WORLD TRADE
ORGANIZATIONWT/WGTCP/W/121
27 May 1999
(99-2140)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM JAPAN
The following communication, dated 16 April 1999, has been received from the Permanent
Mission of Japan with the request that it be circulated to Members.
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Approaches to promoting cooperation and communication among Members,
including in the field of technical cooperation
I. COOPERATION AND COMMUNICATION CONCERNING ENFORCEMENT OF
COMPETITION LAWS
The OECD member countries have extensive experience in cooperation and communication
concerning enforcement of their competition laws that affect international trade.  Specifically:
(a) mutual understanding has been deepened through extensive discussion about how enforcement of
competition laws affects interests of other countries and how conflict can be avoided when problems
arise; (b) the OECD Recommendation of the Council concerning cooperation between member
countries on anticompetitive practices affecting international trade was effected in 1967, and
subsequent revisions led to rules including those of notification (so-called soft laws);  and (c) the
OECD member countries have piled up experience in notification and consultation based on theOECD Recommendation.
Some countries are more involved in this ty pe of cooperation in the form of bilateral
cooperation agreements.  These bilateral agreements are commitments between governments, and
their objectives are the development of cooperation between the authorities and the effectiveenforcement of the competition laws of both countrie s.  These agreements also aim at enhancing trust
between competition authorities and at substantially reducing frictions that result from conflicts with
national sovereignty.
The main elements and merits of such an in ternational cooperation are outlined as follows:
The first element is notification.  Notification means reporting to other countries when
enforcement activities of the competition law of a country are likely to affect important interests of
other countries.  Notification will be given, for example, when firms in the other countries allegedly
violate the competition law in the country, when the country collects information in another country,when a similar case is being examined in another co untry, and so forth.   Notification makes it easier
for the government of the notified country to fores ee cases that may affect its important interests, and
to have an opportunity to express its opinions and claims to the government of the notifying country.
The second element is consultation among relevant countries with respect to the enforcement
of competition law.  Consultation is a mechanism to maintain communication and coordination whenWT/WGTCP/W/121
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the government of the notified country shows concern that its important interests would be affected,
or when more than one country is investigating similar cases.  Especially for merger examinations, the
same case is often examined in different countries simultaneously.  There may be opportunities of
frequent communication between the competition author ities of each country in merger cases thereof.
In addition, cooperation on investigation with competition authorities of other countries might bepossible in some cases.  This consultation mechanism is expected to reduce friction and to result in
efficient and coordinated enforcement activities on cases that have international dimensions.
The third element is consideration of comity.  Comity refers to the consideration by one
country taking into account the important interests of other countries when engaging in enforcement
activities.  The concept so-called "positive comity" is also being introduced.  This concept generally
refers to the consideration that when anti-competitiv e practices within the territory of a country exert
ill effects on the important interests of the other country, the other country can request that measures
based on competition law be adopted by the country in which the practices are occurring.  Positive
comity is expected to prevent difficulties and friction that might result from direct application of the
law of one country to anti-competitive practices in the territory of the other country.
Japan has given and received notifications, when necessary, since the Recommendation of the
OECD Council was effected in 1967.  The Government of Japan is currently negotiating with the
government of the United States to conclude an agreement concerning cooperation on anti-
competitive activities.
II. EXCHANGE OF OPINIONS CONCERNING COMPETITION LAW AND POLICY
It is also extremely useful to have opportunities for exchanging opinions between countries
concerning competition law and policy other than specific enforcement in order to understand and
resolve various problems concerning the relationship between trade and competition policy.
1. Periodical bilateral meetings
High-ranking officials of competition authorities often visit each other and exchange
information on various issues such as recent changes in competition legislation, major violations
against competition laws and important policy issu es.  The Japan Fair Trade Commission (JFTC) have
been conducting periodical meetings with the competition authorities of countries that have strong
economic relationship with Japan, including the United States, European Commission, Korea and
some other countries.  Although trade problems are not specifically addressed as an issue there, thesebilateral meetings are instructive for understandin g the framework of competition laws, policies and
other major issues.
2. Discussion in international organizations
Various issues concerning competition policy are discussed in relevant meetings of the WTO,
the OECD, the APEC and other organizations.  In the OECD Committee on Competition Law and
Policy, country reviews on regulatory reform are proceeding based on the perspective of competition
policy.  Japan positively undertook the review in the first year of this process in 1998.
3. Public comment
A system of public comment is often employed in the formulation of competition policy.  In
general, guidelines are published at their draft stage.  Competition authorities receive a wide range of
foreign and domestic comments and opinions and refine the drafts based on the comments.WT/WGTCP/W/121
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In Japan as well, the JFTC published Guidelines Concerning Mergers and Acquisitions in
December 1998.  Beforehand, a draft was published in June 1998, and opinions were gathered from
foreign and domestic parties for preparation of these guidelines.  In addition, Guidelines Concerning
Unfair Trade Practices with Regard to Patent and Know-how Licensing Agreements are currently at
the revision stage, and domestic opinions concerning the draft were requested by 16 April  whileforeign opinions concerning the draft by 18 May.  The JFTC also issued comments concerning the
draft revision of the Antitrust Enforcement Guidelin es for International Operations prepared by the
government of the United States in 1995.
III. TECHNICAL COOPERATION WITH COMPETITION AUTHORITIES OF OTHER
COUNTRIES
Technical assistance concerning competition policy is increasingly needed in developing and
transitional countries with the recognition that competition law and policy are vital to stimulate
business activities in their countries.  The philosophy of competition policy is universal in that it
makes use of the market mechanism to the maximum extent.  On the other hand, competition policy
includes many technical aspects.  Therefore, it is extremely beneficial for countries with more
experience in competition policy to cooperate those with less experience by assisting the developmentof competition laws and by explaining enforcem ent experience and problems of competition policy.
Based on an initiative from Japan in APEC, the Partners for Progress programme is
functioning as a framework for more effective progress in technical cooperation.  The Partners for
Progress programme provides various types of assistance in the fields of standards and conformityassessment procedures, intellectual property rights, and competition policy.  The JFTC engages in
planning and operations concerning competition policy jointly with the government of Thailand.
Various training courses concerning competition law and policy are also held in Japan. In
addition, specialists are dispatched when requested so that the technical cooperation is well tailored tothe needs.
It is beneficial to create systems that enable continual access to the latest basic information
concerning competition law and policy in foreign countries.  Accumulation and updating of basic data
is being carried out in APEC, UNCTAD, and other international organizations.  The JFTC as well is
handling function of the information center for the Asian and Oceanic Anti-monopoly Conference in
order to assist exchanges of opinions among member competition authorities.
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