WORLD TRADE
ORGANIZATIONWT/WGTCP/W/154
9 March 2001
(01-1151)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE REPUBLIC OF KOREA
The following is the final text of a pape r received from the Permanent Mission of the
Republic of Korea which was circulated as an advance copy for the Working Group's meeting of
2-3 October 2000.
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The Evaluation of Past Activities and Proposal for Future Work in the WGTCP
1. Introduction
Korea believes that the 3-step roadmap which has been set forth by Hong Kong, China (HKC)
(see document WT/WGTCP/W/141) provides a useful and logical framework for analysis in assessing
the past activities of the Working Group on the in teraction between Trade and Competition Policy
(WGTCP) and devising future action plans.  A broad consensus has been reached at the discussions of
the WGTCP on the necessity to enhance the interac tion between trade and competition policy.  In this
regard, the proposal of HKC offers a very practical direction.
Taking into account the HKC's communication, this paper evaluates the work to date of the
WGTCP and provides future tasks, as recognized by the Korean government.
2. Consensus among Members on the Scope of Competition Policy
As was well pointed out by HKC, Members have conferred different meanings to the scope of
"competition policy" and have taken diverse approaches to achieve competition policy objectives and
promote competition.  Furthermore, Members agreed on the need to respect "diversity" among
themselves in setting forth efforts to promote the coherence of trade and competition policy.
Korea firmly believes that the future work of  the WGTCP should fully take into account such
"diversity".  The activities of the Working Group should make contributions to the development of all
WTO Members, reconciling best practices of advanced  countries having a long history of competition
policy enforcement and the developing countries' need for economic development.
3. Identification of Competition Issues with Direct Relevance to International Trade and
the Realization of WTO Objectives
Korea believes that the work of the WGTCP has already identified several competition issues
of significance that relate to international trade and the attainment of WTO goals.  Companies' anti-
competitive behaviours can affect foreign corporations' access to domestic markets, hampering theWT/WGTCP/W/154
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realization of the WTO's ultimate goal, enhancing in ternational trade.  In addition, transnational acts
involving international cartels and international mergers can have a substantial impact on international
trade.  The work of the WGTCP also highlighted the fact that governmental measures that inhibit
international trade can pose an obstacle to the promotion of international trade.  In this regard, some
countries put forth opinions that antidumping measures in particular have been taken arbitrarily and ina manner that undermines the welfare of the global economy as a whole.  This has led to the distortion
of international trade and market economy.
In this respect, Korea's position is that anti-competitive practices of private firms,
transnational acts such as international cartels and M&As, governmental measures that impede
international trade can all be included in the list of competition issues with direct relevance to
international trade and the fulfilment of WTO objectives.
In this regard, HKC has pointed out that practices and measures to be handled in the WGTCP
should:  (i) have significant and demonstrable anti-competitive impact on international trade and
investment; and (ii) be prevalent to the extent that they affect a broad cross-section of the WTO
membership.  The Korean government considers the points raised by HKC as providing useful
guidelines in identifying international competiti on issues.  It further sees merit in identifying
competition concerns based on such standards in future WGTCP meetings.
However, in-depth deliberations should first take place as to whether such requirements
constitute an appropriate standard for determining "relevance" in sorting out competition issues with
direct relevance to international trade and the fulfilment of WTO goals.
4. Review of the Feasibility of Multilateral Options
(1) Whether the WTO is an appropriate body to address the above-mentioned problems
Members at the WGTCP have been divided as to whether the WTO is an appropriate
organization to tackle the problems identified.  The negative view has it that the WTO is inappropriate
in handling anti-competitive practices of the private sector, since it is basically a trade organization
and regulates governmental measures.  In addition, the superiority of cooperation through the bilateraland regional approaches to the multilateral approach is underscored.  On the other hand, those that are
in favour of such a role for the WTO point out th at the formulation of a multilateral framework on
competition policy within the WTO, a governin g body of international trade, would accommodate
competition principles reflected in the existing trade regulations and vice versa.  They see that this
will promote international trade and ultimately lead to increased economic welfare for the
international community as a whole.  They also highlight the fact that the WTO will face little
difficulties in devising a multilateral framework that befits the era of globalization in substance aswell as in name, given the broad geographic scope covered by its membership.
Korea deems the WTO as the best available forum to address competition problems with
relevance to international trade and the fulfilment of WTO goals.  However, it hopes that the WGTCP
holds intensive discussions on this issue, embracing the negative as well as positive views.
(2) Whether the existing WTO rules can serve as important pointers for possible solutions
Some Members at the WGTCP pointed out that  the WTO procedures and methods in trade
dispute settlements related to competition policy are ambiguous and that the organization lacks
effective tools to pursue information exchange and international cooperation, since it cannot directly
regulate competition policy-related issues.  Therefore, the WTO faces various limits in dealing with
competition concerns.  At the same time, they argued that in order to address this problem, provisionsrelated to competition under existing WTO agreements such as the Anti-dumping Agreement shouldWT/WGTCP/W/154
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be re-examined from the competition policy perspective and improved in the direction of promoting
competition.
The Korean government believes that debates on competition-oriented reforms of the existing
WTO rules may be necessary and hopes to fully discuss the issue in the upcoming WGTCP meetings.
(3) Review of feasibility of Multilateral Options
As was pointed out effectively by HKC, besides rule-making, there exist diverse options that
can help address competition problems at the multilateral level, including capacity building through
enhanced technical assistance, institution of a competition policy review mechanism, and closer
cooperation between the WTO and other international fora.  These have been confirmed in past
WGTCP meetings.  However, the Korean government  would like to draw attention to the fact that
several Members vehemently advocated the need to hammer out a multilateral framework oncompetition policy.  It believes that such an argument neither completely replaces other options nor
flatly denies their effectiveness.
Korea hopes that the WGTCP fully deliberates on the multilateral options proposed by Hong
Kong, China.  At this point in time, it would like to offer its opinions on some of them.  First, the
basic stance of the Korean government is that a multilateral framework on competition policy shouldbe put in place.  However, in addition to exploring a wide range of multilateral options, cooperation at
the bilateral and regional levels should be also promoted, until the WTO reaches consensus in this
regard.  Second, it believes that technical assistance can be, and has been, of great help to developing
Members or transition economies in expanding competition policy and building capacity.  In this
light, the KFTC has annually held international workshops on competition policy since 1996, bringingtogether APEC economies to focus on case studies of traditional competition concerns.  However, it is
sceptical as to the effectiveness of such technical assistance projects in tackling competition policy
issues taking place across borders, particularly international cartels that inflict harms on many
countries.  Third, while a competition policy review mechanism can be explored as one multilateral
option to deal with competition concerns at the in ternational level, the following reasons call for
further deliberations on this issue.  The purpose of competition policy review is to enhance
transparency and understanding of corporate practices and competition policies.  Given this, it is more
urgent to come up with an internationally agreed competition norm than instituting such a policy
review mechanism.
5. Conclusion
As can be seen, in the light of the 3-step roadmap of HKC, significant progress has been
achieved in relation to several matters in deliberations of the WGTCP, while others need furtherdiscussion.
Thus, the Korean government does not want to revisit some points in Step 1 and Step 2 and
the evaluation of WTO Agreements in Step 3 of the HKC Communication which have been discussed
at length in the past Working Group meetings.  Instead, it hopes that the WGTCP will concentrate its
deliberations on the guidelines for identifying competi tion issues with direct relevance to international
trade and the fulfilment of WTO objectives contained in the Step 2 and the exploration of the
feasibility of possible multilateral options, taking into account the diversity in economic development
and competition law and policy of each Member.
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