RESTRICTED
WORLD TRADE WT/WGTCP/W/10
19June1997
ORGANIZATION(97-2535)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM PAKISTAN
Thefollowing communication hasbeenreceived from thePermanent Mission oftheIslamic
Republic ofPakistan withtherequest thatitbecirculated toMembers.
_______________
ThisWorking Group derives itsmandate from theSingapore Ministerial Declaration which
stipulates, interalia,that:
(a) itwillstudy issues raised byMembers;
(b) having regard totheexisting WTO provisions inthisareaandthebuilt-in agenda
including under theTRIMs Agreement;
(c) ensuring thatthedevelopment dimension istaken fullyintoaccount.
Accordingly, wepropose thefollowing issues andapproach forconsideration bytheWorking
Group.
I. ISSUES TOBESTUDIED
Development dimension:
(a) Competition policy isacomparatively newareaformany developing countries. It
would therefore beuseful to:
(i) examine existing competition framework indeveloping countries toidentify
common elements, aswellasshortcomings fromadevelopment perspective;
and
(ii) highlightthespecificneedsforinstitutionalandadministrativecapacity-building
indeveloping countries.
(b) Thebenefits fromliberalization oftradeinproducts ofinterest todeveloping countries
aresometimes impaired byprivate, business andgovernment anti-competitive practices.
Itshould therefore bestudied:
(i) howprivate, business andgovernment actions andmeasures distort the
competitive conditions against theproducts ofdeveloping countries;WT/WGTCP/W/10
Page2
(ii) whether theexisting market structure andcompetition framework indeveloped
countries create atrulylevelplaying fieldforSME exports from developing
countries.
(c) Themain objective ofdeveloping countries iseconomic development. Therelevant
issues inthiscontext include:
(i) relationship between competition framework, domestic capacity-building and
development;
(ii) special measures infavour ofdeveloping countries intheareaoftrade and
competition policy tofurther theobjective ofeconomic development.
(d) Thebulkofenterprises indeveloping countries consists ofSMEs. Themarket size
asdetermined bypurchasing power isalsomuch smaller thanindeveloped countries.
Thisraises issues like:
(i) appropriateness ofexisting competition framework indeveloped countries for
developing countries;
(ii) definition oflevelplaying fieldforunequal competitors.
(e) TheTNCs haveaglobal reach andtheiraimistomaximize global profits. Theycontrol
investment flows andintrafirm trade isequal toonethirdoftotalinternational trade.
Globalized system ofproduction andcontrol ofinvestment andtrade flows provide
themwithincreased opportunities forrestrictive business practices. Issues tobestudied
inthisregard include:
(i) scope forboth thetraditional andnewRBPs ofTNCs intheageof
globalization;
(ii) capacity ofdeveloping countries tocombat these RBPs;
(iii) competitive significance ofglobal competition among TNCs.
II. APPROACH
(a) Aholistic approach willbemore appropriate forthework ofthisWorking Group.
Hence thescope ofwork should include:
(i) government aswellasprivate actions andmeasures;
(ii) anti-competitive practices, bothhaving impact within thecountry andacross
theborder;
(iii) bothcompetition andtrade measures thathaveananti-competitive impact.
(b) Agood starting point canbetheexamination ofexisting WTO provisions including:
(i) Articles VIIIandIXoftheGATS;WT/WGTCP/W/10
Page3
(ii) Article 2oftheAgreement onSafeguards;
(iii) Articles 8,31and40oftheTRIPS Agreement;
(iv) Agreement ontheImplementation ofArticle VIoftheGATT.
(c) Itwillalsobeuseful todraw upon thework done byUNCTAD inthisarea. Of
particular relevance willbetheSetofMultilaterally Agreed Rules andPrinciples for
theControl ofRestrictive Business Practices adopted asanon-binding instrument in
1980.
(d) TheWorking Group should beabletohaverecourse tocasestudies onselected issues.
(e) Lastly, contributions byMembers atallstages ofthework should bewelcome.
Pakistan, too,reserves itsrighttosubmit additional non-papers fortheconsideration
oftheWorking Group.