RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/W/126
31 May 1999
(99-2175)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM ZIMBABWE
ON BEHALF OF THE WTO AFRICAN GROUP
The following communication, dated 6 May 1999, has been received from the Permanent
Mission of Zimbabwe, with the request that it be circulated to the Working Group as a contribution of
the WTO African Group.
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I. INTRODUCTION
The purpose of this contribution is to provide an initial expression of views by the African
Group regarding the importance and appropriate treatment of competition policy in the context of theWTO system.  It focuses, in particular, on the matter of enhancing cooperation and communication
among Members in the area of competition law and policy, including the matter of technical
cooperation.  The contribution builds on the statement made by the African Group in the recent
intersessional meetings, in which the Group observed that "We agree with the overall thrust that
markets should remain competitive….  Our governments should … be allowed and assisted to
develop domestic competition legislation to ensure efficient competition and also the protection of the
consumer….  particular attention should be accorded to the specific situation of many of our countrieswho do not have…domestic legislation and institutions for the enforcement of competition policy.
Technical assistance should be furnished and focused in this area".
II. GENERAL PERSPECTIVE ON THE ROLE OF COMPETITION POLICY IN
DEVELOPING MARKET ECONOMIES
The relationship between sound marketplace framework policies, including competition
policy, and economic development is increasingly recognized.  This is particularly the case where
competition policy is implemented as one aspect of a package of inter-related reforms of policies
aimed at promoting economic and social development through market institutions and processes.
Such policy should also reflect fundamental WTO principles of national treatment, most-favoured-
nation treatment and transparency.  Some of the benefits that have been attributed to competitionpolicy, where it is introduced in such a context, include protecting consumers, ensuring competitive
prices for socially important input goods, and attracting beneficial foreign investment while also
ensuring that such investment ultimately works to the benefit of consumers and society as a whole.
Reflecting a greater appreciation of these benefits, a number of African countries have adopted or
strengthened competition laws and policies in recent years, or are in the process of developing them.
Competition policy is also important to reinforce the objectives of trade liberalization.
Experience shows that, if firms are allowed to engage in collusive arrangements or exclusionary
practices in international markets, this can dire ctly suppress the gains that would otherwise accrueWT/WGTCP/W/126
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from the lowering of tariffs and other traditional barriers.  Developing countries may be particularly
vulnerable to anti-competitive behaviour by firms to the extent that they lack the necessary laws and
institutions to effectively address such practices.
More generally, it is important to recognize that developing countries have special needs and
face particular challenges in implementing legislation and policies in the area of competition.Legislation and policies should be strong enough to deal effectively with anti-competitive practices
that impede development, while also providing su fficient flexibility to enable firms to achieve
beneficial economies of scale and other efficiencies, and to take advantage of opportunities to
penetrate international markets.  Account must also be taken of the general economic circumstances
and institutional endowments of such countries.  In many cases, a phased approach to the
implementation of competition policy will be appropriate, focusing on the most egregious practices
such as inter-firm cartels that fix prices.  Count ries may wish to focus their enforcement efforts on
collusive or other anti-competitive practices that raise the price of industrial inputs (energy or raw
materials) that are important for developmental purposes.
III. THE ROLE OF INTERNATIONAL COOPERATION, INCLUDING TECHNICAL
COOPERATION, IN THE APPLICATION OF COMPETITION POLICY
International cooperation, including but not limited to technical cooperation, is another
important consideration in promoting the sound application of competition law and policy in
developing countries.  To date, the matter of technical assistance and training in the adoption and
application of competition policy has received insufficient attention in the Working Group.  While
African countries have benefited from assistance provided by UNCTAD, the World Bank and other
intergovernmental organizations in addition to individual WTO Members with experience in this area,the degree of assistance provided has not been equal to the challenges faced by developing market
economies.  The Working Group should consider and reflect upon ways in which current levels of
assistance might be augmented, and made more effective through enhanced coordination between the
relevant agencies.  In many cases, what is needed most of all may be for countries with experience in
addressing particular anti-competitive arrangements and practices to share non-confidentialinformation, practical experiences and insights with countries lacking extensive experience in this
area.
Beyond the matter of technical cooperation and training, it is important to consider what other
forms of cooperation may be needed to assist develo ping countries to deal effectively with particular
instances of anti-competitive practices that affect their trade and development prospects.  While
recognizing that the nature and extent of cooperation that is feasible will depend importantly on
individual Members' degree of experience and inst itutional capabilities, it would seem that new
arrangements may be needed with respect of two categories of conduct:  first, with regard to situations
such as major international mergers in which the resolution of cases affects a large number of
countries, new approaches may be needed to ensure that the interests of the full range of affected
countries are taken into account.  Second, in situations in which developing countries are affected by
anti-competitive practices of international corporations in their individual domestic markets, newmechanisms may be needed to ensure that th ey have access to the information necessary to
appropriately assess and address the relevant practices.
IV. POSSIBLE MULTILATERAL RULES ON COMPETITION POLICY
It is recognized that there is a clear distinction between the immediate positive value of
national competition laws and policies that take account of domestic need and levels of economicdevelopment, on the one hand, and proposals for multilateral rules on competition law and policy, on
the other hand.  While increased transparency, efficiency gains, consumer welfare and support for
wider domestic reforms are part of the dividends that can arise from national competition laws andWT/WGTCP/W/126
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policies, it is felt that the strengths and weakne sses of multilateral rules need further study and
analysis.  The Group is determined to join in this analysis and to work with and seek the assistance of
all organizations in this area, including UNCTAD and the World Bank, in determining the dividends
and added value that would accrue to Members, if any, from multilateral rules on competition law and
policy.
V. CONCLUSION
There is growing recognition of the important inter-relationships between trade, competition
policy and economic development.  Reflecting this, recently, a number of African countries have
adopted or strengthened national competition laws and policies.  However, African countries, like
other developing countries, face challenges in developing the institutional capability for successful
implementation of competition law and policy.  International cooperation, including but not limited to
technical cooperation, has an important role to play in helping developing countries to meet thesechallenges.  Flexibility is the key in designing laws and policies that address anti-competitive
practices that threaten development without preventing firms from achieving beneficial economies of
scale and other efficiencies.
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