the necessary tools and information since the participating firms were located
abroad.  Given this, international cooperation was an appropriate means to fight export-related
arrangements that had demonstrable anti-competitive effects.72
51. In response, the point was made that so-called "export cartels" typically were conceived as
mechanisms for domestic entities that lacked the resources to engage in effective export activity
                                                     
66 M/21, paragraph 17.
67 M/22, paragraphs 40 and 43.
68 M/21, paragraph 25.
69 M/21, paragraph 13.
70 M/22, paragraph 6.
71 M/21, paragraph 43.
72 M/21, paragraph 41; M/22, paragraph 45.WT/WGTCP/7
Page 14
acting individually.  As such, they often had pro-competitive effects in that they added additional
players to the relevant markets and might bring i nnovation or lower prices. Moreover, they were not
secret and therefore did not bear the hallmarks of what was traditionally considered to be a hardcore
cartel. Hence, blanket condemnation or per se  treatment of such arrangements was inappropriate. If
the effects of this kind of cartels were anti-competitive, there was no impediment today to anyjurisdiction affected enforcing their competition law to prosecute their anti-competitive effects. 
73
52. Responding to this point, the clarification was offered that the suggestion that had been put
forward was simply that export cartels should no t benefit from a blanket exemption from competition
laws, which would exclude them even from scrutiny under a rule of reason (case-by-case) approach.
In fact, most export cartels involved multinational companies, not small and medium-sized enterprises
of the sort that might need to bind together for efficiency purposes.  This was the basis of the
suggestion that export cartels should at least be subject to the possibility of review under a rule ofreason.
74
53. The view was expressed that intergovernmental or state-to-state agreements and restrictive
business practices implemented pursuant to such agreements should be explicitly excluded from the
ambit of any multilateral framework on competition policy and/or the definition of a hardcore cartel,
for developmental and related purposes.  Precedent for the exclusion of intergovernmental agreementsand related anti-competitive practices could be found in a relevant provision of the United Nations Set
(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.  Such an exclusion was
particularly important in regard to the marke ting of commodities.  Commodity markets could not
always be left to be free operation of market forces because of the nature of the product(s) andsometimes required more active involvement by governments and international coordination.  The
stabilisation of prices in these markets was in line with legitimate developmental objectives at least as
they were perceived by some Members.
75
54. With regard to the potential benefits of modalities for voluntary cooperation that could be
incorporated in a multilateral framework on competition policy, the view was expressed thatpromoting broader cooperation in the enforcement of competition law than existed at present was the
necessary and appropriate response to the proliferation of cartels and other anti-competitive practices
with a transnational dimension which could not be effectively controlled by individual countries
acting alone.  Over time, voluntary cooperation in  the framework of the WTO would also prove to be
a tremendous stimulus to the cross-national learning and voluntary convergence in Members' policies
in this area.
76
55. With regard to the nature of the proposed modalities for voluntary cooperation, the view was
expressed that they would include general sharing of information and experience, consultations, case-
specific cooperation and technical assistance.  Case-specific cooperation and technical assistance were
particularly important.77  The view was also expressed that, while case-specific cooperation would be
a component of any modalities in a WTO agreement, cooperation at the WTO would to a large extent
involve more general exchanges of information and experiences at least in the initial stages. 78
56. Regarding the types of information that would be  shared within a multilateral framework, the
view was expressed that a WTO framework should not require the sharing of confidential
information; this would be counter-productive and potentially damaging to existing enforcement
                                                     
73 M/21, paragraph 37.
74 M/21, paragraph 44.
75 M/22, paragraph 66.
76 M/21, paragraph 5.
77 M/21, paragraph 6.
78 M/21, paragraph 26.WT/WGTCP/7
Page 15
capabilities.79  If individual Members wished to go as far as exchanging confidential information, this
was a matter to be pursued in their bilateral relations with other Members interested in this
possibility.80
57. The view was expressed that the establishment of a WTO competition policy committee
would facilitate the exchange of information a nd experience among Members, and otherwise help to
ensure the efficient implementation of a multilateral framework.81  Such a committee could have a
number of roles, including providing a forum fo r exchanging non-confidential information, co-
ordinating technical assistance, examining the interaction between trade and competition policy
issues, and providing a forum for non-binding p eer review.  It would enhance exchanges among
Members and thereby provide improved understanding of competition policy issues faced in Member
countries, and their potential relationship with international trade.  Through peer review, Members
could share experiences about anti-competitive practices that could affect the interests of otherMembers, and the kind of cooperation that would be valuable to effectively address such activities.
82
58. The point was also made that any case-specific cooperation undertaken in the framework of
the WTO would complement, rather than replace, case-specific enforcement cooperation between
agencies under bilateral cooperation agreements, recognising that these bilateral relationships were
based on mutual trust and had developed over time. Likewise, any WTO provisions on cooperationwould need to be flexible in order to take into consideration the differences in Members' competition
regimes, and the fact that cooperation could evolve over time as more experience was gained.  Like
bilateral cooperation agreements, cooperation in the WTO would need to be voluntary.  It was not an
area where binding commitments would be appropriate.  Nonetheless, it had also been recognised that
many anti-competitive practices were international in  nature and could affect the interests of multiple
countries.  To successfully combat such activities, wider collaborative efforts were needed than
currently existed.  Over time, cooperation could evolve from informal exchanges to formal
procedures.
83
59. With regard to the meaning of "voluntariness" in the context of possible modalities on
voluntary cooperation, the view was expressed that the term "voluntary" had both a legal and anethical dimension.  In legal terms, "voluntary" meant that cooperation should not be binding; thus
Members would not be forced to cooperate against their own interests.  In its ethical sense,
"voluntary" implied that countries, especially developed countries, should respect a self-imposed
obligation of cooperation in good faith. 
84
60. Doubts were expressed as to whether developing  countries would indeed be in a position to
benefit from voluntary cooperation under a multilateral framework on competition policy.  If
countries that were unwilling to cooperate, for whatever reason, could take refuge underconfidentiality or other grounds, developing countries lacking the required clout would be particularly
handicapped.
85
61. In response, the point was made that experience had shown that voluntary cooperation was
not a meaningless concept; rather, it had much to offer developing as well as developed countries. A
multilateral framework would help to alleviate, not exacerbate, existing  asymetries in this area.  In the
previous year, the Korean competition authority had received substantial help from developed
countries in addressing an international cartel case, which illustrated that international cooperation
                                                     
79 M/22, paragraphs 8 and 9.
80 M/22, paragraph 9.
81 M/21, paragraph 6.
82 M/21, paragraph 26.
83 M/21, paragraph 26.
84 M/21, paragraph 5.
85 M/21, paragraphs 18 and 19; M/22, paragraph 41.WT/WGTCP/7
Page 16
could indeed provide important benefits.86  Furthermore, "voluntariness" would not be an exception to
what was presently existing; existing bilateral cooperation agreements were also of a voluntary and
non-binding nature.  Notwithstanding this, they had been shown in a number of instances to yield real
results and benefits.87
62. The point was also made that confidentiality was not a refuge but a basic procedural fairness
right that was also essential to effective law enforcement.  Information or evidence that was submitted
pursuant to a particular country's jurisdiction over firms and subject to the legal protections of that
regime should not be dispersed to other jurisdictions without consideration of those countries'
jurisdictions over the firms and practices, how the information would be used and the confidentiality
protections that would be accorded to the information.  To do so might well undermine compliance
with domestic proceedings.  An obvious example would be the protection of informants who come
forward, for example, to report cartels under national leniency programs.  For these reasons, arequirement to share information regardless of confidentiality protections would have a
counterproductive effect on competition enforcement, not enhance it.
88
63. As an illustration of the organic nature of cooperation and how it could develop and be
deepened over time, reference was made to the experience of the Nordic countries.  Nordic
cooperation in the field of competition dated back to the late 1970s and early 1980s, at the time whenthe Nordic countries first started implementing modern competition laws. The heads of the relevant
competition authorities met biannually to discuss topics of mutual concern. From this platform a much
broader and more structured cooperation had developed.  In 1998, a committee consisting of
representatives of the five Nordic countries was established with a mandate to propose increased
cooperation between the national competition authorities in their application of national law.  As afirst step, it proposed that its recommendations should be formalised in a set of non-binding
guidelines which the five countries adopted in 2000.  In the guidelines, the parties agreed to the
exchange of non-confidential information of general interest or concerning specific cases under
investigation. If domestic legislation prohibited the sharing of confidential information, any such
sharing was subject to the consent of the individu als who supplied the information in the first place.
The guidelines also recommended increased consultation and co-ordination between authorities to
make investigations more effective and to avoid contradictory decisions. To the extent that national
law permitted, a party might carry out investigations ("dawn raids") on behalf of another Nordic
country.  The guidelines also contained procedures for consultation and the exchange of information
related to negative and positive comity.  The committee appointed in 1998 proposed that in the longer
term, the Nordic countries should enter into a bind ing international agreement in the areas covered by
the guidelines. Under the agreement, national legisl ation would allow for the exchange of confidential
information, even without the cons ent of the individual concerned.  To date, the experience of Nordic
cooperation was encouraging.  In all important competition cases of interest, contacts were now
established at the earliest possible stage in order to exchange views and, when appropriate,
case-specific information. Moreover, enforcement act ivities, including investigations, were routinely
co-ordinated. Particularly with respect to hardcore cartel cases, the results had been positive.  Thesuggestion was made that the following observations  might be drawn from the Nordic experience:
(i) cooperation should be allowed to develop gradually; (ii) a country needed a minimum of
enforcement structures at the national level - along with the political will to use them - in order to
participate effectively in a network that exchanges any type of information on competition; (iii) much
could be achieved merely by exchanging basic non-confidential information, including information ofa general nature or in relation to specific cases or sectors.  In fact, until two years ago, practically all
information exchanged between the Nordic countries was non-confidential; (iv) any cooperation
                                                     
86 M/21, paragraph 49.
87 M/21, paragraphs 32 and 50.
88 M/21, paragraph 38.WT/WGTCP/7
Page 17
arrangement needed to be founded on mutual trust and (v) cooperation tended to strengthen the
effectiveness of national enforcement efforts, over time.89
64. The point was made that, currently, without access to the cooperation mechanisms that a
multilateral framework would bring, many developing countries lacked the capacity to investigate and
deal with practices such as cartels which were clear ly harmful to them.  In this context, even the
sharing of basic, non-confidential information on cartel activities under a multilateral framework on
competition policy would assist developing countries to deal with harmful anti-competitive practices
by multinational corporations and to protect their national interests.90
65. With regard to the element of support for progressive reinforcement of competition agencies
in developing countries through capacity building, the view was expressed that the need for technical
assistance and capacity building in this area could not be over-stated and clearly outstripped existing
capabilities; multilateral organizations had a key ro le to play in this area, with the support of
developed countries acting in their individual capacities. Cooperation in the context of a multilateral
framework offered the prospect of significantly shortening the time frames that developing countries
would need to build and embed competition laws and policies that would support their development
goals; a key consideration in this regard was the more supportive environment it would provide for
better-targeted assistance and capacity building.91  The point was also made that a long-term
commitment to technical assistance and capacity building was vital to the strengthening of
competition institutions and the dissemination of competition culture in developing countries;
accordingly, it needed to be treated as an integral part of any multilateral initiative.92
66. As a further source of insight into the pros and cons of possible elements of a multilateral
framework on competition policy, the Working Group had before it a Study on Issues Relating to aPossible Multilateral Framework on Competition Policy (document WT/WGTCP/W/228).  The study
had been requested by the Working Group at the Group's meeting on 1-2 July 2002
(WT/WGTCP/M/18, paragraphs 96-98).  It was circulated in preliminary form prior to the Working
Group's meeting of 20-21 February (JOB/03(31), circulated 18 February 2003).  The Study was
intended, firstly, to examine the question of the re lationship between competition policy and industrial
policy, in particular the issue of dynamic efficiency gains and whether competition policy or a
multilateral framework on competition policy would affect the realization of these.  In addition, it was
intended to consider possible resource implications of any multilateral framework in this area, and to
examine the impact of competition law and policy in tackling anti-competitive practices of firms in a
developing country setting.  It was prepared under the responsibility of the Secretariat with the help of
a consultant, Dr. Simon Evenett, Director of Economic Research at the World Trade Institute,
University of Bern.
67. The view was expressed that the Study had systematically addressed the benefits and costs of
a possible multilateral framework on competition policy and had presented strong evidence that such
a framework would have significant net benefits.  It had also shown that there was no fundamental
incompatibility between such a framework and the objectives of national industrial policies, including
the promotion of dynamic efficiency gains.
93  It suggested that, in the main, competition policy was
likely to contribute directly to the attainment of dynamic efficiency gains and other developmental
objectives, in that inter-firm rivalry provided a ke y incentive for firms to lower their costs; to provide
better service and expanded choices for consumers; and to innovate and/or adopt the best available
technologies.94  However, recognizing that this might not always be the case, the Study also identified
                                                     
89 M/22, paragraph 57.
90 M/21, paragraph 48.
91 M/22, paragraph 5.
92 M/21, paragraph 21;  M/22, paragraphs 5, 44, 76 and 83.
93 M/22, paragraph 5 and 18.
94 M/21, paragraph 56 and M/22, paragraph 19.WT/WGTCP/7
Page 18
five specific ways in which potential conflicts between competition policy and national industrial
policy had historically been managed.  These were:  (i) the use of industrial policy instruments which,
even where they tended to restrict competition in  markets, were not actionable under the competition
laws of most countries (e.g., tariffs, subsidies, training programmes and public ownership); (ii) the
explicit incorporation of goals such as dynamic efficiency gains in national competition laws; (iii) theexplicit taking into account, by responsible officials, of dynamic as well as static efficiency
considerations in the application of national laws, which was increasingly common in countries
having such laws; (iv) where necessary, the provision for exemptions, exceptions, and exclusions
from competition law and (v) allowing for a governmental body to overrule a decision made by the
competition enforcement agency in the event that national development priorities might be
compromised.  Furthermore, the Study showed that, by and large, the adoption of a multilateral
framework on competition policy along the lines that had been proposed was consistent with andwould not jeopardize the ability of Members to continue to use these five tools.
95
68. The point was made that the discussion of Japanese experience in the Study illustrated a
number of points that had been made in the Work ing Group's meetings.  In particular, it showed that
the source of dynamic efficiency and growth in Japan had been competition, not the limiting of
rivalry. The automobile industry, which was the symbolic epitome of Japan's strong economic growth,was a good example of this.  In the 1950s, the government had wanted to reduce the number of
automakers in Japan, with the objective of having a single model which would be called the "national
car".  Fortunately, the industry itself had resisted these efforts, choosing a competitive rather than a
monopoly approach.   As from 1966, nine domestic auto makers had been competing with each other
in the market for passenger cars.  The resulting fierce competition had ensured the development of thecar industry, promoted innovation and sustained international competitiveness.  Of course, Japanese
competition policy, and the Fair Trade Commission in particular, had also played a key role in
promoting fair competition in the post-war era.
96
69. The view was expressed that, as had been made clear in the Study, the costs of a multilateral
framework on competition policy could not be meaningfully assessed in isolation from the benefitsthat would flow from it.  The examples and other evidence presented particularly in Part III of the
study had shown the feasibility of attacking cartels, including in developing countries, and the
important benefits for economic and consumer welfare that would flow from this.
97  The recent
Vitamins cartel was a particularly telling example of the costs that cartels had been shown to inflict on
both developed and developing economies, particularly those that lacked effective competition laws.98
The costs of enforcing competition legislation appeared to be minor in relation to the potentialbenefits.
99
70. Supplementing the coverage of the Study, the view was expressed that competition policy, in
addition to embodying the policy considerations th at were set out therein, was based on empirical
methods and data analysis.  The history of competition policy, particularly in the past 20 years, had
been extensively influenced by the branch of economics known as industrial organization; without
this theoretical and empirical underpinning, competition policy would be just another legal orregulatory regime.  In particular, the usefulness of competition policy was derived from its empirical
orientation in relation to anti-competitive effects,  its capacity to adapt to advances in the
understanding of the operation of markets and its principled "rule-of-reason" approach.
100
                                                     
95 M/22, paragraph 19.
96 M/21, paragraph 60.
97 M/22, paragraph 21.
98 See Study on Issues Relating to a Possible Multilateral Framework on Competition Policy (document
WT/WGTCP/W/228), paragraphs 299-302 and Table III.T7 "Estimated overcharges from the vitamins cartel,1990-1999, in year 2000 US dollars; by importer".
99 M/22, paragraph 5.
100 M/22, paragraph 18.WT/WGTCP/7
Page 19
71. Reference was also made to a recent study prepared for the World Bank101 which had looked
at the magnitude of benefits arising from the application of competition law on domestic economies.
Essentially, the study had found that competition law and enforcement yielded benefits at least
commensurate with their costs.  Some additional findings of the study were as follows:  first, the
implementation of competition policy generally resulted in lower prices for consumers and userindustries; this was confirmed for a large sample of developed and developing countries.  In addition,
competition policy encouraged a larger number of firms and therefore a greater degree of consumer
choice in most markets.   For the most part, competition law was also more cost-effective in achieving
these ends than industry-specific regulatory regi mes.  The authors cautioned, nonetheless, that such
regimes may still be needed in so-called natural monopoly situations (markets which are more
efficiently served by a single supplier).
102
72. The view was also expressed that, in discussing the experience of one particular Member that
was characterized by the small size and openness of its national economy, the Study had relied
excessively on a recent IMF paper.  The conceptual approach adopted in the paper was debatable.103
The experience of this Member did not confirm the existence of significant cartels or other entryimpeding private anti-competitive practices, although it remained vigilant in this area.  In any case,
horizontal competition law was not a panacea. Unique domestic situations in different economiescould call for different approaches to deal with the same underlying issues.  The choice of not having
a competition law did not mean that one did not have a competition policy, which could be embodied
in other instruments.
104
73. With regard to the matter of flexibility and progressivity in any multilateral framework on
competition policy, it was recalled that paragraph 25 of the Doha Ministerial Declaration hadstipulated that "Full account shall be taken of the needs of developing and least-developed country
participants and appropriate flexibility provided to address them".
105  In this regard, the view was
expressed that flexibility and progressivity were crucial for ensuring that international commitments
made by Members did not hinder their ability to pursue domestic policy objectives, and for the
preservation of policy space.  The possibility of implementing exceptions and exclusions fromcompetition law and/or a multilateral framework was particularly important in this regard.  These
principles should apply in regard to any commitments to establish a competition law and authority
(including at the regional level).  In particular , flexibility and progressivity were important with
respect to the substantive scope of a law, the powers of enforcement authorities, and the ability to
define the scope and modalities of exclusions and exemptions, which were an important tool for the
maintenance of policy space.
106
74. With regard to possible alternative approaches to a multilateral framework on competition
policy and/or additional matters deserving attention, the view was expressed that Members needed to
prioritise the various issues at hand by asking what was the single most important objective of having
a multilateral agreement on competition law policy.  Was it to ensure greater market access or to
ensure fairer cross-border trade?  If the answer was the former, one would want to ensure that
Members agreed on having a national competition regime that would at least contain the basicsubstantive provisions (abuse of dominance, collusive practices and mergers) and embrace the
proposed core principles of non-discrimination, transparency and due process.  If the answer was the
latter, Members needed to think about ways to protect smaller economies from the anti-competitive
                                                     
101 Hoekman, B. and H.L. Kee, Imports, Entry and Competition Law as Market Disciplines (World
Bank, 2003); also discussed in Study on Issues Relating to a Possible Multilateral Framework on CompetitionPolicy (WT/WGTCP/W/228), paragraphs 278-281.
102 M/22, paragraph 18.
103 M/22, paragraph 22.
104 M/21, paragraph 54; M/22, paragraph 22.
105 M/22, paragraphs 36, 53, 55 and 58; M/21, paragraph 36.
106 See, for related points, M/21, paragraphs 21, 22, 68 and 97 and M/22, paragraphs 5, 6, 7, 9, 11, 12,
15 and 49.WT/WGTCP/7
Page 20
practices of multi-national corporations (MNCs).  Indeed this was important since, if MNCs were
allowed to engage in anti-competitive practices unrestrained, developing countries would become
sceptical about further liberalization of their economies.  Since the WTO was a rules-based
organisation, it was time to have a rule against the most offensive and damaging cross-border trade
practices to date:  price-fixing cartels.  Furtherm ore, broad exemptions for export and international
cartels in  national legislation could not be justified on efficiency grounds, and should therefore be
abolished.  Developed countries should move unilaterally to show their genuine commitment to fairer
conditions of global trade, free from anti-competitive practices.  Enhanced levels of technical
assistance and capacity building would be importa nt in any case for the development of market-
oriented policy frameworks and competition culture in developing countries.107
75. The suggestion was also made that a two-tier approach incorporating the following elements
might provide a way forward:  (i) establishment of a set of principles that was acceptable to allMembers (core principles, prohibition of hardcore cartels, technical assistance, etc.) in a multilateral
agreement.  Minimum standards would be set, and all Members would participate in the negotiation;
(ii) a more comprehensive regulation and cooperation framework, dealing, for example, with
cross-country merger regulation, voluntary cooperation, peer review and dispute settlement, could be
addressed in a plurilateral negotiation.  The existence of competition laws in a Member economywould not be a precondition to participating in such a negotiation.  As regards voluntary cooperation,
an asymmetric approach would be employed.  Developed countries would bear more obligations than
developing countries.  This would entice developing countries to willingly join the multilateral
competition structure, and establish the foundation for regional cooperation.  Enhanced levels of
technical assistance and capacity building would also play a key role under this approach.
108
76. Another possibility that was mentioned would involve concerted efforts in the WTO aimed at
promoting awareness of cartels and other anti-competitive practices and approaches to dealing with
these practices, but without any requirement to adopt a national competition law or any related
binding measures.  Work might also continue on clarifying core principles and modalities for
voluntary cooperation, bearing in mind the needs and perspectives of developing countries.109
77. Reference was also made, at various points in the discussion, to alternative approaches to
compliance mechanisms in this area.  In addition to the potential application of the WTO Dispute
Settlement Understanding, a number of references were made to the potential contribution of peer
reviews in any multilateral framework.  The point was made that, through peer reviews, Members
could share experiences about anti-competitive practices that could affect the interests of other
Members, and the kind of cooperation that would be valuable to effectively address such activities.110
78. Finally, the view was expressed that attention should be given in the Working Group to anti-
competitive practices relating to intellectual property rights (IPRs).  The TRIPS Agreement  provided,
in principle, for control over the abuse of such rights by rights holders.  A future multilateral
framework could also make a contribution in this area, consistent with better protection for IPRs, the
realization of social and public interests and the balancing of rights and obligations in this area.111
                                                     
107 M/21, paragraphs 12-14; see also paragraph 18.
108 M/22, paragraphs 61 and 62.
109 M/22, paragraphs 58-60.
110 M/21, paragraph 26; a fuller discussion of issues concerning the possible roles of dispute settlement
and peer review in a multilateral setting is provide in Part C(II), below.
111 M/22, paragraph 45.WT/WGTCP/7
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II. THE NATURE AND SCOPE OF COMPLIANCE MECHANSIMS THAT MIGHT BE
APPLICABLE UNDER A MULTILATERAL FRAMEWORK ON COMPETITION
POLICY
79. This matter was discussed by the Working Group at its meetings of 20-21 February and 26-27
May.  Written submissions on this item were provided by the representatives of the European
Community and the member States, Australia , United States , Korea  and Japan  (documents
WT/WGTCP/W/229, 232, 233, 235 and 236, respectively).  The representatives of Norway; the
Philippines; Japan ; Canada ; India ; Switzerland ; Brazil ; the United States ; Egypt ; Korea ; Tunisia ; the
European Community and its member States; Nigeria ; Venezuela ; Hong Kong, China  and Kuwait
made oral statements or posed questions on this item (the text of the February meeting intervention by
Canada was subsequently circulated in document WT/WGTCP/W/226). The observers from
UNCTAD and the OECD provided updates on relevant activities of their organizations.
80. The discussion on this item centred on two topi cs: (i) the potential application of the Dispute
Settlement Understanding (DSU) and (ii) the potential role of a peer review system in a multilateral
framework on competition policy.  Peer review was discussed both as a compliance mechanism which
might function as a substitute or as a complement to dispute settlement, and as a capacity building
tool which might constitute an important element of cooperation in the framework of the WTO in its
own right.
81. Regarding the potential application of the dispute settlement understanding under a
multilateral framework on competition policy, the view was expressed that that the WTO was a rules-
based organisation.  Although the WTO Agreements also contained a number of provisions which
were more of a soft law nature, such as best endeavour clauses and political commitments, all WTOAgreements contained some rights and obligations a nd all such rights and obligations could be subject
to dispute settlement under the Dispute Settlement Understanding.   Any other approach would betray
the raison d'être  of the WTO.  The real question was how far to go.  To a large extent, this would
depend on the scope of the obligations that Members would assume under a multilateral framework
on competition to which, it was assumed, dispute se ttlement would apply.  Broadly speaking, there
was a proposal for an obligation to incorporate into national or regional instruments a ban on hardcore
cartels.  What dispute settlement would look at in this context was whether domestic laws prohibited
hardcore cartels.  Furthermore, core principles had been proposed relating to transparency, non-
discrimination and procedural fairness.  In that co ntext, dispute settlement would assess whether, on
its face, domestic legislation complied with the referenced principles, for example whether it
discriminated on the basis of nationality or included required guarantees regarding the availability of
judicial review of administrative decisions.  The proposed principles would not, however, include anykind of provision that would involve assessment of whether a law which was non-discriminatory on
its face was, in particular cases, administered in a way which was discriminatory, or calling for review
of the way in which judicial review of administrative decisions was carried out, since these matters
would not be the subject of any substantive obligations.  In sum, it was proposed to address concerns
about dispute settlement having an excessive reach into domestic legal systems through theappropriate wording of the basic obligations to whic h dispute settlement would apply.  This was what
was meant by a de jure  as opposed to a de facto approach
112.
82. The view was expressed that the question of the role (if any) of dispute settlement should be
approached in an open-minded way, with the focus on what Members were trying to achieve and what
was the best way to achieve the desired result.  There was no inherent reason why a multilateralframework must contain provisions on dispute settlement.  The suggestion was made, moreover, that
certain unique features of competition policy in the WTO might distinguish it from other subject areas
in the Organization.  In particular, about a quarter of the Members currently had no competition law.
Competition law inherently involved national enforcement systems that were based critically on
                                                     
112 M/21, paragraph 65; see also M/21, paragraphs 72, 77 and 78 and M/22, paragraphs 72, 73 and 98.WT/WGTCP/7
Page 22
prosecutorial discretion.  Consideration should also be given to the appropriateness or
inappropriateness of the application of traditional trade sanctions that might be triggered by dispute
settlement, which could have effects that many Members might consider to be anti-competitive.113  In
a related vein, examples were offered where bilateral agreements on competition without dispute
settlement had been found to be useful, suggesting that there was no intrinsic requirement for adispute settlement mechanism in this area.
114
83. The view was also expressed that the role of the Dispute Settlement Understanding should be
decided on the basis of the outcome of possible negotiations on a multilateral framework.  It was
difficult to make abstract judgements as to the exact model without knowing the provisions of the
agreement.  Moreover, Members should allow any role of the DSU to be subject to progressive
implementation as regards developing countries.115
84. The point was made that it was difficult to see the value or need for the DSU at this stage in
the competition context, particularly given the vast gap in the level of experience and differing needs
of WTO Members in the area of competition policy.116  A preference was expressed by some
Members for a non-confrontational approach, aimed at capacity building and sharing information and
experience with a view to creating a culture of competition and a forum for eventual policy
convergence.  This could be coupled with a means of addressing particular concerns of Members in acooperative environment and would be effective enough in encouraging compliance, especially if
effectively backed by a sophisticated system of follow-ups.
117
85. A concern was also expressed that the proponents of applying the DSU sought application of
the core principles not only to provisions related to  hardcore cartels, but to the entire scope of the
national competition laws, thereby penalizing those Members whose laws had more comprehensivecoverage.
118  The related point was also made that the original proposal indicated that certain
provisions in a domestic competition regime which were not substantive requirements of the
framework (such as provisions on monopolies or mergers) would nevertheless be subject to the
overriding core principles such as non-discrimination and transparency.  This would bring those
provisions under the scrutiny of dispute settlement, obliging further discussion on the issue of therights and obligations of Members in respect of these provisions and a definition of the limits of an
agreement.
119  The point was also made that it was difficult to imagine a situation where a Member
might have a well-conceived law on competition whose implementation in a manner inconsistent with
the proposed core principles would not be reviewable120 - something which would arguably also be an
anomoly in the framework of the WTO.121
86. In response to these concerns, the view was expressed that two questions needed to be
addressed: to what would dispute settlement apply and on what basis?  There were several examples
in the WTO agreements of special provisions that adapted the DSU to a specific policy area – in this
regard competition would not be an exception.  The view was expressed that if the agreement was
properly drafted to apply only to de jure  violations of the proposed core principles, a panel would not
be in a position to extend this to permit de facto review.  However, if necessary, a fail-safe provision
to this effect could be added.  Concerning sanctions, although it was especially difficult to applycounter-measures or to calculate the amount of coun ter-measures outside pure market access issues,
this was not a novel phenomenon in the WTO.  Similar issues had arisen in services and intellectual
                                                     
113 M/21, paragraph 67; see also paragraph 68.
114 M/21, paragraph 82.
115 M/21, paragraph 72; see also M/22, paragraph 92.
116 M/22, paragraphs 82 and 94.
117 M/22, paragraph 83.
118 M/22, paragraph 84.
119 M/22, paragraph 87.
120 M/21, paragraph 75.
121 M/22, paragraph 86.WT/WGTCP/7
Page 23
property.122  With regard to the argument that countries which had already adopted competition laws
would be penalised, in the presence of an agreement there must be concurrence on the substantive
obligations in that agreement.  Agreement on the util ity of the core principles in such an agreement,
should lead to their application across the board with no penalization implied.123
87. In a related vein, the view was expressed that one way to ensure prudent and predictable
results in any dispute settlement proceedings would be provide for the establishment of a permanent
group of experts on competition policy and law.    Precedents for this approach could be found in
existing WTO agreements that dealt with other technical and complicated matters such as subsidies
and countervailing measures.  Further, any panel hearing a dispute relating to a WTO agreement on
competition would be under the obligation to read the terms of reference in light of the substantive
provisions of that agreement.  If the agreement was drafted along the lines that had been proposed,
this would rule out the intervention of a panel in individual decisions and in de facto discrimination.Regarding the role of the Appellate Body, consistent with current WTO practices the scope of the any
review would be strictly limited to issues of law covered in the panel report and legal interpretation
developed by the panel.  Consequently, the Appellate Body could not examine or gather new evidence
because it was bound by the initial panel proceeding.
124  The view was also expressed that the
establishment of a permanent group of experts might have the effect of expanding the scope of disputesettlement down the road.  Article 13 of the DSU already empowered panels to seek technical advice
should the need arise.  The establishment of a permanent expert group could only be justified if the
substantive obligations in an multilateral framework on competition policy were to cover the
application of laws and regulations in individual cases which would be fact-intensive, complex, and
technical.
125
88. Recognizing the extent of heterogeneity between Members in competition policy experience,
the point was made that in a hypothetical hybrid system the application of a dispute settlement
mechanism could be limited to the fundamental cases only, followed by expansion of its application
as experience with a WTO competition framework grew over time.126  Addressing this approach, the
point was made that this would be consistent with the main thrust of the agreement which was topromote the culture of competition throughout the world, through cooperation and know-how transfer,
and avoid disputes.
127
89. Pursuing the debate, the point was made that, in a recent paper, Professor Ehlermann, the
former Chairman of the Appellate Body, had observed that "already under existing trade rules,
national competition law and practice are not exempt fr om, but rather subject to, the application of the
dispute settlement system.  Both competition laws as such and their application in individual cases
must comply with the substantive standards of the WTO Agreement [an example is Art. III.4 ofGATT on national treatment], and complaints can be brought against both."
128  If new binding rules
were to be developed under a possible multilateral framework on competition policy, it would only be
logical that the application of laws, regulations, and guidelines would also be subject to such rules.
This, however, could impose significant and far-reaching new obligations on Members.129
90. In response, the point was accepted that jurisprudence relating to general provisions of the
WTO agreements made it clear that they were potenti ally applicable to law enforcement procedures as
well as substantive laws and requirements, and could indeed give rise to dispute settlement proceedings
                                                     
122 M/22, paragraph 85.
123 M/22, paragraph 85.
124 M/22, paragraph 73.
125 M/22, paragraph 86.
126 M/21, paragraph 77.
127 M/22, paragraph 90.
128 Claus-Dieter Ehlermann and Lothar Ehring, WTO Dispute Settlement and Competition Law
(European University Institute Florence, Policy Paper 02/12 (2002)).
129 M/22, paragraph 86.WT/WGTCP/7
Page 24
in particular cases involving the administration or enforcement of competition law.  However, by
definition, cases brought under the existing WTO agreements as opposed to a possible multilateral
framework on competition policy would be decided principally according to the principles embodied
in those general provisions and related jurisprudence.  In contrast, a multilateral framework offered
the advantage of explicitly taking into account the operational exigencies of competition law.  As towhether there was any precedent in the WTO agreements for focusing on de jure  rather than de facto
violations, the Agreement on Subsidies and Countervailing Measures, Article 3.1(a) referred to 'in
law' or 'in fact' whereas Article 3.1(b) did not; as a result, the latter provision had been consistently
interpreted as applying only to de jure violations.  Furthermore, the view was put forward that
resorting to dispute settlement would be a measure of last resort, aided by the potential for a general
consultation provision which would be included in  the multilateral framework, affording WTO
Members an opportunity to consult bilaterally and privately on matters important to them but whichwere felt to be inappropriate for discussion in a broader context of a Competition Policy
Committee.
130
91. Three broad visions were put forward as to the f undamental role of peer review in the subject
area of competition policy in the framework of the WTO.  First, the view was expressed that peer
review was an appropriate complement to, but not a substitute for, application of the disputesettlement mechanism, and perhaps was not even best characterized as a compliance mechanism.
Rather, it was principally a capacity building tool that would help all Members to improve the
effectiveness and efficiency of their competition regimes, over time.
131  Second, the view was
expressed that the benefits of dispute settlement in a multilateral framework on competition policy
were unclear, and that peer review was a more suitable compliance mechanism in this area.  In thissense, it was a substitute for dispute settlement and would be grounded in and function in relation to a
clear set of provisions or non-binding obligations to be negotiated by Members, though it also had
important benefits as a capacity building and cooperation promoting tool.
132  Third, the suggestion
was made that implementing a system of peer reviews was, in and of itself, the best way of carrying
forward the WTO's work in this area, without presuming the existence of any related set of obligationsor commitments.
133
92. As to the general benefits of peer review, the points were made that it would provide a
non-adversarial forum to query and better understand other Members' policies and practices with the
goal of sharing best practices and improving domestic policies and institutions; that it would allow
Members to better understand each other's competition laws and policies, and their enforcement; that
it would facilitate learning through sharing of experience and expertise, which was consistent with the
organic way in which the system of competiti on laws that existed today had developed, namely
through the cross-fertilization of ideas; that it would not only improve domestic enforcement but,
because competition agencies often dealt with cross-border issues, might also result in benefits to the
international trading system; that it would contribute to the transparency of competition laws and
policies and their implementation and promote voluntary convergence gradually, over time.134 In
addition, peer review would promote international cooperation.  Through participation in peerreviews, competition policy officials from different countries not only learnt more about one another's
policies, they also made increased personal contacts, which would encourage increased international
cooperation in implementing competition laws and policies.
135  It would encourage constructive
problem-solving, by providing a forum for Member s who had concerns about the reviewed Member's
laws or practices to raise those concerns and by bringing together countries that had confrontedsimilar problems in the past and could recommend practical solutions from their own experience.
                                                     
130 M/22, paragraph 98.
131 M/21, paragraph 66; see also M/22, paragraph 90.
132 M/21, paragraph 68; M/22, paragraph 82.
133 M/22, paragraph 77.
134 M/21, paragraph 68; M/22, paragraph 77.
135 M/22, paragraph 77.WT/WGTCP/7
Page 25
Finally, peer review would respond directly to the capacity building objectives of the Doha
mandate.136
93. The view was also expressed that while all Members could benefit from peer review,
developing countries could especially benefit, both from being the subject of a review and from
participating in the reviews of other jurisdictions.  There was a high degree of commonality of issuesfacing competition agencies – e.g., institutional design, independence,  setting priorities given scarce
resources, handling of cross-border issues, etc. – so that most of the issues relevant to developed
country authorities would also be relevant to developing country authorities as well.  Taking part in
peer reviews was likely to be a highly efficient way for developing countries to increase their
knowledge base, without a burdensome resource requirement.  By participating in peer review
sessions, developing countries could broaden and d eepen their understanding of competition issues,
and put that knowledge to work toward improving their domestic systems.  Over time, the peer reviewprocess would contribute to a key goal of developing countries seeking to establish competition
policy: the dissemination of a culture of competiti on.  A peer review mechanism could be flexible,
recognizing the needs of developing countries.  It could differentiate among Members based on, for
example, their levels of development or their experience with competition law and policy.  Experience
with sponsored peer review of competition authorities in the OECD Competition Committee hadshown that recommendations from a peer review process, and the accompanying international
support, could be a welcome stimulus for a reviewed member to making needed and desired changes
to its domestic competition regime.  A recent example involved Greece, which had endorsed the
OECD's recommended improvements to its competition regime, and implemented substantial changes
based on the OECD report.  OECD peer review  had recently been applied to two non-OECD
developing countries: South Africa and Chile.  Based on the successful experience with these two
reviews from the point of view of the examiners and the examined parties, other non-OECD members
had expressed interest in being reviewed.  Introdu cing competition peer review into the WTO would
make the benefits of such reviews available to a much wider range of countries, and particularly to
developing countries.
137
94. The point was made that multilateral peer review mechanisms had three common
characteristics:  (i) they involved a committee of experts;  (ii) they represented a collegial form of
monitoring compliance and progress;  and (iii) they entailed interactive investigation.  The objectives
of such mechanisms might include providing po licy advice, encouraging policy co-ordination and
cooperation, gathering and disseminating information and best practice models, and providing
technical assistance and aid.  Some existing and proposed peer review mechanisms that could be
relevant to the design of a competition policy review mechanism and that were mentioned in theGroup included:  (i) the peer review of Individual Action Plans in the APEC System;  (ii) the OECD
Country Reviews of Regulatory Reform (specifica lly the Competition Policy Reviews);  (iii) the
WTO Trade Policy Review Mechanism (TPRM);  (iv) the OECD Economic and Development
Review Committee Economic Surveys;  (v) the IMF Country Surveillance Mechanism (Article IV
Reports);  (vi) the IMF-World Bank Financial Sector Assessment Program (FSAP);  (vii) the OECDBribery Convention monitoring program;  and (viii) the Competition Policy Review Mechanism in the
proposed Free Trade Area of the Americas.  Taking account of these points of reference, the view was
expressed that a competition policy review mechanis m would have to resolve certain key issues, for
example:  (i) size, scope and coverage;  (ii) definition of peers;  (iii) participation and (iv) costs and
resource implications.
138
95. Various suggestions were put forward as to how  a system of peer reviews might function in
the WTO.  One view was that the system should be demand-driven and voluntary.  Independent
review on a demand-driven basis would be most efficient.  In particular, competition policy peer
                                                     
136 M/22, paragraph 77.
137 M/22, paragraph 78.
138 M/21, paragraphs 86 and 87.WT/WGTCP/7
Page 26
reviews would be conducted on the basis of appl ication by the Member to be reviewed and in
accordance with the applicant's needs.  As to the characteristics of the peer review forum, the
suggestion was made that it would be important to establish a WTO competition policy committee,
which would replace the Working Group and would serve as a forum to share information and
experience among Members.  A competition policy review mechanism would also be most efficientlyimplemented by utilising such a competition policy committee.  For cases requiring detailed
examination, it would be useful to establish a peer group consisting of specific peer Members and
outside experts knowledgeable about such projects.  In order to make the system more efficient, the
process would be started by an application for review, followed by a submission of reports by the
countries to be reviewed and, where necessary, a pre-review examination by the review group. That
would be followed by a reviewing meeting, where Members could have discussions in order to
prepare a review report, including policy recommendations.
139
96. Another view was that, given that the WTO was an international organization based on
binding rules, it would be more meaningful for peer  review in the WTO to be of binding nature than
purely voluntary as in other international organizations, such as the OECD. In a multilateral
framework on competition policy in the WTO, peer revi ew should aim at helping to facilitate sharing
of information and experience between Member countries, to enhance transparency in enforcement ofcompetition law and policy, thereby enhancing international cooperation. Such a process would have
the following features:  (i) targeting of all Memb er countries, with the proviso that developing
countries would benefit from appropriate grace periods; (ii) follow-up review of the implementation
of the policy recommendations suggested in peer review; (iii) publication of final reports and
information including through the Internet, to promote compliance through peer pressure.  Actual peerreviews would be carried out in three stages:  (i) at the investigation stage, a Member country under
review would be required to draw  up a report including a brief overview of its competition law and
policy enforcement, in accordance with a standard preliminary review list, and to present it to the
Secretariat. The Secretariat would draw up its report mainly based on the government report; (ii) at
the examination stage, all Member countries in the Competition Committee would discusscompetition law and policy enforcement of the given Member country on the basis of the Government
Report and the Secretariat Report.  The Secretariat would then prepare a final report drawing on the
views expressed; (iii) at the dissemination stage, the government report, the final Secretariat report
and minutes would all be disclosed, thereby enhancing transparency and confidence in the system.
140
Still other delegations indicated that they did not wish to offer specific suggestions as to how thesystem would work at this time.
141
97. The view was expressed that important synergie s would be realized between a system of peer
review and an enhanced commitment to technical assistance in this area.142  To facilitate this, it was
desirable to select countries with some experience in competition policy enforcement to be reviewed
first. In this way, more experienced countries could provide developing countries with useful
information on their experience in enforcing competition law and policy, which could contribute to
easing developing countries' concerns about introduction and enforcement of a domestic competitionlaw and policy.  According to this view, matters to be examined in the review should include core
principles, hardcore cartels, voluntary cooperation and technical assistance stipulated in the Doha
Development Agenda.
143
98. The view was also expressed that it was important to avoid overlap with existing peer review
systems.  In this regard, the point was made that peer review in the WTO could focus on matterslinked to a WTO agreement on competition.  For example, for a developed country, this could include
                                                     
139 M/21, paragraph 70.
140 M/22, paragraph 79.
141 M/22, paragraphs 74 and 78.
142 M/21, paragraph 73; M/22, paragraphs 91, 93 and 95.
143 M/22, paragraphs 75 and 80.WT/WGTCP/7
Page 27
the question of how well it cooperated with competition authorities in other countries, particularly
developing ones, and its provision of competition-related technical assistance and capacity building to
those countries. For a developing country, it could include how well a culture of competition was
being established and whether knowledge of the competition law and regime had been successfully
propagated in the public and private sectors.  It was noted that UNCTAD had also offered to
undertake peer reviews; opportunities for synergies could be explored with that Organization.144  The
view was also expressed that the WTO TPRM was a peer review mechanism that covered a wide
range of trade policy of a given WTO Member.  Therefore, its scope and goals were different from
those of the proposed competition policy review mechanism.145
99. On the issue of whether peer review in the WTO would function as a complement to dispute
settlement; as a substitute for dispute settlement; or as a focal point of activity in its own right, a range
of views was expressed.  One view was that use of peer review as a substitute for dispute settlementcould distort its true purposes, leading it to be perceived as an adversarial mechanism when it was not.
According to this view, peer review should not really be used as a compliance mechanism but as a
capacity building tool.
146  A better approach would be a "hybrid" in which narrowly crafted but legally
binding obligations would be enforced through dispute settlement and broader issues, not necessarily
limited to formal obligations, were addressed through peer reviews.  Alternative formulations of such
an approach were offered.147  Another issue was that peer review might be an ideal compliance
mechanism for the type of agreement that was now being contemplated – with no binding obligations,
it would ensure that individual enforcement decisions were not reviewed or challenged.  At the same
time, it might allow Members to explore the systemic application of competition laws and policies
over time.148  As noted, still another view was that peer re view would be a focus of interest in its own
right, with no presumption of a related set of obligations or commitments. 149
100. The view was also expressed that, in the absence of some kind of dispute settlement
capability, economically weak countries would be fo rced to comply with a multilateral framework
through peer and other pressure, whilst there would not be any mechanism in place to make the morepowerful players comply.  In this context, the benefits of a competition policy review mechanism,
which in any case would put pressure on the limited resources of Members, were questioned.  If
necessary, reviews could be undertaken in other fora such as UNCTAD.
150
III. POSSIBLE ELEMENTS OF PROGRESSIVITY AND FLEXIBILITY THAT MIGHT BE
INCLUDED IN A MULTILATERAL FRAMEWORK ON COMPETITION POLICY
101. The This matter was discussed by the Working Group at its meetings of 20-21 February 2003
and 26-27 May 2003.  Written submissions on this item were provided by the representatives of
Hong Kong, China; Australia ; and the European Community and its member States  (documents
WT/WGTCP/W/224, 232 and 234, respectively).  Japan, Canada , Thailand , Norway , South Africa ,
Chile, Switzerland,  Venezuela , Brazil , India  and the Philippines  made oral statements or posed
questions on this item.  The observer from the OECD provided an update on relevant activities of her
delegation.
102. The discussion delved into the following issues: (i) the application of a multilateral
framework on competition policy to developing countries; (ii) specific elements of flexibility and
progressivity, including exclusions and exemptions; (iii) the compatibility of a multilateral framework
                                                     
144 M/22, paragraph 75.
145 M/22, paragraph 80.
146 M/21, paragraph 66.
147 M/21, paragraphs 69, 72, 77 and 81.
148 M/21, paragraph 68.
149 M/21, paragraph 77.
150 M/22, paragraph 84; see also M/21, paragraph 76.WT/WGTCP/7
Page 28
on competition policy with Members' industrial and other policies; (iv) S&D and core principles;
(v) the cost of compliance with a multilateral framework on competition policy and (vi) S&D and
hardcore cartels.
103. The point was made that in order to enable Members to make an informed decision on
whether or not they would be ready to undertake any multilateral obligations in the area of trade and
competition policy, it was necessary for them to know the "breadth" and "depth" of possible
obligations as well as the provision of any flexibility in areas where they had difficulties or limited
capacities.  Only with such knowledge would Member s be in a position to assess realistically the costs
and benefits of a possible multilateral framework and its practical implications for their economies.
Given the extensive diversity among Members in their levels of economic development, industrial
policies, socio-economic circumstances, legal traditions, competition approaches, institutions, culture,etc., it was to be expected that a possible multilat eral framework would not be entirely consistent with
the present regimes of certain Members.
151  Any effort to harmonise regimes  would be doomed to
failure.152  In any case, obligations under a possible mu ltilateral framework w ould carry implications
in terms of policy, legislative and institutional changes, and resources requirements.  Consequently,
flexibility in the form of S&D should be considered for those economies without competition laws,regardless of whether the country was developing or not.
153  One quarter of WTO Members did not
have a competition law; some of them could have capacity constraints, while others might choose not
to enact competition laws because of valid domestic policy concerns.  There was no reason why the
concerns of these economies should be sidelined.154
104. Regarding the need for flexibility and progressivity to address the above-mentioned concerns,
the point was made that any multilateral framework would have to be adapted to deal with a variety of
special situations155 and to avoid incurring excessive burdens, for example in connection with the
development of regulations dealing with hardcore cartels.156  In this connection, the view was
expressed that the current proposal for a multilateral framework already embodied a high degree offlexibility.  Essentially, it called only for incorporation of the three core principles as well as the ban
on hardcore cartels into domestic legislations, accompanied by sanctions that have a sufficient
deterrent effect.  This was a modest but still meaningful level of ambition.
157  The point was also
made that flexibility could be built into both the "breadth" and "depth" of obligations.  In terms of
"breadth", obligations under different core principles or major issues could be divided into two types
of building blocks: (i) common obligations; and (ii) optional obligations.  Common obligations could
encompass general obligations and disciplines as well as any best-endeavour provisions (e.g. on thecore principles and capacity building) that were to be subscribed by all Members.  Optional
obligations could include non-binding guidelines or specific commitments that were to be adopted by
each Member individually and voluntarily.  Detailed elements under the core principles as well as
other elements set out in paragraph 25 of the Doha mandate (i.e. hardcore cartels and voluntary
cooperation) should be in this category.  Individual Members would be free to choose what optionalobligations they agreed to abide by and what sp ecific commitments to undertake, when they were
ready to do so.
158  This approach provided adequate flexibility for Members to undertake specific
commitments commensurate with their needs and circumstances, without impeding their pursuit of
other domestic policy goals.  This could also help minimise the compliance costs of Members,
including those without horizontal competition laws.  In terms of "depth" of each building block, i.e.how detailed/burdensome each type of obligation should be, it was believed that a consensus on a
                                                     
151 M/21, paragraph 90.
152 M/21, paragraph 94.
153 M/21, paragraphs 90 and 92.
154 M/21, paragraph 90.
155 M/21, paragraph 91-92; M/22, paragraph 107, 110 and 111.
156 M/21, paragraph 92.
157 M/22, paragraph 108.
158 M/21, paragraphs 91-92.WT/WGTCP/7
Page 29
satisfactory outcome was only achievable by avoidi ng overly prescriptive and burdensome provisions
that entailed significant adjustments to domestic regimes, and avoidance of prescribing the means
through which relevant obligations were to be fulfilled by Members.159
105. Progressivity and flexibility also implied admitting exceptions and exemptions, transitional
periods  and the use of regional legal instruments as opposed to national legal instruments.160  One
further point was emphasised:  a new and more progressive approach to the provision of technical
assistance and capacity building was necessary, to ensure benefits from as early stage as possible.  In
particular, the WTO competition policy committee would play a key role in implementing and
generating support for technical assistance and capacity building.161
106. As regards exemptions and exceptions, the point was made that these would be available for
all Members that had a competition law162, subject to requirements for transparency and periodic
review.163  The point was also made that exceptions were not only part of competition policy, but also
reflected a wide variety of public goals, be they cultural, social or income distribution policy, all of
which had little to do with trade.164  Exceptions were of particular significance for those developing
countries that did not yet have a domestic competition law or whose law was still relatively recent anduntested.
165  However, the point was made that it would not be acceptable for the principle of
transparency to be forsaken, nor could competition itself become the exception to the norm of
exceptions.166  The view was also expressed that national governments had to maintain sovereignty on
the question of exceptions and exemptions even if th is resulted in some loss of competition, although
this was qualified by the suggestion that exceptions should be imposed predominantly for pro-efficiency reasons.
167  More specifically, justifications for exceptions and exemptions included the
following considerations:  risk and uncertainty, facilitating innovation, collection and dissemination of
information, and counterbalancing unequal bargaining power.168  Further procedural safeguards and
principles for granting exemptions were outlined as follows:  (i) all interested and affected parties at
the national level should be involved when granti ng exemptions; (ii) exemptions should restrict
competition as little as possible; (iii) exemptions  should be time-limited and periodically reviewed;
(iv) the reviews should clearly identify winners and losers and their impact on economic efficiency
and broader economic interests; (v) there must be a realization that exemptions in one sector might
perpetuate or induce distortions that could affect the efficiency of economic activity conducted in
other sectors; consequently, exemptions should be used with caution so as to not undermine the
overall functioning of competition.169  The underlying principle was the trade-off between efficiency
and fairness.  Any obligations to be introduced in this area needed to take account of this tradition.  Aswell, the point was made that exceptions in competition policy and exceptions in trade policy needed
to be distinguished.  Exceptions in competition policy could have an effect on market access and
investment.  Nonetheless, it was important to point out that the goals of competition policy, while
allied to those of trade liberalization, were not id entical.  The whole question of exclusions had to be
placed in a broader public policy perspective in which trade policy was but one element.
170  On this
issue, illustrating the flexibility of special & differentiated treatment, it was noted that there were
generally four types of exclusions:  (i) partial ex clusions, meaning that some general competition law
                                                     
159 M/21, paragraph 91.
160 M/22, paragraph 106.
161 M/22, paragraph 109.
162 See, generally, M/21, paragraph 92; M/22, paragraphs 106-109 and 111.
163 M/22, paragraph 106, see also M/21, paragraph 104.
164 M/21, paragraph 95.
165 M/22, paragraph 111.
166 M/21, paragraph 104; see also paragraphs 115 and 110.
167 M/21, paragraph 113.
168 M/21, paragraph 113, citing the UNCTAD Series on Issues in Competition Law and Policy, titled
"Exemptions and Exceptions".
169 M/21, paragraph 113.
170 M/21, paragraph 93.WT/WGTCP/7
Page 30
provisions would not apply and that the gaps were not governed by any other competition law rules,
including regulations; (ii) partial exclusions with substitution, meaning that a dedicated competition
law or sectoral rules were developed; (iii) total exclusion, meaning that no competition law provisions
applied; and (iv) total exclusion with substitution, meaning that special laws or rules applied.
107. The suggestion was made that an important aspect of flexibility would be the ability to
employ regional as opposed to national competition law instruments.  A good precedent for this
approach was to be found in the history of the European Community, in which regional competition
rules had been central to the original EC treaty and the Community had only recently reached a point
at which all individual member states had their own regimes.  Further to this point, the suggestion was
accepted that, below a certain size, a country might not benefit from a national competition policy;
regional instruments and competition authorities were  the logical solution in these circumstances and
would be a perfectly valid way of implementing the kind of multilateral framework that had been
proposed.171  CARICOM and COMESA prov ided two additional examples of innovative approaches
to the implementation of competition policy at the regional level.172
108. The view was expressed that the agricultural sector was not only an important carve-out, it
was a huge one, perhaps too large to be dismissed merely as an example of  the use of exclusions as a
way of managing tensions between competition policy and industrial policy.  The contrary view of
some Members was disappointing, in that it ignored competitive realities in this sector.  Subsidies
needed to be seen as an important instrument of competition policy and law.173  In response, the point
was made that, in the European Community, competition rules applied to the agricultural sectorexcept where they were displaced by specific regulations that established relevant limitations.
Reference was made, in this regard, to a recent case in which firms had been sanctioned by the EC
Commission for engaging in a cartel in relation to a particular agricultural product.  Clarification was
also provided that, in the Community, the term "exe mption" did not refer to an outright "exclusion"
from the application of the competition rules but was used more in the sense of an "authorization".
174
109. Regarding the relationship between competition policy on the one hand and social and
industrial policies on the other, the view was expressed that examples provided in a submission by
Australia (document WT/WGTCP/W/232) showed how these could co-exist side-by-side. In
particular, the examples showed that a vigorous competition policy can coexist with policies designed
to achieve specific social and industrial goals.  This was implicit in a mixed approach to governance
relying on market forces and selective government intervention, and was part of the premise that "onesize does not fit all."
175  The related point was also made that, for some countries, developmental
considerations would be paramount whereas for other countries, other dimensions of a historical or
cultural nature might figure prominently.  In any case, harmonization of the substantive elements of
competition law was not desirable.  Convergence wa s a valid goal and was best achieved through the
development of a common approach through dialogue, rather than through detailed and specificcommitments or common standards.
176
110. The point was made that the Study on Issues Relating to a Possible Multilateral Framework
on Competition Policy (WT/WGTCP/W/228) had identi fied five different ways in which industrial
policy objectives could be accommodated in domestic policy frameworks and any conflict withcompetition law could be managed.
177  This supported the view that a multilateral framework on
competition policy would not have to limit the policy space available to developing countries to
                                                     
171 M/21, paragraph 103.
172 M/22, paragraph 109.
173 M/22, paragraph 114.
174 M/22, paragraph 117.
175 M/22, paragraph 106, see also M/21, paragraph 23.
176 M/21, paragraph 93-94.
177 See paragraph 68, above.WT/WGTCP/7
Page 31
implement other important policies that responded to their social, economic and developmental
objectives.178  The example was also given of how the industrial policy of a Member was incorporated
into competition policy; through sectoral distinctions and exemptions limited to 18 months.179 The
view was also expressed that further clarific ation was needed as to how the concept of non-
discrimination would relate to the broader concept of economic, industrial and developmental policyspace.  Flexibility as to how competition la w was enforced was vital in this regard.
180
111. As to whether progressivity and flexibility themselves should have the status of a core
principle, the point was made that these were in a different class from those elements that had been
described as core principles in the paragraph 25 of the Doha Declaration.  In particular, core
principles had been described as absolute, while progressivity and flexibility dealt with transitional
and comparative issues.  This, however, did not diminish their importance.181  The point was also
made that flexibility and progressivity cut across  the entire WTO system rather than being limited to
particular sectors or agreements.182
112. Concern was also expressed that, regardless of whether competition law was enforced through
administrative decisions or judicially, it could entail enormous costs and difficult institutionaladjustments, especially for developing countries in the early stages of implementing a law.
183  T h e
view was also expressed that such concerns were over-stated, for the following reasons: (i) it was not
necessarily an issue of dividing between developed and developing countries, since many developing
countries also had competition regimes in place; (ii) transitional periods, perhaps long ones for very
poor countries, would make any costs bearable; a nd (iii) technical assistance and know-how from
more experienced countries would minimize related compliance costs.  In any case, as had been
shown in the Study of Issues Relating to a Possible Multilateral Framework on Competition Policy
(WT/WGTCP/W/228), the costs of establishing a competition authority were less than was commonly
thought and were likely to be dwarfed by the gains that would arise from competition law
enforcement, for example the prevention of bid rigging.184
113. The view was expressed that a commitment to flexibility should not allow the most egregious
anti-competitive practices to continue.  A related observation was that delaying the assumption of
obligations did not reduce the costs that needed to be incurred – it simply deferred them to a later
date.  What was needed to defray such costs was an enhanced commitment to technical assistance.  If
properly designed and adequately funded, technical assistance and capacity-building could greatly
facilitate developing countries' progress in complying with WTO rules.185  This call was reflected in a
later point that a more progressive approach to the provision of technical assistance and capacity
building was needed.186  This was perceived by some delegations as a desire to focus on domestic
enforcement of competition law and policy and the creation of a limited and simpler form of
international enforcement – the creation of a competition policy without a competition culture.187  In
response, the view was expressed that a competition culture would not be born in a country if thegovernment did not take certain actions to create an environment where it could flourish.  Establishing
a competition policy regime was one of the most useful elements that a government could put in place
to promote a competition culture, taking into account economic circumstances and retaining flexibility
to adapt when conditions changed.
188
                                                     
178 M/22, paragraph 108.
179 M/21, paragraph 109.
180 M/22, paragraph 113.
181 M/22, paragraph 106.
182 M/22, paragraphs 108 and 39.
183 M/22, paragraph 113, see also M/21, paragraph 114.
184 M/21, paragraph 113.
185 M/21, paragraph 96.
186 M/22, paragraph 99, see also M/21, paragraph 111.
187 M/21,paragraph 98.
188 M/21, paragraph 98.WT/WGTCP/7
Page 32
114. Responding to comments made by one delegation, a discussion took place on three possible
dimensions of flexibility in the context of the proposed ban on hardcore cartels: first, the use of
horizontal vs. sectoral approaches; secondly, with respect to implementation and enforcement; and
thirdly, a legislative vs. an administrative approac h.  Looking at the horizontal vs. sectoral approach,
there was no reason why a WTO Member should not implement a ban on hardcore cartels sector by
sector, as one Member had explicitly acknowledged to doing.189  Whilst admittedly this would involve
more work for the WTO Member compared with a horizontal law, a priori no reason existed why this
should not be the case.  If a ban on hardcore cartels was introduced for certain sectors before others,
then the sectors which were not covered by a ban on hardcore cartels would logically be exclusions.
Yet this was felt to be a question for the negotiations phase; if the Group started talking about
exclusions now, it would effectively be starting negotiations.  Similarly, there was no reason whyimplementation and enforcement had to be done via the creation of authority called an antitrust or
competition authority, though an increasing number of countries found this to be an efficient
approach.  There was a variety of other ways, for instance through the granting of additional powers
to some existing body or again, on a sector by sector basis.
190
115. Concerning the two-tier approach to transparency proposed by one delegation, it was felt that
whilst the first level (notification of laws) was logically part of a notification requirement, the second
level (notification of government action) was often a part of industrial policy and was never
incorporated into competition policy – these regulations were part of the way a government chose to
regulate or not any particular sector of economic activity.  In any case, competition law took suchregulations as a given.  These situations would not be covered by a WTO competition agreement but
might be subject to transparency requirements elsewhere in the WTO.  The view was expressed that
procedures for transparency should not be overly burdensome, to the extent that they are clearly
defined.
191  On the other core principles, the view was expressed that the notion of non-discrimination
proposed in the context of competition was not equivalent to absolute non-differentiation of treatmentof all economic operators. Rather, non-discrimination simply held that the nationality of a firm was
not in itself a valid reason for discrimination.  On the topic of procedural discrimination, in
recognition of an earlier point that a system of pro cedural fairness had to fit into the deep legal and
judicial administrative tradition of a given WTO Member, the point was made that the core of the
procedural fairness principle and its essential elements had to be identified; the peripheral elements
being left to individual countries.
192
D. TECHNICAL ASSISTANCE AND CAPACITY-BUILDING, AS CALLED FOR BY
PARAGRAPH 24 OF THE DOHA MINISTERIAL DECLARATION
116. Paragraph 24 of the Doha Ministerial Declaration states that Ministers recognize the needs of
developing and least-developed countries for enhanced support for technical assistance and
capacity-building, including policy analysis and development so that they may better evaluate theimplications of closer multilateral cooperation for their development policies and objectives, and
human and institutional development.  To this end, it  calls for work to be undertaken in cooperation
with other relevant intergovernmental organizations, including UNCTAD, and through appropriate
regional and bilateral channels, to provide strengthened and adequately resourced assistance to
respond to these needs.  In this regard, in the course of each of its meetings in 2003, the WorkingGroup heard reports on activities undertaken pursuant to the mandate given in paragraph 24, whether
by the WTO Secretariat, other intergovernmental organizations and/or by Members acting through
bilateral and regional channels.
                                                     
189 M/21, paragraph 109.
190 M/22, paragraph 116.
191 M/21, paragraph 97.
192 M/21, paragraph 99.WT/WGTCP/7
Page 33
117. In the course of the year, the European Community and its member States (document
WT/WGTCP/W/223) and Australia (see relevant portions of document WT/WGTCP/W/232)
provided written contributions summarizing their activities relevant to the mandate in paragraph 24.
The Group also had before it a Note by the Secretariat summarizing the Secretariat's activities in
response to paragraph 24 (WT/WGTCP/W/230). The representatives of Brazil, China , Egypt,  the
European Community and its member States, Lesotho , Japan , Korea , Thailand  and Tunisia  made oral
statements or posed questions on this item.
118. The following Members informed the Working Group of specific activities relevant to
paragraph 24 that had taken place or would take place at their initiative or with their cooperation:
Thailand,193 Lesotho,194 China,195 Korea,196 Australia,197 Japan198 and Egypt199.  In addition, detailed
updates on relevant activities were provided by UNCTAD and the OECD at each meeting of theWorking Group.
200
119. The following were the main types of activities that were undertaken by the Secretariat in
response to the mandate set out in paragraph 24 of the Doha Ministerial Declaration:
• First, the Secretariat had itself organized a number of regional workshops on the relationship
between competition policy, economic development and the multilateral trading system inaddition to the options before the WTO in this area, in various parts of the developing world. By
the end of July 2003, workshops of this nature will have been organized in Guatemala City, for
the benefit of the countries of Central America
201; in Libreville, Gabon, for the benefit of the
countries of French-speaking Africa; in Port-Louis, Mauritius, for the benefit of the countries ofEnglish-speaking Africa; in Bangkok, for the benefit of the countries of the Asia-Pacific region;
in Kingston, Jamaica, for the benefit of the countries of the Caribbean region;
202 in Cairo, for the
benefit of the countries of the Arab and Middle-Eastern region; in Buenos Aires, for the benefit of
the countries of Latin America;203 in Nairobi, for the benefit of the countries of both English and
French-speaking Africa and in Budapest, for the be nefit of the countries of Central and Eastern
Europe and Central Asia.204
• Second, the Secretariat had participated in an extensive series of workshops that have been
organized by UNCTAD, in addition to two intern ational conferences that were co-organized by
the OECD,205  on matters relevant to paragraph 24 and the proposals before the WTO in this area.
• Third, the Secretariat had organized two one-day Symposia in Geneva on the various issues
before the WTO in relation to the Doha mandate and aspects of the current proposals for a
multilateral framework on competition policy.
• Fourth, the Secretariat had organized two national workshops on the same set of topics that have
been addressed in its regional workshops – i.e, the relationship between competition policy,
                                                     
193 M/21, paragraph 125.
194 M/21, paragraph 126.
195 M/21, paragraph 127.
196 M/21, paragraph 129.
197 M/22, paragraph 123.
198 M/22, paragraph 125.
199 M/22, paragraphs 126 and 127.
200 See e.g. M/22, paragraphs 128 and 129.
201 Organized in cooperation with the Inter-American Development Bank (INTAL).
202 Organized in cooperation with the Inter-American Development Bank (INTAL).
203 Organized in cooperation with the Inter-American Development Bank (INTAL).
204 For further details, see M/21, paragraph 120 and document WT/WGTCP/W/230.
205 One of these, the Seoul Competition Forum and Workshop (November 2002) was also co-organized
by UNCTAD.WT/WGTCP/7
Page 34
economic development and the multilateral trading system in addition to the options before the
WTO in this area – for China and Lesotho.
• Fifth, modules on the issues before the WTO in the area of trade and competition policy had been
presented in various multi-subject training courses and other activities organized by theSecretariat, both in Geneva and in the regions.
• Sixth, and in response to a request by the Working Group (WT/WGTCP/M/18, paragraphs 96-98)
pursuant to the mandate in paragraph 24 of the Doha Declaration, a study had been prepared, with
the assistance of a consultant, Dr. Simon Evenett, on Issues Relating to a Possible Multilateral
Framework on Competition Policy (document WT/WGTCP/W/228, issued 19 May 2003). 
206 The
study had responded, in particular, to the need for "policy analysis and development" which was
included as part of the wider mandate for technical assistance and capacity building in
paragraph 24.207
120. In carrying out the activities referred to above, the Secretariat had cooperated extensively with
UNCTAD and, to a lesser extent, with other intergovernmental organizations active in this area.  InJanuary 2002, the Secretariat had organized a meeting of interested representatives of the Secretariats
of UNCTAD, the OECD and the World Bank to discuss possible approaches to implementing the
mandate in paragraph 24 of the Doha Declaration.  At the meeting, the participating agencies had
agreed that cooperation between them should be viewed as an ongoing process, that they would
remain in regular contact and that they would pe riodically exchange information on upcoming events
with a view to facilitating coordination and avoiding unnecessary duplication (WT/WGTCP/M/17,
paragraph 58).
121. Following the above-mentioned meeting, UNCTAD had been invited to and had contributed a
speaker to all of the regional and national workshops that have been organized by the Secretariat inthe area of the interaction between trade and competition policy since the Doha Ministerial
Conference.  Similarly, the WTO Secretariat, on the invitation of UNCTAD, had contributed a
speaker to each of the regional workshops and conferences that have been organized by UNCTAD in
relation to the post-Doha mandate on trade and competition policy.  The Secretariat had also benefited
from the participation in several of its workshops by representatives of the OECD Secretariat (from
both the trade and competition sides of the Secretariat), and had participated in two international
conferences dealing with the issues before the WTO in this area that were co-organized by the OECD.
In addition, a representative of the World Bank had participated in a regional workshop organized by
the Secretariat for the benefit of countries of the Asia-Pacific region, in Bangkok.
122. In the course of the discussion on this item, a number of observations and suggestions were
made by Members concerning capacity-building programmes.  In particular, the suggestions were
made that (i) in addition to technical cooperation, the promotion of competition policy in developing
countries was useful in enhancing the capacity of such countries; (ii) the WTO and other international
organisations should expand technical cooperation beyond organising seminars and training courses
and (iii) the WTO Secretariat should provide in-depth, specialized assistance in regard to competition
policy.  For example, it would be worth having a specialized course on competition policy in addition
to the existing courses that provided modules on a variety of trade-related matters.
208
123. The view was expressed that most developing country Members were at the first stage of
developing their domestic competition laws and policies; their special needs should be fully taken into
account in a multilateral framework on competition policy.  Therefore, the development of such amultilateral framework had to be done in a realistic, practical and progressive approach.  Flexibility
                                                     
206 See discussion in paragraphs 66-72, above.
207 M/21, paragraphs 102-123; see also document WT/WGTCP/W/230.
208 M/21, paragraph 128.WT/WGTCP/7
Page 35
should be preserved at the national level and should also be reflected in a multilateral framework,
particularly for developing countries.  In the context of international cooperation, priority should be
given to the concerns of developing countries.  In order to increase their level of confidence, capacity
building should be carried out as an integral element of the cooperation process.  The 5th Ministerial
Conference in 2003 would decide whether to launch negotiations on the subject of trade andcompetition policy.  Bearing this in mind, technical assistance and capacity building activities were
needed to help developing country Members understand the basic concepts and principles of
competition policy, to analyse their domestic legislation, to provide basic training to government
officials, to establish a culture of competition, to analyse the relationship between competition policy
and market economy and to facilitate the exchange of information and experience among WTO
Members. 
209
E. STOCKTAKING OF NATIONAL EXPERIENCE AND LEGISLATION
124. A written submission relevant to this item was received from Australia
(WT/WGTCP/W/232).  In addition, the delegations of Poland and Morocco  provided oral updates on
developments concerning their national competition regimes.
125. The representative of Poland indicated that his country had faced rapid liberalisation of many
aspects of the economy, necessitating the need to improve enterprise performance and
competitiveness of the Polish private sector which had grown to account for two-thirds of the whole
economy.  Competition had been enhanced in various ways: (i) privatising of state-owned firms;
(ii) facilitating the establishment of new firms; (iii) encouraging competition between new andexisting firms; and (iv) gradual withdrawal of government subsidies and (v) establishing a
competition agency – the Antimonopoly Office.  The agency had played an important role in
encouraging enterprises to compete, improve their efficiency, to increase output and develop new
products.  Fostering competition had only been poss ible on the basis of a framework of understanding
among the government, enterprises, financial inst itutions and individuals, which allowed each actor to
be dealt with closely and transparently.  The Antimonopoly Office had promoted domestic
competition culture by focusing on: (i) public awareness activities; (ii) participation in the process of
forming legislation in order to prevent new laws from introducing anti-competitive solutions;
(iii) participation in the privatisation process in order to eliminate the possibility that state-owned
monopolies become private monopolies; (iv) identification and elimination of barriers of competition;
and (v) international cooperation and technical assistance in order to develop sound and  reasonable
policies.  The competition authority had given priority to market-entry and expansion restrictions incartel and acquisition activities, thus lowering the resource burden.  Competition policy principles
were now incorporated into all other policies.  As a result, foreign investment and ownership
requirements had been relaxed together with further deregulation and privatization of the economy to
enhance competition.  Tensions between competition policy and other governmental policies were
managed so as to avoid compromising the fundamental objective of enhancing competition in theeconomy.  Overall, Poland's experience showed that the competition impacted positively on
development when developed in a flexible and progressive manner.
210
126. The representative of Australia said that his country had recently conducted a review of the
competition provisions of Australia's Trade Practices Act 1974, the overarching competition law in
Australia.  The review, which had been commissioned by the Prime Minister 18 months previously,
had addressed a number of broad questions about the applicability and appropriateness of the Act,
including its implications for the ability of Austra lian companies to compete globally, in the light of
developments such as the impact of globalisation.  Attention had been given to the various interests
that were affected by the competition provisions including the large business sector, the smallbusiness sector and consumers.  The final report based on the review had emphasized that competition
                                                     
209 M/21, paragraph 127.
210 M/21, paragraphs 131-135.WT/WGTCP/7
Page 36
provisions existed to protect the competitive process rather than protecting individual competitors.
The benefits of a comprehensive approach to competition law had also been stressed.  Competition
law was and should be treated as separate and distin ct from industrial policy or industrial targeted
legislation.  Overall, the report had concluded that the competition law of Australia had served the
country well.   It had sustained a competitive environment which had benefited consumers in terms ofservices available and prices, and had achieved an appropriate balance between the prohibition of
anti-competitive conduct and the encouragement of competition.  The majority of the specific
recommendations in the report had been concerned with the fine-tuning of aspects of the legislation
rather than with any fundamental changes of orientation.
211
127. The representative of Morocco informed the Group that his country's competition law
illustrated three fundamental objectives common to all developing countries implementing
competition policy:  (i) establishing an environment favourable to investment by facilitating access to
all sectors and markets, by eliminating public and private obstacles to market entry and by promoting
the development of SMEs; (ii) improving the performance and competitiveness of enterprises
operating in the country with a view to encourag ing them to compete on equal terms with foreign
competitors on foreign markets.  This permitted en terprises to develop "critical mass" with a view to
realizing economies of scale.  The importance of maintaining attention on anti-competitive behaviour
was emphasised, to prevent distortion of fair competition; (iii) protecting consumers against excessive
prices, resulting from cartels and market sharing.  Transparency in implementation of all competition
policy was necessary.  Morocco aimed for the ideal of perfect competition in drafting its competition
legislation.  As part of this approach, the followin g priorities had been put forward:  (i) to address
price fixing and market sharing by applying competition law; (ii) to open monopolies to competition
by doing away with market access barriers and abuse of dominance and (iii) to address economic
concentrations.  Tensions between competition and industrial policies had been managed by the
adoption of a merger law with high thresholds for market control (40%) as well as exemptions to
cartel prohibitions and abuse of dominance where these were justified by efficiency gains andeconomic progress.
212
                                                     
211 Details are available on the Internet at
http://www.treasurer.gov.au/tsr/content/pressreleases/2003/021.asp.
212 M/22, paragraph 134.WT/WGTCP/7
Page 37
ANNEX 1
TEXT OF THE DOHA MINISTERIAL DECLARATION (WT/MIN(01)/DEC/1)
PARAGRAPHS 23-25
(Adopted 14 November 2001)
INTERACTION BETWEEN TRADE AND COMPETITION POLICY
23. Recognizing the case for a multilateral framework to enhance the contribution of competition
policy to international trade and development, and the need for enhanced technical assistance and
capacity-building in this area as referred to in paragraph 24, we agree that negotiations will take place
after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit
consensus, at that Session on modalities of negotiations.
24. We recognize the needs of developing and least-developed countries for enhanced support for
technical assistance and capacity-building in this area, including policy analysis and development so
that they may better evaluate the implications of closer multilateral  cooperation for their development
policies and objectives, and human and institutional development.  To this end, we shall work in
cooperation with other relevant intergovernmental organizations, including UNCTAD, and throughappropriate regional and bilateral channels, to provide strengthened and adequately resourced
assistance to respond to these needs.
25. In the period until the Fifth Session, further work in the Working Group on the Interaction
between Trade and Competition Policy will focus on the clarification of:  core principles, includingtransparency, non-discrimination and procedural fairness, and provisions on hard core cartels;
modalities for voluntary cooperation;  and support for progressive reinforcement of competition
institutions in developing countries through capacity-building.  Full account shall be taken of the
needs of developing and least-developed country participants and appropriate flexibility provided to
address them.WT/WGTCP/7
Page 38 ANNEX 2
CONTRIBUTIONS PROVIDED TO THE WORKING GROUP ON THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY IN 2003
Symbol
(WT/WGTCP/W/-) Member/other source Where introduced
(Reference in Minutes)Topic
W/222 EC and member States M/20, paras. 4-6;
M/21, paras. 30-31Elements of paragraph 25
W/223 EC and member States M/21, paras. 118-119 Technical Assistance and Capacity Building
W/224 Hong Kong, China M/21, paras. 35, 89-91 Elements of Progressivity and Flexibility
W/225 Korea M/21, paras. 3-6 Elements of paragraph 25
W/226 Canada M/21, paras. 3, 20-27, 64 Elements of paragraph 25 / Compliance Mechanisms
W/227 China M/21, paras. 3, 7-11 Elements of paragraph 25
W/228 Secretariat M/22, paras. 5, 17-24 Elements of paragraph 25
W/229 EC and member States M/22, paras. 72-75 Compliance Mechanisms
W/230 Secretariat M/22, paras. 122, 125-128 Technical Assistance and Capacity Building
W/231 Secretariat M/22, paras. 25-35 Element s of paragraph 25 – Procedural Fairness
W/232 Australia M/22, paras. 4-16 Para. 25, Complia nce Mech., Prog. & Flex., TA/CP, Other Business
W/233 United States M/22, paras. 77-78 Compliance Mechanisms
W/234 EC and member States M/22, paras. 49-57, 107 -117 Elements of Progressivity and Flexibility
W/235 Korea M/22, paras. 79-80 Compliance Mechanisms
W/236 Japan M/22, para. 81 Compliance Mechanisms
W/237 Kuwait M/22, paras. 66-67 Elements of paragraph 25
W/238 Kenya M/22, paras. 36-41 Elements of paragraph 25
W/239 Malaysia M/22, paras. 58-60 Elements of paragraph 25
W/240 OECD M/22, paras. 102-103 Compliance Mechanisms
W/241 China M/22, paras. 43-50 Elements of paragraph 25
W/242 Cuba M/22, para. 42 Elements of paragraph 25
W/243 OECD M/22, paras. 102-103 Compliance Mechanisms
W/244 OECD M/22, paras. 102-103 Compliance Mechanisms
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