WORLD TRADE
ORGANIZATIONWT/WGTCP/W/195
12 August 2002
(02-4387)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM JAPAN
The following is the final text of a paper received from the Permanent Mission of Japan
which was circulated as an advance copy for the Working Group's meeting of 1-2 July 2002.
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MODALITIES FOR VOLUNTARY COOPERATION
I. INTRODUCTION
At the last Working Group meeting, the need of developing countries for capacity building in
developing competition law and policies was discusse d, and the importance of strengthening technical
assistance to this end was emphasized.  In doing so,there was a shared acknowledgement of the
diversity of approaches applicable for both developing and developed countries in promotingcompetition law and policy, depending on their respective stage of development and cultural
differences.  The need to provide technical assistance in line with the various needs of the recipient
countries was also recognized by the Working Group.
Comparing the development of competition legal institutions in various countries, a broad
range of approaches  is evident.  These include:  the prohibition of anti-competitive practices based on
policies that prioritize action to protect consumers and prevent unfair competition;  competition lawsthat regulate cartel activity and abuse of dominant positions (in some cases, this entails sector-specific
business laws);  and, the adoption of a comprehensive competition law, which includes, for example,
merger regulation.
Whichever approach a country adopts, the country aims to strengthen its enforcement.  Some
countries, moreover, have established and are considering building mechanisms for enforcement
cooperation with foreign countries.  It appears that the motivation for such cooperative mechanisms
stem from a desire to more effectively address anti-competitive practices that could adversely impact
their own markets, especially when it is difficult for the enforcing country to address such practices
alone. Although the approaches taken vary, a common element is that each country is endeavouringto control anti-competitive practices by any means.  Thus, whether or not the country has put in place
a comprehensive competition law is not necessarily a vital issue.  In fact, of the 144 WTO Members,
approximated 90 have so-called general competition laws, while the others are assumed not to have
such laws in place.  Nevertheless, there may be some countries addressing specific anti-competitive
practices through the development of other independent approaches such as sector-specific businesslaws.
Economic globalization may result in a single world market at some point in the future.  If
and as this comes to pass, it would be ultimately desirable for every country to address anti-
competitive restraints of trade at an equal or comp arable level of enforcement, including with respect
to the same range of issues that are covered by national measures.  Some therefore argue that theWT/WGTCP/W/195
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convergence of competition legal institutions might be needed in the long run.  However, a first step
could be that every country should be under a commitment to control anti-competitive practices such
as hardcore cartel activities, which may cause serious trade restrictions.  It is understood, of course,
that hardcore cartels undermine the operation of the global market system both domestically and
internationally, and every country should recognize the harmful effects caused by such practices.  Webelieve, therefore, that all countries should be encouraged to address these hard core cartels as serious
offences in order to avoid an adverse impact on trade.
II. MODALITIES FOR PROMOTING INTERNATIONAL COOPERATION
There may be a general acknowledgement that it is vital for each country to promote
cooperation, in order to more efficiently and smoothly promote the control of cross-border anti-
competitive practices.  A competition authority in a single country will experience difficulties ofaddressing such cross-border issues, even as economic globalization may inevitably result in anti-
competitive practices producing economic harm in multiple jurisdictions.
Given this, the next point of debate is what should be done to promote cooperation, and how a
framework for the cooperation should be arranged.
Some of those countries that have until now deepened economic relations with each other
through trade and investment have established bilateral and regional frameworks to enhance
cooperation between competition authorities, addressing the increasing need for cooperation in
competition law enforcement.
Meanwhile, even in multilateral frameworks, a debate is underway with regard to promoting
international cooperation.  In the OECD, fo r example, the "Recommendation of the Council
Concerning Effective Action Against Hard Core Cartels" was adopted in 1998.  This
Recommendation provided that Member countries should promote international cooperation and
comity in enforcing laws prohibiting hard-core cartels.
Furthermore, of particular note here is that regional frameworks, and particularly regional
trade agreements, often contain a chapter on competition policy with a pledge to promote competition
law enforcement in each country and cooperation with each other, in many cases, to establish
frameworks for cooperation in order to facilitate trade and investment.
Although the Japan-Singapore Economic Partners hip Agreement (JSEPA) is only designed to
start with certain limited coverage, it is noteworthy that the two countries have pledged to take
measures to the effective control anti-competitive practices, and to promote cooperation between the
two countries.  It is also worth noting that the "Canada-Costa Rica Free Trade Agreement" presented
at the last Working Group Meeting contains obligations to ensure non-discrimination andtransparency principles in measures adopted in competition law, as well as commitments to establish a
framework for enforcement cooperation between the two countries.
III. EXAMPLE OF REGIONAL COOPERATION FRAMEWORKS:  JSEPA
In January 2001, the Japanese government signed an Economic Partnership Agreement
(JSEPA), including elements of a free trade agreem ent, with the government of Singapore (see the
attached).  Even though the approach to competition laws differs, the chapter on competition policy
advocates that the two countries take measures against anti-competitive activities, in accordance with
their applicable laws and regulations to facilitate trade and investment flows between the two
countries.  The two countries are also supposed to cooperate with each other in this field subject totheir available resources.  This results from a perception between the competition authorities in both
countries that there is an increasing need for cooperation in order to effectively address anti-WT/WGTCP/W/195
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competitive practices, in light of the prospect that the trade and investment relationship between the
two countries will further be strengthened in the future.
Singapore has no independent, comprehensive competition law at present.  It has, however,
established competition provisions in the telecommunications, electricity and gas sector-specificbusiness laws, and provides a prohibition against competition-restricting practices through an abuse of
dominant position provision.  This provision has been incorporated in recent legal amendments, and it
is designed to promote the development of a competitive environment in publicly regulated sectors
that are very important for the state economy.
As for the specific details of the competition chapter, it was agreed that, starting with sectors
in which Singapore currently has legal institutions related to competition, both Japan and Singaporewould engage in bilateral cooperation, including notification, enforcement cooperation through
information exchange, and consultation, subject to their available resources.  It should also be noted
that the Agreement has provision on technical assistance between the two countries.  This Agreement
is the first ground-breaking attempt as a fram ework for cooperation between two countries with
different systems of competition law, and will serve as a reference for the Working Group's discussionon modality for international cooperation.
In view of the growing globalization and progressive strengthening of economic relationships,
the importance of building frameworks for cooperation in competition policy is reaffirmed.  At the
same time, it is suggested that, even if a particular country does not develop a comprehensivecompetition law, it can participate in international efforts to promote international cooperation.
IV. SIGNIFICANCE OF COOPERATION AT MULTILATERAL LEVEL - WHY DO WE
SEEK A FRAMEWORK FOR MULTILATERAL COOPERATION?
While, until now, cooperation arrangements or  frameworks have been constructed at the
bilateral or regional level, there is now active consideration of multilateral measures and hence it
would be worthwhile to once again clarify the signif icance of building up a framework for multilateral
cooperation here.
When studying international cooperation in the area of competition policy, cooperation could
have at least three dimensions at the multilateral level:
- cooperation in support of capacity building;
- information and experience exchange;
- cooperation on individual cases.
The merits of building multilateral frameworks in each category of international cooperation
are thought to be as follows:
A. C
OOPERATION IN SUPPORT OF CAPACITY BUILDING
The importance of technical assistance for capacity building for each country, especially
developing countries, to develop and implement competition law institutions, was stressed at the lastWorking Group meeting in April.  In particular, it is considered desirable that various countries
should mutually coordinate and cooperate with each other on their own individual efforts towards
technical assistance, thereby making those efforts much more effective.  We thus believe that a
multilateral framework can make an important contribution towards the development of a better-
coordinated approach to technical assistance in this area.  It would also be significant for them toWT/WGTCP/W/195
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share information on the present status and the needs of recipient developing countries at a
multilateral level.
B. GENERAL EXCHANGES OF INFORMATION AND EXPERIENCE
Exchanging information on competition law and policy beyond individual cases, and sharing
each other's experience and information on best practices in the application of competition law to
cross-border anti-competitive activities having an adverse impact on plural markets, will be effective
if implemented in more countries through a multilateral framework.  Building up databases of legal
institutions and guidelines in each country, creating opportunities for information exchange on the
latest trends and sharing information at a multilateral level, would have a number of merits.  For
example:
(a) it would help the various countries to adopt and review their competition law
institutions;  and
(b) it would make it easier to obtain the information needed when a firm from one
country wishes to enter another country’s market.
Furthermore, discussion on the experience of policy development and implementation with a
number of experts at a multilateral level, particularly from the perspective of international dimensions,
could evolve into a peer review of members’ competition legal institutions.  This would be significant
for the countries when reviewing and improving their competition legislation.
C. CASE-SPECIFIC COOPERATION
Since the advance of economic globalization may bring the possibility of an increase in anti-
competitive practices that adversely affect one or more foreign markets, there is a growing need for
each country to facilitate enforcement cooperation as well as to engage in careful consideration in
order to avoid conflict with other countries.
Typical examples of this kind of enforcement cooperation concerning individual cases in
bilateral agreements that have been concluded to date are as follows:
- notification;
- enforcement cooperation through exchange of information;
- enforcement coordination;
- positive comity;
- comity.
Since these kinds of cooperation are basically carried out between the countries involved,
they are usually set out as bilateral frameworks.  However, when one anti-competitive practice has an
adverse impact on the markets in more than two coun tries, it would be effective to have cooperation
among a larger number of countries or, in other words, at multilateral level.
As one element of a multilateral framework, it is meaningful to discuss and build the
modalities for cooperation, even if this is of a voluntary nature.  This is because methods of
cooperation in this kind of framework can be used as a model when promoting cooperation inindividual cases between countries that have not c oncluded bilateral agreements.  They would also be
a useful basis for some countries to discuss and draft new bilateral cooperation agreements.WT/WGTCP/W/195
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V. CONCLUSION
When promoting international cooperation in the area of competition policy, we should,
rather than choosing between a bilateral or a  multilateral framework, consider applying both of these
by effectively combining advantageous elements of each framework.
Recognizing the diversity in the development and implementation of a domestic competition
law, it would be unrealistic at this stage to build up a single or universal framework for cooperation
and to require that all other countries apply this single framework at the same high level.  We
therefore believe that a certain level of a framework of cooperation should be build at a multilateral
level, while countries continue to establish a deep er framework for cooperation at the bilateral level,
based on the common experience, resource and legal institutions in the implementation of domestic
competition law.  Needless to say, this is because the two countries which have chosen to deepen theireconomic relationship will be aware of the potential need to address cross-border anti-competitive
activities that may have a serious impact on trad e and investment flows between the two countries.
For example, in bilateral frameworks, the focus ought to be on promoting individual cases of
enforcement cooperation in a more evolved form.  In multilateral frameworks, as well as providing amodel framework for cooperation in individual cases, it will also be significant to utilise it as an
opportunity for exchanging information and experience on policies, and promoting policy reviews
based on agreed core policy principles.WT/WGTCP/W/195
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ANNEX
THE JAPAN-SINGAPORE ECONOMIC PARTNERSHIP AGREEMENT (JSEPA)
Chapter 12:  Competition
Article 1 - Objectives
The objectives of this Chapter are:
(a) to contribute to the effective control of an ti-competitive activities to facilitate trade
and investment flows between the Parties and the efficient functioning of the markets
of the Parties;  and
(b) to promote co-operation between the Parties in such control of anti-competitive
activities.
Article 2 - Anti-competitive Activities
1. Each Party shall, in accordance with its applicable laws and regulations, take measures which
it considers appropriate against anti-competitive activities, in order to facilitate trade and
investment flows between the Parties and the efficient functioning of its markets.
2. Each Party shall, when necessary, endeavour to review and improve or to adopt laws and
regulations to effectively control anti-competitive activities.
Article 3 - Co-operation
1. The Parties shall, in accordance with their re spective laws and regulations, co-operate in the
field of controlling anti-competitive activities subject to their available resources.
2. The sectors, details and procedures of co-operation under this Chapter shall be specified in the
Implementing Agreement.
Article 4 - Dispute Settlement
The dispute settlement procedures provided for in Chapter 21 (Dispute Avoidance and
Settlement) shall not apply to this Chapter.
IMPLEMENTING AGREEMENT
Article 1 - Purpose
The purpose of this Chapter is to implement the co-operation set forth in Article 3 of
Chapter 12 (Competition) of the Basic Agreement.
Article 2 - Definitions
For the purposes of this Chapter:
(a) the term "contact point(s)" means:
(i) for Japan, the Fair Trade Commission;  andWT/WGTCP/W/195
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(ii) for Singapore, Ministry of Trade and Industry.
(b) the term "anti-competitive activity(ies)" means any conduct or transaction that may
be subject to penalties or relief under the competition laws of the respective
Countries;
(c) the term "competition laws" means:
(i) for Japan, the Law Concerning Prohibition of Private Monopoly and
Maintenance of Fair Trade (Law No. 54 of 14 April 1947) and its
implementing regulations;  and
(ii) for Singapore, the Code of Practice for Competition in the Provision of
Telecommunications Services pursuant to the Telecommunications Act 1999
(Act 43 of 1999), Part VIII "Compe tition" of the Electricity Act 2001 (Act 10
of 2001), and Part IX "Competition" of the Gas Act 2001 (Act 11 of 2001);
(d) the term "implementing authority(ies)" means:
(i) for Japan, the Fair Trade Commission;  and
(ii) for Singapore, the Info-communication Development Authority for the
telecommunications sector and the Energy Market Authority for the
electricity and gas sectors;
(e) the term "enforcement activity(ies)" means any investigation or proceeding conducted
by the implementing authorities of a Party pursuant to the competition laws of its
Country, but shall not include:
(i) the review of business conduct or routine filings;
(ii) research, studies or surveys with the objective of examining the general
economic situation or general conditions in specific industries;  and
(iii) criminal proceedings;  and
(f) the term "important interests" means such interests as are considered to be important
by the Party undertaking the co-operation activity(ies) under this Chapter.
Article 3 - Notification
1. Each Party shall notify the other Party with re spect to its enforcement activities that the
notifying Party considers may affect the important interests of that other Party.
2. Enforcement activities that may affect the important interests of the other Party include those
that:
(a) are relevant to enforcement activities of the other Party;
(b) are conducted against a national or nationals of the other Country, or against a
company, association or body incorporated or organised under the applicable laws
and regulations in  the territory of the other Country;WT/WGTCP/W/195
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(c) involve anti-competitive activities, other than mergers or acquisitions, carried out in
any substantial part in the territory of the other Country;
(d) involve mergers and acquisitions in which:
(i) one or more of the parties to the transaction;  or
(ii) a company controlling one or more of the parties to the transaction,
is a company incorporated or organised under the applicable laws and regulations in  the
territory of the other Country;
(e) involve conduct considered by the notifying Party to have been required, encouraged
or approved by the other Party;  or
(f) involve relief that requires or prohibits conduct in the territory of the other Country.
3. Notification pursuant to paragraph 1 of this Article shall be given by the contact point of a
Party as promptly as possible, taking into account the important interests of the other Party.
4. Notifications shall contain such details that would, in the view of the notifying Party, enable
the notified Party to make an initial evaluation of the effect on its important interests.
5. Each Party shall:
(a) promptly notify the other Party of any amendment of competition laws and any
adoption of new laws and regulations of its Country that control anti-competitive
activities;  and
(b) provide the other Party with copies of its publicly-released guidelines or policy
statements issued in relation to the competition laws of its Country.
Article 4 - Exchange of Information
Each Party shall, to the extent consistent the laws and regulations of its Country and its
important interests, and within its reasonably available resources, endeavour to:
(a) inform the other Party with respect to its enforcement activities involving anti-
competitive activities that the informing Pa rty considers may also have an adverse
effect on competition in the territory of the other Country;
(b) provide the other Party with any significan t information, within its possession, which
comes to its attention about anti-competitive activities that the providing Partyconsiders may be relevant to, or may warrant, enforcement activities by that other
Party;  and
(c) provide the other Party, upon request and in accordance with the provisions of this
Chapter, with information within its possess ion that is relevant to the enforcement
activities of that other Party.
Article 5 - Technical Assistance
Each Party may render technical assistance to the other Party for the effective management
and adoption of laws and regulations controlling anti-competitive activities.WT/WGTCP/W/195
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Article 6 - Terms and Conditions on Provisions of Information
1. Unless the Party providing the information has approved otherwise, information which has
been communicated by a Party to the other Party pursuant to this Chapter shall:
(a) be used by the implementing authorities of the receiving Party only for the purpose of
effective enforcement of the competition laws of its Country;  and
(b) not be communicated to a third party.
2. Each Party shall, maintain the confidentiality of any information which has been
communicated to it in confidence by the other Party pursuant to this Chapter, unless the latter
Party consents to the disclosure of such information.
3. Each Party may limit the information it communicates to the other Party when the latter Party
is unable to give the assurance requested by the former Party with respect to confidentiality orwith respect to the limitations of purposes for which the information will be used.
4. Notwithstanding any other provision of this Chapter, a Party shall not be required to
communicate information to the other Party if such communication is prohibited by the laws
or regulations of the Country of the former Party or if the former Party considers such
communication incompatible with its important interests.
Article 7 - Use of Information in Criminal Proceedings
1. Information communicated by a Party to the other Party pursuant to this Chapter shall not be
presented by that other Party to a court or a judge in criminal proceedings.
2. In the event that information communicated by a Party to the other Party pursuant to this
Chapter is needed for presentation to a court or a judge in criminal proceedings, that other
Party shall submit a request for such inform ation to the Party that communicated the
information (hereinafter referred to in this Article as "the requested Party"), through the
diplomatic channel or other channel established in accordance with the laws of the Country of
the requested Party. The requested Party will make its best efforts to respond promptly andfavourably to meet any reasonable deadlines indicated by the other Party.
Article 8 – Scope
1. Articles 3 and 4 of this Chapter shall only apply to the sectors of telecommunications,
electricity and gas.
2. When the Parties adopt new laws and regulations  controlling anti-competitive activities, the
Parties shall, upon the request by either Party, consult with each other to consider whether ornot to amend this Chapter for the purpose of extending the scope of co-operation specified in
paragraph 1 above.
Article 9 - Review and Further Co-operation
1. The Parties shall, not more than three years after the entry into force of this Agreement,
review the co-operation pursuant to Articles 3 and 4 of this Chapter.
2. Upon such review, the Parties may consider extending the co-operation pursuant to this
Chapter to any of the following activities:WT/WGTCP/W/195
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(a) Co-ordination of enforcement activities;
(b) positive comity;  and
(c) comity.
3. Any such extension of co-operation shall be subject to the applicable competition laws and
regulations and available resources of the Parties.
Article 10 - Consultations
The Parties may, as necessary, hold consultations on any matter which may arise in
connection with this Chapter.
Article 11 - Communications
Communications under Articles 3 and 4 of this Chapter may be directly carried out between
the implementing authorities through the contact points of the Parties.  Notification under Article 3 of
this Chapter, however, shall be confirmed in writing through the diplomatic channel.  The
confirmation shall be made as promptly as practically possible after the communication concerned
between the contact points of the Parties is made.
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