RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/M/15
14 August 2001
(01-4010)
Working Group on the Interaction
between Trade and Competition Policy
REPORT ON THE MEETING OF 5-6 JULY 2001
Note by the Secretariat
1. The fifteenth meeting of the Working Group on the Interaction between Trade and
Competition Policy took place on 5-6 July 2001, under the Chairmanship of Professor Frédéric Jenny.
2. At the outset of the meeting, the Chairman not ed that, as had been agreed at the informal
meeting of the Working Group on 29 January 2001, the purpose of the meeting was to carry forward
the work of the Working Group as provided for by the General Council in its decision in December
1998 (WT/GC/M/32, page 52).  That decision read as follows:
"The General Council decides that the Working Group on the Interaction between Trade and
Competition Policy shall continue the educative work that it has been undertaking pursuant to
paragraph 20 of the Singapore Ministerial Declaration.  In the light of the limited number of
meetings that the Group will be able to hold in 1999, the Working Group, while continuing at
each meeting to base its work on the study of issues raised by Members relating to theinteraction between trade and competition policy, including anti-competitive practices, would
benefit from a focused discussion on:  (i) the relevance of fundamental WTO principles of
national treatment, transparency, and most-favoured-nation treatment to competition policy
and vice versa;  (ii) approaches to promoting cooperation and communication among
Members, including in the field of technical cooperation;  and (iii) the contribution of
competition policy to achieving the objectives of the WTO, including the promotion of
international trade.  The Working Group will continue to ensure that the developmentdimension and the relationship with investment are fully taken into account.  It is understood
that this decision is without prejudice to any future decision that might be taken by the
General Council, including in the context of its existing work programme."
3. Following the approach used by the Working Group in its meetings in 2000 and as agreed at
the informal meeting of the Group that took place on 29 January 2001, the Chairman suggested thatthe Group organize its work at the current meeting as follows:
- first, to take up the relevance of the fundamental WTO principles of national
treatment, transparency, and most-favoured-nation treatment to competition policy
and vice versa;
- then, to examine approaches to promoting cooperation and communication among
Members, including in the field of technical cooperation;
- next, to consider the contribution of competition policy to achieving the objectives of
the WTO, including the promotion of international trade;
- and finally, to look at other issues that Members wish to raise that are relevant to the
Group's mandate to study the interaction between trade and competition policy.WT/WGTCP/M/15
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In addition, he referred to the Guideline provided in the above-noted decision of the General Council
that the Working Group should ensure that the development dimension and the relationship with
investment should be fully taken into account.  Fo llowing the Group's past practice, it seemed that this
was something which should be done in relation to each of the above four work elements.
4. The Chairman noted that, as was reflected in the Airgram, in framing their interventions,
delegations might wish to bear in mind the points noted in the Updated Checklist of Questions Posed
by Members in 2000 (Job 520) that had been circulated to Members by the Chairman on
24 January 2001 and the additional points that had been brought to his attention by Members in the
consultations that he had held with individual delegations prior to the informal meeting on
29 January 2001, and which he had brought to the attention of the Working Group at the informal
meeting.  At the informal meeting, it had been agr eed that these points, in addition to any others that
Members considered to fall within the terms of the December 1998 decision of the General Council,including those raised in the Updated Checklist of Questions Posed by Members in 2000, could be
addressed by delegations, to the extent they desired, in their written and oral contributions to the
Group during the year, within the terms of General Council's decision.  The points were as follows:
- first, it had been suggested that it would be useful for the Group to continue to place
emphasis on addressing the concerns that had been expressed by some developing
country Members regarding both the general impact of implementing competition
policy on their national economies and the particular implications that a multilateral
framework on competition policy might have for development-related policies and
programs.  In this regard, it had also been suggested that it would be helpful if
countries having these concerns could be as specific as possible about the possibleconflicts or constraints as well as the synergies that they perceived to exist, in order
that they could be addressed as fully as possible in the Group.  For example, any
problems that Members continued to see arising from the application of the principle
of national treatment within the field of competition law and/or policy should be
raised and discussed.
- second, interest had been expressed in continuing exploration of the implications,
modalities and potential benefits of enhanced international cooperation, including in
the WTO, in regard to the subject-matter of trade and competition policy.  In fact, two
dimensions to this interest had been noted.  The first concerned the modalities,
benefits and limitations of cooperation between national competition agencies.  The
second concerned the issue of possible cooperation/interaction between trade and
competition agencies/authorities in dealing with issues that sat astride the twodisciplines.
- a third suggestion had been that it would be useful for the Group to have a continuing
focus on the issue of capacity building in the area of competition law and policy.
Two specific suggestions as to issues that could be addressed under this rubric were:
(i) the process of competition law enforcement, including alternativeinvestigatory/decision-making models and the role of judicial review; and (ii) the
design of remedies in individual cases.  In addition, there should be a continuing
focus on stocktaking of national experience and legislation.WT/WGTCP/M/15
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I. THE RELEVANCE OF FUNDAMENTAL WTO PRINCIPLES OF NATIONAL
TREATMENT, TRANSPARENCY AND MOST-FAVOURED-NATION TREATMENT TO
COMPETITION POLICY AND VICE VERSA
5. The representatives of Canada and the European Community and its member States
introduced written contributions relevant to this item (documents WT/WGTCP/W/174 and 175,
respectively).  In addition, the representatives of Chile;  Columbia ;  the Czech Republic ;  Egypt ;
Gabon;  Hong Kong, China ;  Hungary ;  India ;  Indonesia ;  Japan ;  Kenya ;  Korea ;  Malaysia ;
Morocco;  Norway ;  Pakistan ;  the Philippines ;  Singapore ;  South Africa ;  Switzerland ;  Thailand ;
Trinidad and Tobago;  the Ukraine;   the United States ;  Zambia ;  and Zimbabwe  made oral statements
or posed questions on this item.  The representative of the OECD provided an update on relevant
activities of his organization.
6. The representative of Canada, introducing document WT/WGTCP/W/174, said that it set out
in written form a number of points that had been made by his delegation orally at the Working
Group's meeting of 22-23 March, responding to the Updated Checklist of Questions Raised by
Members that had been circulated by the Chairman (Job 520, circulated 24 January 2001).
7. The representative of the European Community and its member States, introducing relevant
sections of document WT/WGTCP/W/175, said that it expressed the views of his delegation with
regard to the implications for developing countries of a WTO agreement on competition policy.  In
this regard, it complemented two previous submi ssions by his delegation which had provided a more
detailed discussion of the development aspects of competition law and policy and of the possible
elements of a WTO competition agreement (documents WT/WGTCP/W/140 and 152, respectively).
Concerning the question of why his delegation believed that it was necessary to develop a frameworkagreement embodying core principles on competition policy at the multilateral level, he stated that in
order to facilitate international cooperation on competition policy, it was important to create a climate
of mutual trust.  This would be facilitated by agr eeing on a number of core principles relating to the
application of such policy.  He emphasized that, in proposing this, his delegation was not calling for,
and indeed felt it was important to avoid, a one-size-fits-all or harmonized approach to thedevelopment of national competition policies.  It nevertheless believed that principles such as
transparency and non-discrimination were fundamental values that were fully compatible with
differences in substantive competition laws, related enforcement policies and institutional
arrangements.  A core principle concerning hard-core cartels would also be valuable and would be
compatible with respect for differences in national approaches, since cartels imposed heavy costs on
developing and developed economies alike and were a type of anti-competitive practice which was
condemned under most, if not all, existing competition regimes.  His delegation was not, however,suggesting the adoption of common principles with respect to other areas of substantive competition
law, for example mergers or abuses of a dominant position, in which national approaches were fairly
disparate.  Therefore, under the proposed framework,  there would still be a large amount of flexibility
as regards most aspects of a substantive competition law regime.  As had been pointed out by several
other delegations, special and differential treatment was another one of the fundamental principlesassociated with the multilateral trading system.  The paper submitted by his delegation emphasized
that special and differential treatment should be reflected in specific provisions in any possible
multilateral agreement on competition policy and that such provisions should embody the concepts of
progressivity, flexibility and capacity-building.  These would be integral elements of the proposed
multilateral framework.  As an aside, he stated that his delegation did not consider that, from adevelopment perspective, the benefits of the proposed framework should be measured merely in terms
of special and differential treatment.  The elements relating to cooperation would also provide
significant benefits for developing countries.
8. Continuing, he said that the intent of the proposed WTO framework was to support the
application of competition law and policy as suc h, and not to encroach upon the domain of industrial,
development or social policy.  Reflecting this, the principles of non-discrimination and nationalWT/WGTCP/M/15
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treatment, as they would be embodied in the proposed multilateral framework, would apply to
competition law and/or policy as such and not to wider industrial or development-related policies.
Outside the domain of competition policy, they would have no implications for the much broader
question of the extent to which a market was open to  foreign investment.  Furthermore, with respect to
non-discrimination, the principles would be intended solely to ensure that such law/policy did notinclude provisions that discriminated on grounds of nationality.  Specifically, his delegation was not
proposing that these principles would be binding with respect to the question of how a competition
law was actually applied, as opposed to the content of relevant statutes.  To his delegation's
knowledge, the principle of non-discrimination was a principle that all competition laws complied
with to a large, if not total, extent.  Entrench ing this principle would, nonetheless, be useful in
ensuring that this continued to be the case.  Rega rding the proposed principles of transparency and
due process, a communication that had been submitted by his delegation last year (documentWT/WGTCP/W/152) went into considerable detail in describing these.
9. Continuing, with regard to other aspects of the proposed multilateral framework, he stressed
that a key objective of the proposed framework would be to ensure that developing and, in particular,
least developed countries received enhanced and better coordinated assistance with capacity building
in this area.  This would be done in cooperation with other intergovernmental organizations, includingUNCTAD, and bilateral donors, including the European Community.  With regard to the question of
exclusions from the application of domestic competition law, his delegation was mindful that all
countries with domestic competition laws, both developing and developed, maintained a number of
exceptions to such laws, whether of a sectoral or non-sectoral nature.  This was another dimension
through which governments could ensure that competition law did not impact adversely on social ordevelopment-related objectives.  Consequently, he was not calling for anything more in this area than
a commitment to transparency.  The chapter on competition policy in the Canada-Costa Rica Free
Trade Agreement which was described in the joint submission by those countries to the meeting
(document WT/WGTCP/W/173) provided an illustration of how this might work.  With regard to the
fact that many Members of the WTO currently lacked national competition laws, this would be
accommodated through the principles of progressivity and flexibility.  Specifically, his delegation
believed that any possible commitment by such coun tries in relation to the introduction of a domestic
competition policy regime should embody both an appropriate transition period and flexibility with
respect to institutional design, to ensure that the institutions took account of relevant constraints.  In
addition, he recognized that, in some cases, there were constraints and sensitivities that were country-
specific.  His delegation was ready, in the context of negotiations, to find mutually satisfactory ways
to address these concerns.  Certainly, it believed that a horizontal as opposed to a sectoral regime forcompetition policy better ensured consistency in the treatment of anti-competitive practices and that
the relevant regime should have an element of en forceability.  Nonetheless, it would not necessarily
expect that all countries would have to deal at the horizontal level with the same scope of anti-
competitive practices.  It might well be the case that for some countries, because of their own
institutional conditions and characteristics, it might be more reasonable to focus horizontally on alimited number of anti-competitive practices that were of particular concern, for example hard-core
cartels.  It would also be possible to maintain a horizontal policy regime while at the same time
maintaining a number of exclusions at the sectoral level.  His delegation would approach this point in
a spirit of dialogue and flexibility.
10. With regard to the general relevance of the fundamental WTO principles to competition
policy and/or the pros and cons of a multilateral framework on competition policy embodying these
principles,  the representatives of Canada, the Czech Republic
, Chile , Columbia , the European
Community and its member States, Hungary , Japan , Korea , Morocco , Norway , Pakistan , South
Africa, Switzerland , and the Ukraine  referred to the relevance of these principles to the effective
application of competition policy and/or to the potential benefits of a WTO framework on competition
policy embodying the principles.  In particular, a multilateral framework could assist those Members
of the WTO that did not have competition laws or adequate enforcement regimes to implement
effective laws and regimes and could help to promote cooperation among all WTO Members in theirWT/WGTCP/M/15
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application.  This would enable all countries to more effectively counteract anti-competitive practices
which currently were imposing heavy costs on their trade and development prospects, perhaps
especially in the case of developing countries.
11. The representative of South Africa said that the principles of non-discrimination, due process,
flexibility and transparency were central to his country's national Competition Act, which had been
adopted in September 1999 for the purpose of reinforcing recent economic reforms and stimulating
foreign investment, competitiveness and growth.  The Act provided rights of private action, peer
review processes and for any party affected by the application of the Act to be adequately informed of
relevant procedures, processes and decisions.  With regard to the principle of non-discrimination,
South African companies and foreign companies were treated equally under the Act and were subject
to the same procedures and processes.  South Af rica's legislation also provided that state-owned
companies were as bound by competition legislation as private firms.  Action had already been takenagainst some state-owned enterprises that had allegedly engaged in restrictive business practices.  A
framework built around principles such as these could, regardless of the size of an economy or
country, be a basis for putting in place a competition policy that would contribute both to consumer
welfare and to development-related objectives.  At the same time, adherence to these principles would
not interfere with the ability of Members to respond to their particular needs and economiccircumstances.  Certainly, South Africa's legislation was tailored to its specific needs and
circumstances, notwithstanding that it also fully  adhered to the principles which had been noted.
Some provisions were uniquely South African.  For example, in relation to merger control, the Act
provided for active participation of labour representatives in the assessment of mergers.  In other
words, labour groups had to be advised before the merger took place and had to be provided withcertain information.  That was a specific measure that had been put in place to deal with a particular
concern.  Hence, in the experience of South Africa, it was possible to apply the same competition
principles that would be applied anywhere else in the world and, at the same time, advance specific
economic objectives which were embodied in the Act and were important to the country's
development.
12. Continuing, he said that promoting small business was one of the objectives underlying the
Act.  This was achieved through certain exemptions or exclusions that were applicable providing that
specific criteria had been met.  The criteria were worded clearly and objectively, in order that parties
would know what was needed in order to get a particular result.  If a group of business people were
getting together, what might otherwise be a contravention could be excluded from operation of the
Act if the relevant criteria were met, for example the promotion of exports.  A balance would be
struck as to whether the authority was persuaded by a particular argument.  For example, in a casewhere a proposed merger would lead to a positi on of market dominance and thus raise competition
concerns, approval could nevertheless be sought if the objective of the merger was to enable the
merged entity to be competitive globally.  However, to date, there had been no case in which the firms
involved had been successful in showing that a domestic concentration was necessary to achieve
global competitiveness.  He agreed that competition law need not and should not embody a one-size-fits-all approach.  In particular, the objectives could be different for smaller countries.  However, there
were certain issues that were common to all Members and hence could benefit from a cooperative
approach.  His delegation considered that his country had the right framework for its purposes, but
was not suggesting that the same framework be duplicated by other countries in all respects.
13. The representative of Morocco stated that his country's Law on the Freedom of Prices and
Competition, which had come into force on 1 July 2001, already embodied the principles of non-
discrimination and transparency.  Details regarding the law were provided in his delegation's written
contribution to the Working Group's meeting of 22-23 March (WT/WGTCP/W/170).  On a possible
multilateral approach to the issue, his delegation had a rather nuanced position.  It considered that a
framework could be contemplated but that it would have to fulfil several conditions including theintegration of the development dimension in all of its component parts.  Some of the elements that
would be required in this respect included application of special and differential treatment in a moreWT/WGTCP/M/15
Page 6
effective and consistent way than hitherto, a combination of the factors of flexibility and
progressivity, the setting in place of provisions for technical assistance, notably for countries that did
not have legislation on competition policy, the existence of voluntary cooperation between national
competition authorities and safeguards for national strategic objectives in the form of exemptions.
For Morocco, a multilateral agreement had, first and foremost, to seek to combat anti-competitivepractices that were harming developing countries and not to try to standardise national policies.  In
fact, the paper by the European Community and its member States (WT/WGTCP/W/175) addressed a
number of these elements.  The need for implementation of a multilateral platform to assist
developing countries in implementing competition policies that would address their developmental
needs had been recognized in the Casablanca Declaration which had been adopted at a seminar on
competition policy in the Euromediterranean region that had taken place in Casablanca in July 2000.
14. The representative of Pakistan stated that Pakistan had had a law on monopoly and
competition since 1970.  The law was administered by the Monopoly Control Authority.  To ensure
the acceptability and efficiency of any multilateral framework on competition policy, all Members
should have national competition legislation or other adequate instruments based on a common
understanding.  The work on competition policy should be divided into two broad categories:
domestic and international competition.  In the first category, negotiations should aim at preparingrules regarding establishment and building up of domestic competition law and its effective
enforcement.  As far as international competition was concerned, there was a need to evaluate and
study further the existing WTO rules with reference to competition criteria.  Developing countries still
did not possess competition frameworks that were strong enough to be a useful policy tool for
development.  Therefore, more preparation and debate might be needed to discern how to moveforward in this area in the WTO.  Technica l assistance programmes should be continued and
enhanced side-by-side with negotiations to develop understanding of competition policy and the
effective implementation of such policy on the part of developing countries.  Overall, there was a
great need to enhance international cooperation especially amongst competition authorities in the case
of actions having cross-border effects.  Further negotiations and educative work regardingcompetition policy would be helpful to devise a rules-based approach built around the principles of
transparency and predictability, to ensure political commitment for necessary reforms and
implementation.  The representative of the Ukraine stated that the integration of countries into a single
world economy required, first, improvement in economic regulation in countries in accordance withinternational principles and norms and, second, a more active application of experience gained by
countries which had long-term traditions in antimonopoly regulation.
15. The representative of Colombia highlighted three elements that were emphasized in the paper
submitted by the European Community and its member States (WT/WGTCP/W/175).  The first was
the emphasis given to the issue of development and the recognition that the development dimension
was a cross-cutting issue that should be present in any possible agreement.  The second element was
the link between industrial policy and competition policy.  It was recognized that, in particular cases,
there could be an overlap between those two policies.  However, the paper suggested that anypotential overlap could also be dealt with, if necessa ry, through sectoral or other exclusions.  Clarity
was needed in relation to that possibility since it would reconcile sectoral policy objectives and
competition policy interests.  The third point was th e possibility for developing countries to come to a
conclusion as to whether an agreement was acceptable at the end of negotiations (i.e., the possibility
of an opt-out).  This was an important option that had to be assessed carefully since it was a practicalapproach that would safeguard the interests of Members in relation to the possible coverage of an
agreement.
16. The representative of the Czech Republic said that currently, some 80 per cent of his country's
trade was subject to free trade agreements.  All of the relevant agreements contained provisions on
competition policy.  Given this, his delegation could certify that international cooperation in the areaof protection of international economic competition was useful, necessary and fruitful, and was
routinely addressed in trade agreements at the regional or bilateral levels.  His delegation understoodWT/WGTCP/M/15
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that some Members might have reservations regard ing the taking on of detailed commitments in the
WTO in this area.  However, he could not imagine that those delegations could object to an approach
based not on detailed rules but on the fundamental WTO principles since:  (i) those principles were
pillars of the whole WTO system; and (ii) they would support the sound application of competition
law, in accordance with the objectives and modalities of such law.  The representative of Switzerland
said that the globalized economy was moving on and it was an important task of WTO to establish
guidelines in relation to the globalizing economy.  This was important for the integrity and legitimacy
of the system.  Therefore, his delegation felt that Members should not wait until the problems became
bigger.
17. The representatives of Egypt;  Hong Kong, China ;  India ;  Indonesia ;  Kenya ;  Malaysia ;  the
Philippines;  Thailand ;  Zambia ;  and Zimbabwe  expressed doubts or reservations regarding the
desirability of launching negotiations on a multilateral framework on competition policy and/or
suggested that priority should be placed on promoting effective implementation of competition
policies at the national level, rather than on intern ational rules.  The representatives of Egypt, India ,
Kenya, Malaysia,  the Philippines , Thailand , Zambia  and Zimbabwe  also said that, in any case,
educational work on the subject in the WTO should continue and/or be strengthened or refocused to
give enhanced support to the process of institution-building in developing countries.
18. More specifically, the representative of Hong Kong, China said that the paper that had been
submitted by the European Community and its member States (WT/WGTCP/W/175) suffered from
two major deficiencies.  First, it focused only on the potential benefits of a WTO competition
agreement for developing country Members with relatively little mention of the costs that such an
agreement might bring about.  Without an objective analysis of both the costs and benefits ofcommencing negotiations on competition, it was not realistic to ask the sceptical delegations to accept
a commitment to negotiate on this issue.  Secondly, the negotiation elements envisaged in the paper
were predicated on the need for a comprehensive domestic competition law.  This failed to take
account of the position of Members who did not want to adopt a competition law and did not feel that
such a law was necessary for them.  For Members adhering to this view, there would be no choice butto continue to oppose the proposal for negotiations on a multilateral framework on competition policy.
19. The representative of India said that it was necessary to analyze more closely the impact that
the proposal to require the adoption of competition legislation incorporating certain core principles
would have for developing countries.  India had had legislation to control monopolies and restrictive
trade practices for the past 30 years and was in the process of formulating a more comprehensive
national competition law.  In the process of developing the law, it had discovered some of the many
complexities involved.  Most importantly, it had been recognized that not everything could be speltout in such a law and that some matters had to be left for the evolution of jurisprudence over a period
of time.  One of the issues with which his delegation was wrestling was that it might be perfectly
legitimate for a developing country competition authority to allow large domestic firms to merge so
that they could go some way towards competing on more equal terms with multinationals.  The same
authority might wish to prohibit mergers involving multinationals within their territory on the basis
that they were already large enough to achieve relevant economies of scale in either a static or
dynamic sense.  The application of national treatment would have to be considered carefully in this
context.  The complexity of this issue was further compounded when it had to be addressed by
Members at different stages of development.  His delegation would be grateful for further
contributions on this point.  Secondly, a great deal had been said about how developing countriescould hedge themselves against possible deleterious effects of a multilateral framework, to take care
of their developmental needs; less had been said and much less convincingly about the benefits of a
multilateral framework for developing countries.  Nonetheless, his delegation recognized the need for
countries to have effective national competition laws; it was only questioning the need for a
multilateral framework in this regard.  It would also be interested in more information on existingbilateral cooperation agreements, especially between developed and developing countries.WT/WGTCP/M/15
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20. The representative of the Philippines said that delegations had not been given any systematic
evidence of specific benefits to developing countries that would flow from a multilateral framework
or adverse situations affecting countries that lacked competition laws or institutions.  The
justifications that had been put forward were theo retical in nature.  Moreover, who was to judge that
in fact, developing countries would benefit from a multilateral framework – the developing countriesthemselves or the proponents?  He could think only of difficulties that would be entailed in such an
instrument.  Since the framework would be entered into on a single undertaking basis, developing
countries would be under tremendous pressure to implement policies, laws, measures and institutions
which, at this point, they might not really need.  He appreciated that most of the current formulations
referred to the importance of flexibility and progressivity.  This simply reflected the diversity within
which a multilateral framework would have to wo rk.  Probably, in the longer term it would be
possible to bridge differences in this area but not in their entirety.  His delegation had benefitted agreat deal from the educational work programme particularly in regard to the elucidation of policy
options that might be useful to the Philippines given the unique situation that it was in; nonetheless,
much work remained to be done.
21. The representative of Zambia said that, although he saw the advantages and benefits that
might accrue for developing countries from the proposed multilateral framework, he also had
concerns.  To date, the WTO had not been a prime mover in relation to the development of
competition law, at least not in central and East Africa.  Other institutions such as UNCTAD had had
a more hands-on involvement.  It was important that the WTO be more actively involved in the
development of competition policies and institutions in developing countries, and be seen to be so
involved.  As a developing country, Zambia fully appreciated the importance of the multilateralsystem and the contribution that it could make.  However, it wanted the WTO to be more directly and
actively involved in promoting competition policy in developing countries.  He agreed that more
information was needed regarding the curr ent proposals for a multilateral framework.
22. The representative of Kenya said that his country had been enforcing a competition law and
policy for the past 12 years.  Kenya's experience in enforcing competition law was that it was useful
and important for developing economies.  However, it was one matter to have a law and another for
the responsible agency to have the capacity to en force it.  It was also necessary that the business
community and other government agencies be educated and that the law be continuously updated.
Political will was required.  In this context, his delegation had doubts whether, at the current point in
time, it was appropriate to introduce a multilateral arrangement.  A large number of Members did not
have competition laws nor competition agencies.  Then again, if the agreement was too general, it
could imply that the commitments would be watere d down so much that they would have no meaning.
His delegation also wondered whether, without firs t and foremost ensuring that Members had the
capacity to craft suitable laws which would corres pond to their level of development and the structure
of their businesses, it could be expected that  those Members would competently approach the
commitments.  The benefits that had been enumerated in the papers that had been submitted seemed
to be potential rather than actual.  It was necessary  to begin at the ground level to ensure that those
benefits were realised by developing countries.  Therefore, it would be more useful to continue the
educational process in the Working Group and to assist Members to put in place competition laws in
their own regions and also to establish competent an d able authorities to ensure that in the event of
negotiations, it would be possible to adhere to and implement relevant commitments.  In that respect,
he submitted that UNCTAD, which had been active in the area of competition law and policy for anumber of years, would be more suited than the WTO to come up with a first draft of a possible
agreement.
23. The representative of Thailand noted that his country was at an early stage of implementing
competition law.  It was not opposed, in principle, to developing the role of competition policy in the
WTO but felt that it along with other developing countries needed more experience before it couldenter into negotiations with countries that had considerably greater experience in the area.  This wouldWT/WGTCP/M/15
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allow other delegations to gain a greater appreciation of the benefits of competition policy even for
developing countries and the role that the WTO might play in this area.
24. The representative of Zimbabwe, referring to the experience of Zimbabwe and other countries
within eastern and southern Africa who were me mbers of COMESA, said that the importance of
competition policy for economic development was increasingly recognized in the region.  Over thelast decade or so, most of the countries in that region had undergone structural and adjustment
programmes that included, as a component, privatization.  In this regard, his delegation agreed that it
was important to introduce competition policy at an early stage of development because, particularly
in the context of privatization, monopolies and other anti-competitive tendencies tended to take root if
inadequate instruments existed to address them.  However, many countries in the region had limited
ability to address these issues.  He shared the goals of promoting the effective implementation of
national competition policies through cooperation, mutual assistance and trust that were reflected inthe papers that had been submitted by Canada (WT/WGTCP/W/174) and the European Community
and its member States (WT/WGTCP/W/175).  Nonetheless, it had to be acknowledged that that
cooperation and trust could not be legislated – they had to be built up over time.  Further discussion
was also needed of the suggestion in the papers that a multilateral agreement on competition policy
would allow sufficient flexibility in applying the principle of non-discrimination, including both
national treatment and most-favoured-nation treatment.  His delegation had difficulty reconciling the
flexibility that had been proposed with strict adherence to the concept of national treatment.  Among
the countries in the COMESA region, fifteen of which were WTO Members, only three currently had
functional and fully-operational competition commissions and legislation.  The others were still
grappling with, first of all, convincing stakeholders in those countries that competition policy wasessential for development.  They suffered from technical limitations and limitations with regard to
awareness and the political willingness to pursue these policies.  His delegation believed that,
although the WTO had an important role to play in promoting understanding and awareness in this
area, cooperation had to be developed over time and with due regard to circumstances existing in
particular regions.  The submissions that had been made by Canada and the European Community andits member States should be considered as part of the educative, consultative process of the Working
Group and more concrete steps should be taken by the WTO and others to promote competition policy
at the national level.  With the experience gained, it would then be easier for those countries to engage
in more far-reaching discussions and negotiations  regarding a multilateral framework on competition
policy.  At the moment, it appeared premature for these countries who had not been able to address
such issues effectively at the national level.
25. The representative of Egypt suggested that a domestic competition law was a pre-requisite for
any further steps and that the educational process in the Working Group had to continue until a
consensus was reached to modify its mandate.  National competition laws were needed by developing
countries to promote their development objectives given that the world was globalizing and anti-
competitive practices that affected developing countries were being engaged in on a global scale.
This implied that each and every government had to  formulate its law according to its own conditions
and development needs.  This in turn required a significant degree of flexibility and progressivity in
any arrangement at the multilateral level.  In particular, developing countries had to have the
flexibility to differentiate between national sma ll-to-medium-sized enterprises (SMEs) and foreign-
based multinational enterprises with a view to incr easing the former's competitiveness.  It might also
be necessary to implement special arrangements relating to a country's more promising domesticcompanies.  When it came to technical assistan ce and cooperation, the work in the Working Group
had made it clear that cooperation had to be voluntary in nature and that the existing bilateral and
regional agreements did not require the parties to share information.  Enhanced technical cooperation
was needed to help developing countries to assess their needs and to move forward with effective
domestic laws.WT/WGTCP/M/15
Page 10
26. In response to the foregoing statements, the representatives of the Czech Republic, the
European Community and its member States, Japan , Korea  and Norway  said that the fact that many
WTO Members had not yet formulated their own competition laws did not mean that launching
negotiations on a multilateral framework was impracticable.  In fact, a key purpose of the proposed
framework would be to assist such countries to  implement appropriate laws, in a gradual manner,
taking account of their particular circumstances and relevant international experience.  It was not, in
fact, a top-down approach but one that would enable countries to build effective competition policies
from the ground up.  Much evidence and, indeed, some of the more sceptical countries' own
statements indicated that, currently, they were experiencing major difficulties in implementing
effective competition laws and that enhanced cooperation would be needed to enable them to meet the
challenges.  Furthermore, since the proposed fr amework would be based on broad principles of
general utility rather than on detailed rules, it wo uld not adversely affect the ability of countries to
respond to their particular needs and circumstances but, in fact, would facilitate this.
27. Delving further into the benefits and costs of specific principles that might be included in a
possible WTO framework on competition policy, in the event that such a framework was adopted , the
representatives of Canada, Columbia , Egypt , the European Community and its member States
Indonesia, Japan,  Korea , Pakistan,  Singapore , South Africa , Trinidad and Tobago  and the United
States referred, variously, to the principles of flexibility;  progressivity;  non-discrimination, including
both national treatment and most-favoured-nation treatment;  transparency and due process.
28. The representative of Trinidad and Tobago said that flexibility and progressivity were crucial
to the interests of developing and small economies in regard to any possible arrangement at the
multilateral level.  The treatment given to these concepts in the paper by the European Community
and its member states (WT/WGTCP/W/175) was helpful.  For her delegation, flexibility in developing
a competition regime referred to the substance of each country's national competition law.  It was the
ability of a country to choose from the menu of prohibitions that could be embodied in competition
law those aspects that were relevant for its particular economy, in view of its market structure, level of
development, the types of anti-competitive conduct that were prevalent and other characteristics.  Thismeant that some elements of competition law might not be relevant for that economy, or might have
to be tempered to complement industrial or development policies, through the use of exemptions and
exclusions.  For example, a small, open economy might not need merger control regulation at all, if
the exercise of market power through mergers was disciplined effectively by the competition that was
provided by imports.  Analysing mergers was a complex procedure and it might be a waste of
resources to have a merger control regulation in th ese circumstances.  Further, the structure of the
market might be able to accommodate concentrations or might even require concentrations forefficiency-related reasons.  Alternatively, a small economy might want to support its industrial policy
by using exclusions and exemptions from its competi tion law.  It might want to exclude exclusionary
distribution agreements, for instance, because the peculiarities of smallness could necessitate that a
distributor not carry competing products.  It was important that any arrangements relating to
competition policy at the multilateral level take due account of these considerations.
29. Continuing, she said that, in her delegation's vi ew, the principle of progressivity referred to
the approach or methodology employed in developing and implementing a competition regime.  It
allowed for the gradual and selective introduction of instruments to control anti-competitive
behaviour.  This was important to provide the responsible authority as well as other government
departments and stakeholders the time to accommodate and to adjust to the changes that wereinvolved.  It would also permit the further evolution and deepening of relevant instruments, as
economies developed and regimes matured, over time.  Progressivity was particularly important for
small economies because of the lack of human and financial resources required for the initial
establishment of a competition regime.  It allowed a country to build a firm foundation for the
competition regime by fully assimilating one aspect of competition rules before progressing to thenext.  To give an example of how progressivity coul d be put into practice, in the initial stage of the
development of a competition regime, a small developing economy might do better to introduce onlyWT/WGTCP/M/15
Page 11
measures against hard core cartels and blatant abuses of dominance or, possibly, not even the latter, in
view of its complexity.  It could focus principally on competition advocacy in relation to government
policies and on consumer education in order that consumers would gain a positive understanding of
competition law and how it worked in their favour.  Such an approach would also give the new
personnel in a competition commission an opportunity to get a feel for the job as well as relevanttechnical training.  When appropriate experience had been gained, provisions dealing with more
complex aspects of anti-competitive agreements and abuse of dominance could be introduced, and a
greater focus on sanctions could be applied.  Throughout the early stages, such cases as an agency
chose to take on should be ones that could be fairly easily won, in order that the agency's authority
would be established.  Finally, the profile given to technical assistance in the paper by the European
Community and its member states (WT/WGTCP/W/175) was helpful,  since it suggested that such
assistance would be on a country-by-country ba sis and would be demand-driven, which would be
useful because it would target the real needs of individual countries.  The representatives of Canada
and Japan agreed that flexibility, progressivity and capacity-building were important factors that
responded to the development dimension and that they should be taken into account explicitly in the
context of a multilateral framework on competition policy.
30. The representative of the United States said that it was important that, in looking at issues
such as exceptions, exemptions, flexibility and progressivity, any approach adopted at the multilateral
level take due account of the particular situations facing individual countries.  On the other hand, it
was also important not to lose sight of the fact that competition law and policy were important to
sound economic development and to the successful re-structuring of economies to facilitate greater
efficiency and take advantage of the opportunities provided by trade liberalization.  In other words,while giving due importance to the concepts of flexibility and progressivity, it was also important to
ensure that the underlying objective of promoting effective competition laws and policies continued to
be the top priority.
31. The representative of the European Community and its member States said that the concerns
set out by the representative of Trinidad and Tobago were fully compatible with the approach that his
delegation had been putting forward in terms of the architecture of a possible multilateral agreement.
For instance, his delegation maintained that the only type of anti-competitive practice in relation to
which it was desirable or feasible to establish a common principle was hard-core cartels.  Other
aspects of national competition policy would be left to the discretion of national legislatures.  In
particular, his delegation recognized that issues such as the desirability of introducing a regime on
merger control or how to deal with vertical market restraints or abuse of a dominant position were
substantially more difficult to tackle, and was not proposing any principles or substantive rules inregard to these categories of anti-competitive practices.
32. With regard to the principles of non-discrimination and transparency, the representatives of
the United States and Japan
 said that these were cornerstones of the multilateral trading system, and
were also important for the effective application of competition law and policy.  Continuing, therepresentative of the United States stressed that their application in the context of any multilateral
framework on competition policy nonetheless required careful consideration.  In particular, it was
important to recognize that situations could arise where it might be necessary to treat different actors
differently by virtue of the facts of a particular situation or to treat certain information in a
confidential manner.  It would be important to think carefully about  the distinctions that might have to
be drawn, in this regard, between the facial contents of a law and related enforcement approaches, inorder to ensure that integrity was preserved with respect to the application of the law in these
situations.
33. The representative of Malaysia stated that the benefits of the principle of national treatment in
this field were not obvious.  In view of the ma rked disparity in capacities between developed and
developing countries, his delegation considered that it was better not to attempt to multilateralizecompetition policies and laws.  There were, undoubtedly, merits associated with internationalWT/WGTCP/M/15
Page 12
cooperation among competition authorities, for example, to combat anti-competitive behaviour,
particularly as a result of international mergers and acquisitions that had a negative impact on
developing economies.  These did not require the adoption of a multilateral framework.
34. The representative of Indonesia stated that the principle of non-discrimination came from
international trade principles that were important to promote free trade and to avoid protectionism.
Competition policy, in contrast, was intended to promote a competitive environment and avoid abuses
of market power.  It was necessary to study in greater detail the compatibility of the fundamental
WTO principles with competition policy.  In fact, his delegation applied the principle of non-
discrimination in its national legislation, with certain exceptions such as for small-to-medium-sized
enterprises.  Nonetheless, before it was brought to a multilateral level, it would be necessary to study
the impact on national economies, and particularly to ensure that the principle of non-discrimination
did not diminish the flexibility needed to achieve national objectives.  In addition, although theproponents had stated that they were not seeking harmonization of national legislation, in the view of
his delegation, the proposal to set out the core principles in substantive provisions would entail a
certain degree of harmonization.  At the current point in time, it was important that the application of
competition policy serve development-related goals.  Furthermore, considering that Members had not
reached equal levels of economic development, his delegation was not convinced that a frameworkagreement applicable to all Members would provide equal benefits in particular to developing and
least-developed countries.
35. Concerning the proposed principle relating to prohibition of hard-core cartels, the
representatives of Japan and the European Community and its member States
 said that much evidence
had shown that these were frequently international in scope and imposed heavy costs on developing as
well as developed economies.  Reference was made, in this regard, to a previous contribution by
Japan (WT/WGTCP/W/168) and to a background paper on cartels that had been prepared for the
World Bank's forthcoming World Development Report1.  The evidence showed clearly that such
arrangements did not respect national boundaries and were likely to impose particularly heavy costs
on jurisdictions that lacked adequate tools to deal with them.  It was difficult to understand why anyMember would be opposed to a principle aimed at suppressing them.
36. With regard to the question of whether, as a consequence of the adoption of a multilateral
framework on competition policy, all WTO Members would be required to adopt a national
competition law, the representatives of Hong Kong, China and Singapore
 stated that given the
diversity in competition policy objectives and implementation instruments across economies, arequirement to adopt a national competition law that was perceived as general and minimalist by one
Member could well be a demanding and burdensome requirement for another.  In particular, the paperby Canada glossed over the complicated political, socio-economic and legal considerations
underpinning the adoption or otherwise of a competition law in a domestic context.  Certainly, the
lack of a comprehensive competition law in some countries was not necessarily linked to capacity
constraints; it could be motivated by other consider ations.  Further, the elements of flexibility and
progressivity that were described in the papers by Canada and the European Community and itsmember States (documents WT/WGTCP/W/174 and 17 5, respectively) did not adequately address the
concerns held by their delegations regarding the proposed multilateral framework.
37. The representative of Japan said that his delegation believed that, in order to maintain the
credibility of competition policy and an associated enforcement regime, it was useful for countries to
maintain a horizontal and comprehensive approach with respect to competition law.  Still, flexibilityand progressivity were important with regard to those issues.  In this regard, his delegation was ready
                                                     
1 Margaret Levenstein and Valerie Suslow, Priv ate International Cartels and Their Effect on
Developing Countries (Background Paper for the World Bank's World Development Report 2001, 9 January2001) (available on the Internet at http://www-unix.oit.umass.edu/~maggiel/WDR2001.pdf).WT/WGTCP/M/15
Page 13
to consider the appropriateness of a sectoral approach or other approaches, such as that mentioned by
the representative of Hong Kong, China.
38. The representative of Chile stated that, from her delegation's perspective, in a globalized
world, a multilateral framework would obviously be more effective to combat anti-competitive
practices that went beyond national borders and impacted adversely on multiple countries.Nonetheless, taking account of what had been stated by the representative of Hong Kong, China, it
might be reasonable to envision that the obligations to be embodied in a possible multilateral
framework would not apply to Members choosing not to have a national competition law.  However,
when Members did wish to establish competition bodies  or laws, they would be subject to the relevant
principles including non-discrimination and transparency and would benefit from related technical
assistance.  In these circumstances, countries would realise how important competition legislation was
because it would be voluntary and would take on relevant obligations at an appropriate stage.  Therepresentative of the United States suggested that this idea could have perverse effects in that, by
imposing added obligations on countries that would be triggered only when they adopt competition
laws, it could actually discourage them from adopting the laws.
39. The representative of Norway said that the concerns that had been stated by the representative
of Hong Kong, China might be accommodated in a variety of ways.  In Norway, a government
commission had been appointed to consider a propos al for a new Competition Act that would replace
the existing Act.  This showed that the nature of a country's legal provisions might have to be adapted
to changing economic or developmental circumstances, albeit within certain common overall
principles.  Among other considerations, national competition law would have to be subject to other
rules embodied in national law which meant that certain important public policy objectives could bepursued in parallel with a competition regime.  However, any rules or procedures under national law
would have to be inscribed and practised in a transparent way which did not discriminate on the basis
of nationality.
40. The representative of the European Community and its member states said that the view that a
multilateral agreement on competition policy was premised on the existence of comprehensive
domestic competition laws in all WTO Members needed to be clarified.  In fact, his delegation was
not suggesting that all Members would be required in every case to adopt a comprehensive domestic
law.  Rather, there would be flexibility in terms of exceptions and with regard to the scope and
coverage of the law.  He was aware that some countries were not convinced that even a more limited
horizontal type of law was needed in their particular case.  That was something that could be
discussed in terms of trying to determine what type of solutions were appropriate for the various
conditions that existed in different countries while at the same time maintaining a sense of sharedcommitments.  The representative of Switzerland said that his delegation fully understood the
reluctance of countries that did not yet have a competition law and were hesitant regarding the costsassociated with building up the necessary institutions .  However, it believed that it was possible to
find appropriately flexible modalities to address the issue in the context of a multilateral agreement.
These need not be the same modalities as in other areas of WTO regulation and could be areas ofnegotiation.
41. With regard to the implications of a WTO Agreement on Competition Policy for the ability of
countries to implement national industrial, development and social policies, the representatives of
Hungary, Switzerland
, and Norway  along with the European Community and its member States  and
Canada said that there would be no adverse effect.  The papers submitted by Canada
(WT/WGTCP/W/174) and the European Community  and its member States (WT/WGTCP/W/175)
had made it clear that the basic approach was one of flexibility and progressivity and not one of
harmonization or a one-size-fits-all approach.  Furthermore, the principles envisioned were intended
to apply to competition law and policy as such and not to wider industrial, developmental and social
policies.  Therefore, it was incorrect to view the proposed agreement as being one that would  limit the
use of other domestic economic policies and be used as an instrument for market-opening and toWT/WGTCP/M/15
Page 14
establish full contestability of markets, as had been suggested by some Members.  Continuing, the
representative of Hungary noted that, under the pr oposed framework, commitments with respect to
substantive competition law would relate only to hard-core cartels which were a type of anti-
competitive behaviour that was unambiguously harmful to economic welfare including, very much, in
developing and transition economies.  It was wort h pointing out, moreover, that no Member would
lose its right to maintain exclusions of a sectoral or other nature from the application of domestic
competition law regimes.
42. The representative of Norway said that Norway's experience during the short period for which
it had had a competition regime should dispel concerns about any adverse impact on wider economic
and social policies.  To illustrate, the Competition Act which had been adopted in 1993 applied to
agriculture, fisheries and forestry as well as to othe r sectors.  However, there were provisions in the
Act which exempted those sectors from the general rules against price-fixing and market-sharingarrangements between undertakings.  Therefore, the provisions embodying certain core principles of
the legislation did not apply in those sectors.  There were also other exceptions in the Act that
provided the possibility for the law to be applied in flexible way.  In addition, both decisions in
individual, concrete cases as well as general policy measures enacted by the competition authority
were subject to the ultimate authority of Parliament.  This meant that Parliament would be able to pre-
empt any decision by the competition authority in areas where the competition authority was
conducting an investigation.  This prerogative of the Parliament was not limited only to areas where a
formal law had been passed but included any decision taken by Parliament.
43. The representative of the United States said that, putting aside the question of whether
application of the principle of special and differential treatment could postpone or avoid the
application of obligations of non-discrimination or national treatment for some period, there was still
the question of the ultimate compatibility between the principle of national treatment and the pursuit
of certain economic or other policies, particularly when those polices were articulated in a way that
was not facially non-discriminatory, but could be applied de facto  in a way that would only benefit
national firms.   Taking first the example of the existence of special legislative regimes or regimesthat allowed for special consideration of small and medium-sized businesses, it seemed plausible that
those kinds of rules could be based on sales thresholds that could de facto eliminate their application
to foreign entities so that perhaps the only firms that would be able to avail themselves of that regime
would, in fact, be domestic firms.  A second exampl e involved special consideration in cases where
international competitiveness was sought to be promoted.  While it might make sense in a domestic
context to promote the ability of domestic firms to compete more effectively internationally, such
provision might, as a practical matter, be unavailable to non-domestic firms since, by definition, theywere already doing business cross-border and were, therefore, already competitive internationally, or
at least presumptively so.  Consideration needed to be given as to whether those kinds of regimes
could ultimately be squared with the principle of national treatment.
44. The representative of the European Community and its member states said that, from the
perspective of his delegation, the purpose of the principle of non-discrimination that would be
embodied in the proposed multilateral framework wa s merely to ensure that domestic competition
laws did not include provisions that overtly discriminated on the basis of corporate nationality.
Enforcement policies and practices that were not embodied in the law would not be addressed.  With
regard to the questions raised by the representative of the United States, he felt that these merited
attention and could be addressed effectively once the nature of the obligations to be undertakenbecame more clear.  Broadly speaking, although ther e were clearly issues that would need discussion
as the work proceeded, there did not seem to be a problem that could not be resolved through further
discussions and reflection.
45. In relation to some of the practical challenges faced by competition authorities in developing
countries and their relationship to the current proposals, the representative of Zambia said that a first
obstacle which could be found in most of the countries in his region involved the existence ofWT/WGTCP/M/15
Page 15
exemptions and exceptions from competition law.  Competition authorities were also faced with
problems regarding the interpretation and application of the law in view of the differing attitudes
towards competition law by the business community .  A characteristic of the business community in
most developing countries was that the core private sector consisted of multinational companies
which often did not respect the countries' domestic legislation.  There was a also a lack of politicalwill and support at top levels of government largely due to a lack of appreciation of the place of
competition law in economic development.  The competition laws of developing countries, especially
is his delegation's region, had been modelled on those of developed countries without, in many cases,
being well-adapted to the special needs of developing economies.  Moreover, the enforcement of
competition law entailed costs.  Substantial assistance including the provision of resources was
necessary to make competition laws effective.  The early stages of implementation were characterized
by a great deal of uncertainty.  In a situation where countries could not draw from the experience ofdeveloped competition authorities, it was difficult, using local manpower and resources, to effectively
implement a law.  Moreover, it was common in developing countries that national industrial policies
were interpreted in such a manner that competition policy was not considered.  Competition law was a
new concept to policy makers and the business community.  In the case of his country, a lot of
advocacy had been done and the business community and the government now understood the role ofthe law.  However, it was necessary to move from a principal focus on advocacy to the area of
sanctions so that the competition legislation could be effectively enforced.  The challenge of
enforcement was made difficult by the lack of a culture of competition among all the stakeholders in
the respective countries.  Effective competition in the marketplace was the foundation upon which
developing countries would realize greater efficiencies and improved development prospects.  Anumber of developing countries had competition legislation and they would need as much support as
possible in order for them to help bring about efficiencies in their respective economies.  During
meetings that had been held especially in COMESA, it had become clear that most of these issues cut
across countries with competition authorities and those countries without competition policies.
46. Commenting on the importance of regional approaches to cooperation  in facilitating the
effective implementation of competition law and policy, the representative of Gabon stated that this
was an important factor for the countries of Central and Eastern Africa.  The intention was toharmonize in the sub-region all rules concerning trade and competition.  On a bilateral basis, emphasis
would be placed on efforts by international organizations to contribute to capacity and
institution-building through training of relevant officials.
47. With regard to the appropriateness of a WTO requirement to implement competition law at
the national level and the suitability of the WTO as  an international forum for work on competition
policy, the representative of Hong Kong, China said that  the WTO could only require Members to
implement a competition law if two pre-conditions had been met:  (i) an explicit consensus among
Members that multilateral negotiations on competition policy should proceed; and (ii) an explicit
consensus that the adoption of a competition law be made a binding commitment as a negotiation
outcome.  In the view of his delegation, WTO Members were nowhere near a consensus on eitherquestion.  Additionally, his delegation did not think that the paper by Canada (WT/WGTCP/W/174)
had adequately answered the question of whether the competition problems identified by Members
could be addressed through existing WTO Agreements or activities.  In this regard, the paper had only
identified the possible inadequacies of the competition provisions in the GATS and the related
Telecommunications Reference Paper.  It had not gone on to identify and objectively evaluate allpossible options to rectify the inadequacies uncove red.  Without objectively examining the pros and
cons of various options, the paper jumped to the conclusion that a multilateral competition agreement
was the single best remedy for the multitude of competition problems identified.  His delegation
considered it imprudent and inappropriate for WTO work on competition policy to be advanced on the
basis of such a conclusion.WT/WGTCP/M/15
Page 16
48. The representative of the Philippines said that in a generic sense, it was difficult to disagree
with the principles-based approach embodied in the current proposals for a multilateral framework.
This was really the core basis for commitments under the WTO.  However, with regard to specific
aspects of the application of those commitments in this area, Members were far apart.  This was an
area that had not been adequately addressed by the proponents.  For most countries, competitionpolicy had not risen to the level of an international trade concern.  Recent conflicts in the area of
competition law enforcement reflected the primacy of national policy objectives in this area.  The
major country proponents who had problems should settle the problems among themselves rather than
bringing the issue into the WTO forum.  Cooperation was a bilateral issue in that sense and the WTO
could not be the negotiating forum, especially on the issues of hard-core cartels and mergers and
acquisitions.
49. In response, the representative of Japan said that, as had been explained in a paper that his
delegation had submitted during the previous meeting, there was no reason why the WTO could not
take on new responsibilities in the area of competition policy; just the opposite was the case.  The
WTO was an important organization that dealt with international trade issues.  Coordination and
cooperation in the field of competition policy were closely related to international trade in that anti-
competitive practices could have a major adverse impact on both trade and development.  In thisregard, WTO was certainly an appropriate forum for addressing anti-competitive activities and for
promoting international cooperation in the field of  competition policy, working with other relevant
organizations.  A key advantage of the WTO as a forum for deliberations on this issue was that it
included, as Members, both developed countries with extensive experience in competition law and
policy and Members which had only recently adopted competition laws or were trying to introducesuch laws.  As had been stated persuasively in the contribution by Canada (WT/WGTCP/W/174),
what the WTO brought to the table was broad Membership and the ability to ensure effective
implementation of relevant laws.
50. The representative of Korea said, further, that a multilateral approach to competition policy
within the WTO framework was needed to address the current scale of anti-competitive practices and
to reinforce institution-building efforts at the national level.  It also provided WTO Members with an
opportunity to improve the existing WTO rules to make them more competition-oriented.  While he
recognized that some Members continued to have concerns regarding negotation of a multilateral
competition framework, his delegation was of the view that a number of incentives were available
which could encourage Members to engage in negotiations.  These included grace periods that
differed according to the level of each Member 's economic development; exemptions from certain
obligations; reservations and technical assistance.  These had been analysed well in variouscontributions by the proponents.  Given the limited capacity of some Member countries in this area,
particular emphasis should be placed on technical assistance with a focus on domestic capacity
building.
51. The representative of the OECD updated Members on work in progress in his organization on
the role of special and differential treatment (S DT) at the interface of trade, competition and
development.  He explained that this work, as with any other work by the Joint Group on Trade and
Competition so far, did not prejudge the desirability of having a multilateral framework on
competition policy.  The draft paper that he had mentioned covered the origins, evolution and current
state of SDT provisions in the GATT and WTO agreements and the potential relevance of SDT in a
trade and competition context.  It noted that trade and competition might well be an area where onesize does not fit all.  It then looked at four possible options in order to most effectively advance
development-related concerns (GATS/SDT framewor k, plurilateral approach, distinctions and
differentiation between various developing countries, as well as transitional time periods and technical
assistance).  The paper concluded with an underl ying question of whether SDT and, in particular, non-
reciprocity and transitional time periods would, in fact, benefit developing countries in the specificcontext of trade and competition policy.WT/WGTCP/M/15
Page 17
II. APPROACHES TO PROMOTING COOPERATION AND COMMUNICATION
AMONG MEMBERS, INCLUDING IN THE FIELD OF TECHNICAL
COOPERATION
52. The representatives of Canada and Costa Rica ; Canada ; the European Community and its
member States; and Japan  (two contributions) introduced written contributions on this agenda item
(documents WT/WGTCP/W/173; WT/WGTCP/W/174; WT/WGTCP/W/175; WT/WGTCP/W/176
and WT/WGTCP/W/177, respectively) and the representative of the Ukraine introduced relevant
sections of a non-paper by his delegation.  In addition, the representatives of Chile; Colombia ; Egypt ;
Hong Kong, China; India ; Malaysia ; the Russian Federation ; Trinidad and Tobago ; the United States ;
and Zimbabwe made oral statements or posed questions on this item and the representatives of
UNCTAD and the OECD  provided updates on relevant activities of their organizations.  In addition,
pursuant to a request made at the Working Group's meeting in March (WT/WGTCP/M/14,
paragraph 24), the Group had before it copies of the Report that had been prepared by the Secretariat
on the WTO Regional Workshop on Competition Policy, Economic Development and the Multilateral
Trading System that had taken place in Cape Town in February 2001.
53. The representative of Japan, introducing document (WT/WGTCP/W/176), stated that the
paper dealt with the pros and cons of competition policy for developing countries, including the
relationship of such policy to national development policies.  The benefits for economic development
that were derived from the introduction and enforcement of competition laws and policies included
constraining the abuse of market dominance by domestic and foreign companies, improving economic
efficiency and productivity, securing opportunities for new entry, fostering small and medium
enterprises and enhancing consumer welfare.  As had been noted by South Africa's Minister of Tradeand Industry, Mr. Alec Erwin, at the WTO Regional Workshop that had taken place in Cape Town,
"In the absence of effective national laws, price structures would be driven upwards and domestic
competitiveness would diminish, with benefits flowing only to those powerful enough to extract
economic rent from the national economy…  Competition policy had an important role to play, at
both the domestic and international levels, in ensuring that markets operate to the benefit of allcitizens, and not merely of major corporations."
2  While it had been suggested that Japan's post-war
economic development had been achieved by subordinating competition policy to industrial policy,
much of Japan's economic dynamism was, in fact, rooted in robust market mechanisms created
through competition among firms.  Industrial policy and competition policy were mutually
complementary and helped to create an environment that allowed companies to engage in free and fair
competition.  In addition, the existence of competition policy heightened a country's credibility and
attracted foreign direct investment since, from the perspective of prospective investors, it helped tocreate a stable and predicable environment.
54. Continuing, he suggested that ample evidence  had been brought to the attention of the
Working Group of the harm caused by anti-competitive practices of firms both in terms of
undermining the benefits of trade liberalization and impeding countries' development prospects.
Developing countries were particularly vulnerable to international cartels.  There was no doubt aboutthe harmful impact that these arrangements had on c ountries that lacked the tools to deal with them.
Reference was made, in this regard, to a report by the OECD that had been presented at the Working
Group's meeting of 2-3 October 2000
3 and to the above-noted Background Paper on this issue for the
World Bank World Development Report 2001,4 both of which discussed specific, real-life examples
of international cartels and their adverse impact on developing (as well as developed) countries.  Theintroduction and enforcement of domestic laws and policies as well as the enhancement of
international cooperation in this area was the appropriate policy response.  Nothing could be done if a
                                                     
2 Report on WTO Regional Workshop on Competition Policy, Economic Development and the
Multilateral Trading System (22-24 February 2001), p. 7-8.
3 OECD, Hard Core Cartels:  Meeting of the OECD Council at Ministerial Level (Paris 2000).
4 Levenstein and Suslow, op. cit.WT/WGTCP/M/15
Page 18
country injured by anti-competitive practices lacked a national competition law.  Further, where a
country had a competition law but had not establis hed a cooperative framewor k with the competition
authority of the home country of the company inflicting the damage, it could be extremely difficult to
take effective action against the practice in question.
55. Continuing further, he noted that concern had been expressed by some Members over the
possibility of conflicts arising between development-related policies and the introduction and
enforcement of competition laws and policies.  Reference was made, in this regard, to a further
statement made by South African Minister Er win during the WTO Cape Town Workshop, which
indicated that competition policy itself was an important element of a successful industrial strategy
since it opened markets up and placed pressure on producers to become more efficient.  Such policy
also prevented the abuse of market power by domestic or multinational firms and reinforced
incentives aimed at increasing efficiency, producti vity and the speedier adoption of new technology.
Furthermore, as had already been pointed out by the proponents of a multilateral framework, it was
intended that the principles that would be incor porated in the proposed framework would apply to
competition law and policy as such and not to wider developmental, industrial or social policies.
56. Continuing and introducing document WT/WGTCP/W/177, the representative of Japan stated
that flexibility and progressivity would be two ke y factors in the development and implementation of
a multilateral framework on competition policy, particularly for countries without a competition law.
The paper submitted by his delegation summarized, from a historical perspective, the competition
policy exemption system of Japan.  Japan's experience indicated that international competitiveness
could be strengthened by increasing competition among domestic companies rather than by regulating
competition through exemption systems.  Many promising new industries in Japan had sharpenedtheir competitive edge through competition, both at home and abroad, thereby enhancing the growth
of the Japanese economy.  Some of those industries had not applied for exemptions, even though they
were entitled to and others were not protected by the exemption systems.  Since competition policy
contributed to economic growth and development, it was desirable that developing countries
encourage and enhance competition by positively implementing competition policy and limitingexemption systems.  The paper outlined the various types of exemptions that were available in Japan.
Referring to statistics regarding implementation of the exemption system details of which were
contained in the paper, he stressed that the government had scaled back exemptions over time and
that, in any case, promising industries or products had not invoked exemptions, even when they were
available.
57. The representative of Costa Rica, introducing the paper that had been submitted jointly by his
delegation and by Canada (WT/WGTCP/W/173), said that it dealt with the competition policy chapter
of the Canada-Costa Rica Free Trade Agreement.  The Agreement provided a practical example of
cooperation that was feasible to address the detrimental effects of anti-competitive practices in
relation to trade and development, even between countries at different levels of development.
Specifically, Costa Rica was a small country, its territory only a little bigger than Switzerland with 3
million inhabitants and national income much smaller than Canada's.  In negotiating the competitionchapter of the Free Trade Agreement, both Costa Rica and Canada had had in mind an agreement that
could serve as a model for a competition policy framework in the context of the Free Trade Area of
the Americas as well as providing a framework for cooperation and coordination among their national
competition authorities.  Moreover, both parties were conscious of the important role of competition
policy in ensuring that the gains from liberalization were not lost through anti-competitive practices.This was apparent from the preamble to the competition chapter (Chapter XI) of the Free Trade
Agreement, which stated that it was necessary to ensure that the benefits of trade liberalization were
not undermined by anti-competitive activities.
58. Continuing, he said that, with regard to substantive obligations, Chapter XI of the Canada-
Cost Rica Agreement included an obligation to adopt or maintain legal measures to proscribe anti-competitive business activities, including cartels, abuse of dominant position and anti-competitiveWT/WGTCP/M/15
Page 19
mergers.  Another obligation required parties to establish or maintain an impartial competition
authority that was independent from political interference and was authorized to take appropriate
enforcement action and to be involved in the design, development and implementation of government
policies and legislation.  Furthermore, the chapter contained transparency commitments including an
obligation to make publicly available information on the adoption or modification of measures toproscribe anti-competitive activities.  The chapter also required that measures taken to proscribe anti-
competitive activities should be applied on a non-discriminatory basis.  It contained due process
requirements including the requirement that judicial and quasi-judicial proceedings should be fair and
equitable and that there should be an appeal or review process available in respect of any final
decision taken.  Another significant feature was that Chapter XI included mechanisms for cooperation
that enabled each party to be informed of anti-co mpetitive activities taking place in the territory of
another party that might affect that party's intere sts.  The chapter also provided for notification,
consultation and exchange of information regarding enforcement actions, subject to domestic laws on
disclosure of information and confidentiality.  It contemplated the possibility of the parties entering
into additional cooperation and mutual legal assistance agreements.
59. With regard to enforcement, he noted that the Chapter stipulated that neither party had
recourse to dispute settlement or to any kind of arbitration for any matter arising under the chapter.Where issues arose regarding the chapter's operation, implementation, application or interpretation,
such issues could be addressed either in bilateral consultations to be held at least once every two
years, or pursuant to a written request by one of the parties.  Where a mutually satisfactory resolution
could not be reached through consultations, the issue could be referred to the Free Trade Commission,
which was made up of cabinet-level representatives of the parties concerned.  The chapter alsorecognized the importance of technical assistance in the area of competition policy.  It left both parties
free to pursue their respective policy priorities as th ey considered fit with respect to competition and
with respect to other matters within the framework laid down by the Chapter and applicable
legislation.  The Agreement also recognized that each party could exclude certain activities from the
application of laws in the area of competition.  Such exclusions had to be transparent and to beperiodically reviewed by each party to determine whether they were necessary.  Costa Rica saw the
Free Trade Agreement with Canada as providing important benefits with respect to the application of
competition policy and cooperation in this area.  The agreement was a prime example of the kind of
cooperation that could be achieved between countries at different levels of economic development and
of the feasibility of addressing this issue in a trade context.
60. The representative of Canada, referring to the same paper (WT/WGTCP/W/173), said that
Canada hoped that the agreement would serve as a useful example of both what was and what was not
entailed by competition disciplines in a trade agr eement.  His delegation believed that it illustrated
how certain common disciplines could be achieved while respecting and even reinforcing the
autonomy of the respective domestic competition laws and authorities.  Finally, it was fairly
ambitious and was not meant to be presented as a blue-print for potential WTO negotiations on
competition policy.
61. The representative of the European Community and its member States, introducing relevant
sections of the paper provided by his delegation (WT/WGTCP/W/175), said that bilateral, regional
and multilateral approaches to cooperation in the field of competition policy could and should be
complementary in nature.  In particular, bilateral agreements could be extremely useful in facilitating
a high level of cooperation between particular countries with complementary interests.  However, itwas doubtful that it was possible to efficiently structure meaningful cooperation among a very large
number of competition authorities merely on the basis of bilateral agreements.  With respect to
cooperation at the regional level, his delegation was highly supportive of initiatives of this nature that
had been taken with respect to competition policy in various regions of the world.  Three types of
cooperation arrangements at the regional level could be distinguished, all of which were relevant forthe exercise that Members were engaged in at the WTO.   First, in a number of cases, countries were
in the process of establishing a competition regime at the regional level.  This resonated positivelyWT/WGTCP/M/15
Page 20
with his delegation since the European Community itself embodied a regional competition regime,
which was complementary to the ones that had been developed progressively by the member States of
the European Community at a national level.  Reference was also made to arrangements that
existed/were being developed in the context of COMESA, CARICOM and Mercosur.  As indicated in
its paper, his delegation believed that in a number of cases, certain small countries which were part ofregional integration efforts might come to the conclu sion that it made more sense for them to develop
a regional competition regime rather than a national competition regime.  Any multilateral framework
that was developed on competition policy in the WTO should accommodate this choice.  A second
type of arrangement at the regional level were free trade agreements that contained competition
provisions.   Most such agreements that had been developed in recent years included provisions on
competition policy of one kind or another.  The Agreement described in the paper submitted by Costa
Rica and Canada (WT/WGTCP/W/173) was a good exam ple of this type of initiative, and of how
countries at different levels of development could nonetheless develop meaningful disciplines on
competition that would be mutually beneficial.  A third type of arrangement at the regional level
which had not, in his view, been given due consideration in the Working Group's discussions was the
opportunity at the regional level for countries to share experiences relating to the implementation of a
domestic competition regime and to provide input into any possible negotiations that were occurringat the multilateral level.
62. Continuing, he said that, while his delegation was strongly supportive of regional agreements,
they had clear limitations in dealing with cooperation on competition policy matters.  For example,
depending on the scope of anti-competitive practices in particular sectors, cooperation might well be
necessary with countries that were not necessarily part of the same region.  It was, therefore,important to have a framework that provided access to competition authorities from countries within
and outside individual regions.  Even in relation to issues like technical assistance or experience-
sharing, it was useful to benefit from technical assistance and share experiences not only with
countries that were part of the same region.  As emphasized in his delegation's paper, in order to be
effective, any approach to cooperation would need to combine at least three elements.  One element
was technical assistance.  Another element was case-specific cooperation.  The third element was the
possibility for countries to participate in an  institutional forum where they could exchange
experiences with other competition authorities.  His delegation believed that those three elements
were complementary and essential.  For instance, relying exclusively on technical assistance would
not be effective to meet the cooperation needs of those developing countries that were at earlier stages
in terms of development of their competition regimes.  It was necessary to determine how all those
elements of cooperation could be combined in a credible manner.
63. In response to the question that had been raised as to whether it was appropriate to develop a
multilateral approach when some countries still did not have a competition law and others were at the
earlier stages of the development of their domestic comp etition law regimes, he stated that, first, in the
case of those countries which currently did not have a law, a multilateral framework would allow
them to receive technical assistance in a more concerted and coherent manner than would otherwisebe the case.  At the same time, it would allow them to participate in a network of cooperation with
other competition authorities.  The framework would, of course, have to be adapted to take account of
the individual capacity constraints of countries.  Secondly, as regards those countries that had
introduced their law recently, the framework that was being suggested would be a flexible one so that
it fully allowed for the development of national e xperiences.  It would be important for those
countries to benefit from case-specific cooperation, even if they were still at the early stages in terms
of their own experience.  For those reasons, his delegation felt that it was important not to wait but to
try to develop a multilateral framework on cooperation which was sufficiently credible in terms of
responding to the three types of cooperation needs that he had mentioned.
64. Continuing further, he said that his delegation believed that cooperation, by definition, had to
be voluntary in nature and that it was not feasible to envisage exchanges of confidential information
in the context of a multilateral framework.  This having been said, his delegation believed that muchWT/WGTCP/M/15
Page 21
valuable cooperation could be conducted within such a framework.  Considering the experience of
cooperation among the OECD members or, indeed, on the basis of existing bilateral cooperation
agreements, including the one that his delegation had entered into with the United States, most
cooperation activities were based on voluntariness and did not require the exchange of confidential
information.  This had not prevented the establishment of useful cooperative relationships amongthose countries.  There was a strong case to consolidate at the multilateral level some of the
experiences that arose in the various contexts.  Elements included in bilateral cooperation agreements
and in the OECD recommendations could be used as  a point of reference.  New elements could be
provided by developing countries, which were considered to be particularly necessary to respond
effectively to cooperation needs.  In relation to technical assistance, as had been affirmed by
Commissioner Mario Monti in his recent interv ention in the UNCTAD Expert Group, his delegation
was firmly committed to this, regardless of what policy decision was taken regarding whether or notto have a multilateral agreement on competition.  However, it was clear that technical assistance
efforts would be more effective as part of a collective effort to develop domestic competition law
regimes, in the context of a multilateral framework.  He clarified, as well, that his delegation did not
consider that the WTO Secretariat would be the main provider of technical assistance on this issue.
There were other international organizations that had more resources and experience in that respect –namely, UNCTAD, the World Bank and the OECD.  Nonetheless, the WTO could contribute in
various ways, including by giving added urgency to the work of other donors.  It was important for all
of these organizations to work together in a cooperative fashion to enhance technical assistance in the
competition policy field.
65. The representative of Canada said that the concept of peer review offered a possible route for
advancing thinking and policy goals relating to competition policy in the WTO.  First, it could
function as a soft enforcement mechanism if there was to be an agreement in the WTO on
competition.  Secondly, it would contribute directly to the goals of such an agreement by offering an
ongoing, long-term education and information-shar ing experience.  Peer review would stimulate
discussion and the sharing of experiences across legal cultures, developmental levels and differentinstitutional or historical settings, in a non-adversarial setting.  He noted, in this regard, that the WTO
Trade Policy Review Mechanism (TPRM), which was a form of peer review, had successfully
stimulated the evaluation of diverse aspects of Members' trade policies.  It had strengthened domestic
agencies in promoting liberalization and helped individual Members to better fulfil their WTO
obligations.  His delegation believed that similar benefits would arise through the use of a peer review
process focusing particularly on the area of competition policy.
66. Continuing, he said that the OECD Competition Law and Policy (CLP) Committee also
offered a useful model for peer review, particularly in an area such as competition policy where
currently there were no broad agreements at the multilateral level.  The OECD model involved a
process of voluntary convergence through dialogue and cooperation between relevant officials, over
time.  An important element of this model were  the recommendations that were developed in the
Committee, from time to time.  These recommendations were voluntary and functioned as a referencepoint for countries individually and with regard to cooperative activities.  A key aspect of the
regulatory convergence approach was that it was the result of substantial interaction, so that the
beliefs or attitudes of the participants converged voluntarily over time.  Peer review supported this
convergence process and provided participants with valuable information or feedback regarding the
evolution of policies and enforcement practices in a given country.  Consistent with the voluntarynature of the recommendations, the OECD system di d not involve a dispute settlement mechanism for
achieving compliance.
67. Continuing further, he said that, in the view  of his delegation, competition policy embodied a
paradigm shift as compared to other areas that were already covered in the WTO.  This arose from the
fact that competition law involved the application of general statutes to particular fact situations incomplicated, evolving and different market circumstances.  Further, economic thinking and analysis
relating to market structures and behaviour changed and advanced over time.  These features ofWT/WGTCP/M/15
Page 22
successful competition law systems cautioned against an overly detailed or precise codification at the
multilateral level.  His delegation also did not want the WTO process to impinge on case-specific or
highly confidential business information issues.  Further, it was not a good idea for decisions to be
made on an ad hoc basis because that could lead over time to incoherence; on the contrary, it was
necessary to achieve a reasonable degree of analytical and operational coherence across a wide rangeof economies in order to ultimately have an effective system at the multilateral level.  Peer review as
an ongoing process of policy assessment and refinement responded to these concerns and was also a
way of avoiding the problem of second-guessing na tional enforcement decisions.  It had yielded good
results in the OECD.  Moreover, for nations that had recently chosen to introduce competition policy
regimes or were thinking of introducing competition policy regimes, peer review was a way of
encouraging expanded dialogue and reinforcing the pr ocess of institutional-building.  It provided the
potential for encouraging the identification and sharin g of best practices with regard to enforcement
and policy issues.  It could also provide a realistic understanding of matters such as the precursors
necessary for enhanced cooperation and how the fundamental WTO principles of non-discrimination,
national treatment, transparency and due process were being implemented at national levels.  Peer
review could also provide a forum for consideration of the potential usefulness, to WTO Members, of
relevant voluntary guidelines.  For all these reasons, the concept of peer review merited seriousconsideration as an element of enhanced cooperation on competition policy in the framework of the
WTO.
68. The representative of Ukraine, introducing relevant sections of the non-paper by his
delegation, stated that the Competition Committee in the Ukraine had substantially strengthened its
work in the field of international cooperation.  A treaty of cooperation regarding the development ofcompetition had been signed between the Cabinet of the Ministry of Ukraine and the Government of
the Russian Federation in 2000, in addition to seven interdepartmental bilateral agreements in which
the Committee had taken part.  Cooperation with and assistance from UNCTAD, the OECD and the
European Commission had been essential.  A g ood example in this connection was cooperation
involving UNCTAD, the European Commission, OECD  and the WTO at the International Conference
in Kiev a year ago.  Representatives from 22 countries from the region made it possible to develop a
mutual understanding regarding the need to enhance international cooperation.  In January 2000, a
treaty on agreed anti-monopoly policy among various countries had been signed, which signified a
new stage in the development of cooperation.  It amounted to a regional agreement on competition
and included all the necessary components for a multilateral agreement in the area.  This agreement
embraced countries with great diversity in terms of their experience with competition law and policy
including countries that did not yet have any co mpetition laws, countries with newly-established
competition policies and countries that were comparatively well-experienced in the area.  The
agreement was based on the principle of positive comity with a clear obligation imposed on parties to
cooperate.  A Monopoly Council was established to perform a monitoring function.  The latest version
of the agreement, which had only been operational since last year, had enhanced cooperation between
the CIS countries.  Such cooperation embraced not only the exchange of experiences and theharmonization of laws but also contained notification obligations and allowed for request and receipt
of assistance in the investigation of cases, including mergers.  On the basis of this experience and of
the important role that competition policy was playing in facilitating economic restructuring and
integration within the CIS region and elsewhere, his delegation was convinced that the conclusion of a
multilateral agreement on competition was timely, possible and necessary.
69. With regard to the potential value-added of a multilateral framework on competition policy
particularly for developing countries, the representative of Trinidad and Tobago said that the paper
that had been submitted by the European Community and its member States (WT/WGTCP/W/175)rightly pointed out that developing countries were particularly vulnerable to anti-competitive practices
with an international dimension, such as international cartels, export cartels or abuses of a dominant
position, including by foreign-based multinationals.  Both this and the paper by Canada
(WT/WGTCP/W/174) were useful in providing information on the importance of cooperation
agreements in the current era of rapid trade and investment liberalization, with the accompanyingWT/WGTCP/M/15
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rapid increase in the potential for anti-competitive actions by firms to have economic effects in other
countries.  Like Canada, international trade represented a large component of Trinidad and Tobago's
overall economy.  Indeed, that was the case for all Caribbean countries which for centuries had been
structured to export what they produced and to import what they consumed.  This made them
especially vulnerable to anti-competitive conduct wi th an international dimension, particularly with
the increase of such conduct as their economies went through a process of rapid economic
liberalization.  Her delegation appreciated the point that had been made in both papers that a WTO
agreement could provide the basis for developing mutual trust and would lead eventually to deeper
cooperation.  The papers suggested that a WTO agreement on competition policy would address the
needs of developing countries in the areas that had been mentioned by providing an effective response
to developing country cooperation needs, including capacity building.  Her delegation had two
concerns.  One was the limited nature of the cooperation envisaged.  Canada had warned that this wasa long-term project, one that was incremental in na ture, requiring a step-by-step process.  Step one
was to be largely educative while step two would require notification procedures.  A meaningful first
step would be coordinated enforcement action against international cartels.  She was puzzled as to
how, at a practical level, such limited cooperation mechanism was going to help deal with
international cartels and export cartels in the foreseeable future.  Based on the process that wasenvisaged, it would be an uncomfortably long time before a country like Trinidad and Tobago, and
indeed those developing countries which did not have competition laws or any experience in its
enforcement, matured sufficiently to have deeper  cooperation.  In the meantime, what could be done
about those anti-competitive acts given that cooperation would be limited to an educative process, or,
at most, involve negative comity?  The paper submitted by the European Community pointed out thataccording to a study done for the World Bank, in 1997, developing countries imported
US$81.1 billion in goods and services in industries which had been subject to a price-fixing
conspiracy at some point during the 1990s.  This was extremely worrying.  The other concern was that
the proposed model of cooperation could allow multinational corporations to escape sanctions for
conduct in developing countries through various loopholes.  It was, therefore, still unclear as to how"effective" the response proposed by the European Community through cooperation within a WTO
agreement would be.  Would this, for instance, in clude a "home" country taking action when the
conduct of its MNCs resulted in effects in other ma rkets, but not its own market?  The Vitamins case
was a good example of the type of problems which developing countries could face.  Following the
action against the Vitamins cartel in the United St ates, one developing country that she knew of had
decided to investigate the cartel's conduct in its jurisdiction, and obtained relevant information from
the United States pursuant to a cooperation agreement.  Yet, the competition authority of thatdeveloping country encountered great difficulty bringing firms to justice since, among other
difficulties, the subsidiaries that were resident in that country claimed no knowledge of the collusive
conduct of their parent firms, but stated that they were simply following instructions in setting retail
prices.  Even when a domestic competition law was in place and a cooperation agreement existed with
the US giving maximum cooperation within the terms of the agreement, large developing countrieswere still being defeated by more fundamental problems that accompanied investigations of anti-
competitive conduct with an international dimension.  In this context, she suggested that the Working
Group had a unique opportunity to explore more fully innovative ways to deal with the pervasive and
damaging effects of international and export cartels.  Her delegation believed that deeper thinking was
required on the subject.  The rules of trade had been changed fundamentally to accommodate newissues generated by globalization, such as the inclusion of intellectual property into the GATT/WTO.
Maybe the same kind of innovative thinking was needed in the field of competition policy as it related
to international trade.
70. In response to the comments made by the representative of Trinidad and Tobago, the
representative of the European Community and its member States stated that while cooperation could
be provided within a voluntary framework of mutual interest, it would not be possible for a
developing country to eradicate anti-competitive practices which had an impact on their markets
unless it also developed a national competition law. His delegation had never suggested that
cooperation should be limited to the educative process.  Any credible multilateral agreement onWT/WGTCP/M/15
Page 24
cooperation must include three dimensions:  it must include a dimension that related to technical
cooperation; it had to include procedural mechanisms that allowed competition authorities at different
levels of development to share their own experiences; and it had to include a protocol to facilitate
case-specific cooperation.  The latter should be quite specific in terms of indicating the parties'
expectations but should be voluntary in nature for the reasons explained previously by his delegation.The voluntary nature of cooperation was also an important protection for competition authorities in
developing countries, who might not have adequate resources to deal with all the requests they might
receive.  In developing a multilateral agreement on competition policy, it was necessary for it to be
based on the input and ideas put forward by all Memb ers, such as ideas on how to make enforcement
assistance for developing countries more meaningful.  The framework should respond to a common
interest and should be a common endeavour.  Regarding the time necessary for the development of
effective cooperation, the representative of Canada noted that his delegation's proposal was based on
voluntariness.  Cooperation also hinged on the development of mutual trust between Members and
this took time.  Essentially, the time necessary  depended on how the relationship of trust between
Members developed over time.  The proposed multilateral framework would be an important step in
facilitating this.
71. The representative of Zimbabwe said that cooperation was becoming essential in the
implementation of competition policy for developing countries that had such policies.  For countries
like Zimbabwe, Zambia and Malawi that were no w in the process of implementing competition
policies in their countries, it had become evident that  their authorities needed to cooperate with others,
especially with regard to transnational merg ers and acquisitions and monopoly control following
privatization.  The only way that such issues could be tackled effectively was to have some form ofregional cooperation or, at least, bilateral cooperation.  Bilateral, regional, and multilateral
cooperation were not mutually exclusive and could be complementary in nature.  Given the limited
resources available to most developing countries, it was essential to optimize the way in which such
cooperation was implemented.  The European Community proposal foresaw a strong element of
regional cooperation.  It was his delegation's view that cooperation among the existing COMESAmembers and among those countries that were planning to establish competition authorities would be
a significant element within the regional context.  There should also be consistency between regional
and bilateral agreements.
72. With respect to the types of cooperation that would be feasible in the context of a multilateral
framework on competition policy and/or certain pre-requisites that might apply,  the representative of
the United States commented that  there were certain areas where cooperation could be immediately
explored in terms of matters such as technical assistance and sharing of experiences.  However, there
were other areas that were more challenging in  terms of knowing how to balance the need for
substantive interaction with the need to understand the demands of the process of cooperation.
Further, a certain body of knowledge and experience was probably a pre-requisite to engaging in other
kinds of cooperation.  It was important to note that the GATT/WTO system had had a consultation
provision in the area of anti-competitive practices dating from 1960.  It appeared that this provisionhad been limited in its effectiveness.  However, since it nonetheless existed, it was necessary to
recognize that competition was an area that had been acknowledged in the trading system for some
time.  He noted that in the United States, trade and competition policy officials had cooperated with
one another to address particular situations.  Further, both sets of officials had cooperated with their
counterparts in other countries.  In this respect, the interaction between trade and competitionagencies in dealing with some of these matters also merited consideration.  Nevertheless, the main
point was the fact that cooperation meant a variety of things to different Members.  In the light of
divergences in experience and understanding, it would perhaps be easier to undertake certain things in
a shorter time horizon in some areas as compared to others.  In some of the more challenging, difficult
areas it was important to have a clearer understanding of what some of those challenges were.Another representative of the United States noted that Members' governments already cooperated in a
large number of areas including in criminal, tax and security matters.  The US had agreements with
many countries in all of those areas.  It had nearly 40 mutual legal assistance treaties that coveredWT/WGTCP/M/15
Page 25
criminal matters with developed and developing countries alike.  Cooperation required a serious
commitment of resources.  Further, there seemed to be the perception during discussions that
cooperation was something that developed countries engaged in principally for the benefit of
developing countries.  However, he wished to emphasize that his delegation entered into cooperation
agreements with the full intention of using them to advance its own enforcement-related purposes.  Heimagined that this would certainly be the case with respect to any cooperation initiative relating to
competition policy in the framework of the WTO.
73. The representative of Egypt stated that institution building and bilateral agreements could be
pre-requisites for cooperation on competition policy in a multilateral framework.  Some Members
were of the view that technical assistance was linked to the existence of a multilateral framework on
competition.  He questioned why that was the ca se.  How could a developing country negotiate
something that affected its economic development without being technically capable to do so?  How
could his delegation become a party to an agreement without being able to identify the implications of
such an agreement for its economy?  In this regard, it was necessary to raise developing countries'
capabilities and this would require assessment of th eir technical needs followed by an examination of
the existing means for cooperation.  The work in the Working Group had revealed that cooperation
which was to be meaningful was voluntary in nature.  Resources were limited, and existing bilateraland regional agreements did not bind parties to share information.  That would also be the case under
a multilateral framework on competition.  While some developed countries were of the view that a
multilateral framework was a pre-requisite for cooperation, all developing countries felt that binding
and fruitful technical assistance and cooperation was a priority.  Technical cooperation would help
developing countries establish their domestic policies and rules so that they could reap the realbenefits, if any, of a multilateral framework on competition policy in the future.  To be effective,
technical cooperation had to be tailored and country-specific.   The best way to provide better
technical cooperation was through an international organization, namely the WTO, or elsewhere.
Developing countries needed technical cooperation to help them establish domestic competition
policies.  His delegation's experience showed that most bilateral agreements tended to be betweendeveloped countries that were at the same level of development.   This showed that developing
countries were not yet fully benefiting from bilateral agreements.  Therefore, new agreements had to
be concluded between developing and developed countries with a view to building capacity.  Regional
agreements had to be extended to include new Members outside the region.  The aim of this exercise
would be to ensure the formulation of domestic laws in every WTO Member.  The important link
between multilateral cooperation and the level of prog ress that a country could achieve in formulating
its domestic law could not be denied.  However, multilateral cooperation through the WTO or otherbodies had to develop gradually and be linked to the establishment of adequate enforcement
capabilities.
74. The representative of Zimbabwe agreed that in order for cooperation to be effective, it was
essential that the participating countries have adequate institutional capabilities.  At present, this was
not the case.  There was only a limited number of technical people in Zimbabwe, Zambia and Malawiwho understood concepts such as hardcore cartels, mergers and acquisitions and cross-border
operations that had a bearing on competition policy.  Therefore, it was essential that technical
assistance go hand in hand with any cooperation initiative at the multilateral levels.
75. As to whether, for the successful implementation of a WTO framework agreement on
competition policy, it would be necessary for every WTO Member to have a domestic competitionlaw, referring to the paper that had been submitted by Japan (WT/WGTCP/W/176), the representative
of Hong Kong, China noted that under section 4 of the paper on the "Need to Introduce Overall and
Comprehensive Competition Law for Competition Policy Implementation", Japan had cited HongKong, China as an interesting example of how to effect competition policy without a general or
comprehensive competition law.  In addition, it was worth noting that in the WTO Secretariat Reporton the WTO workshop on Competition Policy, Econom ic Development and th e Multilateral Trading
System that had been held in Cape Town in February, 2001, an economist associated with the OECDWT/WGTCP/M/15
Page 26
Secretariat had noted that some countries, particularly smaller ones, could have other priorities and
might lack the necessary financial means, bureaucratic resolve and/or technical capacity.  The
economist had observed, further, that for some countries, an open trade and investment regime was an
important way of promoting greater competition.  While all countries should seek to promote a culture
of competition, a competition law was not the only way to proceed.  He agreed with those remarks.
His delegation was not averse to legislation per se .  However, it believed that since competition
problems were context-specific, the solutions to such problems should also be context-specific.  The
needs, requirements and characteristics of individual sectors varied extensively.  His delegation's
experience indicated that reliance on free trade and open market policies coupled with sector-specific
measures had been effective in promoting competition.  A general competition law was not the only
instrument to implement competition policy, nor was it the only means of achieving the WTO
objectives of promoting free and open trade.
76. Regarding the voluntary nature of cooperation envisioned by the proponents of a multilateral
framework, the representative of Hong Kong, China noted that the paper that had been submitted by
the European Community (WT/WGTCP/W/175) gave the impression that a multilateral frameworkwas a pre-requisite for such cooperation.  The question was posed as to why competition authorities
could not already cooperate among themselves?  Why should they wait for a multilateral framework?If there were some authorities at the present point in time that did not want to cooperate, they would
not do so merely because there was a multilateral framework since it would be voluntary.  On the
other hand, if obligations on cooperation were taken seriously, it could impose possibly onerous
obligations and large commitments upon some WTO Members, particularly developing countries.
Further, as had been mentioned by the representative of the United States, such obligations would bereciprocal.
77. In response, the representative of the European Community and its member States stated that
successful cooperation depended upon the fulfilment of three pre-conditions.  The first was that the
two sides had to have a sufficient understanding of each other's legal and procedural frameworks.
This was what the transparency provisions of the proposed framework agreement were intended toachieve.  It would provide each of the two concerned authorities a sufficiently clear picture of the
framework under which the other operated.  The second pre-condition was a willingness and an
ability to invest sufficient time and resources.  The European Community had cooperation agreements
which included competition provisions with more than 35 countries amongst which there were seven
different types, making the procedural framework quite challenging.  Ten people in the Commission
dealt with all of those agreements, which demonstrated that it imposed a burden but also that it could
be done with less resources on a large scale.  In any case, one objective of the framework agreementwould be to make the system more efficient.  The third pre-condition was the ability to discuss issues
in a sufficiently open manner.  As to what could be done under the cooperation instrument contained
in the envisaged framework, he stated that a grea t deal could be done if the two sides agreed to a
waiver to allow the exchange of confidential info rmation but much could be done even without such a
waiver.  Previous interventions by his delegation had referred to the type of information that could beexchanged in cartel cases.  In relation to merger cases, a recent report to UNCTAD by the South
African competition authority indicated that info rmation obtained from the European Commission had
figured importantly in the resolution of a particular case and had illustrated the fact that close
cooperation between competition authorities was feasible and could be successful in helping to
resolve serious competition cases.  Cooperation was like a horse:  you could bring it to the water butyou could not make it drink.  The agreement would bring the horses closer to water but it was up to
the authorities themselves to decide whether they would cooperate in the end or not.
78. The representative of Malaysia stated that Malaysia remained unconvinced of the need for a
multilateral framework on cooperation or any rules on competition policy or law in the WTO, simply
because the price that would have to be paid would be too high given Malaysia's current level ofdevelopment.  His delegation saw the merit of some form of international cooperation among
competition authorities.  However, that could occur outside the WTO, either bilaterally or regionally.WT/WGTCP/M/15
Page 27
As to how the concept of progressivity would apply in the context of a multilateral framework,
referring to comments made by the representative of the European Communities, he asked for
clarification as to what was meant by progressivity in terms of special and differential treatment.  As
had been stated previously by his delegation, time-based special and differential treatment was
insufficient.  The term "progressivity" suggest ed a bottom-up approach and that there would be
pressure on developing countries to open up sectors.  Would the approach adopted ensure that a
developing country would be able to liberalize according to its own comfort level or was time-bound
special and differential treatment being proposed?  He reiterated that his delegation was not persuaded
of the need for multilateral rules in the WTO at the current point in time, in any form.  On the other
hand, it was worthwhile to pursue the issue in th e Working Group in an educational mode, and in the
years to come, perhaps Members would be better prepared for negotiations.  In response, the
representative of the European Community and its member States stated that his delegation believed
that the current proposal by his delegation provided all the elements of flexibility that were required.
Those delegations that had difficulties with the flexibility that had been proposed should be as specific
as possible in indicating their difficulties since it was unclear, at present, that the flexibility already
contemplated was not sufficient to accommodate the concerns.
79. Regarding the application of dispute settlement in the context of a multilateral competition
framework, the representative of Trinidad and Tobago stated that her delegation had grave concerns
about the role which the WTO dispute settlement understanding might play in any possible WTOagreement on competition.  If the agreement was going to have wide coverage, including scrutiny of
decisions of competition authorities, the application of dispute settlement, in particular, would
impinge on national sovereignty.  If it had limited coverage including, as a minimum, an obligation tohave a national competition law, including provisions against hardcore cartels, it would be a very
one-sided affair, in that only developing countries would be open to sanctions and the poorer of those
would have to adapt, since the larger, more matu re developing countries already met that minimum
standard.  In response, the representative of the European Community and its member States said that
the nature of dispute settlement provisions that were appropriate in the area of competition policy
depended first and foremost on the nature of the shared commitments that would be assumed.  His
delegation had suggested that dispute settlement should only apply to the commitment to have
legislation in the area, and not to individual de cisions of national competition authorities.  His
delegation did not understand why this was perceived as asymmetrical in terms of its implications
since, ultimately, Members would only be assuming commitments voluntarily and the only question
was whether there would be accountability for the commitments that had been assumed.  In any case,
these were issues that could only be properly addressed and considered when Members had a clearerview about the type of commitment that would be assumed.
80. With respect to the potential benefits of peer review as a tool for ensuring compliance with a
multilateral framework, the representative of Trinidad and Tobago said that her delegation believed
that a non-binding peer review mechanism as had been proposed by Canada had many advantages anddeserved serious consideration as an alternative to the application of dispute settlement in this area.The representative of the United States said that his delegation was interested in the idea of peer
review because, in its view, it could make an im portant contribution to capacity building and to the
understanding of complex technical issues that arose in this field.  Another representative of the
United States noted that his delegation had just completed part of a WTO TPRM examination.
During that examination, the WTO Secretariat had invested a fair amount of interest and resources inasking his delegation what was being done in the antitrust area.  It had been a useful learning
experience for his agency since it highlighted differences in approaches and perspectives with other
jurisdictions.
81. The representative of India suggested that the time and resource costs for developing country
Members to undergo a peer review process in the area of competition policy could be significant.
Even if a multilateral cooperation agreement was flexible so that Members could pursue their own
policies, he questioned how often such an agreement would be used by developing country MembersWT/WGTCP/M/15
Page 28
and how often those Members would be subjected to queries from their more advanced trading
partners.  In response, the representative of Canada noted that, obviously, any review would entail
some costs in terms of time and resources.  However, he doubted that the costs entailed would beonerous, particularly in comparison to the benefits achieved in terms of understanding and insight into
one's own policies.  He stressed, in this regard, that the process would be non-adversarial and collegialand so would foster dialogue and cooperation and would not cause undue sensitivity or headaches.
82. The representative of Hong Kong, China aske d whether a multilateral framework or rules
were necessary to engage in a process of peer review?  The WTO TPRM mechanism already existed,
pursuant to which Members could engage in a dialogue on national experiences.  If rules were to be
created but could not be enforced through the dispute settlement mechanism, what was the point in
making those rules?  In response, the representative of Canada said that it was not realistic to suppose
that the enhanced focus on peer review in the field of competition law and policy that his delegation
was proposing could be achieved solely in the context of the TPRM, which had a broader purview.
His delegation believed that competition policy presented a new challenge for the WTO in terms of
the approach to be used in promoting international cooperation and convergence.  In particular, it was
a particularly dynamic issue since the nature of obligations and how they would be implemented
would have to respond to particular developments in economies, in legal cultures and factualsituations.  In this context, peer review was not merely an enforcement tool in the sense of dispute
settlement but was a tool for fostering understanding and transparency and for promoting, in a
non-confrontational and non-adversarial way, convergence among Members.  The learning and
convergence experiences that peer review would engender was certainly something that could be
helpful to developing countries.  Once the nature of  obligations to be assumed became more clear, the
scope of peer review processes would also be more clear.
83. Referring to the paper that had been submitted jointly by Canada and Costa Rica
(WT/WGTCP/W/173), the representative of Chile noted that the Agreement described in the paper
provided a practical example that shed light on wh at an international competition policy agreement
could look like.  The treatment of exemptions was important in that parties were free to establishexemptions in their national law.  However, there were transparency obligations associated with
exemptions and parties were subject to periodical review.  The representatives of Chile and Colombia
asked whether countries were free under the agreement to exclude sectors in the future and whetherthe other parties could oppose or express their opinions on the exclusion or exemption of sectors.  The
representative of Colombia asked whether the agreement sought to harmonize definitions of
competition policy concepts or whether each country kept its own definitions.  The representative ofIndia sought clarification as to who made what queri es and what kind of queries were made in relation
to the sharing of information or cooperation.  In response, the representative of Costa Rica said that
the Agreement was new and that answers to some of these questions would emerge only over time.
84. On the matter of technical cooperation, the representative of the Russian Federation stated
that in speaking about international cooperation in the area of competition, she wanted to distinguish
between technical cooperation and cooperation between competition authorities in actual cases.  Herdelegation appreciated the technical cooperation that had been provided on a bilateral basis and
through international organizations such as UNCTAD and the WTO.  The analytical materials that
had been provided and the open discussions that had been held in those international organizations
contributed, to a large extent, to the improvement of competition law and policy in her country.  In her
delegation's opinion, the importance of international cooperation on a regional basis was also growingevery year.  In that regard, sessions of the CIS anti-monopoly inter-state council were held twice a
year, adopting decisions on actual issues of competition policy.  Technical cooperation provided on a
regional basis was effective for two reasons:  firstly, because it promoted integration and
harmonization of laws and secondly, because it ensured effective expenditure of resources.  Such an
approach had been used extensively by UNCTAD.  Her delegation believed that it would be useful if
the WTO increased its training and educative activity in CIS countries, given the fact that many CIS
countries were in the process of acceding to the WTO and that three were already WTO Members.WT/WGTCP/M/15
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Her delegation supported development of a WTO agreement on competition policy, bearing in mind
its ten years' experience of dealing with competition law.  It believed that competition rules were vital
to the healthy functioning of a market economy at the national level.  Although such rules might entail
difficulties for some sectors for certain time periods, overall, the balance would be strongly positive.
The same could be said of international rules in the area of competition policy, which were importantto shore up and reinforce efforts at the national level.
85. The representative of UNCTAD, updating Members on relevant activities of his delegation,
noted that the annual meeting of the UNCTAD Intergovernmental Group of Experts on Competition
Law and Policy had taken place immediately prior to the Working Group's meeting.  The Expert
Group monitored UNCTAD's extensive technical assistance and cooperation activities and provided a
forum for the exchange of information and experiences among competition authorities around the
world on relevant subjects.  In addition, the meeting earlier that week had provided an opportunity forcountries that did not have competition legislation, which were mostly developing countries, to
participate in the discussions and to obtain assistance, training and understanding of the issues.  The
four main substantive items that were considered at the meeting this time were:  (i) the competition
treatment of intellectual property rules; (ii) the co ntrol of international mega-mergers (the discussion
on this item featured input from the business sector as well as from academia); (iii) the links betweencompetition authorities and regulatory bodies; and (iv) international cooperation and technical
assistance.   The speakers had included EC Competition Commissioner Mario Monti who had made
proposals on the so-called Global Competition Forum Initiative and made it clear that developing
countries would be extensively involved in this initiative.  He also made a number of specific
comments regarding enhanced levels of technical assistance to be provided in cooperation withUNCTAD and proposed that the European Commi ssion should cooperate with UNCTAD on a study
regarding how anti-competitive practices hampered de velopment, particularly in poor countries.  A
few weeks previously in Brussels, UNCTAD had organized the third Least-Developed Countries
Conference.  During that conference, a discussion had taken place on the harm caused to poor
countries by anti-competitive business practices of firms.  Mr. Monti had also referred to a proposalfor residential training seminars of some 20-25 officials of developing countries, which would take
place in European universities.  In reply to the Mr Monti's keynote speech, UNCTAD's Secretary-
General, Mr. Ricupero, had stated that for him, the competition issue was no longer only a domestic
issue and that, in his view, enhanced international cooperation in this field was essential.  He had also
stated that competition policy was central to economic progress in poor countries and should not be
treated as a luxury, nor as an afterthought.  Finally, Mr Ricupero had commented on the excellent
cooperation that had been taking place between UNCTAD, on the one hand, and the WTO and theOECD Secretariats, on the other hand.  He emphasi zed that UNCTAD was ready to cooperate closely
with the WTO and with all member governments, es pecially governments of developing countries, in
the preparations for and follow-up to the upcoming Mi nisterial Conference in Doha.  At the end of the
Group of Experts meeting, several agreed conclusions had been adopted.  The first was that UNCTAD
was requested for next year's Intergovernmental Group of Experts, to study the possibility offormulating a model cooperation agreement on competition law and policy based on the UNCTAD
Set of principles and rules.  Secondly, the following subjects were chosen to be the basis of
consultations in next year's Expert meeting:  (i) the balance between control of concentrations and the
ability of domestic firms to compete on world markets; and (ii) the interface between competition
authorities and regulatory bodies.  Finally, the UNCTAD Secretariat was requested to prepare studieson the following three subjects, which would be revi ewed at the meeting:  (i) the relationship between
competition, competitiveness and development; (ii) a preliminary report on ways in which possible
international agreements on competition might apply to developing countries, including through
preferential or differential treatment with a view to enabling developing countries to introduce and
enforce competition law and policy; and (iii) a study on the roles of possible dispute mediationmechanisms and alternative arrangements includin g voluntary peer review in competition law and
policy.WT/WGTCP/M/15
Page 30
86. The representative of the OECD updated Members on work done at the May 2001 meeting of
the Committee on Competition Law and Policy and its Working Parties.  Work had progressed on the
anti-cartel program as well as on cooperation in the review of transnational mergers.  In addition,
Poland had been the subject of a regulatory reform review concerning its overall competition policy
and five particular sectors (electricity, gas, oil, coal and post).  Three roundtables had been held oncompetition in telecommunications, price transparency and training of competition authorities.  As
usual, the documentation of the “best practices” roundtables would be progressively uploaded on the
OECD Web site.  Continuing, she mentioned that twenty-one non-member economies had been
invited to the first session of the OECD Global Forum on Competition which would be held on 17 and
18 October 2001.  The first meeting would cover:  (i) competition authorities’ roles and tools; (ii) the
instruments of cooperation including OECD Reco mmendations; (iii) hard core cartels; and
(iv) cooperation in the review of transborder merg ers.  Finally, she reported on the adoption by the
OECD Council of a Recommendation concerning Structural Separation in Regulated Industries
(26 April 2001).  The Recommendation would be of particular interest to governments undertaking
privatization or regulatory reform initiatives.  It  encouraged those governments to consider, in the
context of their initiatives, structural separation (i.e. ownership separation) of vertically integrated
public utility industries along with other options such as continued integration or intermediate formsof separation such as accounting separation.  She felt that this Recommendation merited careful
consideration from a trade as well as a competition perspective, in that it would facilitate creation of a
level playing field in the competitive segments of the industry and make them more open them to
foreign entrants.
87. Continuing, she also informed participants on the outcome of the Joint Group on Trade and
Competition meeting in May 2001.  The Joint Group had heard reports by the WTO and UNCTAD
Secretariats on relevant developments in their organizations.  In addition, the Business and Advisory
Committee to the OECD (BIAC) and, for the first time, Consumers International had been invited to
attend part of the meeting.  With regard to the subject of Electronic Commerce, discussion indicated
that competition authorities had not yet treated a significant number of cases on the trade andcompetition aspects of this issue.  Nevertheless,  some specific issues were already calling for
attention.  Examples included the negative impacts on trade flows and international competition of
complex customs clearance procedures, high international parcel delivery costs, and taxation
problems.  The Joint Group had also discussed the issue of the international exhaustion of intellectual
property rights.  Based on somewhat contradictory results presented in three economic studies
pertaining to Australia, Sweden and the European Union, the discussion had been both lively and
informative.
III. THE CONTRIBUTION OF COMPETITION POLICY TO ACHIEVING THE
OBJECTIVES OF THE WTO, INCLUDING THE PROMOTION OF
INTERNATIONAL TRADE
88. The representative of the European Community and its member States, introducing relevant
sections of the paper submitted by his delegation (WT/WGTCP/W/175), said that the paper set out,
inter alia , his delegation's views on some specific benefits that would be provided by a WTO
agreement on competition policy.  First, an agreement would contribute towards addressing more
effectively those anti-competitive practices that had an impact on international trade.  This was
important for both developing and developed countries.  In the course of the four years of discussion
that had occurred in the Working Group, numerous examples had been provided by the competitionauthorities of both developed and developing countries of such practices.  The evidence provided in
recent reports prepared by the OECD and for the World Bank was also compelling.
5  T h e s e
documents along with related discussions in the Working Group had made it clear that the problem of
anti-competitive practices with an international dimension was certainly not merely an academic or
theoretical one; on the contrary, the evidence was compelling that such practices were more common
                                                     
5 OECD, Report on Hard Core Cartels and Levenstein and Suslow, op. cit.WT/WGTCP/M/15
Page 31
than had previously been widely understood and that they imposed heavy costs on the economies and
the development prospects of poor countries.  Given this, an enormous benefit would accrue to
Members from a framework agreement in the WTO that would seek to:  (i) assist Members in
implementing effective competition policies and in related institution-building processes; and
(ii) promote cooperation among relevant authorities particularly in the exchange of nationalexperience and with respect to cases having an international dimension.  While bilateral and regional
approaches to address these challenges were valuable, they were not enough and could be effectively
reinforced by a parallel initiative at the multilateral level.  A further benefit was of a more systemic
nature and would arise from more firmly integrating competition policy within the WTO system.  To
a certain extent, competition policy was already embedded in the WTO in a limited way, for example,
in the areas of services and TRIPS.  However, the issues arising in these areas would certainly benefit
from having a more horizontal approach to competition policy within the WTO; otherwise, theywould continue to be treated in a fragmented manne r.  An enhanced profile for competition policy in
the WTO could also reinforce the legitimacy of the organization, in that it would demonstrate in a
concrete way that the Organization was committed to ensuring that markets worked to the benefit of
all citizens, and not merely business enterprises.  From the perspective of his delegation, all of the
benefits that had been mentioned were benefits that would accrue to both developed and developingcountries and, for that reason, it was an issue that had to be seen from the perspective of mutual
interests.
89. Continuing, he said that it was incorrect to su ggest that the costs of implementing competition
policy had been overlooked in his delegation's proposal.  The paper by his delegation had noted that
implementing competition policies was not costless, and had suggested three factors that couldinfluence the cost/ benefit analysis of the proposal from the perspective of a developing country.
These were:  (i) the role of a multilateral agreement in supporting domestic competition institutions;
(ii) the benefit that would be obtained from cooperation; and (iii) the degree of flexibility and
progressivity that would be embodied in the agreem ent.  Regarding the concern that commitments in
this area would, to a certain extent, limit policy autonomy, in a limited way this was a naturalconsequence of any multilateral negotiation.  However, competition policy was clearly an area where
domestic action was important but such action woul d be of limited effectiveness unless it was
reinforced by international cooperation.  Hence, in a sense, cooperation at the multilateral level would
enhance rather than diminish national sovereignty in that it would empower countries to deal more
effectively with anti-competitive practices that currently undermined their trade and development
interests.  In any case, the ideas that had been put forward provided for substantial flexibility
regarding the scope of competition law and policy, since only commitments relating to transparency,
non-discrimination and hardcore cartels had been discussed whereas it would be up to countries to
decide how and whether all other areas of substantive competition law would be addressed.  Another
aspect of potential costs could be referred to as “institutional costs.”  These would have to be balanced
by each country having regard to the benefits of competition policy in terms of domestic
welfare/development and other important policy objectives that were being pursued by a country.There were also costs involved in the process of cooperation, which implied the use of administrative
resources.  This was why his delegation had emphasized that it was important for cooperation to be
defined in voluntary terms.  His delegation was convinced that developing countries would have
greater access to cooperation through the provisions of a multilateral protocol than would be the case
otherwise.  As to who would undertake a cost/benefit analysis and when, he noted that anycost/benefit analysis had an ex ante dimension and an ex post dimension.  Analysis had to be based on
ideas that had been put forward.  In this respect,  his delegation had been as specific as possible in
setting out its proposals because it believed that an important element of confidence building was
involved and that it was important for Members to be reassured regarding his delegation's intentions.
Nevertheless, to a certain extent, a definitive assessment of these issues could only be done at the timewhen the features of the agreement were clear.  As to why his delegation considered that the WTO
was the right forum, this was implicit in all elements that had been discussed since the matter of anti-
competitive practices with an international dimension was strongly trade-related and a multilateral
response based on mutual benefits was necessary.  Nonetheless, he did not foresee that the WTO'sWT/WGTCP/M/15
Page 32
role in this area would in any sense be exclusive; on the contrary, it was important that the
Organization's work on competition policy continue to be done in close cooperation with other
intergovernmental organizations active in the field.
IV. OTHER ISSUES RAISED BY MEMBERS RELATING TO THE GROUP'S
MANDATE TO STUDY THE INTERACTION BETWEEN TRADE ANDCOMPETITION POLICY
90. The representative of Argentina introduced a written contribution (document
WT/WGTCP/W/178) and the representative of the Ukraine introduced a non-paper relevant to this
item.  The representatives of Benin, Georgia , Indonesia,  Kenya , Mexico,  Morocco , Pakistan , and
Tanzania made oral statements regarding their national competition laws.
91. The representative of Argentina, introducing document WT/WGTCP/W/178, stated that
Argentina had had anti-monopoly legislation for many years.  The first legislation dated back to 1923
and was entitled the Law for the Repression of Monopolies.  In 1946, when Argentina was in process
of bringing its economy under a higher level of state control, efforts had been made to protect the
nationalized economy against foreign capital interests.  However, despite the legislature's strong urge
to fight monopolies, under legislation adopted at that time, only minimal enforcement activities had
been undertaken.  Important legislation had been adopted at the beginning of the 1980s, including alaw dealing with unfair trade practices and another law concerning the defence of competition.  The
law for the defence of competition introduced new ideas and ways of looking at the problem of trade
restrictive practices.  It also changed the approach from a per se  approach to a more modern approach
based on a rule-of-reason analysis.  Importantly, the legislation of 1980 was enacted within a
systematic framework of competition policies.  It was not just the result of an attempt to avoid,overcome, or correct a particular situation.  The legislation was intensively applied, although the
rulings were not particularly significant.  In the early 1990s, Argentina had undergone an extensive
process of privatization and deregulation.  This raised the issue of the relationship between bodies
regulating public services and the implementing authority under the law for the defence of
competition.  A number of specific enforcement activities were worth mentioning.  In 1997, an exofficio investigation of abuse of dominant position in relation to the most important Argentinian
petroleum company had resulted in a fine of $110 million.  In 1999, a new law was enacted and came
into force, mainly in response to concerns expressed by the public and in the media.  An important
reform embodied in the law was that it created an independent Tribunal for the defence of
competition.  A strict mechanism was established for the selection of members of the Tribunal:  it was
to include seven judges from the National Academy of Law, one representative from the field of
Economic Science, one Deputy and one Senator from the Trade Commission.  Another importantaspect of the law was that prior control of economic concentrations or mergers was made possible.
The law also strengthened the role of competition policy in relation to sectoral regulatory bodies.  A
consultation mechanism between these bodies and the competition authority was established.  Of all
the mergers that had been considered recently in Argentina, it had been found that 45 per cent
occurred abroad but, nevertheless, had an affect in Argentina.  As to what conclusions could be drawnfrom Argentina’s experience, he emphasized that competition policy was a vital underpinning of
successful reform initiatives and a healthy market economy; moreover, Members should not delay
taking action on this issue since this would inevitably compound the problems resulting from a lack of
effective laws and institutions.  Secondly, laws should be designed to establish a general framework
of competition to protect consumers and ensure a healthy market economy, rather than simply dealingwith particular problems in an ad hoc way.  Finally, although a modern competition law was vital, it
was only part of a comprehensive competition policy which would include other initiatives as well.
92. The representative of Indonesia stated that Indonesia had recently adopted a competition law
known as Law No. 5 on Prohibition, Monopolistic Practices and Unfair Business Competition.  The
law had been passed by Parliament in March 1999, with an effective date of March 2000, in order toprovide time to educate the public as to the need for the law.  Businesses had been given an additionalWT/WGTCP/M/15
Page 33
6 months' grace period to comply with it.  Valuable technical assistance had been received from
foreign authorities, including the United States and Germany.  This law had been adopted, in part, in
response to public concerns regarding monopolistic practices and abuse of powers by enterprises.
Prior to its enactment, legal provisions regarding competition were scattered throughout numerous
other laws including both criminal and civil codes, but this approach was not deemed sufficient.  Thenew law was intended to safeguard the interests of the public and to improve national economic
efficiency in order to increase people’s welfare.  It also aimed at ensuring equal opportunities for
large, medium and small-scale businesses as well as to prevent monopolistic practices and unfair
business competition.  It would create a competi tive environment to encourage companies to pursue
efficiency in the running of their businesses; in other words, it was aimed at reducing economic
inefficiencies created by companies' anti-competit ive behaviour.  The law was comprehensive since it
covered almost all forms of agreements and practices that restricted competition.  The majorsubstantive sections of the law dealt first with prohibitive agreements including oligopolies, price-
fixing, market division, exclusive dealing and group  boycotts; secondly, with prohibitive activities
including monopolies and predatory pricing; thirdly, with abuses of a dominant position including
interlocking directorates and mergers and acquisitions; and fourthly, with sanctions for certain
agreements involving, among other things, intellectual property, joint ventures for research anddevelopment, franchising, and other activities engaged in by small-scale enterprises and cooperatives.
Although the provisions contained some market sh are presumptions with regard to oligopolies and
monopolies, the law’s focus was on the prohibition of harmful anti-competitive business practices.
One area in which the law provided limited guidance concerned merger notification and review.
Additional regulations needed to be developed in that respect.  The law fully embodied the principlesof non-discrimination and transparency.  All parties were equally treated, regardless of nationality.  In
addition, transparency and due process were ensured, for example, by allowing businesses examined
by the Commission to be accompanied by legal counsel; making all decisions available to the public,
and permitting parties to the dispute to challenge decisions of the Commission.  These measures were
important to the credibility and hence the effectiveness of the law.  Regarding implementation of thelaw, the Commission for the Provision of Business Competition had already been established.  It was
an independent body that was not part of the executive, the legislature or the judiciary.  The main
functions of the Commission encompassed law enforcement; competition advocacy, such as providing
advice on government policy related to monopolistic practices and unfair business competition; and
writing guidelines and policy statements in order to assist business and public understanding and
compliance with the law.  In closing, he empha sized that competition law could not be seen in
isolation as merely consisting of anti-monopoly regulations.  It was one of several elements needed toestablish a healthy market economy and should be accompanied by other elements such as a policy of
liberalization and deregulation that contributed to minimizing distortive interventions.  The
Commission faced many challenges in implementin g the law.  To mention some, he referred to
difficulties in ensuring that the law would enjoy the support of the people and business actors and
whether the Commission would be able to attrac t professional, well-trained and highly motivated
staff.  The most important challenge that was being faced was to establish that the law would improve
the welfare of the people.
93. The representative of Morocco noted that at the previous meeting of the Working Group, his
delegation had presented a paper (document WT/WGTCP/W/170) outlining the main aspects of
Morocco's national legislation in relation to prices and competition that had been adopted by theParliament on 1 July 2001.  Regarding the main tools contained in the law, consultation was possible
to provide advice on anti-competitive practices and prices.  This tool had an important conciliatory
role with respect to the interest of business operators.  The Council on Competition was comprised of
a president and twelve members, designated by decree for a term of five years, and the term was
renewable.  In addition to the Directorate of Prices and Competition, three members were chosen
based on their legal and economic skills and their expertise in the area of competition.  Three others
worked in the distribution of services.  The president was appointed by the Prime Minister and this
was a full-time position.  Each year, the Council would send a report on its activities to the president.
In relation to procedures regarding anti-competitive practices, the Council would communicate itsWT/WGTCP/M/15
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views to the Prime Minister and the measures, conditions or injunctions decided upon.  A rapporteur
would be appointed to follow-up each matter.  Expertise requiring specific technical knowledge could
be availed of.  The Prime Minister, by reasoned decision upon the recommendation of the Council,
could ask interested parties to put an end to the anti-competitive practices in a given period of time
and could impose conditions with respect to the operations of groups of economic operators.  Forexample, he could ask the enterprises concerned not to merge or to modify operations or to take any
measures to assure or establish sufficient competition.  All decisions taken by the Prime Minister
would be published in an official journal together with the opinion of the Council on Competition and
the remedy.
94. The representative of Ukraine, introducing relevant sections of the non-paper that had been
submitted by his delegation, said that the integration of countries into a single world economy
required, first, that economic regulation in individual countries be in accordance with internationalprinciples and norms and, second, that there should be a more active application of experience gained
by countries that had long-term traditions in antimonopoly regulation.  Competition law and policy in
the Ukraine were based on the norms of the constitution of Ukraine and on the four basic competition
laws of Ukraine:  the Law on the Antimonopoly Committee of Ukraine; the Law on the Limitation of
Monopolism and Prevention of Unfair Competition in Entrepreneurial Activities; the Law on theProtection Against Unfair Competition; and the La w on Natural Monopolies.  Apart from those basic
laws, there were nearly 80 other laws and thousands of by-laws which were permeated with basic
competition principles.  According to Article 42 of the Constitution of Ukraine, the state ensured the
protection of competition in entrepreneurial activities.  Abuses of a monopoly position in a market,
unlawful restrictions of competition, and unfair competition were prohibited.  In 2000, substantialchanges had been made to the Law on the Anti monopoly Committee of Ukraine.  According to the
law, the Antimonopoly Committee of Ukraine was subordinated to the President of Ukraine and was
made accountable to the Supreme Rada (Parliament), which considered the Committee's report on its
activities every year.  This ensured transparency of the Committee's activities not only for the
government, but also for the society as a whole.  The law sought to ensure continuity in relation tocompetition policy matters by establishing a procedure to appoint and dismiss both the Committee's
Chairman and State Commissioners and to gradually replace the Committee's members.  This and
other measures sought to minimise political influence.  The Law on Natural Monopolies was adopted
in 2000 and, in principle, established the legal basis for a new system of state regulation of natural
monopolies.  The new system was intended to ensure the transition from departmental regulation to an
effective, transparent and non-discriminatory situation involving independent state bodies.  The
system made it possible to avoid conflict of interests as between those interested in the protection ofcompetition and those interested in regulating the relevant area since policy was jointly developed.
This also made it possible for the Committee to concentrate its limited resources on carrying out its
principal task, namely to protect, maintain, and develop competition.  The Law on Natural
Monopolies also laid the foundation for equal access to all economic entities, including foreign ones,
to services provided by natural monopolies, and, consequently, its implementation was an importantfactor in the development of competition in international trade.  The Law on the Protection of
Economic Competition had been enacted by the Parliament of Ukraine on 11 January 2001 and would
enter into force at the beginning of the following year.  Exemptions existed for small and medium-
sized entrepreneurs and for owners of intellectual property rights.  The law also allowed for
authorisations in certain cases.  It provided the Committee with a right to refrain from considering
unimportant cases and not to impose penalties in cases where the nature of the violation so warranted.
That norm together with the ability held by pers ons to apply to a court for double damages provided
the incentive to economic entities and consumers w hose rights had been infringed to actively protect
their rights not only by applying to the Committee, but also by applying directly to a court in
accordance with civil legal procedures.  The Committee had the right to seize evidence, includingarticles and documents.  Overall, he emphasized the key role that the law was playing in relation to
the process of creating a healthy and dynamic market economy in Ukraine.  Assistance provided by
various international organizations and bilateral donors had been vital to this effort.  Over time, theWT/WGTCP/M/15
Page 35
law would prove to be a major bulwark of the market economy in the Ukraine and of its integration
into the wider regional and international economy.
95. The representative of Pakistan said that in the late 1960s, a study on Pakistan's economic
situation had found that a substantial degree of control was exercised by 22 families over a number of
the major industries and businesses in Pakistan.  The Monopolies and Restrictive Trade Practice Lawhad been promulgated in 1970, in part, to address this problem.  A statutory authority, the Monopoly
Control Authority, had been constituted to administer the Law.  The Authority was comprised of three
members, each appointed by the federal government for terms of three-five years, one of whom was
appointed as the chairman. Normally, officers from various service groups of the civil service of
Pakistan were appointed as members.  The law clearly stated that no person was to be appointed as a
member of the Authority if he had or acquired any financial or other interest that was likely to
prejudicially affect his functions as a member of the Authority.  The Authority was vested with
powers to appoint officers and members of staff on such terms and conditions as it considered
necessary, and was an autonomous organization.  Therefore, there was no interference from the
government.  The orders made by the Authority were subject to appeal to the High Court. The
Authority's main functions were to register undertakings, individuals and agreements; to conduct
inquiries into the general economic conditions of the country, with particular reference to theconcentration of economic power and the existen ce or growth of monopoly power and restrictive
trade practices; to conduct inquiries in individual cases; to give advice to persons or undertakings
seeking such advice; and to determine whether or not a certain course of action was consistent with
the provisions of the law.  In relation to proceedings initiated following an inquiry, the Authority had
the power vested in civil courts under the Code of Civil Procedure.  It was also empowered to makerecommendations to the federal or provincial govern ments with regard to governmental actions which
might affect the concentration of economic power, monopolies or restrictive trade practices, in
recognition of the fact that government actions might have an important effect on competition.  While
the government was not always bound by the Authority’s recommendations, it would, at least, be
aware of the competitive implications of its actions.  The nationalization process of 1972 limited thescope of the Monopolies and Trade Practices Law.  Therefore, during the 1970s and 1980s the focus
of the Monopoly Control Authority was changed to emphasize the diversification of undertakings'
capital resources.  To this end, a large number of private companies, having a total value of assets not
less than the prescribed limit under the law, were  converted into public limited companies.  The
Monopoly Control Authority was converted from an independent body to one of the many
departments of the Corporate Law Authority during the period of military government.  In 1994, the
government had restored the Authority's independent status and delinked it from the Corporate LawAuthority.  In the 1990s, a shift from asset-based investigation to market-based investigation was
considered important in view of the changing economic situation.  During the past two years, the
Monopoly Control Authority had examined over 500 cases and more than 50 appeals had been filed in
the High Court or in the Supreme Court in relation to orders made by the Authority.  Decisions made
by the Courts in relation to those appeals had enabled the Authority to resolve various controversialissues regarding the implementation of the law, incl uding the determination of the value of assets, the
conversion of companies, public interest, mergers, and the definition of associated undertakings.
Under the law, the Monopoly Control Authority had th e power to and had, in fact, initiated special
inquiries relating to undue concentrations of economic power, restrictive trade practices and other
matters, including cases involving a cement cartel and mergers in the areas of polyester stable fibre,
mineral water and cellular phones.
96. The representative of Georgia said that his delegation had had a law on monopolistic
activities and competition since 1997.  The law included provisions on horizontal and vertical
integration, abuse of dominant positions or monopolization, mergers, natural monopolies, etc.  The
agency responsible for administering the law was the state-based Anti-Monopoly Service of Georgia,which had been established as an independent agency four years ago.  The head of the agency was
appointed by the President.  The Anti-Monopoly Service was authorized to request any governmental
or private institutions to cancel or change any anti-competitive decisions or decrees, to investigateWT/WGTCP/M/15
Page 36
cases, to draw conclusions, to give or not give permissions for mergers, to impose administrative fines
for abuses or other violations of the law, and even to apply to the State Prosecutor’s Office to institute
a criminal case.  The Anti-Monopoly Service was also responsible for administering two related laws,
namely the Law on the Protection of Consumers Rights and the Law on Advertisement.
97. The representative of Benin stated that his delegation did not yet have legislation on
competition.  However, it had drawn up a draft bill on competition which was being considered by the
National Assembly and would be passed shortly.  The draft law contained elements that would allow
the competition authority to combat abusive dominant positions and monopolies, etc. or to allow
measures that could foster competition.  The work on competition policy that had been undertaken in
the WTO had contributed to shaping the proposed law in Benin.  His delegation attached much
importance to initiatives to promote cooperation in the development and application of competition
policy, since national authorities, in many case, could not deal with the issue of anti-competitivepractices in isolation.
98. The representative of Kenya referred to certain aspects of Kenya's competition law and
advocacy activities undertaken in relation to anti-competitive activities.  Kenya’s Restrictive Trade
Practices, Monopolies and Price Control Act had been passed by the President in December, 1988.
For the first eight years of Kenya’s competition law, budgetary allocations for advocacy activities hadnot been made.  However, during the past three years, the Monopolies and Price Commission had
intensified its advocacy and public education activities, emphasizing the importance of competition
policy and law for the country’s economic development.  For instance, during the current year alone
the Commission had made presentations to the permanent committees on finance, trade, planning and
energy.  In March 2001, the Commission had held a regional seminar, which had focused on thestructural organization of competition agencies and compliance and had been attended by
representatives of the private sector and other government departments.  In April 2001, the
Commission had presented papers and interacted with the press, NGOs, professional bodies and other
pressure groups in order to publicize the country’s competition legislation, in an event for a group
made up of NGOs under the umbrella of the Institute of Economic Affairs.  A national committee on
the interaction between competition policy and trade had also been established, which included
members from most fields of business, including the Kenyan Association of Manufacturers,
representatives of small and micro-enterprises, NGOs and the press.  During the past three years, the
Commission had also published annual reports.
99. The representative of Tanzania said that Tanzania had enacted its first competition framework
in 1994 in the form of the Fair Trade Practices Act No. 4.  This Act was the result of demands by
members of Parliament in response to trade liberalization and privatization efforts that had begun in1986 had resulted, in many cases, in the replacement of state monopolies by private ones.  An
effective competition law and policy were needed to address this concern.  The 1994 Act included
elements dealing with deregulation, competition, sectoral regulation and general consumer protection
provisions.  The implementation of the Act rested in the hands of a commissioner.  An appellate
tribunal was created and vested with powers equivalent  to that of the High Court.  However, the 1994
Act had not been fully implemented, partly becau se of limited resources, partly because the
government machinery did not have the minimum critical mass of people with knowledge of
competition policy and law, and partly because the Act itself was too cumbersome.  In April of 2001,
Parliament had replaced the Fair Trade Practices Act of 1994 with the Fair Competition Act.  This
new act would be supervised by a Commission th at would be a body corporate.  It contained
provisions similar to most modern competition laws.  The new Act had been the result of cooperation
and assistance received from Sweden, the United Kingdom and the World Bank.  The UNCTAD
Model Law on Competition and some OECD literature had also provided useful guidance in
developing the law.  Additional assistance from international organizations and countries with well-
developed competition laws to facilitate effective implementation of the law and develop relatedenforcement methodologies would be needed before his delegation would be in a position to join a
multilateral system of cooperation.WT/WGTCP/M/15
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100. The representative of Mexico referred to the experience of the Federal Competition
Commission in Mexico.  For the past eight years, Mexico had had both modern competition
legislation and an administering body, the Federal Competition Commission.  In Mexico's experience,
three requirements had to be fulfilled in order for a competition agency to establish itself and its
credibility.  Perhaps the most important was that the agency needed to have support from thegovernment.  The government had to respect the autonomy of the agency and had to provide the
agency with the necessary resources.  The autonomous or independent status of the authority did not
imply that all conflict would be avoided with regulated agencies.  That type of tension would always
exist.  However, it was important to have direct gove rnment backing in order to support the role of the
agency.  In the case of Mexico, the President had publicly supported the independence of action of the
Mexican competition authority.  Secondly, support was also needed from the various corporate sectors
of the economy.  Mexico, like many other developing countries, consolidated much of its industrialgrowth on the basis of public and private monopolies or dominant firms; these firms naturally tended
to be sceptical of the role of competition policy.  In these circumstances, the challenge faced by
competition agencies was to convince economic actors to support their actions.  The principle of
transparency was a key factor that could achieve this.  The private sector might also support the
creation of a competition agency as a means of attracting foreign direct investment.  However, as soonas an investigation was launched, support from relevant components of the business community could
be jeopardized.  Nonetheless, if the agency acted in a neutral and transparent fashion, it was possible
to convince such actors that the competition agency should be respected and trusted. Finally, the
public needed to be convinced of the merits of competition law.  In Mexico, the main aim of the
competition legislation was to protect the process of competition per se ; not the consumer, nor the
competitors.  Public support was needed since the competition agency had to take action in some very
controversial and difficult cases.  In this regard, it was important to choose cases that would help in
demonstrating the clear importance of competition law and policy for a healthy market economy and
public welfare.
101. The Chairman noted that in accordance with a request made at the Working Group's meeting
in March 2001, an updated version of the Overview of Members' National Competition Legislation
(document WT/WGTCP/W/128/Rev.2) had been circulated by the Secretariat, to reflect information
that was provided to the Group during the past year by Morocco, the Slovak Republic, Thailand and
Uruguay.  This document would be further updated by the Secretariat, in due course, to reflect the
additional inputs on Members' national legislation which had been provided at the current meeting.  In
addition, as had also been requested by Members at the Working Group's meeting in March, a table
and related information concerning exceptions and exemptions from national competition legislation(WT/WGTCP/W/172) had been made available.
102. The Chairman provided a number of personal reflections on the discussion that had taken
place on Agenda items I-IV.  He drew attention, inter alia , to the following points, emphasizing that
they were not in any way implied to be comprehensive and were simply some select personal
impressions which had no official standing:
- In relation to agenda item I, here had been a further, wide-ranging discussion of the
general importance of the fundamental WTO principles for the effective
administration of competition law and policy, of the role that these principles might
play in a possible multilateral framework on competition policy, and of the pros andcons of particular principles in this regard.  Much attention had been paid to the
principles of flexibility and progressivity in addition to those of non-discrimination
and transparency which had previously received extensive attention in the Working
Group.  This had been a particularly rich aspect of the discussion and had elicited a
range of views.WT/WGTCP/M/15
Page 38
- In relation to agenda item II, much attention had been given to the question of the
extent to which the modalities for cooperation which had been proposed by some
Members to be incorporated in a possible  multilateral framework would or would not
be helpful to developing countries in addressing the problems that they faced in this
area.  Particularly helpful, in this regard, had been the intervention in the debate of anumber of representatives from such countries.
- In addition to many other elements, two interesting features of the discussion on
item II had been the presentation, by the parties concerned, of a recent bilateral trade
agreement between countries at different levels of economic development which
embodied significant provisions on comp etition policy and a discussion of the
concept of peer review and the role that it might play in any framework for enhancedcooperation on competition policy in the framework of the WTO.
- As at the Working Group's meeting of 22-23 March, a good number of countries had
made very interesting presentations on their national competition legislation and
experience and on the lessons that they offered for other countries contemplating the
adoption of legislation or facing the challenges of implementing new legislation inthis area.  Particularly helpful, in this re gard, had been the participation in the meeting
by a large number of capital-based officials from national competition agencies.
V. REQUESTS FOR OBSERVER STATUS FROM INTERNATIONAL
INTERGOVERNMENTAL ORGANIZATIONS
103. The Working Group agreed to revert to reques ts made by SELA, the Organization of the
Islamic Conference, the South Centre and the United Nations Economic Commission for Latin
America and the Caribbean (ECLAC) at its next mee ting, having regard to the ongoing consultations
on related matters in the framework of the General Council.
VI. OTHER BUSINESS
104. Regarding the nature and process for preparation of the Working Group's report to the
General Council on its activities in 2001, the Chairman proposed and the Working Group agreed  that
the Secretariat be asked to prepare a draft report of the type that had been done at the end of 1998(WT/WGTCP/2), 1999 (WT/WGTCP/3) and 2000 (WT/WGTCP/W/4).  It was further agreed that a
short meeting of the Group would be held on 28 September, for the purpose of reviewing andapproving the draft Report.
105. As suggested by the representative of Egypt, and following discussion by Members, the
Secretariat was asked to prepare, in advance of the next meeting of the Working Group, an
information note on documentation prepared by other intergovernmental organizations relating to the
impact of mergers and acquisitions on domestic companies, particularly with respect to the small and
medium-sized business sector.  In the course of the discussion, the point was also made that the
importance of competition policy for the small business sector was only one aspect of the overallsignificance of such policy;  this point should be kept in mind in any subsequent analytical work.
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