WORLD TRADE
ORGANIZATIONWT/WGTCP/W/233
26 June 2003
(03-3408)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE UNITED STATES
The following is the final text of a communication received from the Permanent Mission of
the United States, which was circulated as an advance copy for the Working Group's meeting of26-27 May 2003.
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The Benefits of Peer Review in the WTO Competition Context
Under Paragraph 23 of the Doha Ministerial Declaration, there is a decision to be taken, by
explicit consensus, at the Fifth Session of the Ministerial Conference on modalities of negotiations
with respect to the interaction between trade and competition policy.  As this decision point
approaches, all Members must consider the best way in which to carry forward the work that has been
done in this Working Group, taking into account the different needs and vastly different levels of
experience and institutional capacity of WTO Members in this area.  In our view, the best way to
proceed forward at this point to help enhance the worldwide culture of competition for the benefit ofall Members is to begin with a WTO competition peer review process.
1
This paper describes the benefits of a peer review system, drawing on experience in other
competition fora in which it has been successfully employed.  These benefits include facilitating
learning through sharing experiences and expertise, contributing to capacity building, promotingtransparency, promoting convergence, encouragin g problem-solving, and promoting international
cooperation.
There are many ways in which a peer review system can be structured.
2  Some systems are
based on self-assessment by the jurisdiction being reviewed, while others, such as the competitionpeer review process in the OECD, are based on a report prepared by an outside party.  Each
jurisdiction can be assessed with the same frequency or, as in the WTO Trade Policy Review
Mechanism, some jurisdictions can be reviewed more often.  The review can be limited to specific
issues, or can extend to all aspects of a competition regime.  It can consider how a competition agency
handled particular matters, or be limited to policy and institutional issues.  There are many possibleformats for conducting the review itself, for exampl e, orally or in writing, with some Members
                                                     
1 See, e.g.,  Communication from Canada, WT/WGTCP/W/226, 12 March 2003, also supporting a peer
review approach.
2 For an excellent survey of the features of existing peer review systems, see "Peer Review: Merits and
Approaches in a Trade and Competition Context," OECD Joint Group on Trade and Competition, June 6, 2002,
Com/TD/Daffe/Comp(2002)4/Final.WT/WGTCP/W/233
Page 2
designated as examiners, or by a WTO Competition Committee that could be established for this
purpose.  The existing WTO TPRM provides one source of guidance for how reviews might be
structured within the WTO.  While these are impor tant questions, this paper does not seek to answer
them but, rather, focuses on the general benefits of peer review, which transcend the particular
methodology chosen to implement it.  In our view, negotiations after the Fifth Ministerial wouldestablish the particulars of the peer review process.
Peer review facilitates learning through sharing of experience and expertise
Over the past fifteen years, as many countries have increasingly moved toward market-based
economies, the number of countries with competition laws and policies has dramatically increased.
There are approximately 100 countries, most of which are WTO Members, that now have acompetition law, as well as others that have adopted some form of competition policy.  Each of these
laws and policies is different, drawing on national priorities, legal traditions, economic structure, level
of development, and culture, among other factors, in designing a competition law and system
appropriate for the jurisdiction.  At the same time, many common principles underlie most of these
laws.  Hence, there is a high degree of commonality in the types of provisions found among nationalcompetition systems.
When drafting their competition laws, most jurisdictions considered models used in other
jurisdictions.  In some cases, direct technical assistance was provided, for example by other national
competition agencies or by multilateral institutions .  In other cases, drafters examined competition
laws of neighbouring or other countries from whose experience they felt they could profitably draw.
Thus, the system of competition laws that exists today developed organically through cross-
fertilization of ideas, ultimately adapted to the particularities of each jurisdiction.   Many jurisdictions
have acknowledged, including in this Working Group, the value of this sharing of ideas and
experience in developing and shaping their competition laws and institutions.
Well-functioning competition agencies are not, alas, born fully-formed.  Once a law is passed
and an agency is established, the implementation of competition law presents constant challenges.
This is true both for newer and for very experienced agencies, but the issues are most acute in an
agency’s early years.  The challenges are many – to name but a few:  how to set priorities among
different types of cases; how to conduct effective investigations and prosecutions; applying principles
of sound microeconomics to competition analysis; devising effective remedies; how to deal withcross-border jurisdictional and enforcement issues, and the like.
As with the process of drafting a competition law, agencies dealing with issues of
implementation and enforcement of the law can benefit from drawing on input from and the
experience and expertise of those in other jurisdictions.  Such advice can be and sometimes isprovided on an ad hoc basis, for example through technical assistance programs.  However, another
approach is to institutionalize a system of exchanging ideas and experience – i.e., through a system of
peer review.  Peer review provides a mechanism to ensure that participants get regular feedback on
their own laws and policies, while learning from others’ experiences.  This not only improves
domestic enforcement but, because competition agencies often deal with cross-border issues, may alsoresult in benefits to the international trading system.
Peer review contributes to fulfilling the capacity building objectives of the Doha mandate
While all Members can benefit from peer review, developing countries can especially benefit,
both from being the subject of a review and from partic ipating in reviews of other jurisdictions.  There
is a high degree of commonality of issues facing competition agencies – e.g., institutional design,
independence, adequacy of resources, cooperation and handling of cross-border issues, setting
priorities given scarce resources, creating a culture of competition.  Reports prepared in connectionWT/WGTCP/W/233
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with peer reviews contain insights from which al l can learn, but particularly developing countries.
Questions asked of reviewed countries will likely resonate with many other countries with similar
issues.  Suggestions provided to help one jurisdiction will likely be useful to others.  Taking part in
peer reviews is likely to be a highly efficien t way for developing countries to increase their
knowledge base, without a burdensome resource requirement.3
Developing countries can benefit by learning how other jurisdictions have, among other
things, drafted competition laws and regulations, established enforcement institutions, and enforced
their laws.  They can learn how other jurisdictions have tried to develop sound competition policies –
for example, how transparency and procedural fa irness are provided, how hard-core cartels are
prohibited and prosecuted, how cooperation takes place, and how development objectives are
accommodated throughout this process.  By participating in peer review sessions and studying reportsprepared before and after the review, developing countries can broaden and deepen their
understanding of competition issues, and put that knowledge to work toward improving their domestic
systems.  More generally, the peer review process over time contributes to a key goal of developing
countries seeking to establish competition policy: the dissemination of a culture of competition.
Peer review promotes transparency
 The Working Group’s papers and discussions have highlighted the benefits of transparency
as applied to the competition field.  Transparency leads to greater understanding of other jurisdictions’
rules and helps create a level playing field.  Peer review can contribute to transparency of competitionlaws and policies and their implementation.  The report that typically provides the basis for peer
review can describe the reviewed country’s competition laws as well as the policies and enforcement
practices used in implementing the law.  The interc hange facilitated by the peer review process, in
which the reviewed country is asked to explain aspects of its competition regime, increases the
transparency of competition regimes to all WTO Members.
Peer review promotes convergence
 The proliferation of competition laws creates a risk that different jurisdictions may handle
similar issues in different ways.  When applied to cross-border transactions, such divergences can
impose costs, burdens, and uncertainties that can impinge on international trade.  While
harmonization of approaches is neither feasible nor desirable, convergence toward recognizedprinciples of sound competition policy is beneficial both for agencies and for the conduct of cross-
border business.  Peer review brings out how different approaches to competition policy and
enforcement have been successful or unsuccessful.  Participants in peer reviews acquire a shared base
of knowledge that is likely to help shape how they will approach competition issues in their
jurisdictions.  Over the long term, this shared experience is likely to result in greater convergence incompetition enforcement, with corresponding be nefits to the international trading system.
Peer review promotes international cooperation
Through participation in peer reviews, competition policy and enforcement officials from
different countries learn more about one another’s policies and also make increased personal contacts.
In addition, as discussed above, peer review is likely to lead to greater commonality of approaches to
competition issues.  The combination of greater familiarity with other jurisdictions’ competition
systems, getting to know the personnel responsible for implementing them, and greater convergence
of approaches will likely lead to increased cooperation among jurisdictions in implementing
                                                     
3 It is obviously important that any WTO competition peer review process be structured in such a way
that it is not unduly burdensome for the reviewed Members, the other participants, or for the WTO Secretariat.WT/WGTCP/W/233
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competition laws and policies.  Developing countries in particular are likely to enhance their
opportunities for cooperation through peer review.
Peer review encourages constructive problem-solving
Peer review provides a forum for Members who have concerns about the reviewed Member’s
laws or practices to raise such concerns.  However, peer review is conducive not only to identifying
problems but also to finding solutions, in that participants may include countries that have confronted
similar problems in the past and can recommend practical solutions from their own experience.
Moreover, peer review works because of informal peer pressure.  Because Members are generally
likely to agree that it will benefit them domestically to have a properly implemented competition law
and policy, they are also likely to be responsive to constructive suggestions to address problems thathave been identified.
A peer review mechanism can be flexible, recognizing the needs of developing countries
A peer review mechanism can differentiate among Members based on, for example, their
levels of development or their experience with competition law and policy.  As mentioned, frequency
of review can be uniform, vary as in the TPRM, or indeed be a part of the existing TPRM.
A case study: competition peer review in the OECD
 As part of its regulatory reform project, th e OECD has sponsored peer review of competition
authorities in its Competition Committee.  Participation in the peer review is voluntary.  Reviews are
conducted on the basis of an in-depth report prepared by the OECD Secretariat.  The report covers all
aspects of the competition system, including institutional and enforcement issues.  The review is led
by designated member examiners, with opportunities for all members to participate.  Discussionfocuses on successful ways of coping with problems and on ongoing challenges.  Ultimately, the
OECD prepares a report that incorporates information from the examination and makes policy
recommendations.  These recommendations may catalyze reforms, such as measures to improve the
effectiveness of the agency.  The international support provided by the peer review process is often a
welcome stimulus to making needed and desired changes to domestic competition regimes.  One
example of this phenomenon occurred when the Gr eek government endorsed the OECD’s critique of,
and recommended improvements to, its competition regime, and implemented substantial changesbased on the OECD report.
OECD Competition Committee peer review ha s recently been applied to two non-OECD
developing countries.  In February 2003, South Afri ca, at its request, was reviewed in the OECD’s
Global Forum on Competition.  In April 2003, the competition authorities of Chile were reviewed inthe OECD/IADB Latin American Competition Forum, where Canada and Mexico served as the lead
examiners.  Based on the successful experience with these two reviews from the point of view of the
examiners and the examined parties, other non-memb ers have indicated interest in being reviewed.
Introducing competition peer review into the WTO w ould make the benefits of such reviews available
to a much wider range of countries, particularly developing countries.
Conclusion
Peer review can be an effective and important tool in enhancing national competition regimes,
and by helping disseminate the culture of competition to all Members, can benefit the world tradingsystem as well. A peer review process for competition offers significant benefits:
• Peer review deepens understanding of co mpetition principles, and of how other
jurisdictions design and implement competition law and policy.WT/WGTCP/W/233
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• Peer review highlights areas of potentia l improvement and how such improvements
could be made, based on actual experience.
• Peer review encourages constructive problem-solving.
• By providing a forum for countries to wo rk together, peer review can facilitate
convergence and cooperation.
• Peer review enhances the dissemination of competition culture and improves the
quality of competition institutions and enforcement.
• Developing countries can particularly benefit from participating in peer reviews.
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