WORLD TRADE
ORGANIZATIONWT/WGTCP/4
30 November 2000
(00-5169)
REPORT (2000) OF THE WORKING GROUP ON THE INTERACTION BETWEEN
TRADE AND COMPETITION POLICY TO THE GENERAL COUNCIL
TABLE OF CONTENTS      Paragraph  Nos.
A. INTRODUCTION 1-3
B. PROCEDURAL INFORMATION ON THE GROUP'S
ACTIVITIES
(a) Sources and materials used in the Group's work 4-5
(b) Meetings held in 2000 6
(c) Cooperation with other intergovernmental organizations 7-8
C. SUBSTANTIVE WORK DONE IN THE WORKING GROUP
IN 2000
I. THE RELEVANCE OF FUNDAMENTAL WTO PRINCIPLES OF 11-15
NATIONAL TREATMENT, TRANSPARENCY AND MOST-
FAVOURED-NATION TREATMENT TO COMPETITIONPOLICY AND VICE VERSA
II. APPROACHES TO PROMOTING COOPERATION AND 16-99
COMMUNICATION AMONG MEMBERS, INCLUDING IN
THE FIELD OF TECHNICAL COOPERATION
III. THE CONTRIBUTION OF COMPETITION POLICY TO 100-105
ACHIEVING THE OBJECTIVES OF THE WTO, INCLUDING
THE PROMOTION OF INTERNATIONAL TRADE
IV. OTHER ISSUES RAISED BY MEMBERS RELATING TO THE 106
GROUP'S MANDATE TO STUDY THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY
ANNEX 1: TEXT OF THE SINGAPORE MINISTERIAL
DECLARATION, PARAGRAPH 20
ANNEX 2: CONTRIBUTIONS PROVIDED TO THE WORKING
GROUP ON THE INTERACTION BETWEEN TRADEAND COMPETITION POLICY IN 2000WT/WGTCP/4
Page 2
A. INTRODUCTION
1. In the year 2000, the Working Group continued its work pursuant to the decision taken by the
General Council regarding its work programme in December 1998 (WT/GC/M/32, page 52), under
the Chairmanship of Professor Frédéric Jenny (France).  The General Council's 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 the
interaction 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 policyand 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 development
dimension and the relationship with investment are fully taken into account.  It is understoodthat 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."
2. This report provides an overview of the work done by the Working Group in 2000.  It
constitutes a complement to the Working Group's previous reports on its activities in 1997
(WT/WGTCP/1), 1998 (WT/WGTCP/2) and 1999 (WT/WGTCP/3).
3. The report is organized as follows.  Part B provides a procedural summary of the Group's
activities in 2000.  Part C provides an overview of the substantive work done in the Group during the
year, pursuant to the General Council's decision.
B. PROCEDURAL INFORMATION ON THE GROUP'S ACTIVITIES
(a) Sources and materials used in the Group's work
4. As was the case from 1997 up to 1999, the work of the Working Group in the year 2000 was
based on written contributions by Members and on oral statements, questions and answers by
Members in the Group.  This material was supplemented by information received from observer
intergovernmental organizations (see subsection (c) below) and notes prepared by the Secretariat.  A
tabular summary of written contributions to the Group in 2000 is attached as Annex 2.
5. In preparing their written submissions and oral interventions during the year, the Working
Group had access to a set of suggestions that was circulated to Members by the Chairman prior to the
first meeting of the Group in 2000.  These suggestions were initially put forward to the Chairman by
Members in the course of the consultations that he held with interested individual delegations and
small groups prior to an informal meeting that took place on 27 March 2000, and were read out by
him in the informal meeting and at the Group's formal meeting of 15-16 June (WT/WGTCP/M/11,
paragraph 2).  The suggestions were as follows:
"- it was suggested that it would be useful if delegations could support the arguments
and proposals that they put forward in the Group with greater use of more concrete
examples.WT/WGTCP/4
Page 3
- building in part on the previous suggestion, there was a plea, articulated by a number
of individual delegations, for a more concrete discussion of the development
dimension of the issues than had been undertaken to date in the Group.  This would
include consideration of the benefits, challenges and the downsides involved in
implementing competition policy in developing countries, including the problems
involved in establishing competition agencies and organizing enforcement activities;and the benefits and costs, particularly from the standpoint of developing countries,
of the proposals that have been put forward by some Members for enhanced
cooperation on competition policy.
- the suggestion was made that it would be useful and appropriate for the Group to
consider ways of creating and maintaining a culture of competition.  This could
include, but would not be limited to, the exchange of national experiences in the field
of competition law and policy.
- it was also suggested that greater consideration be given to the practical aspects of
competition policy, including the role of competition advocacy in market reform,
deregulation and privatization processes; and competition law enforcement processes
and priorities.
- in addition, a desire was expressed for a continuing focus on the interaction between
trade and competition policy and not merely on competition policy per se ."
It was suggested by the Chairman that these points, in addition to any others that Members considered
to fall within the terms of the December 1998 decision of the General Council, could be addressed by
delegations, to the extent they desired, in their written and oral contributions to the Group during the
year, within the terms of the General Council's decisi on.  An additional checklist of questions that had
been posed in the Group (Job 5696) was circulated by the Chairman on 21 September 2000.
(b) Meetings held in 2000
6. The Working Group held three formal meetings in 2000.  The dates of the meetings were:
15-16 June; 2-3 October and 21 November.  The dates of these meetings were determined in the lightof the instruction in paragraph  22 of the Singapore Ministerial Declaration that careful attention be
given to coordinating meetings of the Working Groups established under paragraphs 20 and 21 with
those of relevant UNCTAD bodies.  At the meetings in June and October, consideration was given to
the full range of topics called for in the decision of the General Council referred to above.  The
principal purpose of the meeting held on 21 Nove mber was to review and adopt the Working Group's
Report (2000) to the General Council.  Reports on these meetings have been circulated in
documents WT/WGTCP/M/11, 12 and 13 (to be issued).
(c) Cooperation with other intergovernmental organizations
7. The Singapore Ministerial Declaration (paragraph 20) encouraged the Working Group to
undertake its work in cooperation with UNCTAD and other appropriate intergovernmental fora, to
make the best use of available resources and to ensure that the development dimension was fully
taken into account.  In this regard, the IMF and the World Bank have continued to attend the WorkingGroup's meetings in an observer capacity, pursuant to the cooperation agreements concluded between
the WTO and these organizations.  UNCTAD and the OECD also attended the meetings as observers,
on the basis of an invitation from the Working Group.  In the course of the Group's meetings, they
have kept the Group updated on relevant activities of their organizations and contributed to the
debate.  The Working Group is highly appreciative of the valuable contributions to its work made byobserver organizations.WT/WGTCP/4
Page 4
8. As a further aspect of cooperation, representatives of the Secretariats of UNCTAD, the OECD
and the World Bank participated in a Workshop that was organized by the WTO Secretariat, in
cooperation with the Governments of Thailand and Japan, for the benefit of Asian WTO Members
and observers and that took place in Phuket, Thailand on 6-8 July 2000.  The subject of the Workshop
was Competition Policy, Economic Development and the Multilateral Trading System:  Overview of
the Issues and Options for the Future.  Although formally separate from the work programme of theWorking Group, the Workshop was aimed at facilitating its work.  During the year, the Secretariat
also participated in meetings of relevant bodies of the OECD and UNCTAD and as a
speaker/instructor in seminars and courses organized by UNCTAD and the World Bank.
C. SUBSTANTIVE WORK DONE IN THE WORKING GROUP IN 2000
9. This section of the Report provides an overview of the substantive work done in the Group,
pursuant to the General Council's Decision in De cember 1998 (WT/GC/M/32, page 52).  The text of
paragraphs 9-106 is based on submissions, statements and interventions by the Group's Memberslisted in paragraphs 11, 16 and 100.  By its very nature, such an overview cannot reflect everything
that was said and capture all nuances of the discussion, such as can be found in the detailed records of
the two substantive meetings of the Working Group (WT/WGTCP/M/11 and 12) and in the written
contributions of Members (see Annex 2).
10. The section is organized in accordance with the way in which the Group structured its
discussion of the issues, on the basis of the General Council's decision calling for the work to be done.
It will be noted that the discussion which took place on some issues cut across more than one of the
subheadings used below.  This means that, in order to have a full appreciation of the discussion that
took place on these issues, it may be necessary to refer to more than one subsection of this Part of the
report.  It also means that some degree of repetition has been unavoidable in the preparation of thevarious subsections.
I. T
HE RELEVANCE OF FUNDAMENTAL WTO P RINCIPLES OF NATIONAL TREATMENT ,
TRANSPARENCY AND MOST-FAVOURED -NATION TREATMENT TO COMPETITION POLICY AND
VICE VERSA
11. This item was discussed by the Working Group at its meeting of 15-16 June 2000.  A written
submission on this item was provided by the delegation of India (W/149).1  It should be noted that the
points raised in relation to this item overlapped, to a degree, with points made in relation to Agendaitem II, Approaches to promoting cooperation a nd communication among Members, including in the
field of technical cooperation  (paragraphs 16 - 99, below).  Consequently, the additional arguments
and counter-arguments summarized in that section may also be relevant to the points summarized
below in relation to this item.
12. The view was expressed that the principles of non-discrimination and transparency were
fundamental to the multilateral trading system.  Competition policy, however, covered a much larger
canvass than trade policy and had implications for industrial policy and investment, among other
areas.  National treatment in the context of comp etition policy was, accordingly, more complex.
Besides, there was the question of the development dimension:  how were the concerns of developing
countries going to be met?  Some delegations had stated that transparency was the most essentialelement and that once transparency was ensured it would not be easy for Members to discriminate.
While transparency could indeed be an essential first step, concerns related to the different stages of
development of developing countries and differences in their endowments needed to be considered.  It
had been stated by many delegations that the objective of competition policy was to obtain efficiency
enhancement, presumably including the concept of "allocative efficiency".  Liberalized trade could
                                                     
1 Hereinafter in this Report, documents issued in the series WT/WGTCP/W/- are referred to as "W/…".
Documents issues in the series WT/WGTCP/M/- are referred to as "M/…".WT/WGTCP/4
Page 5
certainly lead to better allocation of domestic resources in participating countries.  However, it was
suggested that gains in allocative efficiency were of a once and for all nature.  What developing
countries were looking for was dynamic efficiency gains or gains in productivity over and above those
that were attributable to increases in the factors of production, involving the concept of total factor
productivity (TFP) growth.  This was possible only through increased knowledge, technology
upgrading, better organizational and management  techniques in production and through general
enhancement of education and skill levels.  International trade was not a "zero sum" game, in that it
could benefit both players.  However, anti-competitive behaviour by either of the two trading entities
could help it corner the gains from trade.  It was suggested that many of the benefits of international
trade over the last century had been made possible through "beggar-thy-neighbour" policies pursued
by countries in the absence of binding rules restraining such practices.  These practices had, it was
suggested, been promoted by making competiti on policy subservient to industrial policies.2
13. The point was also made that discussions on competition policy and its relationship to
economic development should also take into account the concerns of developing countries relating to
the provisions of the Agreement on Trade-Related Investment Measures (TRIMs).   Some TRIMs
constituted  useful  tools to control horizontal as well as vertical restrictive business practices (RBPs)
of multinational corporations (MNCs).  In the light of this, consideration might be given to the
removal of the prohibition of such measures under the TRIMs Agreement.  Similarly, it had also beenargued that TRIMs could be used by host countr ies in bargaining with multinational companies.
TRIMs could, therefore, be seen as an implicit bargaining tool over the allocation of rents from FDI.
The argument had also been made that the pursuit of a market access agenda in work on competition
policy in the WTO might result in outcomes that were detrimental from a welfare point of view.
3
14. The view was also expressed that, whereas bilateral agreements, regional agreements and/or
plurilateral agreements had found support from some Members, as tools to facilitate the effective
application of national competition policies, the feasibility and enforceability of any agreement on
international competition policy at the multilateral level that went beyond general procedural
cooperation and the introduction of transparency mechanisms had been questioned by many
Members.  In the view of concerns such as the absence of competition law in approximately half ofthe WTO Member countries, the difficulties involved in harmonization of competition policy
principles, the non-enforceability of the principle of "positive comity" in an effective manner
especially from the point of view of developing c ountries and the general lack of confidence in the
ability of the system to build the development dimension effectively into any competition policy
agreement on a multilateral level, it was suggested that a WTO agreement on competition policywould not provide any great advantage.
4
15. It was also suggested that the extent to which the elements identified in non-binding
instruments such as the UN Set and the various OECD Guidelines could be replicated in the WTO
might be limited.  However, this did not mean that anti-competitive practices having cross border
effects and having a significant impact on trade and development should be left unbridled.  While
trade policy was principally concerned with government measures and competition policy with
private anti-competitive conduct, it was nonetheless recognized that the two domains did overlap, forexample with respect to disputes over non-border trade barriers.  The very rationale for discussing
competition policy in the context of the WTO was, in fact, the concern that once government policy-
induced restrictions were removed through the implementation by Members of the Uruguay Round
commitments, the vacated space might be occupied by private enterprise practices of an anti-
competitive nature.  The view was expressed that there was, nonetheless, a danger that competitionpolicy considerations, which were broader and more complex than trade questions, could be
submerged by trade policy considerations and this should be guarded against.  In any case, it might be
                                                     
2 M/11, paragraph 3.
3 M/11, paragraph 4.
4 M/11, paragraph 5.WT/WGTCP/4
Page 6
too early to rush to conclusions on complex issues su ch as this for which the social and institutional
support systems in many countries were not yet well developed.5
II. A PPROACHES TO PROMOTING COOPERATION AND COMMUNICATION AMONG MEMBERS ,
INCLUDING IN THE FIELD OF TECHNICAL COOPERATION
16. This item was discussed by the Working Group at its meetings on 15-16 June and
2-3 October.  Written submissions on this item were provided by Australia;  Canada  (two
contributions);  European Community and its member  States (two contributions);  Hong Kong, China ;
India;  Japan  (four contributions);  Korea  (two contributions);  Switzerland ;  Thailand ;
Trinidad and Tobago;  and the United States  (two contributions) (documents W/148;  W/146 and 155;
W/140 and 152; W/141; W/149; W/145, 147, 156 a nd 157; W/144 and 154; W/151; W/150; W/143;
and W/142 and 153, respectively).  In addition, the representatives of Australia;  Brazil ;  Canada ;  the
Czech Republic;  the European Community and its member States ;  Hong Kong, China ;  Hungary ;
India;  Indonesia ;  Japan ;  Kenya ;  Korea ;  Malaysia ;  Norway ;  Pakistan ;  the Philippines ;  Singapore ;
Switzerland;  Thailand ;  Trinidad and Tobago ;  Tunisia ;  the United States ;  and Venezuela  made oral
statements or posed questions on this item.  The representative of Croatia introduced a non-paper (to
be issued as W/158) and the representatives of UNCTAD and the OECD  provided information on
relevant activities of their organizations.
17. The view was expressed that anti-competitive practices of firms could have a significant and
harmful effect on the trade and development prospects of Members, and thereby undermine the
objectives of the multilateral trading system.6  The practices that were of concern included:
(a) practices that had similar, 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 benign or even beneficial effects in themarket of one or more countries but had a differential impact on the markets of other countries, such
as where a merger had benign effects in one market but had detrimental knock-on effects in another
market.  It was also suggested that, while the categories described no doubt represented valid
concerns, they did not constitute an exhaustive list of the problems that Members, particularly
developing country Members, faced in the area of anti-competitive practices of enterprises.
7
Notwithstanding this, a query was posed regarding the extent to which these practices were having a
significant and demonstrable impact on world trade and investment or affecting a broad cross-section
of WTO Members.8  It was suggested that 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 of
these practices.9
18. The view was expressed that a strengthening of Members' national competition policies could
be instrumental in dealing more effectively with practices of the types described above as well as
other harmful practices and in promoting economic efficiency and consumer welfare generally.10  In
addition, the point was made that competition law and/or policy had an important role to play in
reinforcing economic reforms, including trade and investment liberalization and regulatory reforms, in
Member countries.11  The point was also made that many developing and transition economies had
introduced or strengthened their national competition policies as a way to lock in such reforms and to
achieve better integration into the world economy.12  Implementing an effective competition law or
                                                     
5 M/11, paragraph 5.
6 M/11, paragraphs  20, 24 and 25; M/12, paragraphs 10 and 23.
7 M/12, paragraph 23.
8 M/12, paragraph 22.
9 M/12, paragraph 22.
10 M/11, paragraph 7; M/12, paragraphs 16, 19 and 23.
11 M/11, paragraph 19.
12 M/11, paragraph 31;  M/12, paragraph 23.WT/WGTCP/4
Page 7
policy was not necessarily an easy process; it required effort and commitment including the drafting
of relevant statutes, the hiring and training of relevant personnel, development of appropriate
enforcement procedures and so forth.13
19. The view was expressed that a country could have an effective competition policy without
necessarily adopting a comprehensive competition law.14  This approach relied on an absence of
government intervention coupled with sectoral and other measures to deal with particular problems,where required.  A view was also expressed that, while this could be the case in some specific
instances, it was doubtful whether this approach could be generalized across WTO Members.
15  It was
suggested, in this regard, that some kind of administrative authority would normally be required, for
example, to address the practical needs of international cooperation in competition policy.  In
addition, a query was posed as to how, if a sectoral rather than a comprehensive approach was taken
to competition policy, was it possible to  avoid the danger of over-regulation?16
20. Questions were posed as to whether there was a conflict between competition policy and
industrial policy and, if so, whether the two policies could be reconciled.17  A view was expressed that
in some developed countries, for example Japan and Korea, the role of competition policy had been
subordinated to industrial policy, at least during the early high-growth period.18  Developing
countries, in some cases, were at a similar stage as that which these countries were at 30-40 years ago;
therefore, they would not necessarily wish to follow  the prescriptions that were being offered by those
countries today.  The suggestion was also made that there was no obvious connection between the
absence of competition policy and the recently-observed financial crises.19
21. In response, the argument was made that the application of competition policy did not
necessarily preclude a role for industrial development policies and programmes.20  However, even
where reliance was placed on such policies as a key underpinning of growth, there was a need for theapplication of competition policy from the outset.  In support of this, it was suggested that policies
that encouraged monopolies could be dangerous, since once the monopolies were established, they
became entrenched and took a heavy toll on national economic welfare.  Furthermore, empirically, the
presence of monopolies in developing countries often conflicted with the objectives of efficiency and
competition and had the effect of preventing new entrants from entering emerging markets in whichentry, innovation and economic dynamism were vital.
21  In addition, it was suggested that measures to
prevent anti-competitive corporate mergers were likely to hinder the economic development of
developing countries.  Given the extent of trade liberalization, which had had the effect of extending
geographic markets, and the existence of other gateways, for example relating to efficiency gains,
beneficial mergers would most often be approved when the full range of factors considered bycompetition authorities was taken into account.
22  The point was also made that no conclusive studies
had been conducted which proved that mergers actually improved performance.  The work of the
economist Michael Porter suggested that the best way to improve international competitiveness was,
in fact, to promote vigorous competition at home.23
22. With regard to the role that had been played by industrial policy in economies such as Japan
and Korea, the argument was made that, in Japan, industrial and competition policy had played a
                                                     
13 M/11, paragraphs 8, 16, 18, 21 and 69.
14 M/11, paragraphs 11, 35 and 37.
15 M/11, paragraph 35.
16 M/11, paragraph 36.
17 M/11, paragraph 26 and M/12, paragraph 87.
18 M/11, paragraph 28; see also related discussion of this point in M/11, paragraph 3.
19 M/11, paragraph 28.
20 M/11, paragraph 27; M/12, paragraph 15.
21 M/11, paragraph 26.
22 M/11, paragraphs 26 and 27.
23 Michael Porter, The Competitive Advantage of Nations (New York: Free Press, 1990).WT/WGTCP/4
Page 8
synergetic role in the post-war period.  In fact, in many cases, the growth-intensive industries of that
country had flourished principally as a result of private initiatives rather than (or in some cases in
spite of) government intervention.  Petrochemicals and automobiles were cited as examples of
industries where intense competition had been a key factor underpinning economic growth.
Moreover, government intervention in these industries had not sought to and/or had not succeeded in
limiting the number of entrants to the industries.  Except for well-defined exceptions, the anti-monopoly laws of the country in question had always been applied with full force.
24  In the case of
Korea, monopolies promoted by industrial policy had taken a heavy toll on national economic
welfare.  Although industrial policy had initially served to generate fast growth, it had also set the
stage for the 1997 financial crisis, in that it had contributed to a lack of competitive pressure in major
sectors of the economy.  The Korean economy was now paying the high price of the necessary far-
reaching industrial restructuring.25
23. The view was expressed that a multilateral framework on competition policy in the WTO
might contribute to the effective implementation of national competition policies and to cooperation
among relevant authorities in various ways.  To begin with, it was suggested that such a framework
could substantially assist developing and transition economy Members in meeting the above-noted
practical challenges relating to the implementation of competition law and policy.26  An important
focus of a possible framework would be on technical assistance and capacity building.  Furthermore,developing country competition authorities would also benefit greatly from participating in a
multilateral forum where experiences in the application of competition law would be discussed.
27  A
view was also expressed that it should be up to the relevant national authorities as to whether a
country should adopt a national competition law.28  In any case, the question of the pros and cons of a
multilateral framework was a complex one and a cost-benefit analysis was needed individually andcollectively to determine whether what Members were being asked to give up in the realm of
flexibility was indeed outweighed by what  would be gained from such a framework.
29
24. The view was expressed that past cases had illustrated how the extraterritorial application of
competition law could lead to serious jurisdictional conflicts.  Jurisdictional "out-reaching" had been
criticized by targeted countries and several of them had resorted to "clawback laws" and blockingstatutes to shield their businesses from the extraterritorial application of foreign competition laws.
Ways to avoid jurisdictional conflicts, including new instruments of cooperation, should be explored.
A multilateral framework on competition policy could be helpful in this regard, as well.
30
25. The view was expressed that a further unique contribution of a multilateral framework on
competition policy could be to assist in dealing with the impact of export cartels.31  In this regard, the
practice of competition authorities in many countries was to focus on anti-competitive behaviour that
had an impact on their domestic markets.  This was the key reason why export cartels were not
generally subject to effective competition law disciplines.32  The point was also made that, in many
cases, countries might consider that they lacked jurisdiction to challenge arrangements whose effects
were felt purely in export markets.  However, in practice, such arrangements were less prevalent and
of less concern than situations where both export and domestic markets were subject to cartelization
or other anti-competitive practices with a transnational dimension.  Establishing more effective means
                                                     
24 M/11, paragraph 29; M/12, paragraph 15.
25 M/11, paragraph 26.
26 M/11, paragraph 21; M/12, paragraphs 11 and 12.
27 M/12, paragraph 11.
28 M/12, paragraph 31.
29 M/12, paragraph 73.
30 M/12, paragraph 24.
31 M/12, paragraph 25.
32 M/12, paragraphs 25 and 26.WT/WGTCP/4
Page 9
of addressing such cases would be an important benefit of new arrangements to promote enhanced
cooperation at the multilateral level.33
26. The point was made that the national competition laws and policies of Members were
characterized by extensive diversity, reflecting differences in Members' history and stage of economic
development, socio-economic circumstances, legal contexts and cultural norms.34  It was suggested
that the extent of diversity was an important factor to be considered in assessing the viability,desirability and design of any new institutional arrangement at the multilateral level to promote the
common goal of ensuring the contestability of markets.
35  In fact, it was obvious that countries at
differing levels of development might have a different philosophy and a different approach to
measures to address anti-competitive practices in  their respective economies, and that this would
evolve in the light of the development process.36  It was important, in this regard, to make clear any
dimunition in flexibility that would be implied in a multilateral framework.  At a minimum, sufficient
time should be allowed for individual economies to digest and internalize the complex concepts ofcompetition policy in their domestic institutional frameworks.
37
27. The view was expressed that small, island economies faced particular challenges in
implementing competition law and policy, including a scarcity of human and financial resources for
implementation efforts.38  In response, the suggestion was made that the problems of such countries
called for some sort of coordinated response among the countries that were able to provide theassistance required.  In addition, it was suggested that in the case of small, open economies which
were engaged in a process of regional integration, it might well be advantageous to combine the role
of regional and national competition authorities and many different models could be considered in this
respect.
39  It was suggested, as well, that the portrayal of the problems of small, island economies had
driven home the message that the implementation of a competition regime was necessarily a long andcomplex process involving a multitude of policy, legal, institutional and practical considerations.
40
28. The view was also expressed that the extent of diversity in national approaches, which was
acknowledged by all sides of the debate, did not create problems for a possible multilateral framework
on competition policy.  Rather, it highlighted the importance of flexibility as an intrinsic element of
such a framework.41  Neither case-specific cooperation nor the other elements of the proposed
multilateral framework required the harmonization of Members' national laws.  In other words, it was
common ground that competition policy was not a field in which "one size fits all".  The point was
also made that the extent of diversity in Members' approaches ultimately called attention to the
benefits that might ensue from the progressive fostering of common approaches.  Such benefits might
include the sharing of expertise across countries at different levels of development, providing a levelplaying field and promoting legal stability, predictability and transparency, thereby reducing
transaction costs and enhancing international trade and foreign investment.
42
29. In addition, the view was expressed that it would be a mistake to underestimate the degree of
convergence which had already taken place on some of the underlying principles or essentials of
competition law and policy.  This was clear from looking at the discussions that had taken place on
this issue for some time in the Working Group and fr om the record of experience of different WTO
Members.  For example, there was a high degree of convergence on the priority that needed to be
                                                     
33 M/12, paragraph 26.
34 M/11, paragraphs 33 and 34; M/12, paragraph 32.
35 M/11, paragraph 33.
36 M/11, paragraph 38.
37 M/11, paragraph 33.
38 M/11, paragraphs  8 and  32.
39 M/11, paragraph 32.
40 M/11, paragraph 32.
41 M/11, paragraphs 34 and 57.
42 M/11, paragraph 34.WT/WGTCP/4
Page 10
given to the fight against hardcore cartels.  This was significant because such cartels were undeniably
the most pernicious type of anti-competitive practice from the point of view of trade and development
as well as of competition law enforcement.  If one looked into different national competition law
regimes, one would also see wide agreement on the importance of the principles of transparency and
non-discrimination from both the competition and the trade perspective.  Thus, if one defined the
objective not as seeking harmonization but rather in terms of identifying certain common principles,there was already a good basis to build upon.
43
30. A concern was expressed that a multilateral framework on competition policy might impair
the ability of developing countries to implement pro-development industrial policies, or otherwise
limit their development policy options.44  In particular, it was suggested that certain of the core
elements of the proposed multilateral framework, for example national treatment, might limit
Members' flexibility in this regard.45  It was vital that developing countries retained the ability to
apply a broad range of development-related policies, including for example the use of financialincentives for R&D.  Countries that were now developed had enjoyed such flexibility in the past.
46  In
response, it was stated that the issue of subsidies was not in any way connected with the elements of a
multilateral agreement on competition.  Whatever a multilateral competition agreement looked like, it
would not have any impact on the ability of countries to apply subsidies.47  With regard to other
possible concerns relating to the application of the principles of national treatment, clarification wassought as to the nature of the concerns.  While it was not necessarily the case that they would entail
any conflict with the principles of a multilateral framework on competition policy insofar as they were
not concerned with competition law and policy as such, if necessary, it was suggested, they might be
addressed through exemptions from the application of competition law.
48
31. Concerns were expressed regarding other possible adverse consequences of competition
policy and/or a multilateral framework on competition policy for economic and social welfare.  In
particular, a concern was expressed that, in a regime of perfect competition, there were always those
who had intrinsic advantages and, consequently, would reap a disproportionate share of the benefits.
Thus, a policy based on the ideal of perfect competition would imply the faster marginalization of
others.49  Another concern was expressed that the welfare-creating effects of competition might leak
out of a Member's economy if competition led to local firms being displaced by foreign firms.50  The
concern was also expressed that proponents of a multilateral framework seemed to be proposing 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.51
32. In response, it was suggested 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.  Accordingly, rather than being seen as an element
contributing to marginalization, competition policy and the possibility of enhanced cooperation on
such policy at the multilateral level were better viewed as tools to assist developing countries in
addressing certain practices that had a direct, negative impact on their welfare.52  I n  f a c t ,  i t  w a s
evident that countries that were not equipped with adequate competition regimes and cooperation
                                                     
43 M/11, paragraph 40.
44 M/12, paragraph 27.
45 M/11, paragraph 60; M/12, paragraph 27.
46 M/12, paragraph 27.
47 M/12, paragraph 28.
48 M/11, paragraph 61.
49 M/12, paragraph 29.
50 M/11, paragraph 8; M/12, paragraph 29.
51 M/12, paragraph 36.
52 M/12, paragraph 30 and 37.WT/WGTCP/4
Page 11
agreements would inevitably be exploited by firms who would engage in anti-competitive practices in
their markets.  In this context, a multilateral fr amework was the remedy for developing countries to
aid them to prevent companies from engaging in practices that would harm their development
prospects.53
33. Delving further into specific possible elements of a multilateral framework on competition
policy and the pros and cons of such elements, it was suggested that they might include any or all ofthe following:  (i) core principles to be embodied in Members' competition laws/policies; (ii) elements
or enabling provisions relating to cooperation among relevant authorities; (iii)  the creation of a
standing WTO Committee on Competition Law and Policy; (iv) measures to support competition
regimes in developing countries, to ensure that they partook of the benefits of cooperation in this area
and to build in a sufficient degree of flexibility and progressivity in the framework as a whole,
including through technical cooperation and institution-building; and (v) a requirement for all
Members to adopt a competition law and/or policy and/or to establish a competent administrativeauthority.
54  The following summarizes aspects of the discussion on each of these elements.
34. With regard to core principles to be incorporated in Members' competition laws and/or
policies, it was suggested that these could include at least the following;  (i) principles relating to the
transparent and non-discriminatory application of competition law and policy; and (ii) a commitment
to the prohibition of hard-core cartels.55  It was foreseen that these principles would embody a
significant degree of progressivity and flexibility.56  The related suggestion was also made that a
multilateral framework could 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 opportunity to be heard, protection of confidential
information, and sufficient relief measures.57  It was also noted that a requirement to apply
competition law in a non-discriminatory way would not rule out the possibility of exclusions of
sensitive sectors from the scope of such law, insofar as this was done on a transparent basis.58
35. A view was expressed that, while the principles of transparency in regard to competition law
or policy and the prohibition of hard-core cartels might be acceptable, the principle of non-
discrimination could be more problematic.59  With regard to the situation of one Member, it was
suggested that it might or might not wish to incorporate the principle of non-discrimination into its
own domestic competition law, assuming one was even tually adopted, in the light of its own domestic
and political interests and concerns.  Even if a sectoral approach was proposed as in the GATS, it
would be difficult to accept.  The point was also made that it was surely within the rights of Members
to agree that the two principles of non-discrimination and transparency were fundamental tocompetition law and/or competition policy, as they certainly were to the WTO.  The question was,
were there 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, there was a need for further exploratory dialogues before Members
could grasp the practical implications of these principles for domestic policy implementation.
60
36. The point was also made that the implications of applying the fundamental WTO principles in
the field of competition law and policy would depend on the scope given to the term "competition
                                                     
53 M/12, paragraph 37.
54 M/11, paragraphs 21 and 22; M/12, paragraphs 6, 9, 11, 12, 13.
55 M/12, paragraphs 9 and  11.
56 M/12, paragraph 11.
57 M/12, paragraph 7.
58 M/12, paragraph 11.
59 M/11, paragraph 60; M/12, paragraph 39.
60 M/12, paragraph 39.WT/WGTCP/4
Page 12
policy".  If one took competition policy as being limited to the legal protection of competition,
questions could arise as to the applicability of these principles – which were principally intended to
apply in respect of government measures - to private operators.  Should they simply be applied to the
manner in which a state implemented its competition policy, or was it a question of subsuming the
principles in an obligation which, to an extent, would guarantee a right of appeal?  Arguably, as well,
the obligation of non-discrimination was already embedded in Members' commitments regardingtrade in goods.  Was a new instrument needed?  In a similar way, it was important to clarify the
application of transparency under the current proposals.  Would it apply to states' obligations, to the
obligations of institutions or in relation to business practices? 
61
37. In response, the view was expressed that the principle of non-discrimination was unlikely to
pose significant problems for Members, since virtually no currently existing competition law
envisaged discrimination on the grounds of nationality of firms.62  In addition, the proposed principle
of non-discrimination would be concerned with non-di scrimination in the field of competition law and
policy as such, and not with wider socio-economic policies or regulations of a potentially
discriminatory nature, outside the field of competition law.63  Moreover, at least according to the
proposal of one Member, the type of discrimina tion that would be addressed under the proposed
framework would relate only to legislation and not to the way in which the law was enforced.  In
other words, it would deal with de jure  but not with de facto  discrimination.64  Another view was
expressed that the non-discrimination principle should be applied not only to de jure  but also to de
facto  discrimination.65  In any case, where there was a need, consideration could also be given to
appropriate exemptions from the application of competition law and policy.
38. The point was also made that the mere fact that the Group did not have before it evidence of
systematic violations of non-discrimination and transparency in the field of competition law andpolicy was not a reason to fail to affirm the importance of these principles.
66  The importance of these
provisions from both a trade and a competition policy point of view had been the subject of detailed
submissions in the course of the Working Group's work in 1999.67  This was particularly clear in the
case of transparency.  Recommendations and procedures laid down within the OECD had ensured
some degree of transparency among OECD members with regard to their national competition lawsand policies.  However, it was doubtful that non-OECD members had sufficient insight into the laws
and policies of OECD members, or indeed 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-discrimination on a multilateral level.
68
39. With regard to the proposed principle regarding the prohibition of hard-core cartels, the view
was expressed that there was a broad consensus that such cartels had serious, harmful effects on
consumers and the economies of Members, including both developed and developing countries.69
Concern about the impact of such arrangements and the need for strong remedial measures wasalready embodied in an OECD Recommendation on the subject.
70  Although the Recommendation did
not attempt to prescribe a specific definition of a hardcore cartel (this was left ultimately to national
law), it was nonetheless considered to provide a useful framework and a commitment by the
                                                     
61 M/12, paragraph 40.
62 M/11, paragraph 61.
63 M/12, paragraph 41.
64 M/12, paragraph 41.
65 M/12, paragraph 58.
66 M/12, paragraph 41.
67 M/11, paragraph 53; see Report (1999) of the Working Group on the Interaction between Trade and
Competition Policy to the General Council (WTWGTCP/3), paragraphs 10-37.
68 M/12, paragraph 41.
69 M/12, paragraph 11.
70 Recommendation of the Council Concerning Effective Action Against Hard-Core Cartels
(C/M(98)7/PROV, adopted 25 March 1998).WT/WGTCP/4
Page 13
participating countries to cooperate against hardcore cartels.71  The Group was also informed that the
extent of harm caused by cartels was substantially higher than had previously been understood.72
40. With regard to the subject of cooperation and relevant provisions of a multilateral framework,
at a general level, the view was expressed that international cooperation of some form was essential to
addressing anti-competitive practices in the emerging global economy.73  The suggestion was also
made, however, that it was important that the actual means of cooperation be sufficiently flexible toaccommodate the divergence of policies, institutions and economic circumstances among Members.
74
The point was made that international cooperation on competition policy could take many forms,including the establishment of channels of communication between competition authorities;
facilitating the dissemination and exchange of information on competition policy; voluntary case-
specific cooperation between competition institutions; legal cooperation through bilateral and
plurilateral agreements; and legal cooperation through a multilateral agreement.
75  C e r t a i n l y ,
cooperation could exist without global rules on competition policy.76  The diversity of objectives and
implementation suggested that there might be no single best means to pursue cooperation.77   T h e
Group should not be hidebound in pursuing a particular modality, so long as progress was being made
toward the ultimate objective of increased cooperation.78
41. The view was expressed that a distinction had to be drawn between cooperation and technical
assistance.  While the latter involved the provision of advice to countries regarding the drafting orimplementation of competition laws, or the enhan cement of related institutional capacities, the former
dealt with specific issues 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 overlapp ing jurisdiction of two or more competition
authorities over the same activity or transaction.  Cooperation was also an essential tool to dealeffectively with international cartels and alliances between firms.  It could 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 between national competition author ities that could engender a dynamic of common
interest.  Cooperation could also extend to mutual assistance in the investigation of specific cases ofanti-competitive practices such as hardcore cartels.  The relevant agreements could be either state-to-
state or agency-to-agency.  Cooperation could also take place at the multilateral level.  For example,
general commitments to cooperation were embodied  in two OECD Recommendations in the area of
competition policy that were relevant to the Group's deliberations:  the 1995 Recommendation on
Cooperation and the 1998 Recommendation on Hard-Core Cartels.  An advantage of this kind ofcooperation was that it promoted the adoption of "best practices" which, in turn, increased the
possibilities for convergence in approaches, or "soft harmonization", in the long-run.
79
42. The point was made that the gains from cooperation could, perhaps, be bigger, the smaller the
country and the less extensive its experience in tackling anti-competitive practices.  In this regard, it
was suggested the existing models of cooperation agreements were premised upon exchanges between
competition authorities with equal strength and experience.  It would be useful if the Working Group
could address in more concrete terms how cooperation at the multilateral level could be managed,taking into consideration the large number of countries that would be involved, and the sensitivity of
                                                     
71 M/11, paragraph 59.
72 M/12, paragraph 21, see also Hard-Core Cartels:  Meeting of the OECD Council at the Ministerial
Level (Paris:  OECD, 2000), referred to in the discussion.
73 M/11, paragraph 44; M/12, paragraphs 43-44.
74 M/11, paragraph 44.
75 M/11, paragraph 47.
76 M/12, paragraph 45.
77 M/11, paragraph 47.
78 M/12, paragraph 46.
79 M/12, paragraph 13.WT/WGTCP/4
Page 14
some of the information to be exchanged.  Due to the fact that certain cross-border problems could
only be solved in a satisfactory manner through increased international cooperation, developing a
multilateral framework for institutionalizing this cooperation and setting certain guidelines on how to
proceed was essential.80  The point was also made that cooperation commitments in the context of a
WTO framework agreement on competition policy would provide the cohesion and stability necessary
for a deepening of international anti-trust relations hips.  A multilateral agreement would not interfere
with ongoing case-specific cooperation taking place through bilateral agreements but rather would
supplement and encourage this kind of cooperation.81
43. The view was expressed that the experience of some Members had shown conclusively the
necessity and utility of close cooperation between national bodies in the field of competition policy,
regardless of the stage of development.  For example, in the Czech Republic ten years previously,
there had been neither legislation on competition nor any national authority.  With the transition to the
market-oriented economy, it had become clear that the State needed to provide protection againstunfair practices.  Before the Law on the Protection of Economic Competition had been enacted in
1991, the competition law systems of existing market  economies had been studied.  It was suggested,
further, that while the help provided by other countries' national authorities had been useful and
much-appreciated, the existence of a forum such as the current Working Group would have made the
job easier.  More substantive forms of cooperation, including the development of a multilateralframework on competition policy in the WTO, would be a logical step.
82
44. With regard to the scope and nature of specific elements on cooperation that would be
contained in a multilateral framework on competition policy, it was suggested that these would have
at least four dimensions:  (i) case-specific cooperation;  (ii) exchange of experiences through a
multilateral forum;  (iii) coordination in the provision of general technical assistance;  and(iv) enforcement assistance to developing countries.
83  A view was also expressed that cooperation in
a WTO setting would be essentially incremental in nature, and would be achieved in a step-by-step
manner.  The first phase of the exercise would be largely educational, concentrating on the
development of enforcement capacity.  The second phase would have as its primary feature the
development and implementation of notification procedures.  A Member undertaking an investigationthat 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 a
common approach with respect to procedural issues in merger review.  The latter step would aim at
minimizing the transaction costs involved in getting the requisite approvals of a merger plan indifferent jurisdictions.
84
45. The view was expressed that the concept of positive comity had important benefits and should
be incorporated in the provisions of a multilateral framework.85  Positive comity referred to a situation
in which, if a country believed that one or more of its firms was adversely affected by foreign anti-
competitive practices, it could appeal to the country in which those practices occurred and request that
country to enforce its own compeition law with a view to remedying what the complaining country
saw as harmful measures.  The view was also expressed that what was needed was simply to enablecountries, including developing countries, 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 suspected of anti-competitive activity had their main headquarters for appropriate
action to be taken to remedy the situation.  The requested country would be expected to enter into
                                                     
80 M/11, paragraph 44.
81 M/12, paragraph 14.
82 M/11, paragraph 45.
83 M/12, paragraph 11.
84 M/12, paragraph 14.
85 M/12, paragraph 49.WT/WGTCP/4
Page 15
consultations and to give sympathetic consideration to such requests.  It was not necessary, at this
time, to go as far as incorporating a fully-fledged positive comity instrument.86
46. The point was made that, although the adoption of core principles on substantive competition
law had not been proposed other than in the area of hard-core cartels, the scope of the proposed
elements on cooperation would not be limited to such cartels.  Rather, insofar as domestic rules
prohibited other anti-competitive practices such as abuses of dominance or merger control, which wasdesirable in principle, cooperation could also take place regarding those other practices.
87
47. The view was expressed that the foregoing aspects of cooperation would yield a variety 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 country investigating a foreign multinational could seek
assistance 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, it was foreseen that developing economies would also benefit from
more focused assistance with respect to individual competition investigations at a later stage.
88
48. The point was made that much information that  was potentially relevant to competition law
enforcement was subject to statutory protection, in many if not most jurisdictions with actively-
enforced competition laws.  The reason for this was that business information was often sensitive and
that it was important that it not be divulged for improper purposes.89  In this regard, clarification was
provided by proponents of a multilateral framework that the cooperation that was contemplated under
their current proposals did not include the exchange of confidential information.  This did not mean
that there could not be very useful exchanges of information between competition authorities under
such an instrument.  In fact, the exchange of information that was possible under many of the
cooperation arrangements that existed at the bilateral level was limited to the exchange of non-
confidential information.  The only exception was where the parties under investigation agreed to theexchange of confidential information.  The point was also made that most cooperation carried on in
the field of competition law, including much of that which took place between the European
Community and the United States, was limited to the exchange of non-confidential information.
Notwithstanding this, such cooperation had been of tremendous value for the countries involved.
90
49. Querying the need for a formal arrangement to facilitate the exchange of information of a
non-confidential nature, the point was made that an enormous amount of information relating to cases
and enforcement policies was already freely available to the public, for example on the websites of the
established competition agencies.  In many respects, the Internet already served as a kind of
clearinghouse for such information.  Moreover, a clear advantage of the Internet was the absence of
bureaucracy.91
50. In response, the view was expressed that it would be erroneous to suggest that a multilateral
framework was unnecessary on the basis that the purpose was merely to exchange non-confidentialinformation.  Even where non-confidential information was involved, it was not quite as simple as
picking up the phone and finding somebody on the other side with whom to speak.  Rather, protocols
                                                     
86 M/12, paragraph 50.
87 M/11, paragraph 53; M/12, paragraph 44.
88 M/12, paragraph 11.
89 M/11, paragraph 48.
90 M/11, paragraphs 49 and 53.
91 M/11, paragraph 48.WT/WGTCP/4
Page 16
regarding what kinds of information would be made available, with whom contact should be initiated,
etc., would still be of considerable value.  It was suggested, further, that there were various types of
information that needed to be considered, ranging from information that was available to the general
public on the press of a button on a website to information that was not generally available but was
not, in principle, confidential;  and on to information considered to be confidential.  Information could
be treated as confidential for reasons of administrative secrecy or due to its sensitivity for business-related information.  Another type of information to be distinguished was so-called work product
information which was compiled by the competition authority on its own initiative by looking at the
market and drawing conclusions from price correlations and other data.  A multilateral framework
would facilitate meaningful cooperation by clarifying what types of information were, in principle,
available; what types could be freely exchanged; what types were not to be exchanged, or could be
exchanged only subject to specific conditions such  as authorization from the company possessing the
information, etc.  Without some kind of framework,  it seemed unlikely that information of the type
that was not widely available and yet was not subject to statutory protection or otherwise confidential
would be widely shared.
92
51. The point was also made that the cooperation that was envisioned under the proposals for a
multilateral framework on competition policy was essentially voluntary in nature.  Binding rules did
not make sense in the area of cooperation, and it would be a contradiction in terms to have anythingelse.  Nonetheless, the fact that cooperation would remain, ultimately, voluntary in nature should not
at all be understood as meaning that the propos ed framework 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.  Ifone took account of 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 should be clear that the structure of incentives should be strong enough to significantly
enhance cooperation between countries at different levels of development. The view was alsoexpressed that this approach, rather than one of requiring cooperation, was more in keeping with the
traditions of established competition agencies and more likely to produce the results desired.
93
52. The question was posed as to whether voluntary tools of cooperation, including positive
comity, would suffice to address the problems and concerns of developing countries in the area of
anti-competitive practices, especially in view of existing asymmetries/disparities?94  The suggestion
was made that this question needed to be addressed in the light of the facts that ultimately,
enforcement responsibility lay with the country ha ving 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 country
being requested to take action.  Reference was made to two possible dangers.  First, there was the
danger that provisions on cooperation might deterior ate into hortatory provisions;  and secondly, there
was a danger that there could be such a long list of criteria for participating in such exchanges thatcertain countries might deny cooperation on the grounds that the requesting authorities did not meet
certain standards.
95
53. In response, the view was expressed that there seemed to be more or less a consensus among
Members of the Working Group that it would not be reasonable to expect national competition
authorities to cooperate where certain caveats and conditions were not met.  The conditions forcooperation were not arbitrary and originated from experience with cooperation in a bilateral context.
                                                     
92 M/11, paragraph 51.
93 M/12, paragraph 48.
94 M/11, paragraph 52; M/12, paragraphs 47 and 51.
95 M/12, paragraph 51.WT/WGTCP/4
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It was also clear that cooperation between competition authorities was a learning process where
confidence-building was important and relations developed over time.  Nonetheless, the voluntariness
of the cooperation called for in the proponents' proposals had to be understood in the context of the
commitment implied by acceptance of a multilateral framework.  In this context, if a request for
cooperation was reasonable and properly motivated, it was unlikely that participating competition
authorities would refuse to consider it in a favourable manner except in exceptional circumstances.96
54. Reference was made to examples of situations where the provisions on cooperation in a
multilateral framework could be helpful.  The EC Commission had recently uncovered and sanctioned
a global cartel in the market for stainless steel tubes used in the exploration and transportation of oil
and gas – a market which, incidentally, was important for many developing countries.  The cartel
operated from 1990 to 1995 and the impact within the European Community was relatively limited.
However, as the Commission had made clear in its press release on the case, the cartel had operated
extensively in other parts of the world and it seemed that there was scope for useful cooperationbetween the authorities concerned with such cases.  This was not an isolated example.  Often, in
decisions condemning international cartels in both  the European Community and the United States, it
was mentioned that the cartel had operated elsewhere.  The view was expressed that such cartels had a
serious, detrimental impact on developing countries and that a multilateral framework on competition
policy would provide valuable assistance to such countries in addressing such conduct.
97
55. The query was posed as to whether, if international cooperation required a considerable
narrowing down of differences in substantive compet ition laws, procedures and interpretations, would
this not, in fact, entail an undesirable degree of harmonization of national approaches to competition
policy?98  In response, it was stated that the elements on cooperation that had been proposed were
compatible with a large degree of flexibility by developing countries and by the different WTOMembers who would be parties to such an agreement.
99  Nonetheless, the question of the relationship
between convergence in substantive competition rules and cooperation was a complex one.  A great
deal of useful cooperation on so-called horizontal issues such as legislative questions, market analysis
and exchanges of experience on best practices did not require harmonization of substantive rules or
even a great deal in the way of common approaches.  However, when it came to cooperation inspecific cases, some symmetry in rules and approaches was helpful.  For example, cooperation in a
case dealing with a maritime liner shipping cartel would be difficult in circumstances where one
country subjected such conferences to its national competition law and another country had displaced
the application of its competition law through legislation authorizing such conduct.  However, in the
important area of international cartels, a great deal could be done without much in the way ofsubstantive harmonization provided that the two side s viewed the conduct in question as harmful for
their consumers and economies in general.
100
56. The point was also made that the experience of countries involved in cooperation on
competition law enforcement did not support the view that cooperation of the type that was being
proposed would require extensive harmonization of substantive laws or enforcement policies.  For
example, the point was made that Canada had a close working relationship with the antitrust
authorities of the United States as well as with  the European Community on matters of competition
policy, notwithstanding clear and significant differences in the three jurisdictions' substantive
competition laws.  It was also relevant that, notwithstanding these differences in substantive laws, in
the eyes of many observers, these jurisdictions had converged in certain key respects.  This suggested
that what was at issue in the process of convergence was really a matter of identifying common
                                                     
96 M/12, paragraph 52.
97 M/11, paragraph 55.
98 M/11, paragraph 54.
99 M/12, paragraph 35.
100 M/11, paragraph 55.WT/WGTCP/4
Page 18
background principles rather than the harmonization of specific aspects of competition law.101
Similarly, it was suggested that the experience of Norway during the past 40 years belied the concern
that cooperation under a multilateral framework on competition policy would necessarily require
harmonization of competition law.102
57. The question was posed as to whether cooperation in a bilateral or regional context might be
sufficient to address the perceived detrimental im pact of anti-competitive practices on international
trade and/or development.  An objective evaluation of such cooperation arrangements was called for.
It was suggested, further, that possible benefits of these approaches that should be considered
included the shorter negotiation time and higher level of cooperation standards that could be
applicable in a bilateral or regional setting.103
58. In response, the view was expressed that, while recognizing the important benefits that could
be attained through bilateral cooperation arrangements, there were important practical and substantive
reasons calling for a multilateral agreement.  To begin with, international cartels and other anti-competitive practices were unlikely to respect the neatly defined territories covered by bilateral
agreements.  Rather, they would naturally 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 such behaviour.
In the area of mergers, it was possible that key pieces of information that would make for a morecomplete or more speedy review could lie in jurisdictions that were outside a country's set of regional
or bilateral agreements.  On the practical side, for many countries, there would be significant
operational limitations on the extent to which cooperation could be undertaken based on the limited
number of people and resources available.  Many of the efforts and initiatives that were currently
being undertaken at the bilateral or regional level could be rationalized and thereby made moreefficient if they could be undertaken multilaterally.  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.  More intense
cooperation could and undoubtedly would still be pursued with individual partners, as desired.  The
point was also made that bilateral agreements were limited in number and were essentially based onmutual interests and reciprocity.  If one was seeking to encourage cooperation between countries at
different levels of development, inevitably, one would have to go beyond a purely bilateral or regional
approach.
104
59. A number of additional comments were made or questions posed regarding the nature and
implications of the proposed provisions on cooperation.  The view was expressed that the variouselements that had been discussed, including with respect to case-specific and technical cooperation,
could be tackled in their own right  and did not require the development of a multilateral framework of
rules.  In this regard, the point was made that experience with the APEC Competition Policy and
Deregulation Group indicated that general informa tion 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.
105  In addition,
the question was posed as to what would be the application, if any, of the Dispute SettlementUnderstanding, with regard to the proposed elem ents on cooperation?  Did cooperation agreements
represent the only option to solve the problems that had been identified? How would a multilateral
framework be situated in relation to existing agreements?  What was the scope of the practices to be
tackled?  What market did they affect?  Within which legal framework did they run?  What market
was being affected – was it the worldwide market – or the domestic market – from a legal standpoint?
                                                     
101 M/11, paragraph 58.
102 M/11, paragraph 56.
103 M/12, paragraph 53.
104 M/12, paragraph 54.
105 M/12, paragraph 45.WT/WGTCP/4
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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 the authorities of participating countries need to be convinced of the validity of
other countries' analyses and, if so, would this not amount to a new review procedure?  What was the
relationship between cooperation treaties and legal assistance treaties?  How would the proposedcooperation 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?
106
60. Responding to these questions, proponents of a multilateral framework agreement confirmed
that the cooperation that was envisioned under the current proposals was indeed voluntary in nature
and, therefore, not subject to dispute settlement.  Binding rules did not make sense in the area of
cooperation.  Certainly, it was also the case that the parties to a multilateral framework would remainfree to enter into more intensive cooperation arrangements with individual partners where they chose
to do so.  Nonetheless, the fact that the cooperat ion provisions in the proposed multilateral framework
would remain, ultimately, voluntary in nature and th at they would not attempt to supersede all other
forms of cooperation did not imply that the proposed  framework would not significantly enhance the
environment for and incentives to engage in cooperation among participating countries.  Integral tothe proposed 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 thecooperation field, 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 also promote a culture of cooperation
among Members in addressing anti-competitive practices that went far beyond what was currently the
reality.
107  In response to the suggestion that in order to achieve the optimum results, cooperation
between competition authorities should be voluntary, clarification was sought as to the meaning and
implications of cooperation in the context of a binding multilateral framework. In this regard, it was
suggested 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.108
61. As a further element of the proposed multilatera l framework, the view was expressed that it
would be useful to establish a standing WT O Committee on Competition Policy.  An important
function of the Committee would be to provide a fo rum for the exchange of national experience and
perspectives on competition policy, possibly including peer reviews.109  It was foreseen that peer
reviews, which would 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 of developing countries, it could be used in some cases to identify possible capacity constraints
as well as to examine enforcement policies being followed in individual countries.110  It was suggested
that there could be significant synergies between such a peer review process and the provision of
technical assistance/other measures to promote institution building.111
                                                     
106 M/12, paragraph 47.
107 M/12, paragraph 48.
108 WT/WGTCP/M/12 paragraph 45.
109 M/11, paragraph 22.
110 M/12, paragraph 59.
111 M/11, paragraph 64.WT/WGTCP/4
Page 20
62. As another major element of a multilateral framework on competition policy or related
forward work programme, the suggestion was made that attention be devoted to measures to support
competition regimes in developing countries, to ensure that they partook of the benefits of cooperation
in this area and to ensure a sufficient overall degree of flexibility and progressivity.112  The suggestion
was made that, although technical cooperation was important, the subject had many dimensions, some
of which overlapped with other elements of the pr oposed framework.  In particular, it was suggested
that, in addition to enhancing and improving the deli very of technical assistance, ways to recognize
the development dimension of the issues and support the role of competition agencies in developing
countries included the following: (i) incorpora ting a significant element of flexibility and
progressivity into the overall framework; and (ii) ensuring that developing countries partook in the
benefits of the specific provisions on cooperation in a multilateral framework, for example through
ensuring wide availability of information on cases impacting on their markets, through a requirement
to enter into consultations in cases of mutual interest and through the above-outlined provisionsregarding exchange of national experience and peer review.
113
63. With regard to the specific element of technical cooperation, it was suggested that this was
central to the discussion and that little progress would be made on promoting a competition culture
unless it was meaningfully addressed.114  The implementation of competition policy in developing
countries, perhaps especially smaller, developing countries, posed tremendous challenges in terms oftraining and human capital formation.
115  The following were cited as specific dimensions of the
challenges: the problems of drafting a competition law which was well-suited to the institutional
capacity of the country in question; the process of setting up an effective domestic competition
authority and reinforcing its role at domestic level; and the continuous need to enhance the capacity of
competition authorities to deal with complex cases, in particular those that had internationaldimensions.
116  Decision-drafting and capacity building were referred to as two areas in which
assistance was particularly important.117
64. The following were cited as specific needs of developing countries in the area of technical
assistance, with particular reference to smaller, island countries:  (i) scholarships for
academic/professional training; (ii) internships at  competition authorities to gain experience;
(iii) visiting staff from experienced agencies to guide and assist, particularly in procedural matters in
the early years of new competition agencies; (iv) resource persons/financial assistance for training
workshops targeted at specific groups, such as lawyers, economists, and judges; (v) assistance in the
facilitation of workshops for producers and consumers; and (vi) guidance in the development of an
information database system in new competition agencies.118  It was suggested, further, that in
addition to policy implementation, capacity-building was important to enable developing country
Members to participate effectively in international discussions/negotiations on the subject.119
65. The following six points were put forward as a focus for future technical cooperation
activities in competition law and policy:  first, construction of a network among competition
authorities of Member countries for the efficient and flexible exchange of opinions and information
by using information technology; second, creation of a database of competition law, enforcement,
technical cooperation activities, etc. for each Member country; third, comparison of competition lawsin each Member country and analysis of their historical and economic backgrounds in addition to
moves towards the convergence of competition laws and the menu of options for economies poised to
                                                     
112 M/11, paragraphs 21 and 22.
113 M/11, paragraphs 21-22.
114 M/12, paragraph 60; M/11, paragraphs 8 and 17.
115 M/11, paragraph 8.
116 M/11, paragraph 21.
117 M/12, paragraph 60.
118 M/11, paragraph 9.
119 M/12, paragraph 60.WT/WGTCP/4
Page 21
enact competition law; fourth, consideration of measures to realize the early introduction of
competition laws; fifth, compilation of data on competition policy reflecting the development of
competition laws and experiences with their implementation; and sixth, consultation and exchanges of
opinions on how to address anti-competitive practices that have international implications.  It was
noted that some of these activities were already being carried out at the bilateral or regional levels.
The suggestion was made that the WTO should cooperate with other international organizations inorder to enhance international cooperation in competition policy while at the same time making full
use of efforts made at the bilateral and regional levels.
120
66. The point was made that technical assistance in the area of competition policy was already
being provided by a number of donors, including the World Bank, UNCTAD, the OECD and a
number of individual Member governments.121  A view was expressed that more could be achieved
with the available resources if there was greater coordination of these activities, in conjunction with
the operation of a multilateral framework on competition policy.122  First, a multilateral framework
would enhance the priority that was attached to technical cooperation, on both the donor and recipient
sides.  Secondly, experience had shown that technical assistance was most effective if it was demand-
driven and if a coordinated approach was taken in responding to demands from recipient countries.
The role played by the WTO in stimulating a more integrated and coordinated approach to technical
assistance in this area would be along the lines of the ongoing work in the Committee on Trade andDevelopment and the General Council on enhancing the capacity of the WTO together with other
organizations to promote technical assistance linked to capacity building.  Thirdly, the effectiveness
of technical assistance could be enhanced through the establishment of monitoring mechanisms.  A
WTO Competition Policy Committee would be a natural venue for this.  Fourthly, important
synergies could be realized between technical assistance activities and the exchange of nationalexperience and other activities undertaken in the proposed Committee on Competition Policy.
123
67. In reflecting on the foregoing view, the suggestion was made that three questions needed to
be addressed:  first, what was the role to be play ed by the WTO, if any, in the area of competition
policy?  It had to be borne in mind, in this regard, that the WTO was a rule-making body, not a
development or research agency.  Secondly, what w ould be the value-added of the WTO in the area of
technical assistance and capacity building regarding competition policy?  Thirdly, did the WTO have
the necessary resources and expertise to undertake such a role?  In addition, the following further
questions were posed regarding the role foreseen fo r the WTO in the provision of technical assistance
by proponents of a multilateral framework on competition policy.  First, if the WTO itself was not to
be the principal direct provider of such assistance, who would be?  Second, what would be themodalities of the facilitating role to be played by the WTO itself?  Third, why would a framework
agreement be needed to support this facilitating role?
124
68. In response to these questions, the view was expressed that the fact that the WTO had decided
to establish the Working Group meant that Members had concluded that it could play a useful role, in
cooperation with other international organizations, in promoting understanding in this area.
Furthermore, although the decision in the Marrakesh Agreement on greater coherence in global
economic policy-making referred more specifically to the interaction between financial and tradepolicies, the spirit of the Organization was such that promoting coherence among international
institutions in policy implementation was an important objective.  This suggested that the WTO could,
in principle, play such a role in the area of competition policy, depending on the direction the
Organization chose to take in this area.
125  The suggestion was also made that the view that the WTO
                                                     
120 M/11, paragraph 17.
121 M/11, paragraphs 10 and 22; M/12, paragraph 60.
122 M/11, paragraph 22, 63; M/12, paragraph 11 and 62.
123 M/11, paragraph 22.
124 M/11, paragraph 65; see related comment in paragraph 63.
125 M/11, paragraph 66.WT/WGTCP/4
Page 22
could play a useful role in facilitating the provision of assistance in this field reflected, inter alia , a
general perception that international organizations should attempt to work together more closely and
to take a more coherent and integrated approach to the provision of technical assistance.  The work
done in the Working Group had shown that the WTO could indeed play a useful facilitating role in
this particular area - a role which would be greatly enhanced if a multilateral framework were also
adopted.126
69. The view was expressed that the foregoing did not provide sufficient clarification as to the
role that the WTO would play in this area.  Th e current Working Group was merely a forum in which
to discuss the interaction between trade and competition policy; it had no mandate to coordinate
technical cooperation in this field.  Consequently, it was important to specify more clearly the role
that was contemplated for the WTO.127
70. The suggestion was also made that linking technical assistance initiatives and negotiations on
a multilateral framework on competition policy would risk delaying the delivery of much-neededtraining and assistance for LDCs.
128  In response, the point was made that substantial technical
assistance directed at institution-building in the field of competition policy was already being
provided by various organizations and national governments.  The question was not whether to
commence giving such assistance, but whether its effectiveness could be augmented through the
operation of a multilateral framework.129
71. The view was expressed that a degree of caution was warranted regarding the availability of
resources for technical cooperation in conjunction with a multilateral framework on competition
policy, in view of recent budgetary deliberations in the WTO.  In any case, the WTO was not a
technical assistance agency.  Something more than this was needed to justify the involvement of the
WTO in this field.130
72. With regard to additional ways of supporting competition regimes in developing countries
and ensuring the desired degree of flexibility in any multilateral framework, the view was expressed
that such a framework should embody a flexible and progressive approach to the implementation of
competition policy.  While technical assistance would be an important element of the overall package,
it should go beyond this.  The point was made that the principle of special and differential treatmentfor developing countries in the various WTO Agreements had traditionally been represented by longer
time-spans for adopting the provisions of those agreements.  The year 2000 was significant in that,
during the year, the time allotted for the implementation of numerous agreements by a large number
of developing countries was due to expire.  In view of the ongoing debate in the General Council on
implementation problems, new proposals and solutions were needed so that special and differentialtreatment in any multilateral framework on competition policy was not merely time-based.
131
73. The view was expressed that, in any multilateral work programme on competition, it was
necessary to pay heed to the diversity of, and asymmetries in, Members' economic situations,
competition regimes, legal traditions and cultural co ntexts.  Any lack of sensitivity to the salient
differences among Members in these areas would materially undermine the usefulness and broad
acceptability of any proposal.  Even if it was decided to even consider multilateral rules on
competition policy, it would be imperative for those rules to be flexible enough for developingcountries 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,
                                                     
126 M/11, paragraph 67.
127 M/11, paragraph 68.
128 M/11, paragraph 63.
129 M/11, paragraph 64.
130 M/12, paragraph 63.
131 M/11, paragraphs 41, 42.WT/WGTCP/4
Page 23
but was difficult for others, as was clearly reflected in experience in respect of various obligations
emanating from the Uruguay Round.132
74. The view was also expressed that a way to approach this matter was to ask what, from a
development perspective, were the key benefits that could be obtained from a multilateral agreement
in terms of meeting needs in the area of cooperation?  In this regard, there seemed to be at least two
elements relevant to many developing countries:  on the one hand, a desire to maintain a sufficientdegree of policy autonomy in the content and implementation of competition law; and on the other
hand, a desire to see how international cooperatio n could facilitate the effective enforcement of
competition law to meet the specific needs of developing countries.
133  The suggestion was also made
that the following items could serve as incentives for Members to engage in negotiations on a
multilateral framework agreement on competition policy, and to accept the outcome:  a grace period,
exemptions from certain obligations, waivers, reservations and technical assistance.  In addition, a
multilateral framework on competition policy should reflect economic and social structures ofdeveloping countries so as to contribute to economic development.  Other means to achieve this goal
should also be studied, including the incentives in terms of rights and obligations under the WTO
Agreements.
134 The view was also expressed 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 thepresence of, for example, certain monopolies in sectors covered by the agreement because such
monopolies fit into their policy of economic development.
135
75. On the subject of exclusions, including with respect to the fundamental principles of the
WTO, the view was expressed that these would be 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, since 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
such 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 view was also expressed that the issue of non-discrimination was different from that of sectoralexclusions.  Enforceable provisions relating to sectoral exclusions in a multilateral framework 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.
136
76. Another view was expressed that flexibility should be applied even in relation to the core
principles that had been put forward in some proposals.  Developing countries seemed to feel a realneed for cooperation on the one hand and some concern on the other hand associated with the
establishment of a multilateral framework.  However, the concerns should not be overstated – they
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.  Perhaps, more reliance should be placed on the proposal by a Member for a phased approach
to cooperation at the multilateral level.  The basic idea was that, in phase one, dissemination of sound
and effective competition law would be promoted th rough 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 the exchange of non-confidential information, etc. could occur.  Beyond those
phases, anything could be optional.  Throughout the whole process, the exchange of experience and
learning of practices ought to be conducted.  Th ere seemed to be nothing that was dangerous about
                                                     
132 M/12, paragraph 69 and 71.
133 M/11, paragraph 42.
134 M/11, paragraph 43.
135 M/12, paragraph 70.
136 M/12, paragraph 42.WT/WGTCP/4
Page 24
this proposal.137  Delegations who continued to have concerns were encouraged to take up the specific
elements of the various proposals and to make counter-suggestions regarding the need for special and
differential treatment, where appropriate.138
77. The point was made by a delegation whose country was involved in cooperation with a
number of other countries that the participating countries had quite different regimes. This made it
clear that substantial diversity in competition regimes could coexist with a commitment tocooperation.
139
78. The issue was raised as to whether, as an additional element of a multilateral framework on
competition policy, there would be a requirement to enact a national competition law.  A view was
expressed that this would not be the case.140  There could still be cooperation, in any case.141  The
point was also made that a country did not need to have a competition or antitrust law or agency in
order to have an effective competition advocacy programme.  For example, in the case of Hong Kong,
China, competition advocacy had been undertaken through, inter alia , the promulgation of a
Competition Policy Statement as well as the establishment of a high-level inter-departmental body,
with membership from the Cons umers' Council, which ensured maximum compliance with the pro-
competition principles set out in the Statement by relevant government bureaux/departments.142  I n
response, it was stated that, ultimately, if effective cooperation was desired, there had to be an
authority capable of engaging in such cooperation.  There should be sufficient enforcement powers to
detect anti-competitive practices and to sanction those practices.143  Nonetheless, it was clear that such
a requirement had to be defined in a manner that was sufficiently flexible and that was well-adapted to
different institutional realities.  For example, in the case of small, open economies which were
engaged in a process of regional integration, it might well be advantageous to combine the role of
regional and national competition authorities and many different models could be considered in thisrespect.
 144
79. Clarification was sought regarding the role envisioned for application of the WTO Dispute
Settlement Understanding (DSU),  under the current proposals for a multilateral framework on
competition policy.  Doubts were expressed as to the suitability of the DSU for addressing
competition policy issues.145  On the other hand, a view was expressed that if dispute settlement was
not involved, the need for a multilateral framework was unclear.146  In response, the view was
expressed that if it was considered desirable to strengthen cooperation in the competition field, it
would be necessary to move towards an agreemen t that included a core of binding commitments.
This having been said, the scope of those binding commitments would need to be very carefully
defined so as to avoid unduly limiting countries' flexibility.147
80. The question was posed as to how the sovereignty and independence of national competition
authorities would be reconciled with a multilateral framework on competition policy?  In response,
the point was made that the commitments in a multi lateral framework would relate to legislation and
not to the way in which the legislation was enforced by competition authorities.  Accordingly, there
would be nothing in these commitments that would limit the independence of competition authorities
or the prosecutorial discretion of such authorities.  The view was expressed that, in the experience of a
                                                     
137 M/12, paragraph 71.
138 M/12, paragraph 72.
139 M/12, paragraph 75.
140 M/11, paragraph 60.
141 M/11, paragraph 60.
142 M/11, paragraph 70.
143 M/12, paragraph 55.
144 M/11, paragraphs 32.
145 M/12, paragraph 56.
146 M/11, paragraph 75.
147 M/12, paragraph 57; see related comment in paragraph 48.WT/WGTCP/4
Page 25
Member with extensive experience with cooperation in a bilateral and regional context, a commitment
to cooperation of the sort that was contemplated in the current proposals would not affect the
independence of competition authorities in the exercise of their enforcement responsibilities.148
81. The issue was raised as to whether, even accepting that there was a need for enhanced
international cooperation and/or related institution-building activities on competition policy, the WTO
was the appropriate venue for such activities.  Several of the ideas that had been put forward,including a building up of national capacities, the promotion of a culture of competition, exchange of
information on anti-competitive practices, an obligation to consult, the possibility of multilateral
surveillance, etc., seemed to be unobjectionable in themselves.  Still, it was not clear that these were
enough to engage the WTO.  Clearly, the WTO was not envisaged as the primary provider of
technical assistance on competition policy.  With regard to the more far-reaching proposals
concerning exchange of information, an obligation to consult, multilateral surveillance, etc., what
were the prerequisites?  What would be required in order to take part in cooperation of this nature, andwas the WTO the appropriate forum?
149
82. The point was also made that the WTO dealt with reciprocal tariff concessions and the
regulation of non-tariff barriers.  These considerations defined the conceptual framework of the WTO
and provided the justification for the dispute settlement system and non-violation complaints.  The
new issues that were being raised in areas such as competition policy went beyond the balance ofnegotiated concessions.  If the WTO dealt with those areas, Members could unwittingly extend its
jurisdiction beyond what was originally intended.  This would involve a rethinking of the classic
nature of the WTO and its basic rules and practices.  Another view was expressed 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 was premature to consider whether there was a necessity for, oronce a necessity had been established, what the WTO's role in the formulation of a multilateral
framework would be.
150
83. In response, the view was expressed that 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 to ensure that developing countries and other Members were not unfairly deprivedof the benefits of liberalization.  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 inte rnational cartels, export cartels and exclusionary
practices with an international dimension, had clear distortionary effects on international trade as well
as a harmful impact on development;  accordingly, it was a bit strange to suggest that the WTO as aninternational organization should not concern itself with these practices.  Nonetheless, it was
recognized that the question of the appropriateness of the WTO as the forum to carry forward work on
competition policy at the multilateral level, ultimately, might have to be resolved at the political
level.
151
84. The view was also expressed that the fact that the WTO was primarily a rule-making
organization did not preclude the possibility that it could serve as a forum for promoting progress in
other ways, including in the area of competition polic y.  In this regard, it was important to distinguish
between competition or anti-trust law and its enforcement and the broader concept of competition
policy, which touched on a number of other areas many  of which were already dealt with in the WTO,
for example in the Agreement on Technical Barriers to Trade and the various negotiations on services
issues.  This contradicted the notion that trade policy or the WTO was only concerned with
government measures.  While it was true that government measures had been the principal focus of
                                                     
148 M/12, paragraph 77.
149 M/11, paragraph 71; M/12, paragraph 66.
150 M/12, paragraph 66.
151 M/12, paragraph 67.WT/WGTCP/4
Page 26
the WTO to date, as the world evolved and government measures were less and less a factor affecting
international trade, the impact of anti-competitive practices of enterprises would clearly need further
study in order to facilitate decisions on the appropriate directions to take.152
85. Another view was expressed that the question 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 among the most important activities ofinternational 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 part of 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.
153
86. The view was expressed that five common elements were evident in a number of the views
that had been expressed on the various issues before the Group:  first, a recognition of the extent of
diversity in national approaches;  second, a strong emphasis on the development dimension of the
issues;  third, recognition of the need for flexibilit y;  fourth, the desire for a menu of options for any
action to be taken at the multilateral level; and fifth, a recognition that technical assistance andcapacity building in this area was essential.  With regard to the matter of diversity, it appeared that
there was more or less a consensus that there was a wide divergence of views among Members with
respect to the objectives, scope, substantive content and institutional arrangements for competition
policy, based on different stages of development, needs and concerns, etc.  The question before the
Group was how best to take forward its work in the light of this diversity.
154
87. The view was also expressed that, notwithstand ing 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 sound economic development or the harmful effects of the various
anti-competitive practices that had been mentioned.  There also seemed to be a widely-held viewabout the need for international cooperation to address anti-competitive practices with an international
dimension, although it was 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 approaches
were useful, they did not provide all of the answers and that a multilateral dimension to cooperationwould also be necessary.
155
88. In response, the point was made that it was an objective fact that a number of Members had
not yet agreed to the negotiation of a multilateral framework on competition policy in the WTO.156  In
particular, a number of delegations remained of the view that there was no need for any global rules
on competition policy and/or that the call for a multilateral agreement might be too ambitious at the
moment.  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 hadonly recently been adopted by legislatures.
157
                                                     
152 M/11, paragraph 74.
153 M/12, paragraph 68.
154 M/11, paragraph 72.
155 M/12, paragraph 81.
156 M/12, paragraph 83.
157 M/12, paragraph 79.WT/WGTCP/4
Page 27
89. Another view was expressed that, notwithsta nding possible reservations regarding the
negotiation of binding rules on the subject, there was no doubt that competition policy was an issue on
which the WTO could play a dynamic and progressive role in terms of furthering international
understanding and appreciation of the various elements at issue.  The fact that the WTO was primarily
a rule-making organization did not preclude the possibility that it could serve as a forum for
promoting progress in other ways, including in the area of competition policy.158  In any case, it
remained an open question as to whether the WTO was the appropriate institution in which to initiate
the development of rules on competition in a multilateral context.  As a bottom line, what was
important was not to rush towards an agreement but, to take steps to share experience and facilitate a
convergence of thinking that would underlie any possible agreement.  This would make it possible to
make an informed choice about whether an agreement was appropriate and, if so, the nature and
institutional locus of such an agreement.159  The point was also made that competition should not be a
divisive issue in the WTO.  The issue of competition was distinctly different from certain other areasthat were being discussed elsewhere in the WTO, in that it was potentially a win-win field that would
offer benefits for all participating countries.
160
90. With regard to further work to be undertaken in the Group, reference was made to a
"three-step roadmap" for the future work of the Working Group that had been put forward by a
Member. Under step 1, Members would try to agree on the scope of competition policy for thepurpose of future WTO deliberations.  This should be done on the basis of respect for the above-
mentioned differences among Members and focusing on the objectives and functions of competition
policy rather than on the means to achieve such objectives and functions.  Under step 2, it was
proposed that Members should identify the specific competition problems that had direct relevance to
international trade and the fulfilment of WTO objectives.  Under step 3, it was proposed thatMembers should explore the feasibility of possible multilateral options to address the competition
problems identified in step 2.  It was further suggested that the exploration of possible multilateral
options should be guided by the following considerations:  first, it was necessary to consider whether,
and the extent to which, the WTO was an appropriate organization to tackle the problems identified.
Second, there was a need to maximize the synergies of prospective multilateral solutions and theexisting WTO framework.  Third, it should also be recognized that rule-making was just one of the
many multilateral options available to Members.  Apart from imposing binding obligations on
Members, measures such as enhanced technical assistance and capacity building, a competition policy
review mechanism, deepening exploratory work, etc.  might offer solutions to the problems identified
in Step 2.
161  A view was expressed that this approach was interesting and worthy of further study.162
91. The point also was made that aspects of the three steps in the proposed roadmap had already
been addressed in the Group's deliberations to date.  For example, in 1999, a paper had been presented
in the Working Group on the impact of hard-core cartels on international trade (WT/WGTCP/W/135).
Other aspects had been discussed in previous meetings of the Working Group (see, in particular,
Report on the Meeting of 11-13 March 1998, WT/WGTCP/M/4).163  A view was expressed that, if the
proposed roadmap required that the Group reach agreement  on each element before proceeding to the
next step, then this approach was not supportable.  Ot herwise, the issues raised  in respect of the three
steps were important.  The delegation proposing the roadmap confirmed that it was not its intention
that step 1 of the proposed roadmap would have to be completed before work could commence on
                                                     
158 M/11, paragraph 74.
159 M/12, paragraph 82.
160 M/12, paragraph 83.
161 M/11, paragraph 13.
162 M/11, paragraph 72; M/12, paragraphs 12, 85 and 86.
163 M/11, paragraph 73.WT/WGTCP/4
Page 28
step 2 or 3, and so forth.164  Another view was expressed that th e roadmap should be followed in step-
wise fashion.165
92. A view was expressed that, as contemplated in the three-step roadmap, 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 onfollowing 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.  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 building 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.  Consideration should also be given to the reform of existing WTO rules,
such as those embodied in the Antidumping Agreemen t, with a view to maki ng them more compatible
with the promotion of competition.
166  The view was also expressed 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.167
93. The view was expressed 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 meeting of 2-3 October2000 (Job 5696, circulated 21 September 2000).  This would ensure that the discussions would be
focused on more substantial, exploratory and pragmatic issues.  The suggestion was made that these
questions be considered together with other issues and matters raised for consideration in a paper by
one delegation (WT/WGTCP/W/156) such as the harmonization of procedures regarding international
mergers, prohibition of export cartels and the handling of confidential information.  Questions posedin a paper by another delegation (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.
168  The suggestion was made that
priorities for further work included the identifica tion of the most harmful anti-competitive practices
and the establishment of a common database.  The question of exceptions and possible linkages to anyarbitration which might occur between competition law and policy and other areas of law and policy
as well as the costs of compliance for firms and the impact on investment also needed to be
considered.
169
94. The suggestion was made 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.  From the standpoint of developing countries, it was important to preserve the ability totake necessary measures to nurture industries and sectors wherever desired.  This 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.
170  Another Member, agreeing
                                                     
164 M/11, paragraph 73.
165 M/12, paragraph 85.
166 M/12, paragraph 12.
167 M/12, paragraph 85.
168 M/12, paragraph 87.
169 M/12, paragraph 88.
170 M/12, paragraph 73.WT/WGTCP/4
Page 29
that a cost-benefit analysis would be a useful exercise, stated that basically there were two questions
that needed to be addressed in future discussions.  The first was the whole issue of the relationship
between any possible common principles 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.171  The point was
also made that the mandate under which the Group was currently operating was sufficiently flexible to
allow it to explore all issues of relevance to delegations.  Ultimately, it was up to delegations to
pursue the areas that were of interest to them.172
95. The view was expressed that anti-competitive aspects of government measures not only fell
within the mandate of the Group, but were an important part of that mandate.173  Such measures were
a major impediment to the fulfilment of WTO objectives.174  In addition, the view was expressed that
it was necessary to consider the reform of existing WTO Agreements, such as the AntidumpingAgreement, the Agreement on Trade-related Intellectual Property Rights, and the Agreement on
Subsidies and Countervailing Measures, with a view to making them more compatible with the
promotion of competition.  In fact, every agreement in the WTO system should be examined to see
whether it promoted competition, subject to the principle of no a priori  exclusion.
175  The point was
also made that the need for examination of government measures that impacted adversely oncompetition should not detract from the importance of issues concerning the anti-competitive
practices of firms, and the need for a multilateral framework to assist in addressing such practices.
176
96. The Working Group was informed of a number of activities and developments concerning
UNCTAD which were relevant to the issues under consideration.  For example, the UNCTAD X
Conference had taken note of the importance of competition policy in respect of globalization andliberalization.  The declaration issued at the UNCTAD X Conference (the "Bangkok Declaration")
stated that the international community as a whol e had a responsibility to ensure that an enabling
global environment existed through enhanced cooperation in the fields of trade, investment,
competition and finance, for the purpose of making globalization more efficient and equitable.
UNCTAD had cooperated extensively with other organizations such as the WTO in addition to theWorld Bank and the OECD and wished to continue to do so.
177
97. Further, the Group was informed of the proceedings and results of the Fourth Review
Conference on the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the
Control of Restrictive Business Practices which was held in Geneva on 25-29 September 2000.  In the
Resolution that had been agreed upon at the Conference, delegations had reaffirmed the fundamentalrole of competition law and policy for sound economic development in addition to the continuing
validity of the Set.
178  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, includingsectoral regulators.  The Resolution also laid out the broad lines that UNCTAD should pursue in its
future work in this area, including focusing on the following themes:  (i) capacity building;
                                                     
171 M/12, paragraph 74.
172 M/12, paragraph 89.
173 M/11, paragraph 52 and M/12, paragraph 84.
174 M/11, paragraph 24.
175 M/12, paragraph 84.
176 M/12, paragraph 84.
177 M/11, paragraph 77.
178 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).WT/WGTCP/4
Page 30
(ii) competition advocacy;  (iii) specialized studies on the interplay between competition,
competitiveness and development;  and (iv) providin g 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 differential treatment; and studying the role of dispute
mediation mechanisms.179
98. The Group was also informed of relevant developments in the OECD.  The mandate of the
Organization's Joint Group on Trade and Competiti on had been renewed for two years, i.e. until
June 2002.  Insofar as technical assistance was concerned, the OECD had had ten years of experience
in providing advice on the drafting of domestic competition laws and in the organization of
enforcement seminars in various places around the world, a description of which could be found on its
website.  It was ready to pursue these efforts, in cooperation with other international organizations.
The experience of the OECD thus far was that cooperation was workable even if laws were not
similar and even when enforcement practices were somewhat different.  With regard to the matter ofconvergence of competition laws, in 1994, OECD  Ministers had adopted an Interim Report on
Convergence of Competition Policies.  In that re port, OECD countries, recognizing that convergence
was achievable and desirable, also acknowledged that the goal of the convergence process was not
uniformity in competition policy, law and practice.  Convergence in the enforcement practices among
OECD countries had occurred notwithstanding diverg ing legal provisions and could be explained by
the fact that there were a large number of common principles among OECD countries.  While this did
not prejudge what could occur in a wider forum, one particularly strong area of agreement among
OECD Member countries related to the pernicious character of hard-core cartels, and the need for
strong measures to be taken against them.  Refl ecting this, in 1998, the OECD Council had adopted a
Recommendation concerning Effective Action against "Hard-Core" Cartels.  Non-Member countrieswere invited to associate themselves with that Recommendation and to implement it.  Recently, a
progress report on the implementation of the Recommendation and on avenues for future work had
been adopted by the OECD Council.
180  The report 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.181
99. The Group was informed that an extensive report had been issued in February 2000 by the
International Competition Policy Advisory Committee which had been established two years
previously by the Attorney-General of the United States and the Assistant Attorney-General for
Antitrust.  The report was available on the Departme nt of Justice website at www.usdoj.gov/atr.  It
dealt with three principal issues:  international cartels;  multi-jurisdiction merger review;  and trade
and competition.  In addition to the Commission's own reflections, it was based on extensive public
hearings with participation by current and former senior competition officials from a dozen or more
countries.  On the issue of trade and competition, the Advisory Committee had concluded that the
WTO had an important role to play on the issue and that the work of the Working Group had been
useful although the Report also indicated that, at this juncture, the majority of the Advisory
Committee considered that the WTO was not an appropriate forum for review of private restraints.
The Committee had also called for a new Global Competition Initiative to carry forward work oncompetition policy at the international level, in cooperation with other relevant organizations.
182
                                                     
179 M/12, paragraph 20.
180 Hard-Core Cartels:  Meeting of the OECD Council at the Ministerial Level, 2000 (Paris:  OECD,
2000).
181 M/12, paragraph 21.
182 M/11, paragraph 76.WT/WGTCP/4
Page 31
III. T HE CONTRIBUTION OF COMPETITION POLICY TO ACHIEVING THE OBJECTIVES OF THE WTO,
INCLUDING THE PROMOTION OF INTERNATIONAL TRADE
100. This item was discussed by the Working Group at its meeting on 15-16 June 2000 and
2-3 October 2000. Written submissions on this item were provided by the delegations of  Korea,
Canada, Japan,  and the United States  (documents W/144, W/146, W/147 and W/153, respectively). In
addition, the representatives of the United States; Hong Kong, China ; Canada ; Norway ; Japan ; and
Trinidad and Tobago made oral remarks or posed questions on this item at the first meeting, while the
representatives of the European Community and its member States, Canada  and Switzerland  made
oral remarks or posed questions on this item at the second meeting.
101. On the subject of competition advocacy, the view was expressed that advocacy activities
could play an important role in addressing restraints to competition embodied in existing or proposed
laws and regulations.183  The goal of competition advocacy was to induce consideration of
competition principles in government decision-maki ng, especially with respect to the implementation
of market reforms, deregulation and privatization.184  Since market reforms, deregulation and
privatization served to improve market access, competition advocacy could definitely have a positive
impact upon the WTO's goal of enhancing international trade.185  Advocacy had a broader reach than
anti-trust laws:  while restraints to competition embedded in laws and regulations were often outside
the purview of anti-trust laws, such restraints could be removed or tempered through appropriateadvocacy efforts.
186  Competition advocacy also had a broader reach than other instruments of
competition policy given its impact on general economic development.187  Indeed, competition
advocacy was a widely applicable policy driver to enhance economic efficiency and consumer
welfare.188 For instance, although regulation was a legitimate instrument of government policy, it
could also entail significant costs, including cost s linked to administering and complying with the
regulatory regime as well as indirect costs attributable to distortions caused by the regulatory regime
itself.  Through their advocacy efforts, relevant agencies could highlight and clarify these costs,
thereby encouraging a fuller evaluation of both the costs and benefits of regulation.  In addition, at
times when a sector was undergoing privatization and deregulation, competition advocacy could assist
in managing the difficult transition phase from full regulation to open competition.189  It could serve a
vital function in ensuring that public monopolies were not simply transformed into private
monopolies.190
102. Various examples of successful advocacy activities at the national level were referred to and
discussed.191  In some countries, competition laws provided specific authority for relevant agencies to
engage in competition advocacy;  in other countries,  such authority was considered to be implicit in
the antitrust legislation.  Advocacy also came into play when other laws provided for the participation
of antitrust agencies in relevant proceedings.192  Advocacy could be conducted in formal and informal
ways.  Formal advocacy work involved the submission of written comments including expert studies
and the presentation of oral testimony with respect to pending legislation.193 Additionally, a
competition agency could enter into consultations with government agencies preparing legislative
proposals.194  Informal methods for advocacy work included discussions with legislators and their
                                                     
183 M/12, paragraph 95.
184 M/11, paragraphs 81 and 82.
185 M/11, paragraph 82 and 85.
186 M/12, paragraph 95.
187 M/11, paragraph 82.
188 M/11, paragraph 85; M/12, paragraphs 97 and 98.
189 M/11, paragraph 81, 82 and 85; M/12, paragraph 96.
190 M/12, paragraph 96.
191 M/11, paragraph 81 and 82, and M/12, paragraph 99.
192 M/12, paragraph 95.
193 M/12, paragraph 96 and 97.
194 M/11, paragraph 81.WT/WGTCP/4
Page 32
staffs or between staffs of the competition agencies and the regulators.195  In both cases, it was useful
for a competition agency engaged in advocacy functions to have access to technical expertise, to be
careful with the selection of priorities, to set realistic goals and to participate, to the extent possible, in
a non-confrontational way, taking the approach of informing decision-makers of the potential costs of
misguided regulations and the benefits to consumers of pro-competitive policies.  The view was also
expressed that advocacy had to be backed up by effective competition law enforcement as part of anoverall competition regime.
196
103. With respect to the relationship between the competition advocacy activities and economic
development, two important lessons were suggested.  First, beginning at the very early stages of
economic development, every effort should be made to build a market economy through the
introduction of competition policy, with the compe tition authorities taking on an active competition
advocacy role.  Second, developing countries faced special challenges in the promotion of a free
market, and an effective competition advocate was essential in overcoming those challenges.Consequently, it was critical to confer full author ity on the competition agency to allow it to serve as
an effective competition advocate.
197  Overall, competition advocacy was far from being a luxury
ill-suited for a nascent competition regime.  Rather, investment in competition advocacy went a long
way to alleviate the challenges to competition which otherwise might be faced, and thereby
contributed importantly to the process of economic development.198
104. With regard to the relationship between intellectual property rights (IPRs) and competition
policy, the view was expressed that the system of protecting technology through IPRs stimulated
R&D and could be a driving force for the creation of new technology.  Worldwide, the number of
applications for patents had nearly tripled from 1985 to 1996.  Hence, the coverage of IPR protection
had expanded together with the progress of tec hnology, multiplying the opportunities for exclusive
possession of technological information.  The WTO Agreement on TRIPS had strengthened the
international protection of IPRs.  Although th e TRIPS Agreement contemplated transitional
arrangements for developing, transition and least developed countries, it required all Members to take
positive policy measures in this area, including the establishment and reinforcement of domestic
legislation on IPRs and adequate enforcement thereof.  Given that the TRIPS Agreement led toimproved protection of IPRs, Members should consider the introduction of rules that would control
anti-competitive practices relating to the use of IPRs.  Anti-competitive behaviour relating to the use
of IPRs could take on many forms and shapes.  For example, a patent cross-licensing agreement that
included mutual restrictions on the pricing and output of the patented product, and substantially
lessened competition in the market for this produc t, would constitute an unreasonable restraint of
trade, as any other agreement fixing prices and limiting output, and would therefore be illegal under
competition laws.  Another illustration of anti-competitive behaviour related to the use of IPRs would
be a patent pool where the patent holders refused to grant licences to newcomers or competing firms
without justifiable reasons, in order to block the entry of newcomers or to make it difficult for
competing firms to conduct business.  Such a practice could be found illegal under competition laws,
on the grounds of attempted monopolization or another relevant violation.  In complementing the
protection of IPRs by strengthening their competition rules, developing countries would benefit fromdrawing on the accumulated experiences of other Members in this area.
199  The point was also made
that, historically, developing countries had been the target of monopoly power arising from the abuse
of IPRs.  For instance, licensing contracts often incorporated anti-competitive provisions such as
tie-ins or exclusive grantbacks of new innovations  following on patented inventions.  Developing
countries could include provisions in their competition laws to ensure that patent holders did not
                                                     
195 M/12, paragraph 96.
196 M/12, paragraph 96.
197 M/11, paragraph 81.
198 M/11, paragraph 82.
199 M/11, paragraph 83.WT/WGTCP/4
Page 33
abuse their monopoly rights, and this would be fully consistent with Article 40 of the TRIPS
Agreement.200
105. In addition to the above items, an updated version of the Overview of Members' National
Competition Legislation was prepared to incorporate additional information received from Members
(to be issued as WT/WGTCP/W/128/Rev.2).
IV. O THER ISSUES RAISED BY MEMBERS RELATING TO THE GROUP 'S MANDATE TO STUDY THE
INTERACTION BETWEEN TRADE AND COMPETITION POLICY
106. No submissions were provided or statements made on this item.
                                                     
200 M/11, paragraph 88.WT/WGTCP/4
Page 34
ANNEX 1
TEXT OF THE SINGAPORE MINISTERIAL DECLARATION (WT/MIN(96)/DEC),
PARAGRAPH 20
(Adopted 13 December 1996)
20. Having regard to the existing WTO provisions on matters related to
investment and competition policy and the built-in agenda in these areas, including
under the TRIMs Agreement, and on the understanding that the work undertaken
shall not prejudge whether negotiations will be initiated in the future, we also agree
to:
/g109 establish a working group to examine the relationship between trade
and investment;  and
/g109 establish a working group to study issues raised by Members relating
to the interaction between trade and competition policy, including
anti-competitive practices, in order to identify any areas that maymerit further consideration in the WTO framework.
These groups shall draw upon each other's work if necessary and also draw upon and
be without prejudice to the work in UNCTAD and other appropriate
intergovernmental fora.  As regards UNCTAD, we welcome the work under way as
provided for in the Midrand Declaration and the contribution it can make to theunderstanding of issues.  In the conduct of the work of the working groups, we
encourage cooperation with the above organizations to make the best use of available
resources and to ensure that the development dimension is taken fully into account.
The General Council will keep the work of each body under review, and will
determine after two years how the work of each body should proceed.  It is clearlyunderstood that future negotiations, if any, regarding multilateral disciplines in these
areas, will take place only after an explicit consensus decision is taken among WTO
Members regarding such negotiations.WT/WGTCP/4
Page 35ANNEX 2
CONTRIBUTIONS PROVIDED TO THE WORKING GROUP ON THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY IN 2000
Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/140 EC and member States M/11, pa ragraphs 6, 19-22 The Development Dimension of competition law/policy.
W/141 Hong Kong, China M/11, paragraphs 6, 11-13 Implem entation of competition policy in Hong Kong, China;
Competition Policy Objectives and Future Work.
W/142 United States M/11, paragraph 6 and 18 Creating a cu lture of competition establishing an effective
competition agency.
W/143 Trinidad and Tobago M/11, paragraphs 6-9 Challenges faced by small, open economies.
W/144 Korea M/11, paragraphs 80-81 Competition advocacy.
W/145 Japan M/11, paragraphs 6, 14-17 Contribution of competition policy to economic development.
W/146 Canada M/11, paragraphs 80 and 82 Competition advocacy.
W/147 Japan M/11, paragraphs 80 and 83 Competition policy, IPRs and development.
W/148 Australia M/11, paragraphs 6 and 10 Internat ional cooperation in competition law/policy.
W/149 India M/11, paragraph 3 Statement on issues for study.
W/150 Thailand M/12, paragraphs 5, 16-17 National competition legislation of Thailand.
W/151 Switzerland M/12, paragraphs 5 and 9 Interna tional cooperation in competition law/policy.
W/152 EC and member States M/12, para graphs 5, 10-11 International cooperation in competition law/policy.
W/153 United States M/12, paragraphs 95-96 Competition advocacy.
W/154 Korea M/12, paragraphs 5 and 12, Internati onal cooperation in competition law/policy.
W/155 Canada M/12, paragraphs 5, 13-14 Internati onal cooperation in competition law/policy.
W/156 Japan M/12, paragraphs 5-8 Internationa l cooperation in competition law/policy.
W/157 Japan M/12, paragraphs 5 and 15 Competition and industrial policy in Japan.
W/158 Croatia M/12, paragraphs 5 and 19
(originally introduced as anon-paper)National competition legislation of Croatia.
W/128/Rev.2 (to be
issued)Secretariat Overview of Members' National Competition Legislation.
__________