RESTRICTED
WORLD TRADE WT/WGTCP/W/16
2July1997
ORGANIZATION(97-2763)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM NIGERIA
Thefollowing communication hasbeenreceived fromthePermanent Mission oftheFederal
Republic ofNigeria withtherequest thatitbecirculated toMembers.
_______________
Background
1. WTO Ministers, atSingapore, established aWorking Group tostudy issues raised byMembers
relating totheinteraction between trade andcompetition policy. Issues include (butarenotlimited
to)anti-competitive practices. Theobjective ofthestudy istoidentify anyareas thatmaymerit further
consideration intheWTO framework (WT/MIN(96)/DEC: paragraph 20,second indent).
2. Initial informal discussions intheWorking Group show thattherelationship between trade
andcompetition policy iscomplex. Therelationship isyettobeexamined, particularly within the
multilateral framework oftheWTO. Only alimited number ofMembers havedomestic legislation
incompetition policy although thisnumber isincreasing. Many countries, developed anddeveloping
countries, donotyethavedomestic legislation oncompetition policy. African countries areyetto
acquire experience inthisarea.
3. Members havebeeninvited tooffertheirviews onhowtheWorking Group should proceed,
including justifications forissues proposed fordiscussions. Intheparagraphs thatfollow, Nigeria 's
views areoffered on:approaches; objectives ofthe"study" exercise; assumptions; substantive policy
focus; andmethodology.
Approaches
4. Itisvitalthattheagenda andwork programme thatareestablished fortheWorking Group
should becomprehensive ofissues raised byMembers, balanced andintegrated. These arenecessary
requirements.
5. Thechallenge fortheWorking Group istoexamine therelationship between competition policy,
ontheonehand, andtrade policy ontheother, byidentifying thepoints ofintersection, convergence
andconflict, where theyexist.
6. WTOMembersarefamiliarwithtradepolicyandliberalization,butlessfamiliarwithcompetition
policy. TheWorking Group willgainexperience from thefewMembers which haveexperience in
competition policy. Atthesame time, ithastobeclearly understood thattheexperience ofthese
Members incompetition policy hasfocused virtually exclusively ondomestic andnotinternational
competition policy. Therefore, while reviewing theirvaluable experience, itisnecessary tostatethatWT/WGTCP/W/16
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theWorking Group should notbegin from thedefault, pre-set selection oftheclassical approach to
competition policy which hasfocused almost exclusively ondomestic competition.
7. Rather, theWorking Group should begin withacomprehensive, integrated, andbalanced
identification ofalltheissues raised byMembers. After theoverall picture, itshould thenmapthe
issues fordetailed consideration inawork programme. Thisapproach willmake itpossible forthe
Working Group tocommence withtheexamination oftherelationship onthebasis ofinternational
cooperation andencompassing thetotality ofrelevant Member concerns.
8. Theinitial stages oftheWorking Group meetings should beaneducational process forallthe
issues raised tobefully presented andwidely discussed. Thiseducational stage willassist inthe
development ofacommon terminology andtheestablishment ofcommon assumptions fortheGroup 's
discussions. Thiswillensure notonlycoherent discussions, butalsoensure thatresults ofthestudy
exercise willbecumulative.
Purpose ofthestudy
9. InNigeria 'sview, therationale forthestudy oftherelationship within theWTO arethe
following:
(a) achieving theprinciples andobjectives oftheWTO assetoutinthepreamble ofthe
WTO Agreement, particularly inrespect ofgrowth anddevelopment (raising standards
ofliving, allowing fortheoptimal -efficient -useoftheworld 'sresources inaccordance
withtheobjective ofsustainable development, need forpositive efforts toassist
developing countries tosecure ashare inthegrowth ofinternational trade);
(b) avoidance ofunilateralism inanyareaofmultilateral trade policy; and
(c) toachieve international cooperation andconsensus intheformulation ofmultilateral
trade regimes, forexample, intrade andcompetition policy, ifdetermined tobe
necessary.
Examination ofoperating assumptions oftheWorking Group
10. Asstated,thereisaclassicalapproachtocompetitionpolicywhichfocuseslargelyontheantitrust
approach todomestic competition. Thisapproach isvaluable andwillbeanimportant contribution
totheefforts oftheWorking Group. However, there isalsonowabroadening ofapproaches and
assumptions toinclude awider perspective thataddresses theeffects ofglobalization andtheobjective
ofdevelopment. Theclassical assumption, thedevelopment assumption, bothlinked byshared concerns
forefficiency inorder toexpand production oftrade ingoods andservices, growth anddevelopment,
should bediscussed intheWorking Group. TheWorking Group should avoid partial and/or incomplete
assumptions inpursuing itsmandate.
Policy study focus
11. Nigeria views competition policy asahorizontal issuethatcutsacross allareas oftradepolicy
andtheWTO agreements. Against thisbackground, policy focus andstudy intheWorking Group
inexamining therelationship between trade andcompetition policy could focus onthree categories.
Thefirstcategory (a)represents theclassical approach. Category (b)requires examination. Category (c)
represents theessential development dimension, alsodeserving ofattention.WT/WGTCP/W/16
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(a) Competition policy anditstrade effects. Thisisbased oncompetition policy from
anantitrust perspective toprotect trade/commerce fromunlawful restraints. Restrictive
Business Practices (RBPs), cartels, restriction ofmarket access through abuse of
dominant positions, predatory pricing, etc.These anti-competitive practices, which
antitrust policy seeks toregulate andcorrect, nullify thedividends from trade
liberalization. Under thiscategory, domestic andglobal mergers should beexamined;
(b) Trade policy (measures) witheffects forcompetition. Inthiscategory, theWorking
Group could examine anti-dumping measures, safeguard measures, subsidies and
countervailing measures, andtheireffects, including anti-competitive effects fortrade,
etc.Suchtrade measures havethepotential ofcancelling outthegains achieved from
dismantling barriers totrade; and
(c) Development dimension. Under thiscategory, itwould beuseful toexamine the
competitiveness effects oftariff escalation, technical barriers (technical regulations,
conformityassessmentprocedures,standards,ProcessandProductionMethods-PPMs)
andrules oforigin. Furthermore, divergent interpretations ofthe"jurisdictional"
limitations ofArticle XXofGATT 1994 demonstrate theutility ofexamining the
competitiveness effects ofthevarying interpretations ofthisArticle forallMembers.
Itisalsosuggested thatcapacity-building intrade rules anddisciplines andtheir
competitiveness effects should alsobeexamined.
Methodology
12. Regarding themethodology tobeemployed bytheWorking Group, several sequential steps
could beconsidered asfollows:
(a) inventory ofcompetition-related provisions inWTO agreements;
(b) listofWTO Members withdomestic regulations incompetition policy together with
asummary oftheessential features oftheregulation inorder tohave aclear
understanding oftheclassical status ofcompetition policy;
(c) expert presentations byrepresentatives ofintergovernmental organizations;
(d) discussions ofMembers 'non-papers;
(e) discussion ofcasestudies thatarerepresentative ofthethree perspectives thathave
beenproposed ontherelationship between trade andcompetition policy;
(f) possible jointmeeting withtheWorking Group ontheRelationship between Trade
andInvestment inthespirit oftheMinisterial Declaration andwiththeobjective of
attaining coherence inthework oftheWTO; and
(g) discussions onthedesirability ofrules intheareaoftrade andcompetition policy.