WORLD TRADE
ORGANIZATIONWT/WGTCP/W/184
22 April 2002
(02-2250)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE EUROPEAN COMMUNITY AND
ITS MEMBER STATES
The following communication, dated 18 April 2002, has been received from the Permanent
Mission of the European Community and its member States with the request that it be circulated to
Members.
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A WTO Competition Agreement’s Contribution to International Cooperation and Technical
Assistance for Capacity-Building
I. BACKGROUND
Discussions in the WTO Working Group and other relevant fora, including UNCTAD, have
clearly shown that anti-competitive practices are rarely confined to merely one jurisdiction.Increasingly, such practices are implemented in one jurisdiction while having their harmful effects in
one or more other jurisdictions.
When faced with this type of anti-competitive practices, a country is essentially left with a
choice between two options.  Either to unilater ally apply its domestic competition law with the
inherent legal and practical difficulties this entails, or, rely on international cooperation with other
competition authorities with a stake in the matter, be  it the authorities of the jurisdiction in which the
anti-competitive practices were initially implemented or those of other jurisdictions adversely affected
by the practices.
The UNCTAD Bangkok Declaration
1 – in addition to stressing the crucial role that
competition law and policy play in operationalising the interlinkages between equity and efficiency inthe globalisation process – spelled out that "in addition to national efforts, the international
community as a whole has the responsibility to ensure an enabling global environment through
enhanced cooperation in the fields of trade, investment, competition and finance."  This pressing need
for international cooperation in the field of competition was reaffirmed and further articulated during
the 4
th UNCTAD Review Conference and in the resu lting Declaration which "Calls upon States to
increase cooperation at all levels between their co mpetition authorities and Governments in order to
strengthen effective action in the field of merger control and against cartels as covered by the Set,
especially when these occur at the international level."2
                                                     
1 TD/387.
2 TD/RBP/CONF.5/15, para. 5.WT/WGTCP/W/184
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II. STATE OF PLAY – SOME TYPES AND CHARACTERISTICS OF
INTERNATIONAL COOPERATION
Needless to say, the sine qua non  for international cooperation is the existence of a domestic
competition law as the very basis on which cooperation takes place as well as some authority to apply
and enforce the law.3
The types of international cooperation arrangements in the competition field today are many
and varied.  They range from stand-alone bilateral cooperation agreements such as the one concluded
between the European Communities and the United States to competition provisions, including on
cooperation, as integral parts of free trade agreements like the ones recently concluded by the
European Communities with a number of its trade partners, including South Africa and Mexico.  Also
the EU/ACP Partnership Agreement ("Cotonou") co ntains important provisions on competition.4
Stand-alone cooperation agreements have so far mostly been concluded between developed
countries where there is a high degree of similarity of experience and overall objectives pursued by
the competition authorities involved and their competition laws and policies.  What further
characterises this particular type of agreement is the depth and intensity of the cooperation and theresources and experience required for their successful operation.
In addition to "formal cooperation", i.e. cooperation based on international agreements,
competition authorities may also benefit from "informal cooperation" with colleagues from other
competition authorities.  Formal and informal cooperation can coexist side by side, just as bilateralcooperation agreements can coexist side by side with plurilateral or indeed multilateral arrangements
such as the one the European Communities proposes for the WTO.
However, despite the relative growth in various cooperation arrangements in the competition
field, it is clear that developing countries are usually not parties to such arrangements and therebyunable to reap the benefits.  It is against this backdrop that the European Communities has
continuously been advocating that a central element of any WTO competition agreement should be
inclusive modalities for international cooperation whereby developing countries and their recently
established competition authorities could also benefit from the advantages of international cooperation
while at the same time not be required to become full-fledged parties to more traditional and resource-
demanding bilateral cooperation agreements.
It should also be stressed already at this stage that the European Communities proposes that
the cooperation modalities of a WTO competition agreement would apply to all anti-competitive
practices having an impact on international trade.  Cooperation would therefore not be limited only to
hard-core cartels, but would also cover other trade-related anti-competitive practices of concern for
developing countries, cross-border abuses of a dominant position affecting trade or anti-competitivepractices with a market foreclosure effect.  The cooperation provisions would therefore include
responding to longstanding developing countr y concerns about the importance of assistance by
"home" competition authorities in cases where foreign firms may be engaged in anti-competitive
practices with an impact on developing country markets and their import or export trade.
                                                     
3 Based on its own long-standing experience of regional economic integration, the European
Communities acknowledges the important role competition policy can play at a regional level, especially as
regards small and micro developing economies.  In the experience of the European Communities, a regionalapproach can be complementary to a domestic approach. The European Communities has recently provided
technical assistance to regional initiatives su ch as COMESA and other regional groupings.
4 The different types of international cooperation are described in the UNCTAD secretariat document
"Experiences gained so far on International Cooperation on Competition Issues and the Mechanisms used”,TD/B/COM.2/CLP/21.WT/WGTCP/W/184
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In addition to this, the European Communities has argued that targeted and coordinated
technical assistance for capacity-building purposes to boost and upgrade the human and institutional
framework of developing country competition law implementation and enforcement is indispensable
and could be reinforced by a WTO competition agreement.5
The present submission will therefore focus on the following two main issues:
• Modalities for international cooperation between competition authorities
• Technical assistance for capacity-building purposes
This submission will be followed by a separate submission on the arguments in favour of a
universal ban on hard-core cartels and the ample documentation regarding their harmful effects,
including on developing country economies.  That later submission will illustrate how cooperationcould take place under the proposed modalities for international cooperation.  Annexed to that
submission will also be concrete examples of the type of  information which could be exchanged
under such modalities.
III. COOPERATION MODALITIES IN A WTO COMPETITION AGREEMENT
Given the rapid growth in the adoption and implementation of domestic competition laws in
developing and transition countries over the past decade the time is ripe for these countries to also
benefit from international cooperation to better enable them to combat cross-border anti-competitive
practices.  As also noted by UNCTAD, "(…) initiation and progressive practice of enforcement
cooperation would enhance effective implementation of competition laws and prepare the ground formore advanced cooperation."
6  In other words, what may at first sight seem like a somewhat modest
form of cooperation, is likely to provide a valuable learning experience for developing countries and
could then develop into deeper and more intense cooperation over time.
A. MODALITIES FOR INTERNATIONAL COOPERATION
As already stated, provisions for international cooperation should be at the very centre of a
WTO competition agreement.  Such modalities should be sufficiently flexible to address the needs of
countries at different stages in the development and implementation of a domestic competition law
(i.e. ranging from technical assistance for the drafting of a law, reinforcement of domestic institutions,
to general exchanges of experiences and case-specific cooperation).
The discussions to date in the Working Group have made it clear to the European
Communities that two types of cooperation provisions would be needed in order to address
developing countries' needs properly and effectively:
− provisions to facilitate case-specific cooperation on anti-competitive practices having
an impact on international trade, and,
− provisions relating to general exchanges of information and experiences and joint
analysis of global trade-related competition issues.  This latter function could be
                                                     
5 This type of technical assistance should be seen as separate and distinct from that which will be
provided for purposes of enabling developing countries to participate effectively in future WTO negotiations oncompetition.
6 TD/B/COM.2/CLP/21, para. 32. The paper also makes the important observation that cooperation
between countries with limited experience but faced with similar circumstances could be "of a more balancedcharacter” and could provide a useful learning experience thereby making cooperation with more experiencedpartners fruitful.WT/WGTCP/W/184
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undertaken by a Competition Policy Committee to be established once a WTO
framework agreement has been concluded.
The cooperation provisions of a competition agreement, as well as the establishment of a
multilateral forum for exchange of information and experiences, would be of great benefit for all
WTO competition authorities, in particular those of developing countries.  There are other fora where
at least some (and sometimes a substantial number of) developing countries, as well as developed
countries, can interact.  These fora have their own dynamic and specific purposes with undoubted
beneficial effects overall.  However, a WTO-based multilateral forum constitutes the only way to
ensure that all WTO members effectively benefit from international cooperation and exchanges of
experiences regarding trade-related competition issu es.  We believe that all the fora, including the
WTO, are complementary in nature, rather than alternatives.
It will also be necessary to envisage provisions aimed at addressing the specific cooperation
needs of developing countries and transition economies.  We should also examine whether the
situation of least-developed countries warrants specific provisions in this particular context.
(Section 5 below focuses on the important issues of technical assistance for capacity building and
enforcement assistance for developing countries).
Undoubtedly the future meetings of the Work ing Group will help to further pinpoint the
specific cooperation needs of countries that would need to be addressed in a competition agreement,
including the needs of developing countries.  However, based on the extensive and constructive
discussions in the Working Group, as well as discussions in other fora such as UNCTAD, the
European Communities proposes that the following key elements should be included in a WTOagreement in order to address the cooperation needs of all WTO Members:
B. C
ASE-SPECIFIC COOPERATION
A competition agreement should include provisions to facilitate voluntary case-specific
cooperation in relation to anti-competitive practices having an impact on international trade.  Such
provisions should apply to three main types of anti-competitive practices:
− practices that affect international trade (e.g. international cartels);
− practices that affect market access (e.g. import cartels, exclusionary abuses of a
dominant position), and,
− practices with an impact on the trade flows to and from a different geographical
market than that in which the practices have been conceived (e.g. export cartels,
abuse of a dominant position by a foreign corporation).
More specifically, the cooperation pr ovisions could cover the following:
1. Exchanges of case-related information and evidence
One of the main difficulties for both developed and developing country competition
authorities in dealing with international competit ion cases is to identify and obtain the necessary
evidence located outside its own jurisdiction.  The po ssibility of co-operation between the competition
authorities of jurisdictions adversely affected by  the same anti-competitive practices by exchanging
case-specific information or evidence is of immense value.  One should take into account the fact that
a competition authority may be facilitated in making further progress in and better orient its
investigations once it acquires (with the necessary assistance of a foreign authority) certain facts that
are difficult to collect from abroad in the first place.WT/WGTCP/W/184
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However, as discussions in the Working Group have also made clear, the main obstacle to
these exchanges is the confidential character of some information as well as the existence of different
rules limiting its use and disclosure without the consent of the party which has provided it.  It is clear
that under a WTO competition agreement there should be no requirement to exchange confidential
information.  The next European Communities submission addressing hard-core cartels will illustratewhat type of information could be exchanged in cartel cases.
However, this is by no means an obstacle to exchange of useful non-confidential information
which is not in the public domain.  For a number of practical and resource-related reasons competition
authorities do not automatically post all non-confidential information on their website - if they have
one - thereby making it publicly accessible.  There is a vast range of useful factual and legal
information which could be crucial to other competition authorities when dealing with a specific case
which falls into the broad category between publicly available and confidential information.
Furthermore, even with regard to confidentia l information as such, in each competition
regime there can be specific elements/types of information that are not covered, not covered yet or no
longer covered by the confidentiality protection rules.  Also, under certain conditions - for instance
where permission has been granted by the party which provided the information - even restricted or
confidential information can be shared.
2. Consultations and exchanges of views on case s affecting the important trade interests of
other WTO Members
Under a WTO agreement, WTO Members should be ready to enter into consultations in order
to develop mutually satisfactory and beneficial measures to deal with anti-competitive practices
having an impact on international trade.  To better facilitate such consultations, a WTO Membershould inform other Members whose important trade interests may be affected by ongoing
investigations and proceedings under its competition laws.  Similarly, a WTO Member may bring to
the attention of another WTO Member evidence of an anti-competitive practice with an impact on its
trade or investment and seek information about any possible competition investigation relating to such
practices.  In the context of consultations, a WTO Me mber should also be able to seek assistance from
the home country of a foreign multinational in relation to an ongoing competition investigation and/or
seek information which may be of value for enforcem ent activities in relation to international, import
or export cartels.
Consultations would also provide an opportunity to exchange views about market analysis or
possible remedies.  Furthermore, where an anti-competitive practice has an impact on trade to and
from several geographical markets and is subject to parallel competition investigations, WTO
Members should seek, where appropriate, to co-ordinate their actions.
Finally, in order to minimise the potential for jurisdictional conflicts, a WTO agreement could
also include principles of negative comity, i.e. a WTO Member should take into account the important
and clearly stated trade interest of other Members concerned before action is taken.
IV. GENERAL EXCHANGES OF INFORMATION AND EXPERIENCE AND JOINT
ANALYSIS:  THE ROLE OF A WTO COMPETITION POLICY COMMITTEE
Many WTO Members, including developing countries, have repeatedly stressed the value of
establishing a multilateral forum that would facilitate general exchanges of information and
experiences on issues of common concern relating to the application of competition law to
transactions having an impact on international trade.  In this connection, it has been noted that, in
addition to the establishment of core principles and facilitating case-specific cooperation, the WTOcan also fulfil an important role in fostering policy dialogue and joint analysis.  Such activities would
reinforce the role, standing and visibility of competition authorities on the domestic front and could,WT/WGTCP/W/184
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in particular, promote the integration of developing  countries in international competition cooperation.
The European Communities has on a number of occasions outlined its thinking on what could be
considered in this respect, including:
− facilitation of exchanges of information on domestic laws, practices and
developments through the establishment of "contact points" in the Competition
authorities of each WTO Member, which could facilitate access to such informationupon the request of other WTO Member.  Some of this information is currently
posted on the web sites of a number of competition authorities.  Where necessary,
assistance could also be provided to competition authorities in developing countries
to develop and facilitate access to electronic means of information and the
dissemination of such information through such means;
− exchanges of experiences and discussions on competition policy issues having  an
impact on international trade.  This could include, for instance, further analysis and
exchanges of experiences on the approaches followed by competition authorities
when faced with different types of anti-competitive practices having an impact on
international trade.  It could also include exchanges of experiences on the competition
advocacy role of competition authorities or the review of sectoral exclusions.  Such
analysis and exchanges of views could all serve to facilitate gradual convergence onthe approaches followed by competition authorities and would also help competition
authorities to benefit from the valuable experience of other authorities;
− voluntary "peer reviews" of WTO Members’ competition policies.  This would
provide an opportunity for WTO Members to present their experiences relating to the
application of competition law to anti-competitive practices having an impact oninternational trade and to benefit from the comments of others.  Peer reviews would
also allow for discussion of the enforcement policies of Members.  Finally, the peer
reviews would offer a very important tool for identifying capacity constraints and
reviewing progress in technical assistance programmes;
7
− joint analysis and discussion on global competition issues affecting international trade
and the global economy.  A possible tool to facilitate such analysis would be thepreparation of a periodic report on major competition policy developments with an
impact on international trade and the global economy.  The report could draw on
trends identified on the basis of the annual reports currently being published by many
competition authorities.
The above functions could be carried out by a WTO Competition Policy Committee which
would be established following the conclusion of a competition agreement.
V. SPECIFIC SUPPORT FOR COMPETITION INSTITUTIONS IN DEVELOPING
COUNTRIES
While the provisions on cooperation discussed above would be of value for all WTO Member
competition authorities, discussions in the Work ing Group have clearly shown that there would also
be a need to consider more specific and targeted support for competition authorities in developing
countries and transition economies.
As the European Communities has suggested, such specific provisions should ensure:
                                                     
7 How "peer review” should work in practice, on what issues, as well as how to ensure the voluntary
nature of such reviews, is a point on which the European Communities and its Member States believe theWorking Group should come back at a later stage.WT/WGTCP/W/184
Page 7
− a reinforced and more co-ordinated appro ach to technical assistance for capacity
building;
− enforcement assistance for competition investigations undertaken by developing
countries.
Together with provisions on "progressivity" and "flexibility" which will be addressed in a
future European Communities submission, such target ed support would reflect the principle of special
and differential treatment in a future competition agreement.
A. TECHNICAL ASSISTANCE FOR DEVELOPING COUNTRIES
The European Communities remains convinced that the WTO can make an important
contribution towards the development of a reinforced and better co-ordinated approach to technical
assistance in the competition field (as in other areas) .  As regards competition, it is clear that such a
role should be undertaken in close cooperation with other relevant international organisations such asUNCTAD, the World Bank and bilateral donors and could only complement the primary role of the
WTO, namely that of establishing binding rules and multilateral cooperation modalities.  In other
words, the WTO could be a facilitator rather than an actual provider of technical assistance and would
ensure greater coherence and better use of the resources available.
However, this does not mean that a more coherent approach to technical assistance would
only be considered after the actual conclusion of a WTO competition agreement.  Experience with the
implementation of the Uruguay Round Agreements ha s shown that the issue of capacity-building is
one which needs to be considered straight from the outset.  In line with this important lesson, the
European Communities is suggesting that, in the case of new WTO agreements whose
implementation may require development of domestic capacities, co-ordinated approaches totechnical assistance should be developed in parallel to  the negotiations of any new rules.  The purpose
of this would be to ensure that, once such an agreement is in place, a reinforced approach to technical
assistance can be operationalised immediately and country-specific technical assistance programmes
established shortly thereafter.  Such programmes should be based on a demand-driven approach and
would rely on coordination among all relevant international organisations and bilateral donors.  Theseprogrammes could address the steps necessary to implement WTO commitments, but also more
general capacity-building requirements.  Thus, depending on the specific needs of each WTO
Member, assistance could cover the drafting of domestic legislation, support for the establishment of a
domestic competition authority, training for competition officials and exchange of experiences with
other competition authorities.  The proposed Competition Policy Committee once established couldplay a central role in monitoring the actual implementation of technical assistance programmes, in
facilitating the exchange of information and experiences, and in promoting best practices.
8
Some of the key principles for an reinforced approach to technical assistance include the
following:
− a clear commitment by all development partners to give greater support to technical
assistance in the competition field and to  integrate such assistance into national
development programmes.  While some efforts are already made to better integrate
competition in development cooperation activities, the European Communities
                                                     
8 In the period leading up to the conclusion of a WTO agreement, the European Communities believes
that the Working Group provides a very useful forum for the discussion of technical assistance needs and
exchange of information and experiences. We note in this respect that UNCTAD, the World Bank and the
OECD regularly attend the meetings of the Group and that the secretariats of the WTO and UNCTAD havealready announced a number of joint seminars and workshops to take place. We further note that the WorkingGroup agreed that technical assistance would appear as a permanent agenda item for the meetings of the Group.WT/WGTCP/W/184
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remains convinced that the decisive "push factor" is only likely to be provided by the
actual launch of negotiations on a multilateral agreement;
− an integrated approach to technical assistance to ensure continuous and coherent
support for developing countries and transitional economies at different stages of the
development of a domestic competition regime.  Technical assistance should include,when requested, support for the drafting of a law and the establishment of a
competition authority, building expertise in the area of enforcement, training staff and
support for general information policies, improving the capacity to deal with complex
"international" cases, etc.  Delivery mechan isms should be geared towards the central
goal of enhancing domestic capacity on a sustained basis;
− requests related to the implementation of a WTO agreement on competition should be
included in integrated technical assistance programmes involving relevant
international organisations and other donors.  It should be noted, however, that
technical assistance should not be limited to what is strictly required for
implementation.  An additional important objective should be to promote
convergence towards "best practices" and to improve the capacity of domestic
authorities to reap all the benefits from international cooperation;
− the development, within the framework of the WTO and in cooperation with relevant
international organisations, of a "model work programme" on technical assistance for
capacity-building in the competition fiel d.  The key elements for such a work
programme could include stocktaking of ong oing technical assistance, demand-driven
needs assessment, co-ordinated and integrated responses and procedures formonitoring and evaluation.
The European Communities believes that the appr oach to technical assistance outlined above
will only work if there is a strong commitment to give greater priority to cooperation in the
competition field and to improved co-ordination.  A WTO agreement on competition could play acatalytic role in this respect and the WTO secretariat would obviously need to work in close
cooperation with UNCTAD, the World Bank and other relevant organisations with experience in the
competition field.
B. E
NFORCEMENT ASSISTANCE SPECIFICALLY FOR DEVELOPING COUNTRIES
From the discussions in the Working Group, it would appear that fledgling competition
authorities in developing countries need enforcement assistance from more experienced authorities.
Apart from aspects unrelated to specific competition cases, such as for instance training in
investigation and information-gathering techniques, procedural fairness and access to file issues, etc.,
which could be addressed under the broader framework of technical assistance discussed above, there
are two situations where case-related enforcement assistance could be envisaged:
− making a developing country affected by anti-competitive practices (e.g. an
international cartel or an activity of a multinational firm) which is illegal under itsdomestic competition rules, has an impact on its import or export trade and seriously
distorts competition in its market aware of those practices and helping it launch
investigations.  The transmission of certain information can be of immense help to the
country affected by the anti-competitive practices but has to be done in conformity
with the confidentiality provisions applicable in the country in possession of the
information;WT/WGTCP/W/184
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− enabling a developing country targeted by anti-competitive practices implemented
abroad to request the country or countries where these practices originate or wherethe firms suspected of anti-competitive activity are domiciled, to take action to
remedy the situation or respond to the requesting country’s concerns.
It is understood, of course, that enforcement responsibility lies with the country with primary
jurisdiction over the anti-competitive practices in question and that enforcement assistance would
remain "voluntary" in nature.  In other words, the assistance would have to be compatible with
applicable laws and regulations, enforcement priorities, important interests and available resources of
the country presented with a request for such assistance.  Some have argued that cooperation is
unlikely to be effective if it is "merely" voluntary and does not provide for the exchange of
confidential information.  The European Communities experience, however, is that such limitations
have not prevented a very close and steadily-evolving cooperative relationship with the competitionauthorities we deal with on a regular basis.  Similar experiences have also been made by competition
authorities of most European Communities member states which have considerable experience in
case-related cooperation.  Even the bilateral cooperation agreements which the European
Communities has entered into with other developed economies (Canada and the United States) –
although providing for intensive co-operation – are essentially voluntary in nature and do not containprovisions which allow one party to  compel the other party to act in a particular manner. In other
words, no party to these agreements can legally oblige the other party to cooperate and a part may
have legitimate reasons not to cooperate on a specific matter.
We therefore suggest that rather than focus on the perceived shortcomings of the proposed
cooperation modalities, one should be focusing on the real benefits to be had from such modalities,namely that with the negotiation and conclusion of a WTO competition agreement, developing
country competition authorities would - for the first time - be able to benefit from the type of
consultation and cooperation provisions which have become standard practice among OECD
countries.  Also, it should be borne in mind that the European Communities is proposing that WTO
Members should be under a commitment to ente r into consultations and give sympathetic
consideration to requests for cooperation.  The more exact circumstances under which consultations
can be envisaged would need to be spelled out in the framework agreement.  It could reasonably be
expected that the agreement would create particular incentives to develop such enforcement
cooperation, especially where requests are made by developing country competition authorities.
The European Communities is keenly interested  in further ideas of other WTO Members and
a debate on this important subject, including suggestions on which specific modalities would be
needed to meet the particular needs of developing countries.
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