RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/M/12
8 November 2000
(00-4720)
Working Group on the Interaction
between Trade and Competition Policy
REPORT ON THE MEETING OF 2-3 OCTOBER 2000
Note by the Secretariat
1. The twelfth meeting of the Working Group on th e Interaction between Trade and Competition
Policy took place on 2-3 October 2000, 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 27 March 2000, 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 Group in its previous meeting and in its meetings in
1999, the Chairman suggested that the 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/12
Page 2
He noted, as well, 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
were fully taken into account.  It seemed that this was something which should be done in relation to
each of the above four work elements.
I. THE RELEVANCE OF FUNDAMENTAL WTO PRINCIPLES OF NATIONAL
TREATMENT, TRANSPARENCY AND MOST-FAVOURED-NATION
TREATMENT TO COMPETITION POLICY AND VICE VERSA
4. No contributions were received or statements made on this item.
II. APPROACHES TO PROMOTING COOPERATION AND COMMUNICATION
AMONG MEMBERS, INCLUDING IN THE FIELD OF TECHNICAL
COOPERATION
5. The representatives of Japan (two contributions), Switzerland , the European Community and
its member States, Korea , Canada  and Thailand  introduced written contributions on this agenda item
(documents WT/WGTCP/W/156 and 157; WT/WGTCP/W/151; WT/WGTCP/W/152;
WT/WGTCP/W/154; WT/WGTCP/W/155 and WT/WGTCP/W/150, respectively).  In addition, the
representative of Croatia introduced a non-paper (to be issued as WT/WGTCP/W/158) and the
representatives of UNCTAD and the OECD  provided updates on relevant activities of their
organizations.  The representatives of Australia;  Canada ;  the European Community and its member
States;  Hong Kong, China ;  Hungary ;  India ;  Indonesia ;  Japan ;  Kenya ;  Korea ;  Malaysia ;  Norway ;
Pakistan;  the Philippines ;  Switzerland ;  Trinidad and Tobago ; and Tunisia  made oral statements or
posed/responded to questions.
6. The representative of Japan, introducing document WT/WGTCP/W/156, said that, as trade
barriers were lowered and economies continued to globalize, it was necessary to address not only anti-
competitive practices taking place within the territories of individual countries, but also anti-
competitive practices with an international dimension.  Cooperation among national competition
agencies was vital to meeting the challenge.  While there was already a substantial amount of
international cooperation on competition policy by means of bilateral and regional agreements, amultilateral framework on competition policy would support the efforts of WTO Members to develop
their competition regimes and accelerate cooperation to better enforce competition law.  In respect of
some areas, there might be added value that could only be obtained through a multilateral framework.
His delegation felt that, through the discussions of the Group, a consensus had started to emerge in
respect of some basic elements of a multilateral framework on competition policy, comprising at least
three such elements: (i) the sharing of inform ation and experiences with respect to national
competition laws and enforcement policies and practices; (ii) the provision of technical assistance;and (iii) actions to facilitate the coordination of enforcement policies and initiatives, including
voluntary notifications.  The first element would create valuable opportunities for improving national
competition regimes, through the dissemination of best practices.  Regarding the second element, the
benefits from the provision of technical assistance were not limited to helping developing countries
set up adequate competition regimes; in fact, technical assistance could pave the way for closerinternational cooperation on competition matters with the participating countries.  With respect to
actions to facilitate coordination, this could involve the exchange of general information concerning
enforcement policies and procedures and specific information pertaining to individual cases under
investigation and would allow the Members involved to engage in consultations and possibly
coordinate remedies on the basis of mutual agreement.
7. In the view of the Japanese delegation, the principles of transparency and non-discrimination
were a sine qua non  of both trade and competition policies and for this reason such principles should
also be embedded in a multilateral competition framework.  In addition, a prohibition of practices
considered to be anti-competitive per se , particularly hard-core cartels, could be part of a frameworkWT/WGTCP/M/12
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which could also incorporate rules for investigative procedures built upon the principles of
transparency and non-discrimination.  Concrete obligations in this regard could include the
observance of "due process", protection of the opportunities to be heard, protection of confidential
information, and sufficient relief measures.  A multilateral framework should be sufficiently flexible
to take account of differences in the level of development of national competition regimes, the weightgiven to specific development policies, and relevant economic and social conditions.
8. Continuing, he suggested that a multilateral framework could be particularly useful in
assisting Members to address a number of specific issues that currently were the subject of discussion
or otherwise merited attention.  Two such issues were:  (i) the problem of overlapping jurisdiction and
the lack of harmonized procedures for the review of mergers with international implications, which
imposed significant administrative costs and sometimes led to the abandonment of potentially
beneficial mergers; and (ii) export cartels.  Since the latter constituted a clear distortion ofinternational trade, they would seem to fall clearly within the mandate of the WTO.  Other topics that
merited consideration included the handling of confidential information; how to address violations of
the proposed agreement; and the potential role in a multilateral framework of incremental
commitments, as in the GATS.
9. The representative of Switzerland, introducing document WT/WGTCP/W/151, said that a
variety of arguments had been put forward in support of enhanced cooperation in the fight against
anti-competitive practices, including at the multilate ral level.  To begin with, an asymmetry existed
between the activities and market power exercised by firms and the reach of domestic competition
laws; this was a concern especially for smaller countries with limited bargaining power.  If national
authorities acted in a coordinated manner, they would be in a far stronger position to address anti-competitive behaviour of an international nature.  In addition, reflecting the calls that had been made
for more concrete discussion in the Working Group, it was important to consider the consequences of
pursuing specific alternatives for cooperation.  In the interest of this, the paper by his delegation
examined specific elements of a possible multila teral agreement on competition matters, including:
(i) a prohibition of hardcore cartels (this would not imply, however, that national competition regimesshould be limited to controlling hardcore cartels; whether other types of anti-competitive behaviour
should be addressed would be a matter for each Member to decide);  (ii) modalities for cooperation
between Members, including the designation of a "national contact point";  and (iii) the application of
the WTO principles of transparency and non-discrimination to national competition regimes.  He
suggested that the Group would benefit from a paper prepared by the Secretariat elaborating on the
possible implications of the application of WTO principles in the context of competition policy.
10. The presentative of the European Community and its member States, introducing document
WT/WGTCP/W/152, said that the paper was intended to facilitate more specific consideration of the
possible elements of a multilateral agreement on competition.  It was not, however, intended to
prejudge the question of whether and when to launch negotiations on this matter; this was a political
matter to be decided outside the Working Group.  The first part of the paper reviewed the main
arguments in support of a multilateral agreement on competition.  The starting-point of thesearguments was the recognition that, in a globalized economy, anti-competitive practices were
increasingly international in nature.  Such practices, which included international cartels, export
cartels, import cartels, and abuses of dominance by foreign multinationals, could clearly have an
adverse impact on international trade including, but not limited to, market access effects.  Such
practices could only be tackled effectively by coupling the application of domestic competition lawswith effective international cooperation.  Arguably, the need for such cooperation was much greater in
the case of small or developing economies.  His delegation was of the view that, while cooperation of
a bilateral or regional nature could indeed be useful, a multilateral dimension to cooperation was
needed since the practices at issue often went beyond the territories covered by bilateral and regional
agreements and, in any case, a multilateral agreement could add momentum and emphasis to the fightagainst the practices noted, which had a clear detrimental impact on both trade and the development
prospects of Members.  With reference to the overall role of competition policy in economicWT/WGTCP/M/12
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development, and the need for cooperation to assist developing countries in dealing with the impact of
anti-competitive practices, he referred to a Roundtable on Competition Law and Policy which had
been organized by the Secretary of State for International Development of the United Kingdom in
July 2000 (copies of a summary report on the Roundtable were made available to the Group).
11. Continuing, he said that the second part of the paper by his delegation discussed three specific
possible elements of a multilateral agreement on competition policy, namely:  (i) core principles of
competition law and policy, (ii) modalities of cooperation, and (iii) specific measures to support
competition regimes in developing countries.  With respect to the first element, from the perspective
of his delegation, the objective of a multilateral agreement on competition was not to harmonize
national competition regimes, but rather to promote international cooperation in bringing international
anti-competitive practices under control, and to do so on the basis of common views regarding such
practices.  In recognition of this, his delegation foresaw the use of core principles that would embodya significant degree of progressivity and flexibility, ra ther than rigid rules, as the building blocks of a
multilateral framework.  It was evident, however, that, although there was significant diversity in
national competition regimes, there was also a broad consensus that hard core cartels posed a key
challenge to competition policy.  Accordingly, a prohibition of such cartels as well as elements
relating to transparency and the non-discriminatory application of competition law should be regardedas core principles to be incorporated in a multilateral framework.  Nonetheless, a requirement to apply
competition law in a non-discriminatory way would not rule out considering the exclusion of sensitive
sectors from the scope of such law.  With regard to the second element, under a multilateral
competition agreement, cooperation could have at least four dimensions:  (i) case-specific
cooperation;  (ii) exchange of experiences through a multilateral forum;  (iii) coordination in theprovision of general technical assistance;  and (iv) enforcement assistance to developing countries.
These aspects of cooperation would yield a variet y of benefits.  Case-specific cooperation would
basically involve a commitment by countries to exchange non-confidential information pertaining to
the case at hand, as well as a readiness to engage in consultations when the interests of other WTO
Members were affected.  It could also go beyond this scenario; for instance, a developing countryinvestigating a foreign multinational could seek assi stance from the competition authorities of the
home country to obtain relevant information.  Competition authorities from developing countries
would also benefit greatly from participating in a multilateral forum where experiences in the
application of competition law would be discussed.  An enhanced and more coordinated approach to
technical cooperation would also be of direct benefit to the recipient countries.  Finally, as had been
suggested by the representative of Trinidad and Tobago, while technical assistance of a general nature
was important, developing countries could also benefit from more focused assistance with respect toindividual competition investigations at a later stage.
12. The representative of Korea, introducing document WT/WGTCP/W/154, said that the paper
built upon the approach embodied in the "three-step" road map which had been put forward in the
paper presented by Hong Kong, China in the previous meeting of the Group (document
WT/WGTCP/W/141).  His delegation concurred with Hong Kong, China that the kinds of anti-competitive practices upon which the Group should focus should (i) have a significant and
demonstrable negative impact on international trade and investment, and (ii) be prevalent in the sense
of affecting a cross-section of WTO Members.  The Group should concentrate its deliberations on
following through with the analysis called for by that framework; for instance, on designing
guidelines for identifying competition issues of direct relevance to international trade, and on
exploring feasible multilateral options, taking due account of diversities among Members in their
levels of economic development and in their national competition regimes.  Thus, the Group should
strive to reconcile the established practices of advanced countries, resulting from a long history of
competition law enforcement, with newer approaches necessary to accommodate the specific needs of
developing countries.  His delegation felt that the WTO was the best available forum to addresscompetition problems of great relevance to international trade and the achievement of WTO goals.
With regard to the kinds of multilateral options that should be pursued, although progress could be
achieved in solving international competition problems through technical assistance, capacity buildingWT/WGTCP/M/12
Page 5
and the institution of a competition policy review mechanism, a multilateral framework on
competition policy was more powerful and should be put in place to supplement such initiatives.  In
the opinion of his delegation, it was also necessary to consider the reform of existing WTO rules, such
as those embodied in the Antidumping Agreement, w ith a view to making them more compatible with
the promotion of competition.
13. The representative of Canada, introducing document WT/WGTCP/W/155, said that the paper
focused on one of the major questions before the Group relating to a possible multilateral framework
on competition policy, namely the nature of the pr ovisions that such a framework would incorporate
on international cooperation, in the light of Canada's concrete experiences in this field.  In the opinion
of his delegation, a distinction had to be made between cooperation and technical assistance.  While
the latter involved the provision of advice to c ountries regarding the drafting or implementation of
competition laws, or the enhancement of related institutional capacities, the former dealt with specificissues of common interest arising from the enforcement of competition law.  Nonetheless, it was clear
that the two overlapped, to a degree.  Cooperation was the ideal tool for dealing with the problems
arising from overlapping jurisdiction of two or more competition authorities over the same activity or
transaction.  Cooperation was also an essential tool to deal effectively with international cartels and
alliances between firms.  Cooperation could take place at different levels and in different forms.  Itcould be as simple as the exchange and dissemination of basic non-confidential information such as
legislation and enforcement guidelines.  Even at this basic level, cooperation facilitated the
development of useful channels of communication be tween national competition authorities that could
engender a dynamic of common interest.  Cooperation could also extend to mutual assistance in the
investigation of specific cases of anti-competitive practices such as hardcore cartels.  Cooperation
could take place in a variety of contexts.  For example, the relevant agreements could be either state-
to-state or agency-to-agency.  Cooperation could al so take place at the multilateral level.  For
example, Canada observed two OECD Recommendatio ns in the area of competition policy:  the 1995
Recommendation on Cooperation and the 1998 Recommendation on Hard-Core Cartels.  An
advantage of this kind of cooperation was that it promoted the adoption of "best practices" which, inturn, increased the possibilities for convergence in approaches, or "soft harmonization", in the long-
run.
14. Continuing, he suggested that the growing ne twork of bilateral agreements on competition
policy constituted demonstrable evidence of the value of cooperation in a global marketplace. His
delegation saw a need for a more ambitious scheme for cooperation to achieve true efficiency in
competition law enforcement.  Cooperation commitments in the context of a WTO framework
agreement on competition policy would provide the cohesion and stability necessary for a deepeningof international anti-trust relationships.  It was important to note that a multilateral agreement would
not interfere with ongoing case-specific cooperation taking place through bilateral agreements but
rather would supplement this kind of cooperation.  Another important consideration was that diversity
in legal and economic structures and approaches to competition policy did not preclude or impact
negatively on the ability of countries to cooperate.  A central theme in Canada's efforts to engage incooperation in this field had been to promote a mi nimum level of internatio nal compatibility in the
application of competition law, without compromising the country's fundamental jurisdiction over
conduct affecting its own territory.  A similar theme would be at the core of cooperation in a WTO
setting.  His delegation viewed this kind of cooperation as incremental in nature, to be achieved in a
step-by-step manner.  The first phase in this exercise would be largely educational, concentrating onthe development of enforcement capacity.  The second phase would have as its primary feature the
development and implementation of notification procedures.  A Member undertaking an investigation
that might affect important interests of another Memb er should notify the latter at an appropriate stage
in the investigation.  More meaningful steps to wards enhancing international cooperation would be
the coordination of enforcement actions against international cartels and the development of acommon approach with respect to procedural issues in merger review.  The latter step would aim at
minimizing the transaction costs involved in getting a merger plan reviewed through different
jurisdictions.  Finally, his delegation was of the view that cooperation would produce the best possibleWT/WGTCP/M/12
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results if it was voluntary.  Thus, a cooperation mechanism as part of a multilateral agreement on
competition policy should not undermine the very essence of meaningful cooperation and should
preserve the discretion of Members to act.  In any event, in the light of the independent and
discretionary nature of competition authorities, it would be difficult if not impossible to make
cooperation mandatory.
15. The representative of Japan, introducing document WT/WGTCP/W/157, recalled that, at the
last meeting of the Working Group, a view had been expressed by some Members that, historically,
the rapid growth of the Japanese economy had been facilitated by the subordination of competition
policy to industrial policy.  The second paper prepared by his delegation demonstrated that this had
not been the case; rather, industrial policy and competition policy had played a synergetic role in the
economic development of Japan.  The post-war period had seen the development of many new
industries, ranging from sewing machines to m achine tools, but these industries had flourished
principally as a result of private initiatives and without the assistance of any special preferential
measures.  The paper discussed two examples of particular sectors, namely petrochemicals and
automobiles, in which intense competition had been a key factor underpinning economic growth,
notwithstanding the role of industrial development policies. Concerning the petrochemicals sector,
since efficient production in this sector required significant economies of scale, Japan's Ministry ofTrade and Industry (MITI) had promoted the consolidation of producers of ethylene into sufficiently
large units by requiring minimum production levels.  In MITI's view, consolidation had been helpful
not only to achieve efficiency, but also to mitigate the impact of market downturns.  No limits had
been placed, however, on the number of firms meeting the minimum production levels that could
enter the industry.  Hence, the number of ethylene producers had almost doubled over a few years,pushing domestic prices into a steep decline.  This decline had raised domestic demand for ethylene
and the market boomed, which in turn had attracted more entrants.  The obvious conclusion was that
the ethylene industry had grown by virtue of competition amongst a large number of market players.
In the case of the automobile industry, the Honda Motor Company had refused to go along with a
government recommendation not to enter the car industry, becoming a leading producer in a shorttime.  Other companies followed Honda's example, and in the end nine companies ended up vying
against one another in the automobile market.  In fact , Japan's industrial policy had sought to facilitate
competition by strengthening the competitiveness of firms, for instance, by developing assistance
schemes in the area of R&D.  While technological advances had played an enormous role in the post-
war growth of the Japanese economy, even with respect to R&D efforts the private sector had taken
the lead and the government a complementary role.  Japan's competition policy had also not resulted
in the restriction of competition.  Temporary anti-recession cartels had been authorized at times, tocounteract heavy demand slumps in specific markets th at could have triggered off a chain of corporate
collapse, but such authorizations had been clearly written into Japan's anti-monopoly laws and were
subject to strict conditions.  The same applied to other exemptions from the anti-monopoly laws
covering, for example, specific concerted actions by small businesses to adjust to short-term economic
downswings.  Except for these well-defined situations, Japan's anti-monopoly laws had always beenapplied in full force.  For instance, in 1969 th e two leading Japanese steel companies had merged.
Prior to merging, their merger plan had been reviewed by Japan's Fair Trade Commission.  From an
industrial policy perspective, an argument could had been made that that merger should have gone
unchallenged for the sound development of the Japanese steel industry.  Nevertheless, the Fair Trade
Commission had come to the conclusion that this merger could restrict effective competition and onthis basis it had conditioned approval of the merger on a number of divestitures.  For instance, the
manufacturing of railroad rails, which would otherw ise have become a monopoly, had been split off
and sold to competing companies.  In sum, a sali ent feature of Japan's post-war economic growth had
been the sheer intensity of competition in the markets concerned.  The Japanese government had
contributed to strengthening the rivalry among companies by creating market mechanisms withpositive effects in this regard.  According to the experience of Japan, it was important to introduce
competition policy at an early stage of development, though appropriate industrial policy measures
could simultaneously be employed to promote ec onomic growth.  In today's liberalized world
economy, the introduction of competition policy by developing countries seemed even more urgent.WT/WGTCP/M/12
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The increasing number of mergers among multinational companies and instances of cartels and other
anti-competitive practices with an international dimension could have a heavy adverse impact on
developing economies.  Thus, the establishment of a competition regime was nowadays a critical task
for developing countries seeking to achieve a dynamic market economy.
16. The representative of Thailand, introducing document WT/WGTCP/W/150, said that the
paper presented an overview of Thailand's competition law, its historical development and the
difficulties that had been encountered in implementing it.  The development of Thailand's competition
regime went back to the Anti-Profiteering Act of 1947 and the Price Fixing and Anti-Monopoly Act
of 1979, respectively.  As these Acts had not pr ovided proper protection to consumers and small
businesses from monopoly and restrictive business practices, they had ultimately been replaced by the
Price of Goods and Services Act of 1999 and the Business Competition Act of 1999.  The latter
focused on curbing anti-competitive behaviour and therefore served one of the main objectives ofThailand's amended constitution, which was to support the operation of a free market economy.  It
also complemented other liberal legal instruments recently adopted by Thailand, such as the Foreign
Business Act and the Civil and Commercial Codes.  The Competition Act divided anti-competitive
behaviour into three main categories:  (i) abuse of dominance;  (ii) mergers resulting in monopolies or
unfair competition;  and (iii) other anti-competitive practices, such as price fixing or the geographicalallocation of markets.  A Competition Commission had been set up as enforcement body.  Since the
Competition Act came into effect, the Competition Commission received and issued findings with
respect to two complaints.  The first complaint had been a case of tied sales, where a dominant
producer of liquor bundled the sale of this product with the sale of beer.  As regulations defining
abuse of dominance had not been issued at the time the investigation was conducted, the Commissionhad been unable to determine that such behaviour was illegal under Thailand's competition law.
However, it had requested the producer in question to stop its practices.  The second complaint had
involved alleged collusion by two cable TV operators.  As those two firms had recently merged, the
Commission had ruled that the two firms had subsequently become a single undertaking which ruled
out the possibility of collusion.  Nevertheless, the Commission had requested the sectoral regulator tomonitor the future pricing behaviour of the company concerned.
17. Continuing, she said that her delegation hoped that international organizations such as the
WTO would step up their efforts to equip developing countries with substantive knowledge and
appropriate tools to establish and implement effective competition regimes.  Many questions
regarding the possible interplay between competitio n policy and existing national and international
development plans and policies required further discussion in the Working Group.  For example, how
could developing countries take part in reviewing the mergers of major transnational corporations that
took place outside their own territories but could adversely affect their economies?  How could
international cartels be detected and dealt with effectively in developing countries?  Could this issue
be adequately addressed through increased international cooperation and coordination?  Lastly, she
drew the attention of the Working Group to a Regional Workshop on Competition Policy which had
been organized by the WTO Secretariat in cooperation with the Governments of Thailand and Japanand which had taken place in Phuket, Thailand, in July 2000.  The Workshop had been attended by 22
WTO Members and observers from South, Southeast and East Asia and had dealt with a broad range
of matters that were under consideration by the Working Group, including:  (i) the relationship
between competition policy and economic development; (ii) the special challenges facing competition
agencies in developing countries, and how they mi ght be assisted by the international community in
meeting these challenges; (iii) pros and cons of possible new modalities of cooperation in competition
policy at the multilateral level; and (iv) the nature of a possible multilateral framework on competition
policy.  The Workshop had not sought to arrive at any conclusions, but rather to have a full airing of
the issues from all sides of the debate.  The proceedings of the Workshop might well be of interest to
the Group (in response to this suggestion, a summary report on the Workshop was made available bythe Secretariat).WT/WGTCP/M/12
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18. The representative of Kenya informed the Working Group about recent developments in the
East African region in the area of competition policy.  He said that, on 30 November 1999, Kenya,
Tanzania and Uganda had signed the East African Community Treaty (EAC Treaty).  Following
ratification by all three partner states, the EAC Treaty had come into force on 7 August 2000.
Article 75(i) of the Treaty referred to competition law and policy.  The Sectoral Committee on Trade,Industry and Investment had recommended the establishment of a common competition regime in
tandem with a customs union, within a period of four years from the coming into force of the Treaty.
A Competition Law and Policy Workshop which had been held on 11-12 May 2000 had
recommended that the common competition regime be established separately from the customs union.
This recommendation had been adopted by the Sectoral Committee on 15 September 2000 and had
been subsequently presented to the EAC Council  of Ministers, where it was currently awaiting
ratification.  Member states were expected to set up their own national competition regimes to assistin the establishment of a common regime.  The provision of technical assistance was essential in this
regard.
19. The representative of Croatia, introducing a non-paper by her delegation (to be issued as
WT/WGTCP/W/158, with the assent of the Working Group), said that it addressed issues relating to
the role of competition policy in economic development in addition to Croatia's national competitionlegislation.  Perhaps, the most important issues that a competition authority faced were:  first, to
ensure free market access by regulating the conditions operating within the market post-entry; and,
second, to eliminate and/or to decrease any private barriers to the market.  These conditions were a
sine qua non  for economic development and to ensure the inflow of foreign investment.  However,
there were other preconditions that were needed for successful market access, illustrating thecontribution that competition policy could make to development.  For instance, from the point of view
of Croatia, competition advocacy activities and the promotion of a competition culture were essential.
Recent amendments to the Croatian competition law in 1998 had established strong protection of
market access and dealt with various kinds of abuses of a dominant position or monopolistic practices
in the market.  The enforcement of competition legislation and policy to eliminate barriers to marketaccess made an important contribution to ensuring favourable market entry conditions for both
domestic and foreign suppliers.  Market conditions post-access were also important to market entry –
underscoring the importance of traditional national treatment commitments.  The paper discussed
various questions relating to trade and competition in goods and services, including with reference to
the principles of the General Agreement on Trade in Services.  She also drew attention to some
specific issues in connection with new obstacles to market entry.  For example, contractual
arrangements, including franchising arrangements, in the services sector and in business in generalcould and often did effectively create private barriers to market access for domestic as well as foreign
companies.  The liberalization of the service sector would have a strong impact on the free trade of
goods and national policies of consumer protection and business community.  Distribution services
were an indispensable part of the networks through which services and goods were distributed on a
large scale to ensure a higher level of satisfaction of consumers' needs at moderate prices.  Withregard to the matter of technical assistance, she informed the Group that for the purposes of
improvement of international cooperation in the implementation and enforcement of competition law
and policy, the agency for the protection of market competition of the Republic of Croatia had started
a project involving the exchange of information with neighbouring countries.  This project needed
additional financing, which was currently being discussed.  Perhaps the most important issue thatinfluenced the improvement of competition policy was the extent of international cooperation in the
field.
20. The observer from UNCTAD informed the Working Group that the Fourth Review
Conference on the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the
Control of Restrictive Business Practices had been held the previous week in Geneva.  In preparingfor this conference, five regional seminars had been organized by the UNCTAD Secretariat:  one in
India, for Asia and the Pacific region; another in the Ukraine, for Central/Eastern European and CIS
countries; another in Morocco for African and middle-eastern countries; another in Zambia, forWT/WGTCP/M/12
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southern African countries; and another in Costa Rica, for Latin American and Caribbean countries.
Each seminar had resulted in a declaration, which had served as input to the deliberations leading to
the overall Resolution which had been agreed upon at the Conference.  In the Resolution, the
Conference had reaffirmed the fundamental role of competition law and policy for sound economic
development in addition to the continuing validity of the Set.1  The Set had been redesignated as the
"UN Set of Principles and Rules on Competition", for ease of reference.  Additionally, the Conference
had recommended to the UN General Assembly to convene a fifth review conference in the year
2005.  The Resolution directed the Intergovernmental Group of Experts on Competition law and
Policy to study at its next session the topics of cooperation regarding merger control and the interface
between competition policy and intellectual property rights.  The UNCTAD Secretariat was instructed
to prepare for next year a new chapter of the Model Law addressing the relationship between a
competition authority and regulatory bodies, including sectoral regulators.  The Resolution also laidout the broad lines that UNCTAD should pursue in its future work in this area, including focusing on
the following themes:  (i) capacity building;  (ii) competition advocacy;  (iii) specialized studies on
the interplay between competition, competitiveness and development;  and (iv) providing inputs to
possible international agreements on competition, including by clarifying the ways in which such
agreements might apply to developing countries, with reference to preferential or differentialtreatment;  and studying the role of dispute mediation mechanisms.
21. The observer from the OECD informed the Group of a report that had been published recently
by her Organization on the subject of Hard-Core Cartels, in conjunction with a meeting of the OECD
Council at the Ministerial level.2  The report detailed a number of actions that had been taken by
OECD member governments to implement the OECD Recommendation on Hard Core Cartels whichhad been adopted in 1998.  It called for an expanded three-year phase of the Organization's anti-cartel
programme, on the basis of evidence that the extent of harm caused by cartels in member economies
was substantially higher than had previously been understood.  A number of useful enforcement tools
for dealing with cartels, including leniency programmes for informants, were also discussed in the
report.  She reminded delegates that non-OECD member countries were invited to associatethemselves with the Recommendation.  The Group was also briefed on a number of other activities of
the OECD in the area of competition policy and its interface with trade policy.  Reference was made
to the valuable cooperation that existed between the Secretariats of the OECD, the WTO and
UNCTAD.
22. With regard to the impact of anti-competitive practices on international trade and economic
development, the representative of Hong Kong, China,  commenting on the paper by the European
Community and its member States (WT/WGTCP/W/152), said that three types of anti-competitive
practices had been identified in the paper as potentially undermining the benefits of trade and
investment liberalization for development and economic welfare:  (a) practices that had detrimental
effects across the markets of several countries such as international cartels, anti-competitive mergers
and abuses of dominant position; (b) practices that affected market access for imports; and
(c) practices that had a differential impact on the domestic markets of countries such as where amerger had benign effects in one market but had detrimental knock-on effects in another market.
However, it was unclear to his delegation to what extent these practices were having a significant and
demonstrable impact on world trade and investment, affecting a broad cross-section of WTO
Members.  In the view of Hong Kong, China, it was only when this question had been answered
satisfactorily that it could be determined whether and how the WTO should take action in respect ofthose practices.
                                                     
1 Review of All Aspects of the Set of Multilaterally Agreed Equitable Principles and Rules for the
Control of Restrictive Business Practices:  Agreed Resolution (TD/RBP/CONF.5/L.2, 29 September 2000).
2 Hard Core Cartels:  Meeting of the OECD Council at the Ministerial Level, 2000 (Paris:  OECD,
2000).WT/WGTCP/M/12
Page 10
23. The representatives of Korea, Japan , Canada , Hungary , the European Community and its
member States and India  said that practices of the types that had been described in the papers prepared
by the European Community and its member States for the current and the previous meetings
(WT/WGTCP/W/140 and WT/WGTCP/W/152) as well as in the papers by Japan
(WT/WGTCP/W/156) and Korea (WT/WGTCP/W/1 54) could indeed have significant and
detrimental effects on the trade and/or development of WTO Members.  The representatives of Korea,
Japan, Canada , Hungary , Norway  and the European Community and its member States  said that a
multilateral framework on competition policy would assist developing countries to deal with the
detrimental impact of these practices.  The representative of Korea noted, further, that many
developing and transition economies had introduced or strengthened their national competitionpolicies as a way to lock in domestic reforms and achieve better integration into the world economy.
A multilateral framework would help such countries to structure their economies in a more
competition-oriented manner while dealing more effectively with conflicting domestic vested
interests.   For example, it would provide better protection against the dominance of protectionist
stakeholders such as monopolies.  The representative of India said that these were no doubt valid
concerns but that this was not an exhaustive list of the problems that developing countries faced in thearea of anti-competitive practices.  Therefore, this was an area which deserved further attention by theGroup in its future work - that is, to identify specific issues or aspects where developing countries
faced problems.  Some of these had been identified in previous submissions made by India, but those
had to be built upon.  Nonetheless, in recognizin g the adverse impact that anti-competitive practices
could have on developing countries, his delegation was not accepting that these problems would best
be addressed through a multilateral framework on competition policy – this was something on whichIndia would draw a conclusion once the study process had been completed, and which should not be
prejudged at this stage.
24. With regard to conflicts that could arise in the application of national competition laws, the
representative of Korea said that past cases had illustrated how the extraterritorial application of
competition law could lead to serious jurisdictional conflicts.  Jurisdictional "out-reaching" had been
severely criticized by targeted countries and several of them had even resorted to "clawback laws" and
blocking statutes to shield themselves from extraterritoriality.  Ways to avoid jurisdictional conflicts,
including new instruments of cooperation, should be explored.  A multilateral framework on
competition policy would be helpful in this regard.
25. The representative of Trinidad and Tobago noted that the current practice of competition
authorities in many countries was to focus on anti-competitive behaviour that had an impact on their
domestic markets.  This was a key reason why export cartels were not generally subject to effectivecompetition law disciplines.  Regarding the rele vance of the concept of positive comity in this
context, the representative of Japan said that, even where the law of the requested country did not
exempt such cartels, there was a problem of whether the competition authority of the requestedcountry could address cases where there was only a minimal effect from the cartel on its own market.
That was why Japan considered that by addressing export cartels, the multilateral framework couldbring about a unique value-added to the world economy, which could not be realized by national or
bilateral efforts alone.
26. The representative of the European Community and its member States said that, while the
rules of the European Community did not expressl y exempt, tolerate or encourage cartels whose
effects were felt purely in export markets, the Commission would not have jurisdiction to deal withthem for lack of effects in the EC market.  However, in reality, that situation was not one that
occurred frequently.  More often, domestic cartels  were encountered that, in parallel with internal
price-fixing and market-sharing mechanisms, aimed at  cartelising export markets.  Frequently, during
investigations, members of the cartel were forced to abandon such external activities since they were
viewed by the Commission as supporting and complementing illegal domestic practices.  Enhancedinternational cooperation could contribute to more effective control of cartel members in respect of
the external aspects of their activities, even if that needed to be carried out by a third country withWT/WGTCP/M/12
Page 11
primary jurisdiction on those external aspects.  Also, the definition of the relevant geographic market
was relevant to international or global cartel cases.  With the progressive globalization of markets, it
was no longer obvious that one could make a clea r distinction between effects on domestic markets
and effects on export markets.  In all those situations,  it was considered that there was scope for
cooperation with authorities in other countries where the cartel operated.  Establishing more effectivemeans of addressing such cases would be an im portant benefit of new arrangements to promote
enhanced cooperation at the multilateral level.
27. The representatives of Malaysia, India
, Pakistan  and Trinidad and Tobago  expressed concerns
and/or sought clarification as to the potential impact of a multilateral framework on competition
policy on the ability of developing countries to implement pro-development industrial policies.   It was
suggested, further, that  the core elements proposed in the first paper by Japan (WT/WGTCP/W/156)
as well as that by the European Community and its member States (WT/WGTCP/W/152), particularlynon-discrimination, might limit Members' flexibility to resort to developmental policy options, for
example the use of financial incentives for R&D.  The representative of Malaysia added that  the paper
by Japan (WT/WGTCP/W/157) had further reinforced his delegation's view that, at least in the earlier
stages of economic development, countries like Malaysia needed a great deal of flexibility.  The
Uruguay Round Agreements had already limited some of Malaysia's options. This was in contrast tothe situation that had been faced by Japan at least in the early days of its economic development.
Developing countries needed flexibility to be able to administer certain policies in favour for their
nationals and their constituencies.  Even if a sectoral approach as in the GATS was eventually
adopted, Malaysia would find that difficult to accept.  Clarification was sought in relation to what
kind of flexibility developing countries could have in this respect.  Clarification was also sought fromJapan as to whether the Fair Trade Commission strictly implemented the Japanese Anti-Monopoly
Act.  The representative of Pakistan added that it would be important to have a discussion on certain
related issues such as exclusions, the question of incremental implementation, and retaining space forindustrial policy measures on which sensitivities were acute.
28. In response, the representatives of Japan and the European Community and its member States
said that the issue of subsidies was not in any way connected with the elements of a multilateral
agreement on competition.  There were separate disciplines on the issue in the WTO.  Whatever a
multilateral competition agreement looked like, it would not have any impact on the ability of
countries to apply subsidies.  This would be dealt with, if at all, in separate discussions in the WTO.
29. The representative of India, reflecting on the paper submitted by Trinidad and Tobago to the
previous meeting of the Working Group (WT/WGTCP/ W/143), said that India shared the fears and
apprehensions which had been expressed by Trinidad and Tobago, in particular that the welfare-creating effects of competition might leak out of the economy if competition led to local firms being
displaced by foreign firms.  The representative of the Philippines said that in a regime of perfect
competition, there were always those who had intrinsic advantages and, consequently, would reap adisproportionate share of the benefits.  Thus, a policy based on the ideal of perfect competition meant
the faster marginalization of others.  It was clear that it would not be the developed countries whowould be marginalized.
30. The representative of the European Community and its member States said that the proposals
that were under discussion were not intended to achieve perfect competition.  Rather, they were
intended to assist all countries, including developing  countries, to deal more effectively with anti-
competitive abuses that harmed their development, trade and economic welfare.  In particular, theproposed multilateral framework w ould empower competition authorities in developing countries to
eradicate those types of practices.  Accordingly, rath er than being seen as an element to contribute to
marginalization, it was in fact offering developing countries a tool to address practices which, the
discussions in the Working Group as well as in UNCTAD had shown, had a heavy negative impact on
their welfare.WT/WGTCP/M/12
Page 12
31. With regard to  general considerations regarding the value that might be added by a
multilateral framework on competition policy,  the representative of Pakistan stated that each element
in the so-called core principles that were referred to in the papers by Japan (WT/WGTCP/W/156) and
the European Community and its member States (WT/WGTCP/W/152) needed to be further clarified
and examined in turn.  He observed, for example, that most Members already had in placemechanisms which ensured transparency of whatever competition laws and regulations were in place
and that, generally, there was no discrimination between national firms and foreign firms.
Consequently, the Group needed to go beyond this in understanding the need for the proposed
principles.  The representative of Malaysia said that the issue in question was whether there should be
global rules on competition.  Malaysia had always stated that it should be up to domestic authoritiesas to whether there should be a domestic competition law.  If it helped in economic development, so
be it.  It was completely up to the national authorit ies to decide and to include the elements thereof.
Of course, if there was such a law there would be some core elements associated with addressing
restrictive business practices.
32. The representative of Hong Kong, China noted that out of the then 138 WTO Members, only
about 80 had enacted national competition laws.  If  "multilateral" meant all Members, then it was
necessary to take account of the diversity between those who had the law and those who did not andalso to consider the diversity as amongst thos e who had competition laws.  Moreover, the terms
"competition law", "competition policy" and "competition regime" had been used loosely and, in
some cases, interchangeably in many of the submissions.  As an example of the confusion that this
created, under Hong Kong, China's domestic regime, there were competition elements in various
pieces of legislation but whether these could be called "competition law" or "competition policy" wasunclear.  The representative of Indonesia agreed that the matter of definitions was important,
particularly for non-English speaking countries such as Indonesia, given that such countries mighthave different understanding of what was meant by competition policy, competition law etc.
33. The representative of Australia said that her delegation welcomed the opportunity the various
contributions had provided to focus on particular issues such as cartels, cooperation enforcement,
technical assistance, anti-competitive behaviour and other issues that had been raised.  The elements
of a multilateral framework that were set out in the paper by the European Community and its
member States (WT/WGTCP/W/152) provided a realisti c basis for discussion of the pros and cons of
such a framework, now and in the future.  The papers by Korea (WT/WGTCP/W/154), Japan
(WT/WGTCP/W/156), Switzerland (WT/WGTCP/W/151) and Canada (WT/WGTCP/W/155)
confirmed the priority of those elements in the Group's discussions and the need to evaluate them and
the other issues incrementally to get to the point where the Group could examine the feasibility of amultilateral framework, from the basis of a common understanding of the issues and of each other's
diverse needs and capabilities.
34. The representative of Hungary said that, in relation to the possible elements or possible
content of a multilateral framework agreement on competition policy, Hungary's view on what was
desirable and at the same time feasible largely corresponded to what had been outlined in the annex tothe proposal by the European Community and its member States (WT/WGTCP/W/152) regarding the
core principles of competition law and policy, the modalities for cooperation and support for
competition institutions in developing countries.  At the same time, Hungary agreed with those
delegations that had emphasized that there were several issues that required clarification, elaboration
and discussion.  One of the key issues was that type and degree of flexibility the envisagedmultilateral framework would offer for Members, in particular, but not limited to, developing
countries.
35. The representative of the European Community and its member States said that the various
elements that had been put forward in the paper by his delegation (WT/WGTCP/W/152) were
compatible with a large degree of flexibility by developing countries and by different WTO Memberswho would be parties to such an agreement.  It was obvious that any international agreement impliedWT/WGTCP/M/12
Page 13
some limit on flexibility of countries.  By definition, that was what an international agreement was.
However, at the same time, countries entered into su ch agreements because they felt that their gains
and benefits were greater than any such limits that may exist.
36. The representative of the Philippines said that the idea of the proponents of a multilateral
framework seemed to be to transplant the whole system of laws which had evolved in developed
countries over the years to developing countries, many of which did not have the institutional memory
nor the cultural consciousness to implement such laws and might find them difficult to comply with.
At this stage, the question for the Philippines would be what would the possible benefits be to
developing countries by assuming more obligations in exchange for gaining the assistance of
developed countries in enforcing their laws.  If competition law was indeed good for developing
countries, there would be no need to have a multilateral agreement since the countries would do it
themselves.  Currently, if developing countries made a mistake, they could always amend their lawsto suit their particular national needs.  However, if they had to adhere to minimum standards in a
multilateral framework, they would lose the flexibility to adapt their laws to suit their particular needs.
37. The representative of Norway stated that when a developing country faced the option of
whether or not to take on a competition regime, there would be several elements that needed to be
judged, the level of economic development and economic policy formulation being the mostimportant ones.  The WTO Agreements implemented in other areas were among the most dynamic
elements that formed the framework under which a developing country would have to make its
decision.  As had been mentioned by the Canadian delegate, there were cracks in the existing network
of cooperation arrangements to deal with anti-competitive practices that would be exploited by firms
who would target countries that were not equi pped with adequate competition regimes and
cooperation agreements.  Norway viewed a multila teral framework as the remedy for developing
countries to aid them to prevent international co mpanies from harming their development prospects
by engaging in anti-competitive practices as their markets were progressively being liberalized as
result of the implementation of WTO Agreements.  It would be the best remedy for developing
countries to counter any negative effects of the globalization process.  As the United States hadpointed out, setting up a culture of competition was a difficult task and took time.  Therefore, the
proposed framework agreement was being put forward as  a tool that could contribute to the effective
implementation of competition policy by Members.
38. With regard to specific elements of a multilateral framework on competition policy, the
representative of the European Community and its member States said that, in addition to the
fundamental WTO principles of non-discrimination and transparency, there was value in defining acore principle in a multilateral competition agreemen t relating to hard-core cartels.  The need for
effective measures against such pernicious economic activities was one area of substantive
competition policy in which there was a substantial degree of convergence of views among countries
at different levels of development.
39. The representative of Malaysia said that the proposals contained in the papers by the
European Community and its member States (WT/WGTCP/W/152) and Japan (WT/WGTCP/W/156)
included reference to core principles such as national treatment which Malaysia could not afford at
this stage of its economic development.  Developi ng countries needed flexibility to be able to
administer certain policies in favour for their nationals and their constituencies.  Even if a sectoral
approach was being proposed as in the GATS, Malaysia would find that difficult to accept.  The
representative of Hong Kong, China said that it was within the rights of Members to agree that the
two principles of non-discrimination and transparen cy were fundamental to competition law and/or
competition policy, as they certainly were to the WTO.  The question was whether there were indeed
any problems with regard to the observance of these principles by some Members in their competition
law or policy regimes?  Were there any examples that some Members did not follow those core
principles and, if not, was there truly a need for a higher level of surveillance at the multilateral level?Beyond this, when it came to the questions of the substantive measures to which the principles shouldWT/WGTCP/M/12
Page 14
apply and the relevant procedures, more exploratory dialogues would be needed before Members
could grasp the practical implications for domestic policy implementation.
40. The representative of Tunisia said that, without prejudice to any position which might
eventually be taken, certain points required greater consideration in the exploratory process.  As
regards the appropriateness of WTO principles with competition policy and vice versa, a certainspecificity in applying them to competition policy had to be respected.  If one took competition policy
in its widest meaning, it covered matters which were already embedded in trade policy and in
obligations which Members had assumed.  If one took competition policy as being limited to legal
protection of competition, questions would arise as to the applicability of these principles to private
operators - because they were principally intended to apply in respect of government measures.
Should they be applied to the manner in which a state implements its competition policy or is it a
question of replacing these principles by an obligation which to an extent would guarantee a right ofappeal.  Looked at from this angle, why should it be limited to the law in respect of competition, and
why not to other legal aspects?  The obligation to non-discrimination was already embedded in
Members' commitments regarding trade in goods.  Why was a new instrument needed?  If one took
the principle of non-discrimination, looked at on the supply side, it was plausible, but looked at from
the demand side, it was not obvious.  Legally, it would mean doing away with tolerance for externaleffects and practically, it might lead to applying domestic law extraterritorially.  With regard to the
principle of non-discrimination, as related to the size  and scope of a market at a given time, would this
open the door to equitable treatment of the organized and non-organized sectors?  This was already
difficult to do domestically.  In a similar way, it was important to clarify the application of
transparency under the current proposals.  Would it apply to the states' obligations, to the obligationsof institutions or in relation to business practices?
41. The representative of the European Community and its member States said that  the type of
non-discrimination that would be addressed in a multilateral framework as it envisioned it concerned
whether a competition law as such embodied any form of discrimination on grounds of nationality.
His delegation was not, in its proposals, attempting to address the much larger issue of whether acountry might or might not maintain domestic regulations of a discriminatory nature outside the scope
of a competition law.  His delegation had also tried to clarify that in its view, the binding elements of
a multilateral framework on competition policy would relate only to legislation and not to the way in
which the law was being enforced.  Therefore, de jure discrimination should be included as a binding
commitment in a multilateral agreement on competition policy.  However, if one spoke about de facto
discrimination, it would be very difficult to avoid a situation where the application of the law in
individual cases could be affected.  In his de legation's view, this was not a desirable outcome.
Therefore, his delegation foresaw that issues of de facto  discrimination should not be dealt with as
binding elements of a multilateral framework. The representative of Switzerland said that the mere
fact that the Group did not have before it evidence of systematic violations of non-discrimination andtransparency in the field of competition law and policy was not a reason not to affirm the importance
of these principles.  This was particularly clear in the case of transparency.  Recommendations andprocedures laid down within the OECD had ensured some degree of transparency among OECD
members with regard to their national competition laws and policies.  However, he doubted that non-
OECD members had sufficient insight into the laws and policies of OECD members, or of each other.
Obviously, the greater the number of countries that adopted and applied competition laws, the more
pressing would be the need to have new mechanisms to ensure transparency and non-discriminationon a multilateral level.
42. On the subject of exclusions, including with respect to the fundamental principles of the
WTO, the representative of  Korea, commenting on the paper by the European Community and its
member States, said that exclusions were necessary if momentum for open negotiation of an
agreement on competition policy was to be created.  However, it was important for the working of theagreement over time that most exclusions be phased out as a lack of competition in one sector more
often than not affected other sectors.  Thus, as was the case with a number of WTO Agreements suchWT/WGTCP/M/12
Page 15
as the Agreement on Textiles and Clothing, an agreement on competition policy should provide for
transition periods that allowed initial exclusions but gradually eliminated most of those exclusions.
The representative of the European Community and its member States said that, in the view of his
delegation, the issue of non-discrimination was a different issue from that of sectoral exclusions.  Hisdelegation recognized that, for various reasons, most or all countries had considered it necessary fromtime to time to implement exemptions from the application of their domestic competition laws.
Therefore, the Community and its member States had adopted the view that enforceable provisions
relating to sectoral exclusions in a multilateral fr amework should be limited to measures to ensure the
transparency of such exclusions, although there was still a hope that, over time, Members would
reduce the number of such exclusions, as well.
43. With respect to  the role of provisions relating to c ooperation in a multilateral framework on
competition policy,  the representatives of Canada, the European Community and its member States
,
Switzerland, Hungary , Norway , Japan  and Korea  said that these were important to enable countries to
deal effectively with anti-competitive practices in a globalizing economy and should, therefore, be
integral elements of a multilateral framework on competition policy.  The representatives of Pakistan
and India, without accepting the need for a multilateral framework on competition policy, noted that
greater international cooperation was something which their countries found, in principle, to beattractive given the whole question of international enterprises operating across borders, and the
benefits that cooperation, including technical cooperation, could yield in addressing anti-competitive
practices in these circumstances.
44. The representative of the European Community and its member States said that,  although his
delegation had not proposed the adoption of core principles on substantive competition law other than
in the area of hard-core cartels, the scope and coverage of domestic competition legislation was
otherwise left to the determination of each country.  Insofar as the extent the domestic rules prohibited
other anti-competitive practices such as abuses of dominance or merger control, which was desirable
in principle, cooperation could also take place regarding those other practices.  In other words, the
scope of the proposed measures on cooperation was certainly not limited to hard-core cartels.
45. The representative of Malaysia said that  the paper by Canada (WT/WGTCP/W/155) had
pointed out that cooperation could take many forms and that it could exist without global rules on
competition policy.  The representatives of India; Hong Kong, China ; Indonesia ; Trinidad and Tobago
and the United States noted that the same paper had emphasized that, to achieve the optimum results,
cooperation between competition authorities should be voluntary.  In fact, by definition, the term
"cooperation" meant to cooperate on a voluntary basis.  To force someone to cooperate was not
cooperation per se .  Consequently, the meaning and implications of cooperation in the context of a
binding multilateral framework had to be clarified.  For example, would dispute settlement apply if
certain kinds of information were not exchanged?  It was also suggested that, of the six useful and
relevant "pointers" toward the end of Canada's paper, four concerned the pre-requisites for
cooperation and two dealt with institution-building and support.  It was suggested that all six issues
could be tackled in their own right  and that a multilateral framework of rules was not needed to ensure
progress in these areas.  The representative of H ong Kong, China suggested, further, that Hong Kong,
China's experience with the APEC Competition Policy and Deregulation Group was that general
information exchange between competition institutions, transparency enhancement of competition
regimes and implementation of various technical assistance initiatives could all be satisfactorily
conducted in a voluntary and non-binding setting.  Was Canada prepared to consider taking forwardsome or all of the proposed elements of cooperation outside the context of multilateral negotiations?
46. The representative of Pakistan said that his country was among the countries who were
convinced that there was a case for greater international cooperation between competition authorities.
Clearly, there could be various modalities for achieving this objective.  The Group should not be
hide-bound in pursing a particular modality, provided it was making progress towards the ultimateobjective.  The crux of the matter was that Members together identify certain areas which requiredWT/WGTCP/M/12
Page 16
international cooperation.  Perhaps the Group could start with mergers, although it was not suggested
that the practices of concern be restricted to mergers alone.
47. The representative of Tunisia said that, while recognizing the interests of developing
countries in cooperation on competition policy, it was necessary to go into greater detail regarding
certain elements related to it.  What was the effectiveness of agreements in the light of currentpractices and the imbalance in the strength of competition policy institutions in developed and
developing countries.  Did cooperation agreements represent the only option to solve the problems
which arose?  Does this cooperation have to be formalized and at what level?  How could an
agreement be cited in relation to existing agreements, even if these are optional – whether they be
multilateral or plurilateral?  And this question led to another:  what was the scope of the practices to
be tackled?  What market did they affect?  Within which legal framework did they run?  What about
countries which applied directives such as those on hard-core cartels?  Was this sufficient in itself, ordid this practice need to be inculcated in the developing countries?  What market was being affected –
was it the worldwide market – or the domestic market – from a legal standpoint?  What priorities
would be given to anti-competitive practices and discrimination?  If the focus was on international
practices, how could these be addressed effectively through the application of national legislation?
What would be the implications of different analytical methods in relation to cooperation?  Would theauthorities of participating countries need to be co nvinced of the validity of other countries' analyses
and, if so, would this not amount to a new revi ew procedure?  What was the relationship between
cooperation treaties and legal assistance treaties?  How would the proposed cooperation instruments
be integrated into the WTO provisions relating to government actions, and would the concept of
independence for competition authorities be affected by a multilateral framework?  This had to becleared up, because this was not a concept which is embedded in different legal systems.
48. Responding to these questions, the representatives of Canada and the European Community
and its member States  affirmed that the cooperation that was envisioned under the proposals for a
multilateral framework on competition policy was essentially voluntary in nature.  The representative
of Canada said, further, that in Canada's vision of  such an agreement, which shared much with the
proposals set out in the paper by the European Community and its member States
(WT/WGTCP/W/152), the agreement would be a relatively modest one in which binding rules only
made sense in certain areas.  Certainly, binding rules did not make sense in the area of cooperation.  It
would be a contradiction in terms to have anything else.  It was also not obvious to Canada that there
was much room for binding rules in the area of technical assistance.  Responding to a further, specific
question which had been posed by Hong Kong, China, he also made it clear that what Canada was
talking about was not simply an agreement about cooperation on competition law enforcement.Cooperation was a fundamental piece but certainly not the only piece.  The components of an
agreement were fundamentally interdependent.  Technical assistance and core principles were
necessary parts of an agreements and fundamental to facilitate cooperation.  He also suggested that
cooperation depended on familiarity which was required in order to create mutual trust.  It was not a
one-way street in terms of who benefits.  It was to countries' mutual advantage and the benefits couldeasily flow in both directions given where the information happened to be located in a particular case,
for example.  Thus, it would be a natural part of an agreement and fundamental to facilitate other parts
of a multilateral agreement.  Canada continued to believe that such a framework would go a long way
to assist developing and other countries to address the detrimental effects of anti-competitive practices
on trade and development.  The representative of the European Community and its member States
said that the fact that cooperation would remain, ultimately, voluntary in nature should not at all be
understood as meaning that the proposed framewor k would not significantly enhance the environment
for and incentives to engage in cooperation among participating countries.  Integral to the framework
would be a commitment by countries to consult and to seek mutually acceptable solutions on a range
of areas relating to anti-competitive practices with an  international dimension.  If one looked into the
fact that there would be convergence on core principles, that there would be not only bilateral
consultations but also a multilateral forum for exchange of views and experiences and that there
would be a specific recognition of the needs of developing countries in the cooperation field, it shouldWT/WGTCP/M/12
Page 17
be clear that the structure of incentives should be strong enough to significantly enhance cooperation
between countries at different levels of development.  In a way, a multilateral agreement would not
only promote a culture of competition, it would al so promote a culture of cooperation that went far
beyond what was currently the reality.  The representative of the United States agreed that
voluntariness was crucial to meaningful cooperation.  Without it, one could imagine results which
were contrary to what most Members, including the United States, were interested in, namely
enhancing the culture of competition policy and competition law enforcement around the world.
49. The representative of Korea noted that the paper by the European Community and its member
States (WT/WGTCP/W/152) referred to "negative comity" but not to "positive comity", the latter
having benefits that Korea had promoted in many submissions to the Group.  Positive comity was a
concept that implied that if a country believed that one or more of its firms were adversely affected by
foreign anti-competitive practices, it could appeal to the country in which those practices occurred andrequest that country to enforce its own compeition law with a view to remedying what the
complaining country saw as harmful measures.  As had been shown in an OECD report adopted in a
meeting of the OECD Committee on Competition law and Policy in May 1998, positive comity was,
at present, incorporated in a number of bilateral agreements which had been adopted since the United
States and the European Community had introduced it in their 1991 bilateral agreement.  AlthoughWTO Members lacked experience in this area and had only a few cases in which positive comity had
actually been used, it appeared that the benefits of positive comity could be real when harmful
extraterritoriality could be avoided.
50. In response, the representative of the European Community and its member States
acknowledged that the paper by his delegation (WT/WGTCP/W/152) did not use the term "positive
comity".  What was aimed at was to enable a developing country that became the target of anti-
competitive practices organized abroad to put forward a request to the country or countries where
those practices originated or where the firms su spected of anti-competitive activity had their main
headquarters that action was taken to remedy the situation or to respond in other ways to respond to
the requesting country's concerns.  The requested country was expected to enter into consultations andto give sympathetic consideration to such requests.  Hence, the proposal did not refer to a fully-
fledged positive comity instrument, as had been proposed by Korea and Japan.  At the current point in
time, it was premature to expect more far-reaching commitments in a multilateral framework, at least
during an initial phase.
51. The representatives of Trinidad and Tobago, India
 and Pakistan  posed the question of whether
voluntary tools of cooperation, including positive comity if this was ultimately adopted as an element
of the contemplated framework, would suffice to address the problems and concerns of developingcountries in the area of anti-competitive practices, particularly in the light of existing disparities and
inequalities of bargaining power?  It was suggested that this question needed to be addressed in the
light of the facts that ultimatel y, enforcement responsibility lay with the country with primary
jurisdiction over the anti-competitive practices in question; and that enforcement assistance would
remain voluntary in nature, that is, compatible with  the enforcement priorities, important interests and
available resources of the requested country.  The answer to this question was important to assess the
utility of a framework agreement that would bring together countries at different stages of economic
development.  The representative of Trinidad and Tobago said, further, that given that the
fundamental argument being advanced was that the globalization process had caused an increase incross-border effects of anti-competitive behaviour, and that this made it necessary to globalize someaspects of competition law, it was questioned whether this was consistent with the position that
competition authorities limited their action to behaviour that affected their domestic market.  The
representative of Pakistan suggested that there were two dangers.  First, there was the danger that
provisions on cooperation might deteriorate into hortatory provisions;  and secondly, there was adanger that there could be such a long list of criteria for participating in such exchanges that certaincountries might deny cooperation on the grounds that the requesting authorities did not meet certain
standards. In the light of this, it was important to understand precisely how cooperation provisions inWT/WGTCP/M/12
Page 18
a multilateral framework would operate.  Could the effects of particular cases of mergers, export
cartels, price-fixing on an international scale, etc. actually be discussed?  The representative of India
suggested that the ability of developing countries to discipline large multinational corporations even
in the presence of multilateral rules was doubtful.
52. In response, the representative of the European Community and its member States said that
there seemed to be more or less a consensus among Members of the Working Group that it was not
reasonable to expect to force an authority to cooperate where certain caveats and conditions were not
met.  His delegation had been clear as to what those conditions should be in its written contribution to
the meeting (WT/WGTCP/W/152).  These conditions were not arbitrary and originated from the
Community's experience with cooperation in a bila teral context.  Coopera tion between competition
authorities was a learning process where confidence-building was important.  This was an area where
relations were developed over time and were initially based on mutual interest, as had been pointedout by Canada.  Nonetheless, the inherent voluntariness of the cooperation called for in the proposed
framework had to be understood in the context of the commitment implied by acceptance of the
framework.  In this context, if the request for cooperation was reasonable and properly motivated, he
stated that he was confident that participating comp etition authorities would not refuse to consider it
in a favourable manner under the pretext that it was not a priority or that the authority did not have thenecessary resources.
53. The representatives of India; Hong Kong, China
; Indonesia ; Pakistan  and the Philippines
posed the question as to whether cooperation in a bilateral or regional context might be sufficient to
address the perceived detrimental impact of anti-competitive practices on international trade and/or
development.  An objective evaluation of such cooperation arrangements was called for.  Therepresentative of Hong Kong, China suggested, further, that the benefits of bilateral and regional
approaches, relative to a multilateral approach, had been grossly understated in the submission of theEuropean Community and its member States (WT/WG TCP/W/152).  For example, little mention had
been made of the shorter negotiation time and the higher level of cooperation standards applicable in a
bilateral or regional setting.  At the same time, it was suggested by the representative of India that
existing bilateral and regional arrangements were largely confined to countries at similar stages of
development.  In this context, if a new arrangement on international cooperation was reached, how
could it be ensured that such cooperation extended to countries at different stages of development?
54. In response, the representative of Canada, while affirming the important benefits that could be
provided through bilateral cooperation arrangements, nonetheless suggested that there were important
practical and substantive reasons calling for a multilateral agreement.  Focusing on the practical
aspects first of all, hard-core cartels and interna tional cartels were unlikely to respect the neatly
defined territories covered by bilateral agreements.  In fact, it stood to reason that they would tend to
act strategically and to seek out the cracks that existed between relevant regional and bilateral
agreements.  Only by having a proper network that covered all potential areas, that is, a multilateral
framework, could Members prevent that kind of strategic behaviour.  In the area of mergers, it was
possible to imagine that key pieces of information could lie in jurisdictions that were outside acountry's set of regional or bilateral agreements.  Currently, there were no provisions for cooperation
between regions.  For example, Mercosur did not have provisions for cooperation with APEC,
although there was some overlap in the membership.  Therefore, it was quite easy to imagine that
certain key pieces of information that would make for a stronger or more speedy review of a merger
were likely to be found in jurisdictions that were not within a country's set of agreements.  Amultilateral agreement would ensure that this was not the case.  Also, on the practical side, for a
country like Canada there were significant operational limitations on the extent to which cooperation
could be undertaken based on the limited number of people and resources available.  As various
regional and bilateral agreements and free trade initiatives were being negotiated, Canada was
conscious of the fact that it was rapidly approaching the limit of what could be done.  In Canada'smind, many of these efforts could be rationalised and thereby made more efficient if they could be
done multilaterally.  More intense cooperation could and undoubtedly would still be pursued withWT/WGTCP/M/12
Page 19
individual partners, as appropriate.  In Canada's view, a multilateral agreement would also be an
efficient vehicle to enhance the level of compatibility as well as the familiarity and mutual trust
between national competition authorities that were vital to meaningful cooperation.  There was,
therefore, a real need for a multilateral agreement to promote cooperation, to the mutual advantage of
participating countries, notwithstanding the ack nowledged benefits that bilateral cooperation
agreements could provide in appropriate circumstances.  The representative of the European
Community and its member States, while stating his agreement with the views that had been
expressed by Canada, added that bilateral agreements were limited in number and were essentially
based on mutual interests and reciprocity.  If one was seeking to encourage cooperation at very
different levels of development of the competition regimes, inevitably, one would have to go beyond a
pure bilateral approach and one would have consider a multilateral approach in relation to the issue of
cooperation.
55. With regard to the proposed requirement of a national competition authority with sufficient
enforcement powers, the representative of the European Community and its member States said that
his delegation recognized that such a requirement had to be defined in a manner that was sufficientlyflexible and that was well-adapted to different institutional realities.  For example, in a previous
intervention, Trinidad and Tobago had indicated some of the particular problems that, for instance,small developing countries may face in setting up of a fully fledged competition authority.  For his
delegation, the key element was that, ultimately, if effective cooperation was desired, there had to be
an authority capable of engaging in such cooperat ion.  There should be sufficient enforcement powers
to detect anti-competitive practices and to sanction those practices.
56. The representatives of Trinidad and Tobago and Pakistan
 sought clarification of the role
envisioned by the proponents of a multilateral framework on competition policy for application of the
WTO Dispute Settlement Understanding.  The representative of Trinidad and Tobago said, further,
that Trinidad and Tobago had doubts that the WTO Dispute Settlement Understanding was suitable
for dealing with competition issu es and felt that cooperation mechanisms would be more appropriate.
She appreciated the fact that that the paper defined non-discrimination as solely applying in the areasof access to competition authorities, access to the judicial system and in the application of national
competition law.
57. In response, the representative of the European Community and its member States affirmed
that his delegation was of the view that, if it was desired to step-up cooperation in the competition
filed, it was necessary to move towards an agreem ent that included a core of binding commitments.
This having been said, as had been pointed out by Canada, the scope of those binding commitments
would need to be very carefully defined so as to avoid unduly limiting countries' flexibility.  That wasthe reason why his delegation, in its paper, had suggested only a limited number of binding
commitments in relation to the national legal framewor k.  For instance, he was not suggesting that the
question of how the law was being enforced in practice was something that should be considered or
looked at on the basis of binding commitment.  As a logical consequence, it followed that any
application of the dispute settlement mechanism would have to be adjusted to correspond to the scopeof the binding commitment under the multilateral agreement.  The role of dispute settlement had not
been discussed in the paper by his delegation (WT/WGTCP/W/152) since it was felt that at the
current point in time, it was more productive to focus on the substantive elements that would be
included in a multilateral agreement.  However, as had been stated by his delegation on other
occasions, it was certainly of the view that it would not be appropriate to have dispute settlementreview of the decisions of national competition authorities in individual cases.
58. The representative of Korea said that his delegation had a different view regarding the
coverage of de jure  and de facto  discrimination.  In Korea's view, it would be an exceptional case if a
Member's competition law were to contain provisions explicitly discriminating against foreign
enterprises.  However, there might be many cases where less favourable treatment was applied de
facto  to cases involving foreign enterprises compared  with similar cases only involving only domesticWT/WGTCP/M/12
Page 20
firms.  Therefore, the non-discrimination principle should be applied not only to de jure
discrimination but also to de facto  discrimination.
59. With regard to the role of a peer review mechanism in the proposed multilateral framework,
the representative of Trinidad and Tobago noted that  in the paper by the European Community and its
member States (WT/WGTCP/W/152) it was foreseen that this would be voluntary in nature.  She
assumed that the results of the review process woul d be non-binding.  Clarification was sought as to
the objectives of the proposed reviews.  Would it be to critically evaluate the enforcement policies and
practices of Members and/or to assist in developing enforcement capacity?  In response, the
representative of the European Community and its member States said that his delegation believed
that this would be a useful component of the proposed multilateral framework.  Peer review, whichwould indeed be voluntary in nature, would be an  instrument through which issues that related to
enforcement could be discussed in an open and constructive manner.  For example, in the case ofdeveloping countries, it could be used in some cases to identify possible capacity constraints.  It could
also be used to examine enforcement policies be ing followed in individual countries.  However, it
clearly was not a commitment that implied dispute settlement.
60. The representatives of Kenya, India
 and Trinidad and Tobago  said that the subject of
technical cooperation was an important one and that little progress could be expected on the issues
unless questions of capacity-building were meaningfully discussed.  These questions were important
not only for purposes of institution-building but also to hone the skills of negotiators to ensure that
they could effectively represent the interests of developing countries in any decisions to be taken.  The
representative of Kenya said that, when competition policy was applied domestically, it enhanced the
efficiency of the application of the limited resources for further development.  However, when
markets were opened up internationally, countries such as his with limited resources and institutional
capability were exposed to the anti-competitive activities of multinationals and national corporations.
Particularly where countries did not yet have domestic competition laws, but even otherwise,
multinational corporations appeared to have considerable ability to evade detection of their activities;
this was an important factor underlying the need for capacity building in this area.  Kenya'sexperience in the last ten years was that very little or no assistance at all had been provided in the area
of in the area of competition policy, except by UNCTAD.  Decision-drafting and capacity building
were two areas in which assistance was particularly important.  Without the required assistance on
these and other matters, it would be more suitable to focus first on competition policy advocacy so
that more and more countries could start appreciatin g the benefits and the role of competition policy
in the development process.
61. In response, the representative of the European Community and its member States said that
his delegation agreed with the representative of Kenya that developing countries would not wish to
become engaged in a negotiation on competition policy without having a good understanding of the
issues that were at stake.  This was the reason why his delegation was taking a transparent and
educational approach in setting out its ideas re garding the possible elements of a multilateral
agreement, to enable countries to look more closel y into the issue and come to an informed decision
on that basis.  The Community had also been supportive of a number of processes of regional
seminars and other capacity-building activities to help countries to be in a position to take an
informed decision on this matter when the time for such a decision actually came.
62. The representative of Korea said that his delegation shared the view expressed in the paper by
the European Community and its member States (WT/WGTCP/W/152) that the WTO could make a
significant contribution to a better approach to th e provision of technical assistance on competition
law and policy by the international community, particularly if this was done in conjunction with the
adoption of a multilateral framework.  The detailed description on page 13 of the paper was
particularly relevant.  As Korea had emphasized in its previous submission on competition policy, the
importance of enhanced coordination between the di fferent competent international organizations in
the provision of technical assistance could not be over-stressed, especially when it came to specificWT/WGTCP/M/12
Page 21
tasks such as the drafting of a law or training of agency personnel.  The representative of Switzerland
also affirmed the importance of such assistance, noting that, perhaps, this had not been made
sufficiently clear in the paper by his delegation (WT/WGTCP/W/151).
63. The representative of Pakistan said that his delegation was wary about promises of technical
assistance given the deliberations that had taken pl ace at the last meeting of the Budget and Finance
Committee.  Little had been clear except that there was little or no possibility of additional funding.
Members should not harp too much on technical assistance as an inducement, or delude themselves
about its availability.  In any case, the WTO was not a technical assistance agency.  The WTO could
have an input but that was as far as it could g o.  As an inducement to enter into an agreement,
technical assistance was not enough.
64. The representative of Hong Kong, China said that a number of the proposed elements of a
multilateral framework dealing with international cooperation and technical assistance could, perhaps,
be more expeditiously pursued outside the context of negotiations or, indeed, outside the context of
the WTO.  For example, there did not seem to be any reason why interested donors should not start
working now on initiatives to provide enhanced te chnical and enforcement assistance for developing
countries.  On the contrary, linking these initiatives with multilateral negotiations would unduly delay
the much-needed assistance for developing countries.  Likewise, it was hard to understand thesuggestion that modalities on general exchange of information and experiences, as mentioned in the
last 4 bullets under item 2 of the Annex, be brought within a binding multilateral framework.  There
already existed plenty of standing ad-hoc mechanisms in the WTO and other international fora for
Members to share general information and experience on competition policy issues.  The challenge
was how to ensure more cost-effective and coherent use of those mechanisms rather than to imposenew binding obligations on Members.
65. The representative of the European Community and its member States said that he wished to
dispel any misunderstanding that his delegation was in any way conditioning or delaying technical
assistance until the launch of a negotiation on the multilateral agreement.  On the contrary, in addition
to other donors, the Community and several of its member States were actively engaged in theprovision of such assistance, in a number of countries and regions.  It was clear that there was a great
deal to be done in this area, although his delegation remained convinced that, precisely because of the
capacity-building requirements that had been menti oned by Kenya, much more significant results
could be achieved within the context of nego tiations on a multilateral framework.  Another
representative of the European Community and its member States provided details of some current
activities of the Community in the field of competition law and policy.
66. The representatives of Hong Kong, China, the Philippines , India  and Pakistan  posed the
question of  why, even assuming that some action was needed on competition policy at the multilateral
level, was it appropriate to pursue this in the WT O?  The representative of the Philippines stated,
further, that the WTO dealt with reciprocal tariff concessions and dealt with the regulation of non-
tariff barriers.  That defined the conceptual framework of the WTO.  These considerations were why a
dispute settlement system and non-violation complaints existed.  Currently, new issues were beingraised in areas such as competition policy that went beyond the balance of negotiated concessions.  If
the WTO dealt with those areas, Members could unwittingly extend its jurisdiction beyond what was
originally intended.  His delegation was sceptical of the desirability of this and wanted to be educated
as to why, unwittingly and without the conscious political will of the international community, should
the WTO should be converted into something that was even more powerful in the context of globalgovernance.  This would involve a rethinking of the classic nature of the WTO and its basic rules and
practices.  The representative of India said that the WTO was, very much, the appropriate body to
consider issues concerning the interaction between trade and competition policy but that, as yet, it waspremature to consider whether there was a necessity for, or once a necessity had been established,
what the WTO's role in the formulati on of a multilateral framework would be.WT/WGTCP/M/12
Page 22
67. In response, the representative of the European Community and its member States said that
ultimately, this was a question that might have to be resolved at the political level.  However, from the
point of view of his delegation, the WTO was certainly  more than just an instrument for the balanced
negotiation of concessions.  It had a mandate to establish rules to govern international trade relations
and ensure that developing country and other Members were not unfairly deprived of the benefits ofliberalization.  It was difficult to conceive of any area of economic policy which was more clearly
trade-related than competition policy.  The types of anti-competitive practices that had been discussed
in the Working Group, including international cartels, export cartels and exclusionary practices with
an international dimension, had a clear distortionary effect on international trade as well as a harmful
impact on development; accordingly, it was a bit strange to suggest that the WTO as an international
organization should not concern itself with these practices.
68. The representative of Japan said the question that had been posed by Pakistan and other
delegations should be reversed – i.e., the relevant question was why not the WTO?  Elsewhere in
Geneva, technical cooperation, horizontal cooperation, exchange of experiences and construction of
databases were the most important activities of international organizations.  Although the WTO's
strength as an institution resided in its contractual nature and its status as a rule-making body, this
certainly did not imply that it was unable to absorb enhanced technical cooperation activities as partof its agenda.  On the contrary, the Organization's rule-making and technical cooperation activities
were mutually supportive and complementary.  The most important consideration was that an urgent
need for enhanced technical cooperation and support for the implementation of effective national laws
had been expressed by a number of developing countries.  Through Working Group meetings and
regional workshops of the type that been presented in Phuket, and formal or informal contacts withofficials in capitals, Japan was convinced that already, a substantial number of countries were
supportive of approaching more positively, in a more imaginative way, the needs of those countries.
69. With regard to ensuring the necessary degree of  flexibility in any multilateral framework, the
representatives of Hong Kong, China, India
 and Pakistan  said that discussions at the Working Group's
previous meeting had underlined the need for whatever multilateral work programme on competition
was considered necessary to pay heed to the diversity of, and asymmetries in, Members' economic
situations, competition regimes, legal traditions and cultural contexts.  It was unclear whether the
proposal by Switzerland (WT/WGTCP/W/151) had adequately taken account of such diversity and
asymmetries.  In the view of Hong Kong, China, the lack of sensitivity to the salient differences
among Members in these areas would materially undermine the usefulness and broad acceptability of
any proposal.  The representative of Indonesia said that, if it was decided to even consider multilateral
rules on competition policy, it would be imperative for those rules to be flexible enough for
developing countries to achieve their development objectives.  Additional burdens should not be
placed on developing countries.  Even the question of notification might be an easy task for some
delegations, but was difficult for others, as was clearly reflected in experience in respect of various
obligations emanating from the Uruguay Round.
70. The representative of Korea, commenting on the paper by the European Community and its
member States (WT/WGTCP/W/152), said that while flexibility in the implementation of an eventual
multilateral agreement on competition policy was vital, deference to the particular circumstances of
Members should not be interpreted as meaning that countries could justify the presence of, for
example, certain monopolies in sectors covered by the agreement because such monopolies fit into
their policy of economic development.
71. The representative of Japan said that, in view of the diversity of developing countries and
their need for economic development, Japan wanted  the proposed multilateral framework to be as
flexible as possible.  As had been mentioned in the opening paragraph of its submission on
cooperation in a multilateral framework (WT/WGTCP/W/156), such flexibility should be applied in
relation even to the core principles incorporated in Japan's proposal.  Progressivity and an incrementalapproach were the pre-requisites.  Developing countries seemed to feel a real need for cooperation onWT/WGTCP/M/12
Page 23
the one hand and some concern on the other hand associated with the establishment of a multilateral
framework.  However, those concerns should not be overblown.  Such concerns could be addressed
through a more focused discussion, in concrete terms, on the special and differential treatment for
developing countries and the scope of the dispute settlement system of the WTO.  Japan was ready to
pursue, in future meetings, a flexible approach in t hose areas as well, if there was such a desire on the
part of some of the Member countries.  For example, perhaps, more reliance should be placed on the
proposal developed in the paper by Canada (WT/WGTCP/W/155) for a phased approach to
cooperation at the multilateral level, which had also been mentioned by Malaysia.  As he had
understood it, the basic idea was that, in phase one, dissemination of sound and effective competition
law would be promoted through technical cooperation.  In phase two, where Member countries had
already introduced a competition law, technical assistance could occur for capacity building.  In phase
three, if qualified countries were so willing, OECD-type voluntary cooperation including theexchange of non-confidential information, etc. could occur.  Beyond those phases, anything could be
optional.  Throughout the whole process, the exchan ge of experience and learning of practices ought
to be conducted.  There seemed to be nothing that was dangerous in that process.
72. The representative of Switzerland said that, in the proposal by his delegation
(WT/WGTCP/W/151), the need for flexibility had, in fact, been recognized in that important
questions as to what national competition laws should contain had been left to the discretion of
individual Members.  However, further discussion of how the specific needs of developing countries
in this area would best be addressed was welcome.  He encouraged delegations such as Hong Kong,
China to take up the model and analyze where and to what extent they, for example, considered
special and differential treatment necessary, taking into consideration the relatively limited range ofprescriptive elements in the Swiss model.
73. The representative of Pakistan said that  a cost-benefit analysis was needed individually and
collectively to determine whether what Members were being asked to give up in the realm of
flexibility was, perhaps, outweighed by what woul d be gained from the development of a multilateral
framework.  Currently, Pakistan was not convinced on this point.  What his delegation required wasthe ability to take necessary measures to nurture industries and sectors wherev er desired.  That would
not be accomplished simply by specifying a list of sectors which would be exempt with the
understanding that the rest would be included under the ambit of competition rules.
74. The representative of the European Communities and its member States agreed with the
suggestion by the representative of Pakistan that the Group should undertake a cost-benefit analysis.
At the end of the day, there were basically two questions that needed to be addressed in future
discussions.  The first was the whole issue of the relationship between any possible commonprinciples and the necessary degree of flexibility.  Secondly, there was the issue about the type of
cooperation modalities that would be useful at the multilateral level.  Those two issues could be
discussed in a concrete and specific manner without prejudging the political decisions of countries
about the issue of negotiation on a multilateral framework.
75. The representative of Canada reminded the Group that his country was involved in
cooperation with a number of countries that had quite significantly different regimes.  Canada's
competition regime was rather different in certain areas  from that of the United States or that of the
European Community.  This made it clear that a commitment to cooperation and to certain
fundamental principles would still allow for substantial diversity in competition regimes.
76. The representative of Hong Kong, China said that  his delegation was grateful for the
reassurance that had been provided by several delegations that there would be no harmonization of
national competition laws and the need for progressivity and flexibility would be respected.  His
delegation would be happier still if it were made clear that there would be no need for mandatory
introduction of competition law.  Reading between the lines, he felt that this was what some
delegations had in mind.WT/WGTCP/M/12
Page 24
77. The representatives of Pakistan and Tunisia  raised the question of how the sovereignty and
independence of national competition authorities would be reconciled with a multilateral agreement?
In response, the representative of the European Community and its member States said that the
commitments in a multilateral framework would relate to legislation and not to the way in which thelegislation was enforced by competition authorities.  Accordingly, there would be nothing in thesecommitments that would limit the independence of competition authorities or the prosecutorial
discretion of such authorities.  The representative of Canada affirmed that, in the experience of his
country, a commitment to cooperation did not affect the independence of competition authorities inthe exercise of their enforcement responsibilities.
78. The representative of Hong Kong, China qu eried the basis for the suggestion in the  paper by
Japan (WT/WGTCP/W/156) that a fair degree of consensus had already been reached on some key
elements relating to a multilateral framework on competition policy.  In response, the representativeof Japan said that was not suggesting that there were no divergent views or that such views were
unimportant.  On the contrary, a multilateral framework needed to be inclusive and his delegation
encouraged other delegations to be as forthcoming as possible about their specific concerns about the
current proposals.
79. The representative of Malaysia reiterated his delegation's position that there was no need for
any global rules on competition policy.  The proposals that had been made did not answer several of
the questions, doubts and concerns which Malaysia and other developing countries had expressed at
the previous meeting of the Working Group, and which had been summarized in the Note by the
Chairman circulated prior to the current meeting (Job 5696, circulated 21 September 2000).  The
representative of Kenya said that Kenya appreciated the benefits which could flow from competition
policy.  However, the call for a multilateral agreem ent might be too ambitious at the moment.  The
representative of Indonesia stated that he shared the concerns that had been expressed by delegations
such as Malaysia, Pakistan and India.  It was difficult to consider multilateral rules in this area since,in the case of many developing countries, such rules could require revisiting and possibly re-designing
laws which had only recently been adopted by legislatures.  He noted, as well, that a number ofconcerns had been raised by these and other countries in the ongoing discussions in the General
Council on implementation questions.  Perhaps, if those issues could be satisfactorily resolved,
Indonesia would be able to have an open mind on competition policy.
80. The representative of Japan suggested that his delegation's position had significant elements
in common with views that had been expressed by the departing United States Assistant Attorney-
General for Antitrust, Mr. Joel Klein, at a conferen ce in Brussels two weeks previously.  In response,
the representative of the United States said that some of the press reports on Mr. Klein's speech had
been wrong, at least in some respects.  What Mr. Klein had said and what the United States position
continued to be was that, on the one hand, there were a number of important practical issues in the
field of international competition policy that needed to be addressed.  While some of those issues
could best be addressed at the bilateral level, others could best be addressed at the regional level or, in
some cases, at the multilateral level.  However, the time was not now ripe for negotiations on bindingrules in the field of competition law enforcement.  In that context, Mr. Klein had suggested that it was
necessary to come up with an appropriate forum to resolve some of the more pressing practical issues,
particularly in the area of mergers.  As to what, precisely, the forum should be, from the point view of
the United States, this was something that had not yet been determined.  However, the United States
considered that the format should be inclusive, including representatives of the WTO, OECD,UNCTAD and the World Bank.
81. The representative of the European Community and its member States said that, although he
recognized the continuing divergence of views in the Group on certain key points, it would be
surprising if there was not a large degree of consensus within the Group on a number of underlying
analytical issues such as, for example, the contribution that competition policy could make to soundeconomic development or the harmful effects of the various anti-competitive practices that had beenWT/WGTCP/M/12
Page 25
mentioned in the papers by his and other delegations.  There also seemed to be a widely-held view
about the need for international cooperation to address anti-competitive practices with an international
dimension, although he recognized that not all questions were resolved as to which elements could
most usefully be addressed at the bilateral, regional and multilateral levels.  Still, a large and growing
number of Members seemed to have come to the view that, while bilateral and regional approacheswere useful, they did not provide all of the answers and that a multilateral dimension to cooperation
would also be necessary.  This was reflected, for example, in the resolution that had been adopted at
the Fourth Review Conference on the UN Set as well as in various interventions in the Working
Group.  Notwithstanding these indications of a growin g convergence of views, he recognized that it
was important to address the concerns that continued to be raised by some delegations.
82. Another representative of the United States said that he agreed with the comment by the
representative of the European Community and its member States that the purpose of the Working
Group was to examine analytical aspects of the issues, leaving political questions such as whether to
initiate negotiations to be resolved in other fora.  In any case, the position of the United States
continued to be that the relationship between trade and competition policy was an area of increasing
importance for the WTO, for the multilateral trading system and for the future of international trade.
However, it remained an open question as to whether the WTO was the appropriate institution inwhich to initiate the development of rules on competition in a multilateral context.  Furthermore,
currently it was premature to attempt to answer this question.  Submissions made by the United States
during the year, pursuant to the educational mandate embodied in the Singapore Ministerial
Declaration, indicated that his delegation had tried to maintain the emphasis not on the political
debate but, rather, on how the Group could, in an incremental, constructive and pragmatic way, lookat the various issues in the area and help to nurture and disseminate the culture of competition.  This
was of obvious importance to developing and transition economies that were either considering
whether to enact a competition law or policy or, if that choice had already been made, addressing the
practical challenges involved in implementing such law or policy.  Nonetheless, it was apparent that
much of the debate in the Group had been on the question of what benefits might be obtained throughhaving a framework or an agreement on competition policy in the WTO and whether one needed a
framework or an agreement in order to achieve them.  A great deal had been said about the value of
transparency, international cooperation and technical assistance, much of which was valid.  It was
perhaps true that, at a certain point in the development of the issue, an agreement or framework of
some kind would be the appropriate housing for the issue.  However, it was unclear to his delegation
that this was currently the case or that the Group had yet reached a point where it could make a
suitably informed judgement on the matter.  The United States had legitimate questions that needed tobe sorted through as to how one could give effect to international cooperation at the level of the WTO
in the particular legal context that competition law presented.  As a bottom line, what was important
was not to rush towards an agreement but whethe r steps could be taken such that the sharing of
experience and convergence of thinking that would underlie a possible agreement developed in a way
that would make possible an informed choice about whether an agreement was appropriate and, if so,the nature and institutional locus of the agreement.
83. The representative of Japan said that competition should not be a divisive issue in the WTO.
All Members of the WTO embraced market economies and cherished competition.  It was not only
close to the heart of the WTO community but at the very heart of it.  It had never been esoteric to the
WTO.  Accordingly, Members should dispel the mindset of a North/South divide, if there was one, sofar as competition issue was concerned.  The issue of competition was distinctly different from certain
other areas that were being discussed elsewhere in th e WTO, in that it was potentially a win-win field
that would offer benefits for all participating count ries.  The representative of Hong Kong, China said
that it was not his delegation's intention to play up any so-called North/South divide.  It was an
objective fact that a substantial number of Members had not yet agreed to the negotiation of amultilateral framework on competition policy in the WTO.WT/WGTCP/M/12
Page 26
84. With regard to  governmental measures that impacted on trade and competition,  the
representatives of India; Pakistan ; Hong Kong, China ; Korea ; Malaysia ; Indonesia  and the Philippines
said that addressing these was an important part of the mandate of the Group.  In the first instance,this would include addressing anti-competitive practices that, in the view of these delegations, were
embodied in existing Uruguay Round Agreements  such as the Antidumping Agreement, the
Agreement on Trade-related Intellectual Property Rights, and the Subsidies Agreement.  Every
agreement in the WTO should be examined to s ee how it promoted competition, subject to the
principle of no a priori exclusion.  The representative of Japan said that Japan shared a common
interest in these issues, to an extent, but also felt  that consideration of these issues should not detract
from the issues concerning anti-competitive practices of firms and the need for a multilateral
framework on competition policy.  The representative of Switzerland said that his country did not
apply trade remedy measures such as antidumping or countervailing duties.  Nevertheless,
Switzerland considered that the application of trade remedies was something which could be
discussed by the Group in the future.
85. With regard to the future work of the Work ing Group, the representative of Trinidad and
Tobago suggested that Members needed more time to think through the whole question of the
relationship between competition policy and development.  The discussion had been constructive but
many questions remained to be answered.  The re presentative of India, referring to the paper
submitted by Hong Kong, China to the previous meeting of the Group (WT/WGTCP/W/141), recalled
that it had suggested a three-step roadmap for the Group's future work.  As far as the first stage was
concerned (i.e., agreement on the scope of competition policy), this required a great deal of further
deliberation.  Regarding the second step suggested by Hong Kong, China, that is identification ofspecific problems that were relevant to a globalizing market, there was no doubt that problems
existed, although the discussion had certainly not been exhaustive.  With regard to the third step, that
is exploration of both the feasibility and content of multilateral options, India differed slightly with
the approach taken by Pakistan on this.  That is to say, it would be difficult for India as a delegation to
participate actively in a discussion of the content of a multilateral framework until the Group hadactually come to the third step.  Thus, the three st eps identified by Hong Kong, China should analysed
in a step-by-step fashion.  He said, further, that the paper submitted by Korea (WT/WGTCP/W/154)
had posed three questions which would add substance and focus to the debate:  first, whether the
WTO was an appropriate body to address the problems that had been identified; second, whether
existing WTO rules could provide "pointers" regarding necessary reforms; and third, a systematic
review of the feasibility of relevant options at the multilateral level.  This would include consideration
of options other than rule-making.  In fact, the paper by Korea provided useful examples of activities
that might be undertaken in relation to capacity- building, the establishment of a competition policy
review mechanism and closer cooperation between WTO and other international fora.  Moreover,
even if there was still a divergence of opinion on rule-making or the time was not perhaps yet right to
consider this issue, this did not constrain Members from initiating action as per the various
suggestions.  This would, perhaps, be a very importa nt intermediate step in facilitating a convergence
of viewpoints when the possibility of multilateral rules was considered.   Finally, India tended to agree
with the suggestion that had been made previously by  Australia that analytical work in the form of a
scoping study to determine similarities and disparities amongst Members' approaches to competition
policy and practice would be in order.  This could be done by the Group itself or by the Secretariat.
86. The representative of Hong Kong, China, commenting on the paper by Korea
(WT/WGTCP/W/154), expressed gratitude for the recognition that had been given to Hong Kong,
China's 3-step roadmap for the future work of th e Group.  Hong Kong, China agreed with Korea that
the question of what constituted appropriate sta ndards and guidelines for identifying competition
issues with direct relevance to international trade and fulfilment of the WTO objectives merited
further deliberation by the Working Group.  Having regard to the remit of the WTO and the terms ofreference of the Working Group, Hong Kong, China saw merit in the idea of Members collectively
drawing up criteria to provide a basis for identification of problems at hand.  Hong Kong, China had
proposed two such criteria:  first, the existence of significant and demonstrable anti-competitiveWT/WGTCP/M/12
Page 27
impact on international trade and investment; and second, prevalence of an anti-competitive practice
among WTO Members.  The issues raised under steps 2 and 3 of the proposed roadmap were at the
heart of the paper by Korea and a few other submissions as well.  While step 1 had not attracted much
discussion thus far, its importance should not be overlooked.  Given the wide-ranging meanings,
expectations and priorities which Members attached to the term "competition policy" or its variationsin an international context, Hong Kong, China was convinced that more research and deliberation on
step 1 would help lay a solid foundation for Members to build consensus step-by-step.  In this regard,
it had given further thought as to how best to organize the Working Group's work around step 1 and
suggested that priority consideration should be given to the following issues:  to what extent was there
an internationally accepted terminology for the scope of the term "competition policy"?  What were
the common threads of the different streams of definitions for the term?  Did the various streams of
definitions suggest that there were dimensions mark ed by a dichotomy of views, and, if so, what were
the conceptual elements necessary to grapple with such a dichotomy?  More intensive discussions on
individual elements of the 3-step  roadmap would also be welcome.  The representative of Indonesia
agreed that further discussion of the definition of competition policy was desirable.
87. The representatives of Japan, Korea , Malaysia  and Pakistan  suggested that it might be useful
for the Group to focus on the points raised by the Chairman in the list of questions which he had
circulated in advance of the current meeting (Job 5696, circulated 21 September 2000).  This would
ensure that the discussions would be focused on more substantial, exploratory and pragmatic issues.
The representative of Korea suggested that these questions could be considered together with other
issues and matters raised for consideration in the paper by Japan (WT/WGTCP/W/156) such as theharmonization of procedures regarding international mergers, prohibition of export cartels and thehandling of confidential information.  Questions posed in the paper by Switzerland
(WT/WGTCP/W/151) on the potential for conflicts with industrial policy, conflict with investment
policy and the additional need for special and differential treatment of developing countries also
merited consideration in the Group.  The representative of Hong Kong, China, commenting on the
paper by Switzerland (WT/WGTCP/W/151), said that the questions raised on development policy in
the concluding paragraphs of the paper merited detailed study and deliberations.  To draw up a
multilateral action plan before thorough consideration of those questions was, in the view of Hong
Kong, China, putting the cart before the horse.
88. The representative of Tunisia said that priorities for further work might concern the
identification of the most harmful anti-competitive practices and the establishment of a common data
base.  The question of exceptions and possible linkages to any arbitration which might occur between
competition law and policy and other areas of law and policy also needed to be considered.  Also,what would be the costs of compliance for firms and the impact on investment?
89. The representative of Pakistan said that, in suggesting that a more focused discussion was
needed on some of the issues and questions which had been raised, he did not mean that the Group
should devise a whole list of new issues and get into a procedural wrangle on what should be
discussed.  The relevant questions could clearly be addressed under the existing broad agenda.  Inparticular, it could be done by carrying on with the tradition of raising questions which Members
would wish to address and then the discussions could be structured accordingly so that each of those
questions perhaps could have more focused attention.  The representative of the United States agreed
that the mandate under which the Group was currently operating was sufficiently flexible to allow itto explore all issues of relevance to delegations.  Certainly, the questions that the Chair hadsynthesised from the last meeting of the Group had helped to inform all delegations and provided a
certain degree of focus.  However, it was up to delegations to pursue the areas that were of interest to
them.
90. The representative of Hong Kong, China suggested that the revised list of questions which the
Chairman had been encouraged to prepare could be structured in a way that enabled Members to tell
the difference between the more fundamental questions and those questions that depended on theWT/WGTCP/M/12
Page 28
fundamental questions.  This kind of structure would help Members to have a better reflection of the
actual state of the discussion and to contribute more meaningfully to it.  The Chairman said that he
would consider this suggestion but that he wa s concerned about imposing his own subjectivity
regarding what was fundamental and what was not fundamental.
91. The representative of the United States, commenting on the contribution of Switzerland, said
that the paper had suggested that there was an enhanced mutual interest of all countries in promoting
stability in markets around the world.  In the view of his delegation, competition should not be
equated with stability; in fact, it was the antithesis of stability.  Cartels, which sought to promote
stability, were clearly a bad thing from the standpoint of competition policy.  In response, the
representative of Switzerland stated that the comment by the representative of the United States was
perfectly right.  He had not been referring to the stability of particular markets but to the long runstability of the market economy.  If one took this perspective, it was clear that competition policy, bypromoting efficiency and the continual restructuring of the economy in response to market forces,
would enhance the overall stability of the economy in the long term.
92. The representative of Kenya said that the prio rity for developing countries might not, at the
present time, be to address multilateral competition policy issues.  Currently, issues like
unemployment and access to health care posed more pressing problems.  The representative ofMalaysia suggested that consideration be given to transferring the Working Group's work on the
subject of anti-competitive practices to UNCTAD, which had an expert body on this subject.  Therepresentatives of India and Pakistan
 suggested that there could be merit in considering this
suggestion.
93. A representative of the Secretariat stated that a Regional Workshop for African Members and
observers, similar to the one which had been held in Phuket, Thailand, for Asian Members and
observers, would be held in Capetown, South Africa, probably in February 2000.  The Secretariat
would consider organizing another workshop for Latin America and the Caribbean, if this was of
interest to Members.  The representatives of Trin idad and Tobago welcomed the possibility which had
been mentioned of eventually holding a regional workshop or seminar for the Caribbean region.  The
representative of Guatemala said that, although her country did not have a competition regime as of
yet, significant preparatory work had been undertaken  in this regard.  Her delegation agreed with the
view that competition regimes would benefit from adopting fundamental WTO principles such as
transparency, national treatment and non-discrimination.  She also concurred with the Canadian
delegation in that cooperation and technical assistance were different processes.  Guatemala was
relying on international assistance to set up its competition regime and would be interested in hosting
a regional workshop on competition policy like the one that had recently been organized by the WTOin Thailand.
94. The Chairman provided his personal reflections on the discussion that had taken place on
Agenda item II.  He drew attention, inter alia , to the following points, which he emphasized were
simply personal impressions and had no official standing:
- The discussion had commenced with the presentation of several contributions
exploring in detail possible features of a multilateral framework on competition
policy.  While these proposals had embodied certain common elements, including
core principles, modalities for cooperation and measures to promote technical
cooperation and institution-building, there had also been a number of differences in
emphasis.  Responding to concerns that had been raised in previous meetings of theGroup, in several of the proposals it had been emphasized that harmonization of
domestic competition laws would not be required as a prerequisite to participation in
a multilateral framework.  It had also been mentioned that exemptions could exist
provided that they were transparent.WT/WGTCP/M/12
Page 29
- Some delegates had suggested that one of the important benefits of a multilateral
agreement would be to step up cooperation between competition authorities and to
get at the practices that would otherwise "fall between the cracks" of national
competition regimes and bilateral or regional agreements.
- A question had been raised by one delegate as to whether there had been an
underestimation of the benefits of bilateral and regional agreements and, perhaps, an
overestimation of the benefits of a multilateral agreement.  While the answers given
to this question had had various dimensions, one delegate had suggested that a key
limitation of bilateral and regional agreements was their limited coverage both in
terms of membership and geographic territories.  It had also been suggested that the
value of a multilateral framework might not be so much in the specific provisions thatit embodied on cooperation but, perhaps, in the sheer fact that one would define
common core principles and would have a general agreement that would give an
incentive to competition authorities to cooperate more than they do.
- Another point that had been stressed by some delegates who were proponents of a
multilateral framework had been that cooperation on specific cases should remain
essentially voluntary in nature.  In other words, it had seemed that, under the
multilateral framework that had been proposed by some Members, there would be a
commitment to cooperation similar to that which is contained in the cooperation
arrangements that some countries already have at the bilateral level but that, as inthose agreements, countries ultimately would not be required to cooperate if this was
against their important interests.  This had seemed to be an important clarification
from the standpoint of at least one Member that hitherto had been sceptical of the
desirability of a multilateral framework for cooperation in this area.
- Some delegates had also suggested that the interests of developing countries were
likely to be neglected if cooperation was pursued only at a bilateral level and that,
from that point of view, a multilateral agreement on cooperation could be a useful
way to make sure that developing countries would reap the benefits of cooperation.
Additionally, there had been some mention of  the fact that a multilateral framework
could reduce the cost of transactions for businesses and that this was not a negligible
consideration.
- A question had also been posed, which seemed to be of interest to a large number of
delegates, as to whether a multilateral framework would attempt to circumvent the
ability of countries to provide subsidies as a tool of industrial policy.  In reply, it had
been stated by a key proponent of such a fr amework that this would definitely not be
the case.
- A number of delegates had asked whether there were other ways to achieve the
benefits that the proposed multilateral framework was envisioned to achieve.  For
example, it was suggested that it might be possible to achieve the desired benefitsthrough mechanisms such as peer reviews, technical assistance and institution-
building and other measures outside the scope of a multilateral agreement.  At least,
these delegates felt it was important to examine this possibility.
- Notwithstanding the apparently useful clarification that had been provided on the
above and other points, several delegates had nonetheless emphasized that further
clarification of the specific implications of, for example, the proposals that had been
put forward on core principles as well as on cooperation remained necessary before
the merits of the proposed multilateral framework could be properly evaluated.WT/WGTCP/M/12
Page 30
- There had also been several contributions on the second aspect of this agenda item
which dealt with the relationship between competition and economic development.
On the issue of competition and economic development, the Group had heard from a
country which had recently adopted a competition law and which had explained why
it thought that competition law was necessary to protect opportunities for firms togain access to markets and also to protect firms once they had gained access to
markets.
- The Group had heard an interesting report about the work which was done at the
Fourth Revision Conference of the UNCTAD.  It had been noted that the agreed
resolution from that Conference had affirmed the fundamental role of competition
law and policy for sound economic development.  In addition, among many othervery interesting elements, it had called on UNCTAD to provide input to the
development of international agreements on competition policy, including at the
multilateral level.  The information that ha d been provided by the representative of
the OECD regarding that Organization's work on hard core cartels had also appeared
to be relevant to the Group's deliberations.
- A number of proposals for structuring the future work of the Group had been
discussed.  It had been suggested that the Chairman consider revising and updating
the set of questions that had been circulated in advance of the meeting.  The point had
also been made that, ultimately, it was up to Members to raise the points of concernto them, and that the Group's mandate was broad enough to encompass the various
concerns that had been raised.
- Other delegates had suggested that it was important to give more attention in the
Working Group to government measures that had an impact on trade and competition.
- Finally, several delegates had suggested that it was not productive at this point for the
Group to engage in political negotiation.  Rather, it was preferable that the Group
continue to focus its work on the educative and analytical process.  It was
acknowledged, however, that as part of this process, it was relevant to continue
studying the pros and cons and possible modalities of a multilateral framework as
well as other potential options for addressing the various problems that had beenidentified.
In closing, the Chairman undertook to circulate, at an appropriate stage, an updated checklist of
questions that had been put forward by Members.
III. THE CONTRIBUTION OF COMPETITION POLICY TO ACHIEVING THE
OBJECTIVES OF THE WTO, INCLUDING THE PROMOTION OF
INTERNATIONAL TRADE
95. The representative of the United States, introducing document WT/WGTCP/W/153, said that
the paper discussed the role of competition advocacy.  The importance of this topic reflected the fact
that, in addition to private restraints such as cartels, restraints to competition could arise from
unwarranted restrictions embodied in laws, regulatio ns and policies.  Such restraints would often be
outside the purview of anti-trust laws, but would be open to advocacy efforts by competition agencies
to remove or temper their anti-competitive effects.  In the United States, competition advocacy was
part of the mission of both the Department of Justice (Antitrust Division) and the Federal TradeCommission.  The goals of the agencies' advocacy programmes were to represent the interests of
consumers in preventing the adoption of restraints that could reduce competition and consumer
welfare.  For example, in general, the agencies urge d that any regulations entail as little restriction as
possible on competition.  The paper provided a number of examples of advocacy activities at theWT/WGTCP/M/12
Page 31
federal, state and local levels of government and with reference to a variety of forms of government
intervention in markets for diverse services and goods.  Unlike in some countries, in the United States,
the relevant statutes did not provide specific authority for competition advocacy, but such authority
was considered to be implicit in the legislation.  In addition, certain other laws provided explicitly for
participation by antitrust agencies in relevant proceedings.
96. Continuing, he said that competition advocacy could be done in formal and informal ways.
Formal advocacy work involved the submission of written comments including expert studies and the
presentation of oral testimony.  Informal methods in cluded discussions with legislators and their staffs
or between staffs of the competition agencies and the regulators.  He noted, as well, that the role of
competition advocacy could be particularly important in economies undergoing a transition to a
market-based economy, in which there would typically be a lot of privatisation activity.  In such a
context, advocacy was vital to ensure that public monopolies were not simply transformed into privateones and necessary regulations promoted public welfare by incorporating competition principles.
With regard to suggestions for maximizing the effectiveness of advocacy work, a  pre-condition was
that proceedings be transparent and that the relevant agencies be receive sufficient advance notice of
pending decisions to make the necessary preparations.  It was helpful, as well, if the relevant hearings
were open to the public so that the position advocated by the competition agency could be widelydisseminated.  Certainly, it could be helpful if the agency's advocacy role was specified in the law
although, as noted, this was not the case in the United States.  It had been found to be useful for the
competition agency to have access to technical expertise, to be careful with the selection of priorities,
to set realistic goals and to participate, to the exte nt possible, in a non-confrontational way taking the
approach of informing decision-makers of the potential costs of misguided regulations and thebenefits to consumers of pro-competitive policies.  Finally, advocacy had to be backed up by effective
competition law enforcement as part of an overall competition regime.
97. The representative of the European Community and its member States, commenting on the
submission by the United States, said that it provided many valuable insights into the important role
that competition advocacy could play in ensuring the efficient and competitive operation of markets.Competition advocacy was also an important element of competition policy in the European
Community.  As one example of such activity, Community proposals originating from the
Commission and addressed to the Council were re viewed and, where appropriate, input was provided
to ensure that they were compatible with competi tion policy objectives as they were enshrined in the
EC Treaty.  He noted as well, that a monitoring system was in place to deal with state aids to industry
that were harmful to competition.
98. The representative of Canada, also commenting on the submission by the United States, said
that, from the Canadian point of view, the paper had been useful in highlighting the manner of which
competition authorities could relate to sector regulators in a useful way.  The views expressed were
strongly complementary with those that had been put  forward in Canada's submission to the previous
meeting of the Group (WT/WGTCP/W/146).  He noted, as well, that the challenges posed by the
relationship between competition authorities and sectoral regulators had been highlighted by a numberof delegations from developing countries in the Fourth Review Conference which had taken place at
UNCTAD during the previous week.  This would a ppear to underscore the relevance of the points
made in the United States' submission for developing countries.  The representative of the United
States had also mentioned that only a small part of the US competition agencies' budget was allocated
to advocacy activities, which was certainly true in Canada, as well.  On this basis, one might thinkthat such activities were a luxury for nascent competition agencies.  However, Canada's experience
was that such activities were far from being a luxury and, indeed, were a very useful tool for
promoting an efficient and competitive environment.
99. The representative of Switzerland, commenting on the same submission, said that it provided
a large number of useful suggestions and insights.  Competition advocacy activities by theWT/WGTCP/M/12
Page 32
competition authority had also proven to be very useful in Switzerland, for example in addressing
anti-competitive arrangements in the health care sector.
IV. OTHER ISSUES RAISED BY MEMBERS RELATING TO THE GROUP'S
MANDATE TO STUDY THE INTERACTION BETWEEN TRADE AND
COMPETITION POLICY
100. The Chairman noted that, at the Group's meeting in June, the Secretariat had undertaken to
revise the Overview of Members' National Competition Legislation (WT/WGTCP/W/128/Rev.1) to
incorporate input that had been received from Paraguay.  However, it seemed that consultations were
continuing with the mission of Paraguay regarding the appropriate coverage of Paraguay's legislation
in the table.  In any case, the Secretariat now intended to prepare a new version of the document to
reflect the submissions that had been received from Thailand and Croatia and any other additions that
were appropriate.
V. REQUESTS FOR OBSERVER STATUS FROM INTERNATIONAL
INTERGOVERNMENTAL ORGANIZATIONS
101. The Working Group agreed to revert to reques ts made by SELA, the Organization of the
Islamic Conference and the South Centre at its next meeting, having regard to the ongoing
consultations on related matters in the framework of the General Council.
VI. OTHER BUSINESS
102. Regarding the nature and process for preparation of the Group's report to the General Council
on its activities in 2000, 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) and1999 (WT/WGTCP/3).  It was further agreed that a short meeting of the Group would be held on
21 November, for the purpose of reviewing and approving the draft Report.  At the meeting, the
Group would also consider the scheduling of its meetings in the year 2001.
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