./.WORLD TRADE
ORGANIZATIONWT/GC/W/308
25 August 1999
(99-3540)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Trade and Competition
Communication from Japan
The following communication, dated 20 August 1999, has been received from the Permanent
Mission of Japan.
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Proposal
1. Successive reductions in trade barriers, such as tariffs, have highlighted the need to address
the issue of anti-competitive business practices that affect international trade.  The globalization ofbusiness activities has also put more emphasis on cooperation among Members against such
anti-competitive practices.  In this respect, Members should agree to put the item of competition law
and policy on the agenda of the next WTO negotiations with a view to:  establishing a competition
regime for each Member; ensuring effective enfor cement in order to properly address anti-competitive
practices;  and promoting international cooperation in this area.  The establishment of a multilateral
agreement on competition law and policy could be a possible option to be pursued in the negotiations.
We must also be mindful of the valuable discussions carried out in the Working Group on theInteraction between Trade and Competition Policy.
Background
2. Border trade barriers, such as tariffs, have been substantially diminished through the
successive efforts made throughout the GATT and WTO negotiations.  As a result, various kinds ofnon-tariff barriers within the border areas, inter alia  anti-competitive business practices in domestic
markets, have been highlighted as being the remainin g obstacles to affect international trade.  Thus,
there is an increasing need for each government to deal properly with anti-competitive business
practices that affect international trade.
3. Moreover, with the globalization of business activities, anti-competitive business practices
may occur across the borders of more than one country, or may even affect the conditions of
competition in a foreign country, thereby incr easing their international dimension.  Under such
circumstances, it would be difficult for a single government to correctly assess the distortive effects
on trade and to effectively preclude or deter such anti-competitive practices having an international
dimension.  To simply eliminate them by making use of the national competition law and trademeasures may not only raise conflicts with other countries, but may also create practical difficulties to
ensure the effectiveness of enforcement.
4. On the other hand, the global overview of the situation concerning competition law and policy
suggests that there are a number of WTO Members who have yet to adopt competition laws, or whose
own competition law does not function effectively enough.  It appears, therefore, that anti-competitive
business practices are yet to be sufficiently addressed.  For those practices having had significantWT/GC/W/308
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international effects, the cooperation arrangements have been put forward, either bilaterally or
multilaterally, outside the WTO and have gained a certain success.  However, such cooperation
arrangements tend to be established only among developed countries having plenty of experience in
competition law, since the parties concerned expect the arrangement to be mutually beneficial.
5. The above analysis indicates that it would be desirable to establish a multilateral framework
covering these issues with a view to promoting competition law and policy, as well as its enforcement
mechanism, and to strengthening cooperation in this area among the Members.  Thus, the issue of
competition law and policy, including the establishment of such a multilateral framework, should be
put on the agenda of the next WTO negotiations.  At the same time, it is important to adopt a
progressive approach to reflect the current situation of competition law and policy, and its
enforcement mechanism, in each Member country.
6. When actually contemplating a WTO agreement on competition law and policy, we should
first consider incorporation of the fundamental WTO principles of transparency and
non-discrimination, as well as of the provisions concerning the establishment and development of a
competition law and policy.  At the same time, the agreement should be aimed at anti-competitive
business practices that affect international trade, since the expansion of trade in goods and services is
one of the important objectives of the WTO.
7. Furthermore, appropriate consideration should be made in making rules on competition law
and policy in light of the possible effects that such rules may have upon developmental aspects of the
developing country Members.  There is much diversity in the development stage and in competition
policy among WTO Members:  many have no compe tition law, while others have a long experience
on the issue of competition law enforcement. Many developing countries lack human resources andexpertise in administration, and thus need a preparatory period to create competition cultures and to
establish competition law and its enforcement mechanism.  Such differences among Members should
be taken into account in an appropriate manner.  For example, in the case where some Members have
difficulties in adopting their competition law, it would be useful to discuss whether alternative ways
to effectively implement competition policy exist, without undermining the principles of transparency
and non-discrimination.  Moreover, when establishing competition law and policy, Members should
be given a certain flexibility as to its contents.
8. In order to cope with the anti-competitive business practices having an international
dimension, and to avoid conflicts caused by the ap plication of trade measures and competition law
across borders, Members should examine the various cooperation arrangements, including an
information exchange exercise on the enforcemen t of competition law.  Technical cooperation by
developed countries also plays an important role in strengthening the enforcement mechanism ofcompetition law in developing countries.
9. Although it is important to ensure the effective application of WTO rules on competition law
and policy for each Member, it would not be appropriate to apply the WTO dispute settlement
procedures to the specific applications of law in individual cases, since such work would entail great
difficulties in collecting evidence or in fact-finding.  Rather, alternative measures should be examinedto maintain the effectiveness of such rules, e.g ., by gathering information and exchanging views on
the enforcement activities of a Member's competition law and policies in a general manner.
10. The interaction between the trade and competition policy has been extensively discussed
within the Working Group.  In this respect, it would be useful to review the existing rules on trade
remedies from a perspective of competition policy.  Japan, in this regard, is considering taking upsuch issues in appropriate fora, e.g. those for reviewing the Agreement on Anti-Dumping.
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