WORLD TRADE
ORGANIZATIONWT/WGTCP/5
8 October 2001
(01-4871)
REPORT (2001) 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 4-8
ACTIVITIES
(a) Sources and materials used in the Group's work 4-5
(b) Meetings held in 2001 6
(c) Cooperation with other intergovernmental organizations 7-8
C. SUBSTANTIVE WORK DONE IN THE WORKING GROUP 9-103
IN 2001
I. THE RELEVANCE OF FUNDAMENTAL WTO PRINCIPLES OF 11-46
NATIONAL TREATMENT, TRANSPARENCY AND MOST-FAVOURED-NATION TREATMENT TO COMPETITION
POLICY AND VICE VERSA
II. APPROACHES TO PROMOTING COOPERATION AND 47-93
COMMUNICATION AMONG MEMBERS, INCLUDING INTHE FIELD OF TECHNICAL COOPERATION
III. THE CONTRIBUTION OF COMPETITION POLICY TO 94-101
ACHIEVING THE OBJECTIVES OF THE WTO, INCLUDING
THE PROMOTION OF INTERNATIONAL TRADE
IV. OTHER ISSUES RAISED BY MEMBERS RELATING TO THE 102-103
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 TRADE
AND COMPETITION POLICY IN 2001WT/WGTCP/5
Page 2
A. INTRODUCTION
1. In the year 2001, 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 2001.  It
constitutes a complement to the Working Group's previous reports on its activities in 1997
(WT/WGTCP/1), 1998 (WT/WGTCP/2), 1999 (WT/WGTCP/3) and 2000 (WT/WGTCP/4).
3. The report is organized as follows.  Part B provides a procedural summary of the Group's
activities in 2001.  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 2000, the work of the Working Group in the year 2001 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 2001 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 2001.  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 29 January 2001, and were read out by
him in the informal meeting and at the Group's formal meetings of 22-23 March (WT/WGTCP/M/14,
paragraph 4) and 5-6 July (WT/WGTCP/M/15, paragraph 4).  At the informal meeting, it was agreedthat 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
General Council's decision.  The points were as follows:WT/WGTCP/5
Page 3
"- first, it was suggested that it would be useful for the Group to continue to place
emphasis on addressing the concerns that had been expressed by some developing
country Members regarding both the general impact of implementing competition
policy on their national economies and the particular implications that a multilateral
framework on competition policy might have for development-related policies and
programs.  In this regard, it was suggested that it would be helpful if countries havingthese concerns could be as specific as possible about the possible conflicts or
constraints as well as the synergies that they perceived to exist, in order that they
could be addressed as fully as possible in the Group.  For example, any problems that
Members continued to see arising from the application of the principle of national
treatment within the field of competition law and/or policy should be raised and
discussed.
- second, interest was expressed in continuing exploration of the implications,
modalities and potential benefits of enhanced international cooperation, including in
the WTO, in regard to the subject-matter of trade and competition policy.  In fact, two
dimensions to this interest had been noted.  The first concerned the modalities,
benefits and limitations of cooperation between national competition agencies.  The
second concerned the issue of possible cooperation/interaction between trade andcompetition agencies/authorities in dealing with issues that sat astride the two
disciplines.
- a third suggestion was that it would be useful for the Group to have a continuing
focus on the issue of capacity building in the area of competition law and policy.
Two specific suggestions as to issues that could be addressed under this rubric were:(i) the process of competition law enforcement, including alternative
investigatory/decision-making models and the role of judicial review; and (ii) the
design of remedies in individual cases.  In addition, there should be a continuing
focus on stocktaking of national experience and legislation."
In addition, in framing their interventions, delegations had access to the points noted in an Updated
Checklist of Questions Posed by Members in 2000 (Job 520) that was circulated to Members by the
Chairman on 24 January 2001.  As with the suggestions noted above, at the informal meeting on
29 January, it was agreed that the points included in the Updated Checklist, in addition to 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 tothe Group during the year, within the terms of the General Council's decision (WT/WGTCP/M/14,
paragraph 4 and WT/WGTCP/M/15, paragraph 4).
(b) Meetings held in 2001
6. The Working Group held three formal meetings in 2001.  The dates of the meetings were:
22-23 March, 5-6 July and 28 September.  The dates of these meetings were determined in the light of
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 withthose of relevant UNCTAD bodies.  At the meetings in March and July, 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 28 September was to review and adopt the Working Group's
Report (2001) to the General Council.  Reports on these meetings have been circulated in
documents WT/WGTCP/M/14, 15 and 16.WT/WGTCP/5
Page 4
(c) Cooperation with other intergovernmental organizations
7. The Singapore Ministerial Declaration (paragraph 20) encourages 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 en sure that the development dimension is fully taken
into account.  In this regard, the IMF and the World Bank have continued to attend the Working
Group's meetings in an observer capacity, pursuant to the cooperation agreements concluded betweenthe 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 by
observer organizations.
8. As a further aspect of cooperation, representatives of the Secretariats of UNCTAD and the
OECD participated in a Workshop that was organized by the WTO Secretariat, in cooperation withthe Government of South Africa and with financial support from the Government of the
United Kingdom (Department for International Development), for the benefit of African WTO
Members and observers.  The Workshop took place in Cape Town, South Africa on 22-24 February
2001.  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 formallyseparate from the work programme of the Working 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 resource person in seminars/workshops organized by the OECD in
cooperation with the Governments of Brazil and Korea.
C. SUBSTANTIVE WORK DONE IN THE WORKING GROUP IN 2001
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 December 1998 (WT/GC/M/32, page 52).  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/14 and 15) 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 should 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 thattook 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 the
various 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 meetings of 22-23 March and
5-6 July 2001.  Written submissions on this item were provided by Canada, the Czech Republic  and
the European Community and its member States (two  contributions) (documents W/174; 165; and 160
and 175, respectively).1  In addition, the representatives of Brazil; Canada ; Chile ; Columbia ; the
Czech Republic; Egypt ; the European Community and its Member states ; Gabon ; Hong Kong, China ;
                                                     
1 Hereinafter in this Report, documents issued in the series WT/WGTCP/W/- are referred to as "W/…".
Documents issued in the series WT/WGTCP/M/- are referred to as "M/…".WT/WGTCP/5
Page 5
Hungary; India ; Indonesia ; Japan ; Kenya ; Korea ; Malaysia ; Morocco ; Norway ; Pakistan ; the
Philippines; the Russian Federation ; Singapore ; South Africa ; Switzerland ; Thailand ; Trinidad and
Tobago; the Ukraine ; the United States ; Zambia  and Zimbabwe  made oral statements or posed
questions on this item.  The representatives of UNCTAD and the OECD  provided updates on relevant
activities of their organizations.  In the course of the discussion, reference was made to questions
included in the Updated Checklist of Questions Posed by Members in 2000 (Job 520), specificallyquestions 2 and 3 in Section III.  It should also be noted that the points raised in relation to this item
overlapped, to a degree, with points made in relation to Agenda item II, Approaches to promoting
cooperation and communication among Members, including in the field of technical cooperation
(paragraphs 47-93, below).  Consequently, the additional arguments and counter-arguments
summarized in that sub-section may also be relevant to the points summarized below.
12. An important aspect of the discussion on this item concerned the relevance of certain
principles, including the fundamental WTO principles, for the effective application of competitionpolicy and the role that such principles could play in a multilateral framework on such policy.
Reference was made, in this regard, to the principles of non-discrimination (including national
treatment and most-favoured-nation treatment), transparency, flexibility and progressivity, special and
differential treatment and due process, and the importance of effective prohibition of hardcore
cartels.
2
13. With regard to the overall context for the disc ussion, the point was made that in view of the
globalization of markets, the continued growth of world trade was correlated with the repression of
acts aimed at limiting competition, such as international cartels that fixed prices or divided national
markets.  Such acts had the effect of restricting the benefits that were intended to be derived from
trade liberalisation.3  In order to deal effectively with these practices, it was essential to expand
cooperation in the implementation and enforcement of competition law.4  This, in turn, required the
upgrading of institution-building programmes and the creation of a climate of mutual trust, which
would be facilitated by agreeing on a number of core principles.5  The proposed principles relating to
non-discrimination and transparency were also pillars of the WTO system.6  Effective national
competition policies were part of the founda tion upon which developing countries could realize
greater efficiencies and improved development prospects.7  Negotiations and/or an enhanced work
programme on competition policy built around the principles of transparency and predictability would
help to ensure political commitment for necessary reforms and implementation.8  The view was also
expressed that globalization was moving on and that, in this context, establishing a multilateral
framework of rules or guidelines relating to comp etition policy and the prevention of anti-competitive
practices was important for the integrity and legitimacy of the WTO.9  In addition, a number of
delegations made the point that their competition laws and/or policies were already consistent with the
principles of non-discrimination, transparency, flexibility, progressivity and due process, which were
important to the effective application of such policy.10
14. The view was expressed that a framework built around principles such as the foregoing could,
regardless of the size of an economy or country, be a basis for putting in place a competition policy
that would contribute to both consumer welfare and development-related objectives.  At the sametime, adherence to these principles would not interfere with the ability of Members to respond to their
particular needs and economic circumstances.  This was supported by reference to the national
                                                     
2 M/14, paragraphs 6, 7, 12, 14, 15, 16, 17; M/15, paragraphs 7, 8, 9, 10, 11, 16, 28, 29, 32.
3 M/14, paragraph 15.
4 M/15, paragraphs 14 and 50.
5 M/15, paragraphs 7, 10 and 50; M/14, paragraph 15.
6 M/15, paragraphs 16 and 32.
7 M/15, paragraph 45.
8 M/15, paragraph 14.
9 M/15, paragraph 16.
10 M/14, paragraphs 6, 15 and 16; M/15, paragraphs 13, 16 and 34.WT/WGTCP/5
Page 6
experience of a Member whose legislation adhered to the principles of non-discrimination,
transparency, due process and flexibility, and yet was tailored to meet its specific needs and
circumstances.  For example, in relation to merg er control, the legislation provided for active
participation of labour representatives in the assessment of mergers.  This was a specific measure that
had been put in place to deal with a particular concern.  In addition, the objective of promoting small
businesses was specifically built into the Act.  This was achieved through certain exemptions orexclusions that were applicable providing that spec ific criteria had been met.  Special provision was
also made for joint activities relating to export promotion.
11
15. The point was made that, in advocating the adoption of a multilateral framework on
competition policy embodying certain key principles, the proponents were not calling for, and indeed
felt it was important to avoid, a one-size-fits-all or harmonized approach to the development of
national competition policies.12  In particular, it was important to note that, other than in the area of
hard-core cartels, the proponents were not calling for the adoption of common principles relating tosubstantive competition laws or enforcement policies.  Therefore, under the proposed framework,
there would still be a large amount of flexibility in regard to most aspects of a substantive competition
law regime.
13
16. The view was expressed that development of a multilateral framework on competition policy
would be acceptable provided that it fulfilled several conditions.  These included integration of thedevelopment dimension in all of its component parts; application of special and differential treatment
in a more effective and consistent way than hitherto; provisions relating to flexibility and
progressivity; the putting in place of provisions for technical assistance, notably for countries that did
not have legislation on competition policy; the existence of voluntary cooperation between national
competition authorities and safeguards for national strategic objectives in the form of exemptions.First and foremost, it should seek to combat anti-competitive practices that were harming developing
countries and should not to try to standardise national policies.  In fact, it appeared that the current
proposals addressed a number of these elements.
14
17. The view was also expressed that the case for adopting a multilateral framework on
competition policy was unpersuasive.15  In this regard, it was suggested that relevant contributions by
the proponents suffered from two major deficiencies:  first, they focused largely on the potential
benefits of a WTO competition agreement for developing country Members with relatively little
mention of the costs that such an agreement might bring about.16  Secondly, they were predicated on
the need for a comprehensive domestic competition law.  This failed to take account of the position of
Members who did not want to adopt a competition law and did not feel that such a law was necessaryfor them.
17  In addition, the view was expressed that relevant contributions had failed to adequately
answer the question of whether the competition problems identified by Members could be addressed
through existing WTO Agreements or activities.18  Furthermore, Members had not been given any
systematic or practical evidence of specific benefi ts to developing countries that would flow from a
multilateral framework or adverse situations affecting countries that lacked competition laws or
institutions.19  In fact, the proposed framework could put developing countries under pressure to
implement policies, laws, measures and institutions which, it was suggested, they might not reallyneed at this point.
20  It was also suggested that, even though the proponents had stated that they were
                                                     
11 M/15, paragraphs 11 and 12.
12 M/15, paragraphs 7 and 41; M/14, paragraph 57.
13 M/15, paragraph 7.
14 M/15, paragraph 13.
15 M/15, paragraphs 17, 18, 19, 20, 23, 33, 34, 36, 47 and 48.
16 M/15, paragraph 18.
17 M/15, paragraph 18.
18 M/15, paragraph 47.
19 M/15, paragraphs 19 and 20.
20 M/15, paragraph 20.WT/WGTCP/5
Page 7
not seeking harmonization of national legislation, the proposal to set out the core principles in
substantive provisions would, in fact, entail a degree of harmonization.21  Furthermore, considering
that Members had not reached equal levels of economic development, it seemed unlikely that a
framework agreement applicable to all Members would provide equal benefits in particular to
developing and least-developed countries. The poi nt was also made that there were, undoubtedly,
merits associated with international cooperation among competition authorities, for example, to
combat anti-competitive behaviour, particularly as a result of international mergers and acquisitions
that had a negative impact on developing economies.  Nonetheless, combatting such behaviour did not
require the adoption of a multilateral framework.22
18. Concern was also expressed regarding the implications of the so-called principles-based
approach being advocated by the proponents of a multilateral framework on competition policy.
Government policies, measures and regulations that gave rise to anti-competitive practices were
already covered, in most case, by existing WTO Agreements, which required compliance with the
relevant principles.  Furthermore, confirmation had been provided that, in most cases, existing
competition laws did not contain discriminatory provisions.  In this context, the need for a framework
setting out the application of these principles in the field of competition law and policy was unclear.23
In response, the point was made that none of the existing WTO Agreements dealt in a systematic waywith issues that arose in the field of competition law and policy.  The need for action in the WTO was
clear, given the mounting evidence that anti-competitive practices were undermining both the gains
from trade and the development prospects of Members.  At the same time, it was not the intention of
the proponents that an agreement on competition law and policy would have implications that went
beyond the domain of such law/policy.  Therefore, there was no reason to expect, a priori, any conflict
with other WTO Agreements.
24
19. Delving further into the relevance of particular principles to competition policy and vice-
versa, with regard to the principle of non-discrimination, the point was made that adherence to this
principle was important to the sound application of competition law and policy from a national
perspective.25  The importance of a WTO principle on this matter derived from the fact that, with
globalisation and increasing international competitio n, national competition policies were subjected to
national industrial policy and pressures by related lobbies to provide more favourable conditions  for
national companies.26  A WTO principle on national treatment applying specifically to competition
policy would assist governments in resisting such pressures.27  In addition, a binding principle
regarding non-discrimination on the basis of nationality in the application of competition law and
policy was important since a fair approach towards foreign investors would help countries to attractforeign investment.
28
20. With regard to concerns that had been raised regarding the potential impact of applying the
principle of non-discrimination in the field of competition law and referring to question 3 in
Section III of the Updated Checklist of Questions Posed by Members in 2000 (Job 520, circulated
24 January 2001), it was stated that the intent of the proposed WTO framework was to support the
application of competition law and policy as suc h, and not to encroach upon the domain of industrial,
development or social policy.  Reflecting this, the principles of national treatment and most-favoured-nation treatment, as they would be embodied in the proposed multilateral framework, would apply to
competition law and/or policy as such and not to wider industrial or development-related policies.
                                                     
21 M/15, paragraph 34.
22 M/15, paragraph 33.
23 M/14, paragraph 12; M/15, paragraph 48.
24 M/14, paragraph 13.
25 M/14, paragraphs 6 and 15; M/15, paragraph 16.
26 M/14, paragraph 16.
27 M/14, paragraph 6, 13 and 16.
28 M/14, paragraph 6.WT/WGTCP/5
Page 8
Outside the domain of competition policy, they would have no implications for the much broader
question of the extent to which a market was open to  foreign investment.  Furthermore, with respect to
non-discrimination, the principles would be intended solely to ensure that such law/policy did not
include provisions that discriminated on grounds of nationality.  Specifically, it was not proposed that
these principles would be binding with respect to the question of how a competition law was actually
applied, as opposed to the content of relevant statutes.29
21. The related point was also made that the application of the principle of non-discrimination in
the field of competition law and policy was separa te and distinct from the question of sectoral
exceptions, exemptions and exclusions from national competition regimes.  The latter was known to
be a sensitive issue in respect of which there were many different approaches among WTO Members.
Accordingly, the approach proposed by the proponent s of a multilateral framework in relation to the
issue of sectoral exclusions from competition law has simply to permit them, subject to appropriate
transparency requirements.  Provision for exceptions would further help to ensure that a commitmentto non-discrimination in the application of domesti c competition law would not conflict with the
pursuit of other domestic policy objectives, such as, for instance, the promotion of small and medium
sized enterprises.
30  Various examples were given of national competition regimes containing
exceptions or other special provisions embodying these objectives.31
22. Responding to question 2 in section III of the Checklist of Questions raised by Members,
namely whether it was necessary to incorporate principles such as non-discrimination in a multilateral
framework on competition policy or whether it was sufficient to rely on existing general provisions
such as GATT Articles III and X or on domestic competition laws in which such principles were, to
varying extents, already reflected, the point was made, firstly, that although experience in the WTO
had indeed shown that the principles of non-discrimination and transparency had general application,when it was considered particularly important to emphasise such principles in a particular context,
they had been incorporated into individual WTO Agreements.  Moreover, the principles had been
adapted to ensure that they were well-suited to ad dress the specific issues that arose in a particular
policy area.  A good example was the Agreement on Technical Barriers to Trade, which dealt with
technical regulations and standards.  Most would agree that such measures were already covered,implicitly, by Articles III and X of the GATT.  However, insofar as the Members of the WTO had
considered that the issues raised by this particular policy area were of sufficient concern for them to
be addressed at the multilateral level, it had been considered important to emphasise the principle of
non-discrimination and to have detailed, specific provisions relating to transparency vis-à-vis the
particular concerns that were raised in relation to technical barriers to trade.  More particularly, giventhat more and more Members were adopting domestic competition law regimes, and were applying
their laws to domestic and international firms, it had become important to agree on some basic rules to
which all participants could adhere.
32
23. The view was also expressed that the benefits of the proposed principle concerning national
treatment were not, in fact, obvious.  In view of the marked disparity in capacities between developed
and developing countries, it was better not to attempt to multilateralize competition policies and
laws.33  In addition, the point was made that the principle of non-discrimination came from
international trade principles that were important to promote free trade and to avoid protectionism.
Competition policy, in contrast, was intended to promote a competitive environment and avoid abuses
of market power.  It was necessary to study in greater detail the compatibility of the fundamental
WTO principles with competition policy.  In particular, it would be important to ensure that the
principle of non-discrimination did not diminish the flexibility needed to achieve national
                                                     
29 M/15, paragraph 8; M/14, paragraph 8.
30 M/14, paragraph 8; M/15, paragraphs 9 and 15.
31 M/14, paragraph 8; see also M/15, paragraph 12.
32 M/14, paragraph 7.
33 M/15, paragraph 33.WT/WGTCP/5
Page 9
objectives.34  The point was also made that it might be difficult to reconcile the degree of flexibility
that had been proposed with respect to the content and application of competition law with strict
adherence to the concept of national treatment.35
24. Further to this point, the view was expressed th at many complexities were involved in the
process of developing a competition law; application of the proposed principle on national treatment
had to be assessed in this light.  For example, it might be legitimate for a developing countrycompetition authority to allow large domestic firms to  merge so that they could go some way towards
competing on more equal terms with multinationals .  The same authority might wish to prohibit
mergers involving multinationals within their terr itory on the basis that they were already large
enough to achieve relevant economies of scale in either a static or dynamic sense.  The application of
national treatment had to be considered carefully in this context.  The complexity of this issue was
further compounded when it had to be addressed by Members at different stages of development.
Nonetheless, there was no question about the need for countries to have effective national competitionlaws or about the importance of such laws for economic development; the question concerned the
need for and content of any multilateral framework in this regard.
36
25. The view was expressed that, in pursuing work aimed at ensuring compliance with the
fundamental WTO principles in the field of competition law and policy, the WTO should seek to
ensure that the underlying foundations of competition law were respected and that the ability to applylaws in a responsible way was unfettered.  The point was also made that, notwithstanding that there
was broad agreement at a general level on the importance of the fundamental WTO principles for the
field of competition law and policy, careful consideration would have to be given as to how the
principles would be defined and applied in any WTO framework, in a specific way.
37  For example,  it
was important to recognize that situations could arise where it might be necessary to treat differentactors differently by virtue of the facts of a particular situation or to treat certain information in a
confidential manner.  It would be important to think carefully about  the distinctions that might have to
be drawn, in this regard, between the facial contents of a law and related enforcement approaches, in
order to ensure that integrity was preserved with respect to the application of the law in these
situations.
38
26. In a related vein, the view was expressed that, notwithstanding the assurances given by the
proponents,  questions remained regarding the ultimate compatibility between the principle of national
treatment and the pursuit of certain economic or other policies, particularly when those policies were
articulated in a way that was not facially non-discriminatory, but could be applied de facto  in a way
that would only benefit national firms.  Taking the example of special legislative regimes or regimesthat allowed for special consideration of small and medium-sized businesses, it seemed plausible that
those kinds of rules could be based on sales thresholds that could de facto eliminate their application
to foreign entities so that perhaps the only firms that would be able to avail themselves of that regime
would, in fact, be domestic firms.  A second exampl e involved special consideration in cases where
international competitiveness was sought to be promoted.  While it might make sense in a domestic
context to promote the ability of domestic firms to compete more effectively internationally, such
provision might, as a practical matter, be unavailable to non-domestic firms since, by definition, theywere already doing business cross-border and were, therefore, already competitive internationally, or
at least presumptively so.  Consideration needed to be given as to whether those kinds of regimes
could ultimately be squared with the principle of national treatment.
39
                                                     
34 M/15, paragraphs 19 and 34.
35 M/15, paragraph 24.
36 M/15, paragraph 19.
37 M/14, paragraph 14.
38 M/15, paragraph 32.
39 M/15, paragraph 43.WT/WGTCP/5
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27. In response, clarification was provided that the purpose of the principle of non-discrimination
that would be embodied in the proposed multilateral framework was merely to ensure that domestic
competition laws, as such, did not include provisions that overtly discriminated on the basis of
corporate nationality.  Enforcement policies and practices that were not embodied in the law would
not be covered.40  Moreover, the clear intention of the proponents was that the proposed principle
would not have application beyond the field of competition law as such, and would not encroach uponthe domain of industrial, development or social policy.
41  Any specific concerns that came to light as
the nature of the obligations to be accepted became more clear would be resolved in this light.42  In
response to a related concern, the point was accepted that characterization of discrimination as
"formal" or "informal" was not helpful.43
28. The point was also made that due to constraints in human capacity, it would not be possible
for all requests for cooperation in the field of enforcement to be met.  This was a key reason why
cooperation under the proposed framework should be voluntary.  That is, countries would not berequired to provide enforcement assistance in all circumstances.  It was noted further, that, in
principle, this entailed a potential for issues to arise in relation to the MFN principle.  Guidelines
might be needed on this matter.  Notwithsta nding this, the proposed framework could provide
substantial benefits including by enabling competition authorities to meet regularly within a solid
institutional framework.
44
29. With regard to the principle of transparency, the view was expressed that this was the best
guarantee of the non-discriminatory application of competition law and should, in any case, be a
primary concern of competition authorities.  For example, publication of the basic legal framework
that applied in a jurisdiction was essential to provide legal certainty for undertakings.45  Adherence to
the principle of transparency would serve to enhance predictability and allow business and industry aswell as consumers to know their rights and obligations under the domestic competition law.
46  The
related point was also made that the confidentiality of certain kinds of information was and should
continue to be respected by competition agencies and other authorities.47  The principle of due process
was also vital to the sound application of competition law and policy.48
30. Clarification was sought regarding the level at which the principle of transparency would
apply.  Specifically, would it apply only to competition law per se  or would it apply to laws,
regulations, administrative procedures and guidelines which might be relevant to competition such as
sectoral regulations in the areas of telecommunications, banking and broadcasting, etc.?  How would
it apply in individual cases?  In response, and referring to question 2 in Section III of the Checklist as
to whether a transparency obligation in the area of competition would apply to states, institutions or toprivate sector entities, the view was expressed that transparency was a key principle both for
competition policy and for the multilateral trading system and that it should apply to a domestic
competition law framework.  The obligation should cover laws but also regulations, guidelines and
due process guarantees relevant to the enforcement of domestic competition policy.  However, it
would not apply to the activities of private enterprises as such.
49
31. With regard to the principle of special and differential treatment, the view was expressed that
this was another of the fundamental principles associated with the multilateral trading system which
                                                     
40 M/15, paragraph 44.
41 M/15, paragraph 8.
42 M/15, paragraph 44.
43 M/14, paragraph 14.
44 M/14, paragraph 17.
45 M/14, paragraphs 6 and 15.
46 M/14, paragraph 11.
47 M/14, paragraph 15.
48 M/14, paragraph 19; M/15, paragraph 8, 11, 27.
49 M/15, paragraph 18.WT/WGTCP/5
Page 11
should be reflected in specific provisions in any possible multilateral agreement on competition
policy.  Such provisions should embody the concepts of progressivity, flexibility and capacity-
building and be integral elements of the proposed multilateral framework.  The related point was also
made that that, from a development perspective, the benefits of the proposed framework should not be
measured merely in terms of special and differenti al treatment.  The elements relating to cooperation
would also provide significant benefits for developing countries.50
32. With regard to the concept of flexibility, the view was expressed that it referred to the ability
of a country to choose from the menu of prohibitions  that could be embodied in competition law those
aspects that were relevant for its particular economy, in view of its market structure level of
development, the types of anti-competitive conduct that were prevalent and other characteristics.  This
recognized that some elements of competition law might not be relevant for a particular economy, or
might have to be tempered to complement industrial or development policies, through the use of
exemptions and exclusions.  For example, a small, open economy might not need merger controlregulation, if the exercise of market power through mergers was disciplined effectively by the
competition that was provided by imports.  Analysing mergers was a complex procedure and it might
be a waste of resources to have a merger control regulation in these circumstances.  Further, the
structure of the market might be able to accommodate concentrations or might even require
concentrations for efficiency-related reasons.  Alternatively, a small economy might want to supportits industrial policy by using exclusions and exemptions from its competition law.  It might want to
exclude from the purview of its competition law the practice of exclusionary distribution agreements
because the peculiarities of smallness could necessitate that a distributor not carry competing
products.  It was important that any arrangements relating to competition policy at the multilateral
level take due account of these considerations.
51
33. Concerning the concept of progressivity, the view was expressed that it referred to the
approach or methodology employed in developing and implementing a competition regime.  It
allowed for the gradual and selective introduction of instruments to control anti-competitive
behaviour.  This was important to provide the responsible authority as well as other government
departments and stakeholders the time to accommodate and to adjust to the changes that wereinvolved.  It would also permit the further evolution and deepening of relevant instruments, as
economies developed and regimes matured, over time.  Progressivity was particularly important for
small economies because of the lack of human and financial resources required for the initial
establishment of a competition regime.  It allowed a country to build a firm foundation for the
competition regime by fully assimilating one aspect of competition rules before progressing to thenext.  To give an example of how progressivity coul d be put into practice, in the initial stage of the
development of a competition regime, a small developing economy might do better to introduce only
measures against hard core cartels and blatant abuses of dominance or, possibly, not even the latter, in
view of its complexity.  It could focus principally on competition advocacy in relation to government
policies and on consumer education in order that consumers would gain a positive understanding of
competition law and how it worked in their favour.  Such an approach would also give the new
personnel in a competition commission an opportunity to get a feel for the job as well as relevanttechnical training.  When appropriate experience had been gained, provisions dealing with more
complex aspects of anti-competitive agreements and abuse of dominance could be introduced, and a
greater focus on sanctions could be applied.
52
34. Further to the above points, the view was expressed that, in looking at issues such as
exceptions, exemptions, flexibility and progressivity, any approach adopted at the multilateral levelmust take due account of the particular situations facing individual countries.  On the other hand, it
was also important not to lose sight of the fact that competition law and policy were important to
                                                     
50 M/15, paragraph 7.
51 M/15, paragraph 28.
52 M/15, paragraph 29.WT/WGTCP/5
Page 12
sound economic development and to the successful re-structuring of economies to facilitate greater
efficiency and take advantage of the opportunities provided by trade liberalization.  In other words,
while giving due importance to the concepts of flexibility and progressivity, it was also important to
ensure that the underlying objective of promoting effective competition laws and policies continued to
be the top priority.53  The view was also expressed that the importance that had been attributed to the
concepts of flexibility and progressivity was fully compatible with the approach that had been putforward with respect to the architecture of a poss ible multilateral agreement.  For instance, the only
type of anti-competitive practice in relation to which it was considered, by the proponents, to be
desirable or feasible to establish a common principle was hard-core cartels.  Other aspects of
substantive competition law would be left to the discretion of national legislatures.
54  Moreover, the
concept of flexibility would go a long way to accommodate the fact that many Members of the WTO
currently lacked national competition laws.  In particular, any possible commitment by such countries
in relation to the introduction of a domestic competition policy regime should embody both anappropriate transition period and flexibility with respect to institutional design, to ensure that the
institutions took account of relevant constraints.
55
35. With regard to the need for a principle relating to the effective prohibition of hard-core
cartels, the point was made that much evidence had shown that these were frequently international in
scope and imposed heavy costs on developing as well as developed economies.  Reference was made,in this regard, to a previous contribution by a Member (W/168) and to a background paper on cartels
that had been prepared for the World Bank's 2001 World Development Report.
56  The evidence had
shown clearly that such arrangements did not respect national boundaries and were likely to impose
particularly heavy costs on jurisdictions that lacked adequate tools to deal with them.  It was difficult
to understand why any Member would be opposed to a principle aimed at suppressing them.57  The
point was also made that other types of anti-competitive practices, such as abuse of a dominant
position, were not amenable to the adoption of a common principle since, in general, they were
subject to substantial differences in national approaches and/or their sound application required a rule-
of-reason (case-by-case) approach.58
36. A further, related question discussed under the rubric of the relevance of the fundamental
WTO principles to competition policy and vice versa was that of whether, as a consequence of the
adoption of a multilateral framework on competition policy, all WTO Members would be required to
adopt a national competition law.  In this regard, the point was made that, given the diversity in
competition policy objectives and implementation instruments across economies, a requirement to
adopt a national competition law that was perceived as general and minimalist by one Member couldwell be a demanding and burdensome requirement for another.  Relevant contributions by the
proponents had glossed over the complicated political, socio-economic and legal considerations
underpinning the adoption or otherwise of a competition law in a domestic context.  Certainly, the
lack of a comprehensive competition law in some countries was not necessarily linked to capacity
constraints; it could be motivated by other consider ations.  Further, the elements of flexibility and
progressivity that were described in relevant contributions by the proponents did not adequately
address the concerns held by sceptical delegations with regard to this matter.
59  The point was also
made that the WTO could only require Members to implement a competition law if two pre-
conditions had been met:  (i) an explicit consensus among Members that multilateral negotiations on
                                                     
53 M/15, paragraph 30.
54 M/15, paragraph 31.
55 M/15, paragraph 9.
56 Margaret Levenstein and Valerie Suslow, Priv ate International Cartels and Their Effect on
Developing Countries (Background Paper for the World Bank's World Development Report 2001,
9 January 2001) (available on the Internet at http://www-unix.oit.umass.edu/~maggiel/WDR2001.pdf).
57 M/15, paragraph 35.
58 M/14, paragraph 6; M/15, paragraph 7.
59 M/15, paragraph 36.WT/WGTCP/5
Page 13
competition policy should proceed; and (ii) an explicit consensus that the adoption of a competition
law be made a binding commitment as a negotiation outcome.  The view was expressed that Members
were far from a consensus on either question.60
37. In response, the suggestion was made that the view that a multilateral agreement on
competition policy was premised on the existence of comprehensive domestic competition laws in all
WTO Members across all sectors needed to be clarified and that their delegations were not necessarily
insisting that all Members would be required in every case to adopt a comprehensive domestic law.61
Rather, considerable flexibility would be provided in terms of exceptions and with regard to the scopeand coverage of the law.  Furthermore, at least one of the proponents was ready to consider the
appropriateness of a sectoral approach or other approaches, such as those that were in place in some
Members.
62  The point was also made that a Member's experience confirmed that the nature of a
country's legal provisions could be adapted to changing economic or developmental circumstances,
albeit within certain common overall principles.  Among other considerations, national competitionlaw would have to be subject to other rules embodied in national law which meant that important
public policy objectives could continue to be pursued in parallel with a competition regime.
63
38. Further to this exchange, the suggestion was also made that, taking account of what had been
stated by the more sceptical delegations, it might be reasonable to envision that the obligations to be
embodied in a possible multilateral framework woul d not apply to Members choosing not to have a
national competition law.  However, when Members did wish to establish competition bodies or laws,
they would be subject to the relevant principles including non-discrimination and transparency and
would benefit from related technical assistance.64  In response, the view was expressed that this idea
could have perverse effects in that, by imposing added obligations on countries that would be
triggered only when they adopt competition laws, it could actually discourage them from adopting thelaws.
65
39. The view was also expressed that, for developing countries, having a domestic competition
law was a pre-requisite for any further steps and that the educational process in the Working Group
had to continue until a consensus was reached to modify its mandate.  National competition laws were
important for developing countries to promote their development objectives since the world wasglobalizing and anti-competitive practices that affected developing countries were being engaged in
on a global scale.  However, governments had to formulate their laws according to their own
conditions and development needs.  This in turn  required a significant degree of flexibility and
progressivity in any arrangement at the multilateral level.  In particular, developing countries had to
have the flexibility to differentiate between nati onal small-to-medium-sized enterprises (SMEs) and
foreign-based multinational enterprises, with a vi ew to increasing the former's competitiveness.
When it came to technical assistance and cooperation, the work in the Working Group had made it
clear that cooperation had to be voluntary in nature.
66
40. The point was made that a key objective of the proposed framework would be to ensure that
developing and, in particular, least-developed countries received enhanced and better coordinated
assistance in regard to capacity building in this area.  This would be done in cooperation with other
intergovernmental organizations, including UNCTAD, and bilateral donors.67  The view was
expressed that the importance attached to this issue by the proponents was helpful.  It was important
                                                     
60 M/15, paragraph 47.
61 M/15, paragraphs 9, 37 and 40.
62 M/15, paragraph 37.
63 M/15, paragraph 39.
64 M/15, paragraph 38.
65 M/15, paragraph 38.
66 M/15, paragraph 25.
67 M/15, paragraph 9.WT/WGTCP/5
Page 14
that assistance with capacity building be provided on a country-by-country basis and be demand-
driven.  This would better ensure that it met the real needs of individual countries.68
41. Reference was made to a number of practical challenges faced by competition authorities in
developing countries and their relationship to the current proposals for a multilateral framework.  In
this regard, the point was made that it was one matter to have a law and another for the responsible
agency to have the capacity to enforce it.  It was also necessary that the business community and othergovernment agencies be educated and that the law be continuously updated.
69  In addition to the
general problem of lack of awareness of the objectives and modalities of competition law, a
characteristic of the business community in many developing countries was that the core private
sector consisted of multinational companies which often did not respect the countries' domestic
legislation.70  In some countries, much advocacy had been done and the business community and the
government now had a general understanding of th e role of competition law.  However, it was
necessary to move from a principal focus on advocacy to  the area of sanctions so that the competition
legislation could be effectively enforced.  In addition, an important obstacle to the effective
implementation of competition law in many countries involved the existence of exemptions and
exceptions from competition law.71  In meeting these challenges, sufficient political will was
essential.72  However, in many countries there was a also a lack of political will and support at top
levels of government largely due to a lack of appreciation of the place of competition law in economicdevelopment.
73
42. The point was made that the importance of competition policy for economic development was
increasingly recognized in COMESA.  Over the past decade or so, most of the countries in this region
had undergone structural and adjustment programm es that included, as a component, privatization.
Experience had shown that it was important to introduce competition policy at an early stage ofdevelopment because, particularly in the context of privatization, monopolies and other anti-
competitive tendencies tended to take root if inadequate instruments existed to address them.
However, many countries in the region had limited ability to address these issues.
74  During meetings
that had been held in this region, it had also become clear that most of these issues cut across
countries with competition authorities and those countries without such authorities and policies.75
Reflecting this, regional approaches to cooperation  were an important factor in facilitating the
effective implementation of competition law and policy in Central and Eastern Africa.76  The WTO
could also play an important role in promoting understanding and awareness in this area, although it
had to be recognized that cooperation had to be developed over time and with due regard to
circumstances existing in particular regions.77  To do this, it was important that the WTO be more
actively involved in working with developing countries in the regions.78  The point was also made
that, to date, the WTO had not been a prime mover in relation to the development of competition law
in central and East Africa; other organizations such as UNCTAD had had a more hands-on
involvement and should remain active in the field.79
43. The point was also emphasized that a large number of developing countries still lacked
competition laws and agencies.  In these circumstances, careful attention had to be given to the matter
                                                     
68 M/15, paragraph 29.
69 M/15, paragraph 22.
70 M/15, paragraph 45.
71 M/15, paragraph 45.
72 M/15, paragraph 22.
73 M/15, paragraph 45.
74 M/15, paragraph 24.
75 M/15, paragraph 45.
76 M/15, paragraph 46.
77 M/15, paragraph 24.
78 M/15, paragraph 21.
79 M/15, paragraphs 21 and 22.WT/WGTCP/5
Page 15
of ensuring that Members had the capacity to craft suitable laws which would correspond to their
level of development and the structure of their businesses.  Without this, it was unclear how they
could competently approach relevant commitments.  Then again, if an agreement was too general, the
commitments might have no meaning.80  The view was also expressed that even developing countries
that were not opposed, in principle, to developing the role of competition policy in the WTO needed
more experience before they could enter into negotiations with countries that had considerably greaterexperience in the area.  This would enable them to gain a greater appreciation of the benefits of
competition policy for themselves and the role that the WTO might play in this area.
81
44. Another problem was that, in many cases, where they existed, the competition laws of
developing countries were modelled on those of developed countries which were not well-suited to
the special needs of developing economies.  Moreover, the enforcement of competition law entailed
significant costs that had not been fully discussed in the Working Group.  Substantial assistance
including the provision of resources would be necessary to make competition laws effective.82
Notwithstanding these challenges, the point was also made that effective competition in the
marketplace was the foundation upon which developing countries would realize greater efficiencies
and improved development prospects.  Developing countries needed as much support as possible in
order for them to bring about the relevant efficiencies in their respective economies.83
45. In response to the foregoing points, the view was expressed by proponents of a multilateral
framework on competition policy that the fact that many WTO Members had not yet formulated their
own competition laws did not mean that launching negotiations on a multilateral framework was
impracticable.  In fact, a key purpose of the proposed framework would be to assist such countries to
implement appropriate laws, in a gradual manner, taking account of their particular circumstances and
relevant national and international experience.  It was not, in fact, a top-down approach but one thatwould enable countries to build effective competition policies from the ground up.  Much evidence
and, indeed, some of the more sceptical Members' statements indicated that, currently, they were
experiencing major difficulties in implementing effective competition laws and that enhanced
cooperation would be needed to enable them to meet the challenges.  Furthermore, since the proposed
framework would be based on broad principles of general utility rather than on detailed rules, it wouldnot adversely affect the ability of countries to respond to their particular needs and circumstances but,
in fact, would facilitate this.
84
46. The view was also expressed that, although a number of countries continued to hold
reservations regarding the adoption of a multilateral framework at the present time, educational work
on competition policy in the WTO should continue and/or be strengthened or refocused to giveenhanced support to the process of institution-building in developing countries.
85  Over time, more
concrete steps could be taken including in the framework of the WTO to promote the implementation
of competition policy at the national level.86  Another possible approach was that work on competition
policy in the WTO be divided into two broad categories, namely domestic and international
competition policy.  In the first category, negotiations could aim at preparing rules regarding
establishment and building up of domestic competition law and its effective enforcement.  As far as
international competition policy was concerned, there was a need to evaluate and study further theexisting WTO rules with reference to competition criteria.  Developing countries still did not possess
competition frameworks that were strong enough to be a useful policy tool for development.
Therefore, more preparation and debate would be n eeded to discern how to move forward in this area
                                                     
80 M/15, paragraph 22.
81 M/15, paragraph 23.
82 M/15, paragraphs 45 and 25.
83 M/15, paragraph 45.
84 M/15, paragraph 26.
85 M/15, paragraphs 17, 20, 21, 22, 24 and 25.
86 M/15, paragraph 24.WT/WGTCP/5
Page 16
in the WTO.  Technical assistance programmes should be continued and enhanced side-by-side with
negotiations to develop understanding of competition policy and the effective implementation of such
policy in developing countries.87  Note was also taken of the possibility mentioned in a Member's
contribution (W/175) for developing countries to come to a conclusion as to whether an agreement
was acceptable at the end of negotiations (i.e., the possibility of an opt-out).88
II. A PPROACHES TO PROMOTING COOPERATION AND COMMUNICATION AMONG MEMBERS ,
INCLUDING IN THE FIELD OF TECHNICAL COOPERATION
47. This item was discussed by the Working Group at its meetings of 22-23 March and
5-6 July 2001.  Written submissions on this item were provided by the representatives of Canada and
Costa Rica; Canada ; Colombia ; the Czech Republic ; the European Community and its member States
(two contributions); Japan  (four contributions); Korea ; Romania ; the United States  and Uruguay
(documents W/173; W/174; W/162; W/165; W/160 and W/175; W/167, W/168, W/176 and W/177;W/166; W/161; W/164 and W/169 respectively) and the representative of the Ukraine introduced
relevant sections of a non-paper by his delegation.  In addition, the representatives of Brazil; Canada ;
Chile; Columbia ; Egypt ; the European Community and its Member states ; Hong Kong, China ; India ;
Korea; Malaysia; the Philippines;  the Russian Federation ; Switzerland ; Trinidad and Tobago ; the
United States; Zimbabwe  made oral statements or posed questions on this item.  The representatives
of UNCTAD and the OECD  provided updates on relevant activities of their organizations.  In the
course of the discussion, reference was made to a number of questions included in the Updated
Checklist of Questions Posed by Members in 2000 (Job 520), including questions 1, 4, 5 and 7 in
Section III of the document.  In addition, pursuant to a request made at the Working Group's meeting
in March (M/14, paragraph 24), the Group had before it copies of the Report that had been prepared
by the Secretariat on the WTO Regional Workshop on Competition Policy, Economic Developmentand the Multilateral Trading System that had taken place in Cape Town in February 2001.
48. The discussion on this item spanned a wide range of issues, including the following:  (i) the
contribution of competition policy to economic development; (ii) the relationship between
competition and industrial policies; (iii) the need for strengthened international cooperation to address
cross-border anti-competitive practices; (iv) possible elements that could be incorporated in amultilateral framework on competition policy, including the types of cooperation envisaged;
(v) concerns and objections advanced in relation to the concept of a multilateral framework and its
possible elements; (vi) the implications of dive rsity in Members' institutional endowments and
economic situations for the feasibility and content of a multilateral framework on competition policy;
(vi) the perceived scope for enhancing the effectiveness of technical cooperation and assistance in thearea of competition policy; (vi) concerns arising in relation to application of the WTO dispute
settlement mechanism in the area of competition policy; and (vii) the potential contribution of peer
review processes relating to the content and impl ementation of competition laws and policies in this
area.
49. With regard to the contribution of competiti on policy to economic development, the view was
expressed that competition laws, policies and institutio ns played an essential role in strengthening the
private sector as an engine of growth and development and in preventing restrictive practices thatwould otherwise impose heavy costs on consumers.  They were particularly important for developing
and transition economies since they could help to establish the foundation for a healthy market
economy.
89  Specific benefits perceived to flow from the introduction of such legislation and policies
included preventing abusive practices by domestic and foreign companies; improving internal
economic efficiency and productivity; securing opportunities for entry into markets by newentrepreneurs; promoting opportunities for small and medium enterprises; dealing with anti-
                                                     
87 M/15, paragraph 14.
88 M/15, paragraph 15.
89 M/14, paragraphs 21 and 28.WT/WGTCP/5
Page 17
competitive abuses of intellectual property rights and enhancing choices for consumers.90  As had
been noted by South Africa's Minister of Trade and Industry, Mr. Alec Erwin, at the WTO Regional
Workshop that had taken place in Cape Town, "In the absence of effective national laws, price
structures would be driven upwards and domestic  competitiveness would diminish, with benefits
flowing only to those powerful enough to extrac t economic rent from the national economy… .
Competition policy had an important role to play, at both the domestic and international levels, inensuring that markets operate to the benefit of all citizens, and not merely of major corporations".
91
50. The suggestion was also made that it was difficult or impossible to determine precisely the
stage of economic development at which it was most appropriate or under what conditions
competition legislation should be adopted, given the differences in the social and economic
backgrounds of each country.92  Furthermore, while the introduction of domestic competition policy at
the early stages of development was certainly helpful, efforts to have minimum standards in such
policies based on international "best practice", that is practices followed by some developed countries,
were something that many developing countries would find difficult to accept.93  Notwithstanding
this, the view was also expressed that there were risks associated with delaying the implementation of
sound competition laws and policies and that there was no need to wait for a WTO agreement to
accomplish this.94  The point was also made that the later that competition policy was adopted, the
more difficult it would be to remedy market distor tions brought about by the absence of such policy.95
51. The view was expressed that competition policy and industrial policy could serve
complementary roles in creating an environment that would promote growth, productivity and free
and fair competition.96  It was not a question of one replacing the other.  Industrial policies could
undoubtedly help in responding to some of the challenges faced by developing countries.  However,
competition laws and policies were also important to allow countries to create conditions conducive toproductivity enhancement, ensure the sound development of domestic industry and restrict abuses of
dominant positions by large companies, includin g multinationals.  The outcome would be greater
international competitiveness for domestic industries.
97  In fact, competition policy itself was an
important element of a successful industrial strategy since it opened up markets and placed
appropriate pressures on producers to become more efficient.98  In addition, the existence of
competition policy heightened a country's credibility and attracted foreign direct investment since,
from the perspective of prospective investors, it helped to create a stable and predicable
environment.99  The point was also made that some Members who were advocates of a multilateral
framework on competition policy had nonetheless, in the early stages of their own development, been
characterized by weak competition policies and interventionist industrial strategies.100  In response,
the point was made that an authoritative study of the interaction between competition policy and
industrial policy in one such Member's economy had concluded that it would have been better for it to
introduce a more effective competition policy at an earlier stage of its development.  This would not
have made it impossible for the government to intervene in other ways but would have helped to
balance such intervention.101  In the case of another such country, the point was made that
interventionist policies had ultimately had heavy costs, in that effective and competitive financing
                                                     
90 M/14, paragraph 34; M/15, paragraph 53.
91 Report on WTO Regional Workshop on Competition Policy, Economic Development and the
Multilateral Trading System (22-24 February 2001) , p. 7-8; quoted in M/15, paragraph 53.
92 M/14, paragraphs 34 and 62.
93 M/14, paragraph 64.
94 M/14, paragraph 64.
95 M/14, paragraph 34.
96 M/15, paragraph 53.
97 M/14, paragraph 65.
98 M/15, paragraph 55.
99 M/15, paragraph 53.
100 M/14, paragraph 64.
101 M/14, paragraph 65.  See also M/15, paragraph 53WT/WGTCP/5
Page 18
mechanisms did not develop in an appropriate fa shion, industry grew in an unbalanced way, and
excessive economic power was acquired by conglomerates.102
52. With respect to the need for and benefits of cooperation among countries in the area of
competition policy, the view was expressed that this was well-recognized.103  Reference was made, in
this regard, to recent studies prepared by or for in ternational organizations and to specific examples of
cases of international cartels discussed in these sources and in contributions by Members.104  S u c h
cartels were a prime example of cross-border anti-competitive practices having an adverse impact
upon international trade and development, as well as on the welfare of consumers.  The point was
made that since parties to such anti-competitive practices were typically located in multiple countries,
it was difficult for any one country to respond adequately to such behaviour.105  Countries lacking
adequate competition laws, including developing countries, would surely be victimized by such
arrangements.106  In fact, developing countries might be particularly vulnerable to these practices
given that they tended, at least in many cases, to have weak or non-existent competition regimes.107
Even where a country had a competition law, if countries lacked a cooperative framework with the
competition authority of the home country of the company inflicting the damage, it could be
extremely difficult to take effective action against the practice in question.108
53. The related view was also expressed that a multilateral framework on competition policy
could make a distinct and valuable contribution to enhancing international cooperation in this fieldand enabling Members of the WTO to deal more effectively with anti-competitive practices that
affected their trade and development.
109  This was despite the fact that cooperation at the bilateral and
regional levels also had an important and valuable role to play.110  Certainly, arrangements at the
bilateral, regional, and multilateral levels were not mutually exclusive and could be complementary in
nature.111  In particular, bilateral agreements could be extremely useful in facilitating a high level of
cooperation between countries with complementary interests.112  Nevertheless, it was doubtful
whether it was possible to efficiently structure meaningful cooperation among a very large number of
competition authorities merely on the basis of bilateral agreements.113  Such an approach would take
too much time and might exclude countries that had an important role to play in fighting specific anti-
competitive activities with international dimensions.114  Further, it took time to conclude new bilateral
agreements and substantial costs were involved.115  In addition, since bilateral agreements were based
on the principle of reciprocity, they tended to be concluded between developed countries that had
similar levels of sophistication in terms of their competition regimes, although some bilateral
agreements had recently been concluded between developed and developing countries.116  In this
context, a WTO framework would enable the benefits of existing bilateral arrangements to be sharedmore broadly, particularly with developing countries
117 and would function as a kind of safety net in
                                                     
102 M/14, paragraph 33.
103 M/14, paragraph 45; M/15, paragraphs 54 and 61.
104 Levenstein and Suslow, op. cit. and OECD, Hard Core Cartels:  Meeting of the OECD Council at
Ministerial Level (Paris 2000); M/14, paragraphs 25, 27, 35 and 36; M/15, paragraph 54.
105 M/14, paragraph 35; M/15, paragraph 69.
106 M/14, paragraphs 35; M/15, paragraph 54.
107 M/14, paragraph 21; M/15, paragraph 69.
108 M/14, paragraphs 25, 28, 32 and 37; M/15, paragraphs 54 and 61.
109 M/14, paragraphs 21, 22, 25, 26, 28, 29, 32,  37; M/15, paragraphs 55, 56, 61, 63 and 68.
110 M/15, paragraph 61.
111 M/15, paragraphs 61 and 71.
112 M/15, paragraph 61.
113 M/15, paragraph 61.
114 M/14, paragraph 22.
115 M/14, paragraph 48.
116 M/14, paragraphs 22 and 48; M/15, paragraph 73.
117 M/14, paragraph 48.WT/WGTCP/5
Page 19
that it would be available where alternative, bilateral agreements were not.118  The point was also
made that, although some had argued that the negotiation of a single multilateral agreement was less
costly than a number of bilateral agreements, the cost of cooperation at the bilateral level might be
reduced if the relevant agreements were similar.119
54. With respect to cooperation at the regional level, the point was made that three types of
arrangements at this level could be distinguished, all of which were relevant for the exercise thatMembers were engaged in at the WTO.  First, some countries were in the process of establishing a
competition regime at the regional level, as was the case in COMESA, CARICOM and Mercosur.
Such an approach might be particularly useful for small countries for whom it made more sense to
develop a regional competition regime rather than a national competition regime – something which
could be accommodated within a multilateral framework.  A second type of arrangement comprised
free trade agreements containing competition provisions.  A third type involved the opportunity at the
regional level for countries to share experiences relating to the implementation of a domesticcompetition regime and to provide input into any possible negotiations that were occurring at the
multilateral level.
120  All three types could play a constructive role.  Nevertheless, despite their merits,
regional agreements had clear limitations in dealin g with cooperation on competition policy matters.
For example, depending on the scope of anti-competitive practices in particular sectors, cooperation
might well be necessary with countries that were not necessarily part of the same region.  Such aframework would also provide developing countries with the opportunity to draw upon the experience
and expertise of developed countries.  It was suggested, therefore, that even given the existence of
useful arrangements at the bilateral and regional levels, it remained important to have a framework
that provided access to competition authorities from countries within and outside individual
regions.
121
55. With respect to the specific elements to be in corporated in a possible multilateral framework
on competition policy, the view was expressed that many Members had arrived at a common
understanding regarding the main elements of competition policy and the basic outline of a possible
framework of cooperation on competition matters. 122  In particular, it was suggested that such a
framework could comprise the following elements: (i) case-specific cooperation;123 (ii) provision of
technical cooperation124 and assistance with institution-building;125 (iii) sharing of information and
experiences126 and discussions of common areas of interest;127 (iv) cooperation regarding notification
and coordination; 128 (v) the adoption of core principles; 129 and (vi) a clause to ensure an appropriate
level of flexibility.130  In addition to the above elements, the view was expressed that a multilateral
framework on competition policy would have to be  characterized by:  (i) progressivity in any
commitment relating to the introduction of a domestic competition law regime; and (ii) flexibility
with regard to the diversity of national approaches to competition law and policy, taking into account
the differences in both the competition laws of WTO Members and in the institutional procedures for
the enforcement of such laws.131
                                                     
118 M/14, paragraph 48.
119 M/14, paragraph 47.
120 M/15, paragraph 61.
121 M/14, paragraphs 29 and 55; M/15, paragraphs 62 and 63.
122 M/14, paragraph 23.
123 M/14, paragraph 26; M/15, paragraph 62.
124 M/14, paragraph 23; M/15, paragraph 62.
125 M/14, paragraph 28.
126 M/14, paragraphs 23 and 26; M/15, paragraph 62.
127 M/14, paragraph 26.
128 M/14, paragraph 23.
129 M/14, paragraph 23.
130 M/14, paragraph 23.
131 M/14, paragraph 28.WT/WGTCP/5
Page 20
56. As an illustration of some of the elements that could be included in a possible multilateral
framework, reference was made to the competition policy chapter of the recently-adopted
Canada-Costa Rica Free Trade Agreement.  The Agreement contained provisions on general
principles relating to competition law/policy;  cooperation;  confidentiality;  technical assistance;  and
consultations between relevant authorities.  It was suggested that the Agreement provided a practical
example of the type of cooperation possible to address the detrimental effects of anti-competitivepractices in relation to trade and development, even between countries at different levels of
development.
132  It showed how certain common disciplines  could be achieved while respecting and
even reinforcing the autonomy of the respective domestic competition laws and authorities, although
it was not necessarily intended as a blueprint for possible negotiations in the WTO.133
57. Regarding the specific benefits that the propos ed multilateral framewor k would offer, it was
suggested that it would facilitate cooperation in the fight against restrictive business practices, for
example by providing:  (i) enhanced availability  of information on cases involving anti-competitive
practices; (ii) consultations among competition agencies in order to better address anti-competitive
practices of common concern and to manage jurisdictional conflicts through the application of
positive comity principles; and (iii) new procedures for the exchange of national experience and
perspectives on competition policy such as peer review.134  The promotion of cooperation at the
multilateral level could also have a positive impact on domestic decision-making processes in relationto the implementation of competition policy.  In  particular, by increasing awareness of other
Members' experiences and by being exposed to best practices, Members would gain valuable insights
that would strengthen domestic reform efforts.
135 It was further suggested that a multilateral
framework could also help to strengthen the effectiveness of technical assistance in the area of
competition policy (e.g., assistance in drafting competition laws, strengthening the institutionalcapacities to deal with complex cases, etc).  Within such a framework, technical assistance
programmes could receive higher priority and be better focused on the needs of recipient countries.
136
58. Notwithstanding the foregoing views expre ssed by the proponents, the view was also
expressed that a compelling case for development of a multilateral framework on competition policy
in the WTO had not been made.  The argument was made that the competition policy agenda of majorOECD countries was dominated by market access and merger control issues which were largely
irrelevant for developing countries.  To the extent  that market access impediments resulting from anti-
competitive behaviour by incumbent firms arose from time to time, these could and should be dealt
with by domestic competition authorities.  Therefore, the ability of WTO-based negotiations to play
as constructive a role in the area of competition law as they had in the area of trade policy wasunclear.
137  In response, disagreement was expressed with the premise that the objective of the WTO
was merely to guarantee market access.  The objective of the WTO system was not to guarantee
market access as such, but to promote the equality of competitive opportunities for Members.  This
was the basic principle of the WTO as reflected in GATT Article III.  This principle was fully
consistent and compatible with the objectives of competition policy.  Furthermore, it was manifestly
inaccurate to say that the current proposals focused excessively on market access rather than on
development-related goals.  The proponents had been clear about the need to follow a balancedapproach which placed emphasis on practices that adversely affected economic development as
compared with those that predominantly affected market access.  For example, in discussing
international cooperation, it had been suggested that the type of issues that should be addressed
through cooperative frameworks would include ha rd-core cartels, abuses of dominant positions
                                                     
132 M/15, paragraphs 57, 58 and 59.
133 M/15, paragraph 60.
134 M/14, paragraph 28.
135 M/14, paragraph 22.
136 M/14, paragraph 28.
137 M/14, paragraph 66.WT/WGTCP/5
Page 21
including those undertaken by multinational enterprises, and other practices having a detrimental
effect on trade and/or development.138
59. The argument was also made that the proponents of a multilateral framework on competition
policy had shifted from focussed, sectoral issues  to a principles-based framework, with the
fundamental WTO principles of MFN and national tr eatment and non-discrimination as the basis for
such a regime.  However, the existing structure of principles in the WTO was such that they had beenbased or applied in relation to specific issues, measures or elements.  This would be lost by a broad-
brush application of principles which would then encompass various trade and trade-related areas.  A
principles-based approach would also seem to cover developing countries' industrial policies; this
appeared to be the principal objective.  In addi tion, although it had been stated that commitments
could take different forms, that is, that there would be flexibility, experiences in implementing
existing agreements including TRIPS and TRIMs had illustrated the problems that could ensue for
developing countries.  While the importance and validity of competition policy in the domesticcontext was not questioned, it was necessary to take into account individual country needs and
priorities and allow countries to judiciously use and reconcile their scarce resources in ways that they
considered fit.
139
60. In response, the view was expressed that the objectives of the proposed multilateral
framework had been misconstrued.  In fact, they were not so sweeping as had been suggested by someof the more sceptical delegations.  The application of the core principles that had been discussed
would be based on clear parameters about the scope of application of those principles.  There would
be a clear recognition about what non-discrimination meant, how it related to particular types of
policy measures, the particular modalities of transparency that were relevant in the context of
competition law, etc.  Most importantly, the current proposals were not intended to establish general
principles that would apply in an undefined manner to all kinds of government policies including
industrial policies or other policy objectives that were being pursued by national governments.
Rather, the intent was that these principles would apply only in respect of competition law and policy
as such.  The underlying intent was to assist all WTO Members to gain access to the tools that would
enable them to deal effectively with the docume nted threat posed by anti-competitive practices to
their trade and development prospects.
140
61. Doubts were expressed as to whether, indeed, a consensus existed regarding the proposed
elements of a multilateral framework.141  In response, the point was made that while dissenting views
certainly existed on the subject of what should be done in the WTO, there was nonetheless a degree of
agreement on many of the underlying elements of competition policy and of the aspects ofcooperation that were necessary to respond effectively to the threat posed by international anti-
competitive practices.  Such consensus was evident from technical cooperation programmes that had
taken place with the competition officials of developing countries and through bilateral contacts.
142
62. With regard to the types of anti-competitive practices that could be addressed under the
proposed multilateral framework, the view was expr essed that the following categories of practices
were relevant: (i) anti-competitive practices with a similar impact on the markets of multiple countries
or on world markets, such as international cartels; (ii) anti-competitive practices affecting marketaccess, such as import cartels, certain abuses of dominant positions and vertical agreements; and
(iii) anti-competitive practices, the effect of which was felt primarily in a different market from that in
which they were conceived, such as export cartels.  In order to address such anti-competitive practices
in an effective manner, there was a need for both effective national competition policies and enhanced
                                                     
138 M/14, paragraph 67.
139 M/14, paragraph 41.
140 M/14, paragraph 42;  M/15, paragraph 55.
141 M/14, paragraph 74.
142 M/14, paragraph 74.WT/WGTCP/5
Page 22
international cooperation at the bilateral, regional and multilateral levels.143  The view was expressed
that the extent to which such practices had had a significant impact on world trade and investment was
unclear.144  In contrast, the view was expressed that the evidence which had been presented in the
Working Group had shown clearly that such practices indeed had a serious adverse impact on
international trade and development.145  Another view expressed was that the forms of
anti-competitive behaviour to be addressed by a multilateral agreement was a matter fornegotiation.
146
63. With respect to the nature of cooperation that was envisioned by the proponents of a
multilateral framework, commenting on question 7 in Section III of the Checklist, the view was
expressed that cooperation, by definition, could only be voluntary in nature since countries clearly
could not be required to cooperate.  As to why a multilateral framework was then necessary for
cooperation, it was suggested that while cooperation had to be voluntary, it was founded upon a
degree of mutual trust.  Trust was something that could not be mandated by an internationalagreement nor could it be subject to specific rules.  Nevertheless, an international agreement could
play an important role in building trust.  Th e key element in this process was to encourage
convergence with respect to some basic principles and to ensure that such a process was linked to
aspects such as having a competition law with appropriate scope, administrative and enforcement
provisions, due process, etc.   To the extent that relationships of trust were established between
competition authorities from different countries, the question of disparity between Members in terms
of bargaining power or resources would become irrelevant given the mutuality of benefits arising
from cooperation in specific cases.
147
64. The question was posed as to how voluntary such a multilateral system really would be if
MFN rules applied.  While the application of MFN to something like tariffs was clear, it was unclearhow it could apply to requests for cooperative assistance in antitrust cases.  What would happen if a
country received more than one request in relation to the same investigation but one request required a
greater use of resources than the other?  Were those like circumstances? Was it necessary to
favourably reply to both requests? What if th e same amount of resources were required but one
request was received when the agency was less busy and one when it was more busy and did not havethe resources to respond?  What if a country was one from which more mutual cooperation was
expected as compared to another?  If there was no obligation to cooperate but only to give
sympathetic consideration to requests to cooperate, it was also questioned as to how that test could be
judged.  In fact, the possibility of being subjected to those kind of WTO disciplines in relation to a
supposedly voluntary exercise could chill the exercise of cooperation and perhaps lead to lesscooperation for fear that cooperating with one co untry would imply a burden to cooperate with many
more.
148  The question was also posed as to why competition authorities could not already cooperate
among themselves rather than waiting for a multilateral framework?  If cooperation under a
multilateral framework was voluntary, those authorities which at present did not want to cooperate
might continue not to cooperate.  On the other hand, if obligations on cooperation were taken
seriously, it could impose possibly onerous obligations and large commitments upon some WTO
Members, particularly developing countries.149
65. Regarding the characterization of cooperation as "compulsory" or "voluntary" , the point was
made that there was a series of graduations that could be seen in existing cooperation instruments
ranging from, for example, a requirement to give sympathetic consideration of a request or to make
                                                     
143 M/14, paragraph 28.
144 M/14, paragraph 72.
145 M/14, paragraph 73.
146 M/14, paragraph 50.
147 M/14, paragraph 38.
148 M/14, paragraph 43.
149 M/15, paragraph 76.WT/WGTCP/5
Page 23
best efforts to respond in a positive way to a requirement making cooperation contingent on the
existence of a mutual enforcement interest between the requesting and requested agency.  Appropriate
qualifications could be built into a multilateral competition framework to ensure that developing or
other countries were not obligated to cooperate in cases where this was inconsistent with their
important interests.  Nonetheless, such a framework could still provide important benefits to
developing and other countries in addressing anti-competitive practices that were genuinely harmfulto them, in that it could make routinely available information which, while not confidential in a legal
sense, would, otherwise, not be easily available.
150
66. The point was also made that under the proposed framework, it would be for each WTO
Member to determine for itself how far it wanted to request cooperation in relation to different
competition policy issues.  No one would be forced to seek cooperation in the WTO, or to engage in
cooperation against their own important interests.  However, WTO Members should be ready, if they
received a request for cooperation from another WTO Member, to give sympathetic consideration andto enter into consultations with regard to the request.
151
67. With respect to the nature of the informati on that would be the subject of a multilateral
competition framework, the suggestion was made that  information-sharing arrangements in existing
cooperation agreements generally excluded confidential information, which rendered them largely
ineffective.152  The question was also posed as to whether the proposal would be useful in addressing
international cartel cases.  Why was an agreement was needed at all if cooperation was limited to non-
confidential information?153  The view was also expressed that competition policy was an area where
convergence of economic and even political interests appeared to be essential to persuade countries to
share information with foreign competition authoritie s to enable them to investigate the practices of
domestic enterprises that generated adverse anti-competitive effects in foreign markets while the gainsof such practices accrued in the domestic market.
154
68. In response, it was suggested that distincti ons needed to be drawn between different
categories of information:  non-public information such as business secrets which could not be shared
under most existing cooperation instruments; non-public information which could be shared under
such instruments and was helpful to law enforcemen t processes, such as legal or economic analysis
undertaken by an agency relating to the agency's assessment of particular practices or the fact that an
investigation was proceeding; and public information such as that available on the Internet which was
available to everybody.155  The exchange of information under a WTO agreement on competition
would encompass factual as well as legal informatio n;  such information would provide significant
benefits, particularly for newly-established competition authorities.156  Experience drawn from
existing cooperation agreements that did not provide for the exchange of confidential information
indicated that cooperation had nonetheless been useful.157  The fact that, in many cases, even where
they were not required to do so, cooperating parties would agree to a waiver to allow the exchange of
confidential information and the important benefits that this could provide was also noted.158  Further,
the exchange of information, even if restricted to non-confidential information, would make the
application of competition law smoother in cases where anti-competitive practices originated abroad
given that any factual and legal information collected by a foreign competition authority would behelpful to a domestic competition authority dealing with such cases.
159  The point was also made that
                                                     
150 M/14, paragraph 46.
151 M/14, paragraph 63;  see also M/15, paragraphs 64 and 67.
152 M/14, paragraph 45.
153 M/14, paragraph 47.
154 M/14, paragraph 45.
155 M/14, paragraph 46.
156 M/14, paragraph 26.
157 M/14, paragraph 46.
158 M/15, paragraph 77.
159 M/14, paragraph 32.WT/WGTCP/5
Page 24
while most countries had restrictions on disclosure of confidential business information in relation to
foreign and domestic agents alike, it was conceivable that domestic regimes would allow greater
sharing of confidential business information in the future.160
69. The point was made that cooperation required a commitment of resources.  There were certain
areas where cooperation could be immediately explored, such as technical assistance and sharing of
experiences.  A certain body of knowledge and experience was probably a pre-requisite to engaging inother kinds of cooperation.  Therefore,  in the light of current divergences in experience and
understanding, it would be easier to undertake certain activities in the framework of the WTO in a
shorter time horizon as compared to others.
161  The observation was also made that developing
countries should not expect that the flow of information under new cooperation arrangements would
be consistently in their favour; rather, developed countries would enter into such an arrangement for
the purpose of using it in pursuit of th eir own enforcement objectives, as well.162
70. The suggestion was made that the implementation of cooperation mechanisms under a
multilateral agreement could operate in two phases.  The initial phase could be educational and would
concentrate on the development of institutional support and enforcement capacity in Member
countries, through technical assistance and the exchange of experience and information.  The second
phase could have as its primary feature the development and implementation of notification
procedures, its objective being to ensure a minimum level of awareness about the activities of othercompetition authorities.
163
71. With regard to the potential value-added of a multilateral framework on competition policy,
particularly for developing countries, concerns were expressed regarding the limited nature of
cooperation that was apparently envisaged.  In particular, concern was expressed as to how, at a
practical level, such a limited cooperation mechanism would help to deal with international cartels
and export cartels in the foreseeable future.  Another concern was that the proposed model of
cooperation could allow multinational corporations to escape sanctions for conduct in developing
countries through various loopholes.  The suggestion was made that deeper thinking was required on
the subject.  It was noted, in this respect, that the rules of trade had been changed fundamentally to
accommodate new issues generated by globalization, such as the inclusion of intellectual property intothe GATT/WTO.  Perhaps the same kind of innovative thinking was needed in the field of
competition policy as it related to international trade.
164  In response, it was suggested that the
credibility and usefulness of the proposed agreement had three dimensions: a dimension that related to
technical cooperation; procedural mechanisms that allowed competition authorities at different levels
of development to share their own experiences; and a protocol to facilitate case-specific cooperation.The latter should be quite specific in terms of indicating the parties' expectations but should be
voluntary in nature.  The voluntary nature of cooperation was also an important protection for
competition authorities in developing countries, who might not have adequate resources to deal with
all the requests they might receive.
165
72. Consideration was given to the implications of the extent of diversity in Members' approaches
to national competition law and policy, institutional endowments and socio-economic situations.  This
aspect of the discussion had various dimensions.  To begin with, the concern was raised that theproposals for a multilateral framework on competition policy would entail an excessive harmonisation
of national approaches to competition law.
166  In response to this concern and commenting on
                                                     
160 M/14, paragraph 48.
161 M/15, paragraph 72.
162 M/15, paragraph 72.
163 M/14, paragraph 38.
164 M/15, paragraph 69.
165 M/15, paragraph 70.
166 M/14, paragraph 53.WT/WGTCP/5
Page 25
question 1 in Section III of the Checklist as to the extent to which international cooperation would
require a common basis in terms of shared principles, enforcement structure and machinery and
legislative provisions, the view was expressed that meaningful cooperation at the multilateral level
would not require harmonisation although it would require certain common elements.  In particular,
the proposed framework would require establishment of certain common approaches, particularly in
relation to the principles of transparency and non-discrimination, which were intrinsic to the effectivepursuit of competition.  It would have to include general provisions requiring a competition law and
an independent authority to administer it in or der to provide the practical means for Members to
respond to their undertakings.  The aims of the various common approaches would be to encourage a
degree of compatibility between Members in the application of their respective competition laws.
167
73. The point was also made that the harmonisation of substantive competition law was
manifestly not the objective of the exercise since, under the current proposals, most aspects of
substantive competition law would be left for each country to define on its own.  In fact, there wasonly one area of substantive competition law, namely hard-core cartels, for which a common principle
was being proposed.
168  This reflected the fact that cartels had a clear and unambiguously harmful
impact on international trade and that there was a consistent and long-standing consensus among
competition authorities that hard-core cartels should be treated as a serious offence.  At present, it was
not considered feasible or possible to envisage a common principle in relation to other areas ofsubstantive law such as abuses of dominant positions or mergers with transboundary effects.
169
However, other anti-competitive practices with an international dimension could still be pursuedthrough the cooperation provisions in the proposed multilateral framework, to the extent that they
were dealt with under relevant domestic laws.
170  Overall, what was being sought were some basic
common principles which would help different domestic competition law regimes to co-exist and tocooperate in an effective manner.  The principles of transparency, non-discrimination and a common
commitment to take action against hard-core cartels  provided the basis for a common language and
for cooperation among different competition policy regimes but in no way constituted a
harmonization of competition law.
171
74. Commenting on question 5 in Section III of the Checklist as to how the independence of
national competition authorities could be reconciled with a multilateral agreement, the point was
made that the obligations that would flow from a multilateral agreement would be general in nature
and would not speak to the details of competition enforcement in specific cases.  Therefore, an
agreement would not impinge upon the operational independence of national competition
authorities.172
75. Commenting on question 4 in Section III of the Checklist as to how an agreement on
international cooperation would apply to and generate benefits for countries at different stages of
development and with differing degrees of experience and resources in competition and policy, the
view was expressed that this did not pose an obstacle to the adoption of a multilateral framework
since: (i) much beneficial technical cooperation co uld take place between countries notwithstanding
differences in national endowments, stages of development and other characteristics; and (ii) the
proposed framework would not require a harmonised approach and would explicitly provide forflexibility and progressivity.
173  In the case of those countries that, at the current point in time, did not
have a domestic competition law framework, adequate transition periods and other forms of flexibility
would be provided.  Capacity-building programmes were important so that countries that needed to
                                                     
167 M/14, paragraph 50 and 51.
168 M/14, paragraphs 49 and 50.
169 M/14, paragraph 49.
170 M/14, paragraphs 49 and 50.
171 M/14, paragraph 54.
172 M/14, paragraph 52.
173 M/14, paragraph 58.WT/WGTCP/5
Page 26
reinforce their domestic institutional capacity, either  to make sure that they were in a position to
comply with international commitments or to make sure that they could fully benefit from
international cooperation, were able to do so.174
76. Given the importance that had been attached to the concept of flexibility, the proponents of a
multilateral framework were requested to define this concept  in concrete terms.175 In response, the
point was made that the importance of recognising differences in domestic institutional frameworksand capacities had been recognised and that any possible agreement would be adapted to differences
in institutional capacities and in levels of development.  It was also suggested that those delegations
that had difficulties with the flexibility that had been proposed should be as specific as possible in
indicating their difficulties since it was unclear, at present, that the flexibility already contemplated
was not sufficient to accommodate all the concerns that had been identified.
176
77. Clarification was sought as to what was meant by progressivity in the context of the
multilateral framework.177  In this regard, the view was expressed that the principle of special and
differential treatment, which was one of the fundamental principles of the multilateral trading system,
could be instrumental in protecting the interests of developing countries and in ensuring the flexibility
of commitments in the form of different transition pe riods, etc.  As to the form that this principle
should take in relation to competition rules or policies, reference was made to the United Nations Set
of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive BusinessPractices ("the Set") which offered specific provisions on special and differential treatment for
developing countries regarding the development, financial and trading needs of developing countries
that developed countries needed to bear in mind when controlling restrictive business practices.
Reference was also made to the UNCTAD Wo rld Investment Report 1999, "Foreign Direct
Investment and the Challenge of Development", which stated that all multilateral agreements oncompetition should fully take into account the need for special and differential treatment of
developing countries and that such treatment could cover the ability to exempt certain sectors from the
application of national competition legislation for development reasons and the establishment of
exceptions and exemptions that currently existed in nearly all developed countries.  The point was
made that the scope of exceptions or exemptions from the application of competition law variedconsiderably from one country to another, for various reasons.
178  The experience of one Member was
referred to which suggested that international competitiveness could best be strengthened by
increasing competition among domestic companie s rather than by limiting competition through
exemption systems.179  It was suggested that an approach based on transparency could be applied in
respect of the application of exceptions and exemptions.180  Reference was made, in this respect, to the
Canada-Costa Rica Free Trade Agreement which left parties free to establish exemptions in their
national law.  However, there were transparency obligations associated with exemptions and parties
were subject to periodic review.181  It was suggested that the Working Group should continue its
examination of the development dimension in relation to competition policy, with specific reference
to the question of exceptions and exemptions from competition law.182
78. As a further, specific dimension of the implications of diversity, objections were posed and
questions raised in relation to the perceived requirement to establish national competition authoritiesand domestic competition laws.
183  This, it was suggested, did not adequately take account of the
                                                     
174 M/14, paragraph 59.
175 M/14, paragraph 60.
176 M/15, paragraph 78.
177 M/15, paragraph 78.
178 M/14, paragraph 40.
179 M/15, paragraph 56.
180 M/14, paragraph 59.
181 M/15, paragraph 83.
182 M/14, paragraphs 40 and 59.
183 M/14, paragraphs 40, 44 and 56.WT/WGTCP/5
Page 27
divergence and the diversity of competition policy objectives and implementation instruments across
economies.  Further, the proposed imposition of an obligation on all Members to set up an
administrative authority could not be supported since such a prescriptive approach did not provide any
room for flexibility.184
79. In response, the point was made that cooperation with respect to competition matters was only
possible when a competition regime was already in operation; that is, when there was a domesticcompetition law of some sort and a domestic competition authority existed with sufficient powers to
effectively enforce that law.
185  In addition, the view was expressed that developing counties had
encountered difficulty in drawing up and enforcing competition polices and laws so as to safeguard
the interests of consumers and the efficient functioning of their markets.186  While cooperation could
be provided within a voluntary framework of mutual interest, it would not be possible for a
developing country to eradicate anti-competitive practices which had an impact on their markets
unless it also developed a national competition law.187  The view was also expressed that the proposed
elements for inclusion in a multilateral competition framework would be complemented by the
principle of flexibility which would accommodate differences in institutional and constitutional
endowments as between Members.188 The point was also made that, in any case, the proposals were
unclear with respect to whether Members would be obligated by WTO rules to establish a competition
law or to establish a competition authority.189
80. The view was also expressed that it was possible to effect competition policy without a
general or comprehensive competition law.  Some countries, particularly smaller ones, could have
other priorities and might lack the necessary financ ial means, bureaucratic resolve and/or technical
capacity to adopt a competition law.  Further, an open trade and investment regime coupled with
sector-specific measures might be an important way of promoting greater competition.  While allcountries should seek to promote a culture of competition, a competition law was not the only way to
proceed.
190  In response, the view was expressed that in order to initiate the process of negotiations in
the area, it was not necessary that all Members have a law in place.  It would be necessary to respect
the problems and needs of countries that did not have a domestic legal framework and that specific
responses would have to be developed for those indi vidual countries.  Further, a "one-size-fits-all"
approach clearly should be avoided since, currentl y, perhaps one third of WTO Members did not have
a competition law.  The possibility of an "opt-out" also existed.191  Any agreement should be flexible
enough that countries, in the process of negotiations, would come to the conclusion that it was in their
own interest to subscribe to commitments contained in the agreement, including those that related to
the adoption of a domestic competition law.192 Further, in the case of countries which currently did
not have a law, a multilateral framework would allow them to receive technical assistance in a more
concerted and coherent manner than would otherwise be the case.193
81. The view was expressed that while the importance and validity of competition policy rules
and competition policy in the domestic context was not doubted, it was necessary to take into account
individual country needs and priorities and allow countries to judiciously use and reconcile their
scarce resources in ways that they considered fit.194  The important link between multilateral
cooperation and the level of progress that a country could achieve in formulating its domestic law
                                                     
184 M/14, paragraph 75.
185 M/14, paragraph 44.
186 M/14, paragraph 40.
187 M/15, paragraph 70.
188 M/14, paragraph 75.
189 M/14, paragraph 72.
190 M/15, paragraph 75.
191 M/14, paragraph 57.
192 M/14, paragraph 90.
193 M/15, paragraph 63.
194 M/14, paragraph 41.WT/WGTCP/5
Page 28
could not be denied.  However, multilateral cooperation through the WTO or other bodies had to
develop gradually and be linked to the establishment of adequate enforcement capabilities.195  Given
that many developing countries had had bitter experiences in dealing with the various obligations that
emerged from the Uruguay Round, there was a need to examine thoroughly and objectively the pros
and cons of any multilateral rule-making proposal.196  The suggestion was made that the price
associated with a multilateral competition framework would be too high and that while the merit ofsome form of international cooperation among competition authorities was evident, that could occur
outside the WTO, either bilaterally or regionally.
 197
82. The view was expressed that developing countries were not yet fully informed about the pros
and cons of the proposed multilateral framework and that more educational work was needed that
would help provide countries with means to assess their needs, based on their economic and
development conditions.198  Any multilateral arrangement in the area ideally needed to evolve out of
experience gained at the bilateral and the regional levels.199  While some developed countries were of
the view that a multilateral framework was a pre-requisite for cooperation, developing countries felt
that binding and fruitful technical assistance and cooperation was a priority.  Such assistance would
help developing countries to establish their domestic policies and rules so that they could reap the real
benefits, if any, of a multilateral framework in this  area in the future.  To be effective, technical
cooperation had to be tailored and country-specific and should go hand in hand with any cooperationinitiative at the multilateral levels.
200
83. Delving further into the issue of technical cooperation, the point was made that while in
recent years, developed countries had established mutually cooperative relations primarily through the
OECD and bilateral channels, developing countries were making a growing number of requests for
cooperation, particularly in the area of technical cooperation.  Bilateral and regional technicalcooperation activities provided developing countries with valuable opportunities to obtain skills and
specialized knowledge in the area of competition policy.  Therefore, the continuation of such
activities was entirely justified.  However, there was a risk of duplication since technical cooperation
was provided through many sources.  Lack of coordination would lead to wasting limited human and
financial resources.  Duplication could be minimized and efficiency and effectiveness improved byimproving coordination among existing cooperation programmes.  A multilateral framework would
facilitate this.
201
84. Reference was made to a survey that had been conducted of technical activities in
1999-2000202 which suggested that more resources were need ed for such activities;  that even if there
was no evidence of duplication, increased coordination between providers of assistance would furtherenhance the efficiency of the programmes; that excessive coordination in an effort to stretch resources
had limits both in terms of costs and country sensitivities; that distribution of current resources could
be improved through increased assistance being prov ided to competition authorities rather than funds
being provided to private contractors.
203  The view was also expressed that there was insufficient
evidence to suggest that the current ad hoc system of providing technical assistance  was less effective
than ideally would be the case.  Further, it was not clear that a multilateral agreement on technical
                                                     
195 M/15, paragraph 73.
196 M/14, paragraph 41.
197 M/15, paragraph 78.
198 M/14, paragraph 61.
199 M/14, paragraph 45; M/15, paragraphs 73 and 74.
200 M/15, paragraph 74.
201 M/14, paragraph 21.
202 "Experiences of OECD outreach and Members' technical activities in 1999-2000", OECD, March
2001.  The survey covers 17 Member countries, OECD outreach activities as well as information from or aboutUNCTAD, the World Bank and the WTO.
203 M/14, paragraph 68.WT/WGTCP/5
Page 29
assistance would improve the current situation. There were possible inefficiencies associated with the
establishment and operation of a centrally-planned system.204
85. In response, the point was made that the proponents of a multilateral framework were not
suggesting that the WTO should play a role equivale nt to a "central planner" in relation to existing
bilateral technical cooperation programmes.  Rather, the role would entail softer forms of
coordination, primarily sharing information about the cooperation programmes engaged in by donorcountries and identifying the needs of particular developing countries.  The point was also made that it
was not intended that the WTO would become the primary provider of technical assistance in this
area.
205  Other international organizations had more resources and experience.  However, it was
important for all of these organizations to work together in a cooperative fashion to enhance technical
assistance in the competition policy field.206  Given its near global membership and the clear linkages
between trade and certain anti-competitive practice s, the WTO was the appropriate forum to achieve
better coordination in this area.207
86. A number of countries referred to technical cooperation efforts that had contributed to the
establishment and development of competition law and policy in their respective countries.208  F o r
countries that were currently in the process of implementing competition policies, it had become
evident that their authorities needed to cooperate wi th others, especially with regard to transnational
mergers and acquisitions and monopoly control following privatization.  The only way that suchissues could be tackled effectively was through cooperation at an appropriate level.
209  Reference was
also made to UNCTAD and OECD meetings during which technical assistance and cooperation
activities engaged in by those organizations were referred to and an exchange of information and
experiences among competition authorities around the world on relevant subjects occurred.210
87. Concerns relating to the possible application of the WTO Dispute Settlement Understanding
in the context of a multilateral framework on competition policy were explored.  It was suggested that
this would impinge on national sovereignty, particularly if a potential multilateral agreement had wide
coverage.  The role of dispute settlement in relation to any requirement for a national competition law
was of particular concern, especially from the standpoint of smaller and poorer countries that had not
yet adopted such a law.  In response, the point was made that the nature of dispute settlementprovisions that were appropriate in the area of competition policy depended primarily on the nature of
the shared commitments that would be assumed.  To address one particular concern, the dispute
settlement mechanism might apply only to the comm itment to adopt legislation but not to individual
decisions of national competition authorities.  The ap plication of dispute settlement in respect of this
obligation would merely ensure accountability for commitments that had been voluntarily assumed.
211
88. The suggestion was made that the concept of peer review offered a possible route for
advancing thinking and policy goals relating to competition policy in the framework of the WTO, and
might serve as an alternative to application of the Dispute Settlement Understanding in this area.  It.
would contribute directly to the goals of such an agreement by offering ongoing, long-term education
and information-sharing experience.  Peer review would also stimulate discussion and the sharing of
experiences across legal cultures, developmental levels and different institutional or historical
settings, in a non-adversarial setting.  Reference was made to both the WTO Trade Policy ReviewMechanism (TPRM) and review exercises conducted within the context of the OECD Competition
                                                     
204 M/14, paragraph 70.
205 M/14, paragraph 71.
206 M/15, paragraph 64.
207 M/14, paragraph 71.
208 M/15, paragraphs 68, 71 and 84.
209 M/15, paragraph 71.
210 M/15, paragraphs 85 - 87.
211 M/15, paragraph 79.WT/WGTCP/5
Page 30
Law and Policy (CLP) Committee as providing useful models for a peer review mechanism on
competition policy in the WTO.212
89. The view was expressed that reliance on peer review as an alternative to dispute settlement in
the context of a multilateral framework on competition policy was appropriate given that competition
policy embodied a paradigm shift as compared to other areas that were already covered in the WTO.
This arose from the fact that competition law involved the application of general statutes to particularfact situations in complicated, evolving and different market circumstances.  Further, economic
thinking and analysis relating to market structures and behaviour changed and advanced over time.
Such features cautioned against an overly detailed or precise codification at the multilateral level.
Furthermore, the WTO process should not impinge upon case-specific or highly confidential business
information issues.  Rather, the objective was to achieve a reasonable degree of analytical and
operational coherence across a wide range of economies in order to ultimately have an effective
system at the multilateral level.  As an ongoing process of policy assessment and refinement, peerreview responded to these concerns and was a way of avoiding excessive intrusion into national
enforcement decisions.  It could also help to provide a realistic understanding of matters such as the
precursors necessary for enhanced cooperation and how the fundamental WTO principles of non-
discrimination, national treatment, transparency and due process were being implemented at national
levels and could facilitate consideration of the potential usefulness, to WTO Members, of relevantvoluntary guidelines.
213
90. Responding to these arguments, the view was expressed that a non-binding peer review
mechanism had many advantages and deserved serious consideration as an alternative to the
application of dispute settlement in this area.  It could also make an important contribution to
capacity-building and to the understanding of complex technical issues that arose in this field.214  The
point was also made that the time and resource costs associated with peer review, particularly for
developing country Members, could be significant.215  In response, the view as expressed that it was
unlikely that such costs would be onerous, particularly in comparison to the benefits achieved in terms
of understanding and insight into one's own policies.216
91. The question was posed as to whether a multilateral framework was necessary to engage in a
process of peer review since the WTO TPRM mechanism already existed, pursuant to which
Members could engage in a dialogue on national experiences.  In addition, it was questioned why
rules were needed if they could not be enfo rced through the dispute settlement mechanism.217  I n
response, the view was expressed that it was not realistic to suppose an effective peer review
mechanism focusing on competition policy could be achieved solely in the context of the TPRM,given its broader purview.  Competition policy presented a new challenge for the WTO in terms of the
approach to be used in promoting international cooperation and convergence.  In this regard, peer
review was not merely an enforcement tool but was a tool for fostering understanding and
transparency across economies and legal cultures and for promoting convergence among Members in
a non-confrontational and non-adversarial way.  The point was also made that once the nature of
obligations to be assumed became more clear, the scope of peer review processes would also be
clarified.
218
92. With regard to whether the WTO was an appropriate venue for multilateral action on
competition policy, the view was expressed that given that international cartels and other cross-border
                                                     
212 M/15, paragraphs 65 and 66.
213 M/15, paragraph 67.
214 M/15, paragraph 80.
215 M/15, paragraph 81.
216 M/15, paragraph 81.
217 M/15, paragraph 82.
218 M/15, paragraph 82.WT/WGTCP/5
Page 31
anti-competitive practices eroded the benefits from free trade, it seemed logical for the WTO to take
action to deal with these practices.219  A WTO mechanism for cooperation between the competition
authorities of developed and developing countries would assist in tackling international cartels.220  A
possible advantage of the WTO in this regard was that it had the ability to provide technical assistance
and other capacity-building support for developing countries, making it possible for such countries to
learn from the experience of developed countries and to gradually enhance their own competitionregimes.
221  The point was also made that although WTO rules were, for the most part, targeted at
governmental behaviour rather than private behaviour, the WTO nevertheless provided the ability to
require Members to implement a competition law.  Further, in certain cases, governmental measures
were to be found at the root of specific anti-competitive behaviour.  In addition, there were already
some limited competition provisions in existing WTO agreements – the GATS addressed competition
questions in Articles 8 and 9 and the related Telecommunications Reference Paper featured provisions
prohibiting anti-competitive cross-subsidization.  However, the existing provisions addressed only aportion of the normal coverage of competition policy.  Therefore, the WTO had a unique role to play
in dealing with some of the international issues facing competition policy, but new provisions would
need to be negotiated in order to allow the WTO to fulfil this role.
222
93. Notwithstanding the foregoing, doubt was also expressed as to whether the issue of
competition was ripe for negotiations in the WTO.  The suggestion was made that, although flexibilityhad been promised, experiences in implementing existing agreements including TRIPS and TRIMs,
gave developing countries cause for concern.  There were other issues that needed to be discussed
such as scope, depth, timing and sequencing, coherence, government standards, the application of the
dispute settlement mechanism in the area, etc.
223  The view was also expressed that the feasibility and
desirability of other alternatives to a multilateral route had not been adequately addressed.224  Before
defining further the specific components of the proposed multilateral competition framework, more
input from developing countries regarding their needs would be useful.225  The identification of
developing countries' needs could be the starting-point for devising a concrete mechanism for
multilateral cooperation in the WTO in the area of competition policy.226
III. T HE CONTRIBUTION OF COMPETITION POLICY TO ACHIEVING THE OBJECTIVES OF THE WTO,
INCLUDING THE PROMOTION OF INTERNATIONAL TRADE
94. This item was discussed by the Working Group at its meetings of 22-23 March and
5-6 July 2001.  Written submissions on this item were provided by the representatives of Australia;
the European Community and its member States; Hong Kong, China  and the Slovak Republic
(documents W/159, W/175, W/163 and W/171, respectively).  The representatives of Chile;
Colombia; the European Community and its member States ; Hong Kong, China ; Korea ; the
Philippines; Switzerland ; and the United States  made oral statements, presented comments, or
posed/responded to questions.  The representative of the OECD provided an update on relevant
OECD activities.
95. The view was expressed that trade and competition policy were mutually reinforcing and
complementary in various respects.227  Competition policy facilitated trade by removing restraints to
commercial flows.  In turn, trade policy encouraged competition by lowering tariffs and eliminating
                                                     
219 M/14, paragraph 37.
220 M/14, paragraph 25.
221 M/14, paragraph 37.
222 M/14, paragraph 39.
223 M/14, paragraph 41.
224 M/14, paragraph 75.
225 M/14, paragraph 73.
226 M/14, paragraph 74.
227 M/14, paragraphs 77, 79, 81 and 88.WT/WGTCP/5
Page 32
non-tariff barriers.228  Competition authorities could also play a role in trade remedy cases, in ensuring
that an appropriate balance was struck between the interests of domestic industry and those of
consumers.229  Notwithstanding this, the point was also made that trade and competition policies had
arisen in different historical and national contexts.  In considering ways of enhancing the
complementarity of trade and competition policies, account also needed to be taken of the issue of
sequencing.  To the extent that anti-competitive market conditions could be addressed throughenhanced complementarity between trade and competition policies, there would be less scope and
latitude for the practices offset by trade-remedy measures to emerge in the first place.
230  Reference
was also made to OECD reports which addressed as pects of the complementarities between these two
policy fields.231
96. An approach was suggested regarding ways to promote greater coherence between trade and
competition policies, particularly with respect to issues relating to the interaction between these two
policy fields.  Over the past few decades, globalisation had produced a paradigm shift in internationalcommerce.  This phenomenon posed challenges to all governments.  First, it called for increased
intergovernmental efforts to address issues with major transborder consequences in pursuit of the
common goal of global welfare maximisation.  Seco ndly, the impact of globalisation also called into
question the adequacy of traditional analytical tools and policy instruments that were directed only at
market conditions within national borders and not across national borders.  Thirdly, the trenddisplayed the limitations of formulating or executing trade and competition policies in a
compartmentalised manner.  Fourthly, there was also  a need to ensure that the multilateral trading
system would continue to be effective in promoting market contestability world-wide.  To meet these
challenges, a balanced work programme was required encompassing the following four elements.
The first element related to the trade and competiti on interface.  Further exploratory work in the WTO
should look at two aspects: (i) how trade policies or measures could impede the free play of market
forces; and (ii) how the lack of a sound competiti on policy could obstruct the flow of international
trade.  The second element also concerned two asp ects: (i) anti-competitive governmental action; and
(ii) private restrictive business practices.  Given that both aspects could work against the competition
process, both should be covered by future WTO work on trade and competition.  The third elementconcerned policy coherence within and across borders.  As markets enlarged beyond their traditional
national boundaries, there was a need to ensure policy coherence across national borders through,
perhaps, international intergovernmental cooperative efforts to address competition issues with an
international dimension.  Equally important was a government's commitment to achieve policy
coherence within national borders through, perhap s, implanting a competition dimension in all
domestic economic policies.  The fourth element concerned the interests of both consumers and
producers.  With an increasingly integrated world economy, it was important that both trade and
competition policies were grounded in welfare maximisation in the interests of both consumers and
producers alike rather than producers alone.
232  The view was expressed that this approach called, in
particular, for an enhanced focus on addressing the anti-competitive effects of government measures,
including anti-dumping measures.233  The view was also expressed that the approach had much in
common with the underlying concerns of advocat es of a multilateral framework on competition
policy, and called attention to the need for development of new tools to address competition issues at
the multilateral level.234  In addition, the point was made that the concerns and developments noted
                                                     
228 M/14, paragraph 79.
229 M/14, paragraphs 79, 86 and 87.
230 M/14, paragraph 88.
231 Trade and Competition Policies for Tomorrow , OECD, 1999 and Trade and Competition Policies –
Options for a Greater Coherence , OECD, 2001.
232 M/14, paragraphs 78.
233 M/14, paragraph 83, 86 and 87.
234 M/14, paragraphs 80 and 85.WT/WGTCP/5
Page 33
underscored the importance of continued exchanges and closer cooperation between trade,
competition policy and perhaps also regulatory officials in addressing issues of common interest.235
97. The contribution of competition policy to economic development was discussed, with detailed
reference to the national experience of a Member.  The Member's National Competition Policy (NCP)
covered all trading entities regardless of their ownership.  It placed considerable emphasis on the
ongoing review of legislation affecting competition in addition to matters such as anti-competitivepractices of firms and appropriate treatment of universal service obligations.  The concept of
"competitive neutrality" between private and government-owned entities was also fundamental to the
NCP.  The results observed included ongoing benefits in terms of lower prices, greater choice for
consumers, a clearer operating environment, and reduced compliance costs for businesses.  The
Member's experience suggested that, in implemen ting competition policy, it was imperative that
governments consulted widely throughout the community and throughout the whole process to ensure
that the short-term costs as well as the long-term benefits of a national competition policy were well-understood.  It strongly supported the benefits of competition policy in promoting greater
productivity, efficiency and economic growth.  In particular, the introduction of an effective
competition policy had been instrumental, together with related microeconomic and structural
reforms, in achieving a significant increase in  growth and productivity in the national economy.
236
The views were expressed that this Member's experience underlined the importance of mutually-
reinforcing trade and competition policies237 and that it would be useful to have more analyses of this
nature.238  The suggestion was also made that the principle of neutrality embedded in the Member's
competition regime could make an important contribution to ensuring competitive conditions for all
suppliers in the provision of goods and services.239
98. The view was expressed that a multilateral framework on competition policy could make an
important contribution towards Members' ability to  deal more effectively with anti-competitive
practices that have an impact on international tr ade, thereby enhancing the complementarity of trade
and competition policy.  Action of this nature was needed since evidence which had been referred to
in the Working Group, including recent reports prepared by the OECD and for the World Bank,240 had
made it clear that the extent of anti-competitive practices with an international dimension was greaterthan had previously been understood and that such practices imposed heavy costs on the economies
and development prospects particularly of poor countries.  While bilateral and regional approaches to
address these challenges were valuable, they were not enough and could be effectively reinforced by a
parallel initiative at the multilateral level.  A further benefit was of a more systemic nature and would
arise from more firmly integrating competition polic y within the WTO system.  To a certain extent,
competition policy was already embedded in the WTO in a limited way, for example, in the areas of
services and TRIPS.  However, the issues arising in  these areas would certainly benefit from having a
more horizontal approach to competition policy w ithin the WTO; otherwise, they would continue to
be treated in a fragmented manner.  An enhanced profile for competition policy in the WTO could
also reinforce the legitimacy of the organization, in that it would demonstrate in a concrete way that
the Organization was committed to ensuring that markets worked to the benefit of all citizens, and not
merely of private enterprises.
241
99. The suggestion was made that three factors could influence the cost/benefit analysis of a
WTO agreement on competition policy from the perspective of a developing country.  These were:
(i) the role of a multilateral agreement in supporting domestic competition institutions; (ii) the benefit
                                                     
235 M/14, paragraphs 78, 80, 82 and 83.
236 M/14, paragraph 77.
237 M/14, paragraph 81.
238 M/14, paragraph 83.
239 M/14, paragraph 83.
240 OECD, Report on Hard Core Cartels and Levenstein and Suslow, op. cit.
241 M/15, paragraph 88.WT/WGTCP/5
Page 34
that would be obtained from cooperation; and (iii ) the degree of flexibility and progressivity that
would be embodied in the agreement.  Regard ing the concern that had been expressed that
commitments in this area would, to a certain extent, limit policy autonomy, the view was expressed
that this was a natural consequence of any multilate ral negotiation.  However, competition policy was
an area where domestic action was important but such action would be of limited effectiveness unless
it was reinforced by international cooperation.  In any case, the proposals for a WTO agreement oncompetition policy provided for substantial flexibility regarding the scope and content of competition
law and policy.  In relation to institutional costs, it was suggested that these would have to be
balanced by each country having regard to the benefits of competition policy in terms of domestic
welfare/development and other important policy objectives that were being pursued by a country.  The
point was also made that there were costs involved in the process of cooperation; for this reason, it
was important that commitments regarding cooperation be defined in voluntary terms.
242
100. The point was also made that there were now in excess of 90 countries with competition laws,
notwithstanding the lack of requirements or coercion from the WTO or any other body.  This situation
had evolved in response to domestic needs as countries had seen fit.  Moreover, the overwhelming
majority of existing laws, if not all of them, were already characterized by transparency and non-
discrimination and contained some kind of ban against hard-core cartels.  Extensive technical
assistance was already being provided by individual countries and international organizations andmuch cooperation occurred when agencies arrived at the stage when they felt ready to engage in such
activities.  It was not clear that a rules-based approach in an international trade body would be
superior to this constructive and organic, evolutionary process in promoting competition law and
policy.
243  The view was also expressed that any proposals to take forward WTO work on trade and
competition should be evaluated in terms of the extent to which such proposals could accommodatediversity, be it with regard to economic circumstances, resources, endowments, or degree of
institutional development.
244
101. Clarification was sought from the proponents of a multilateral framework as to why the WTO,
which was a rule-making body in the area of international trade, was considered to be an appropriate
forum for the development of multilateral rules/policy in the area of competition policy.  In response,
the view was expressed that the WTO offered the advantage of a solid and stable institutional
framework in which developing countries and industrialized countries participated on an equal basis
and could develop an agreement on the basis of equal participation.  In any case, competition policy
was already embodied in various WTO Agreements including the TRIPS Agreement and the GATS
Agreement and would inevitably be implicated in some of the issues that would be discussed inpending negotiations.  The types of anti-competitive practices that were being discussed such as
international cartels, export cartels, import cartels and abuses of a dominant position that had
transboundary effects all had an international dimension and had clear adverse effects upon
international trade and development.  Moreover, in view of the criticism often levelled at the WTO
that it created enhanced freedom for producers without necessarily providing due protection for other
members of society, it would be difficult to explain that Members had come to the conclusion that
anti-competitive business practices that distorted international trade were not a proper concern for theWTO to address.
245  The view was also expressed that since one third of WTO Members did not have
a competition regime in place, there was no point in discussing the prospects for cooperation in the
Organization.246
                                                     
242 M/15, paragraph 89.
243 M/14, paragraph 82.
244 M/14, paragraph 81.
245 M/14, paragraph 89.
246 M/14, paragraph 86.WT/WGTCP/5
Page 35
IV. O THER ISSUES RAISED BY MEMBERS RELATING TO THE GROUP 'S MANDATE TO STUDY THE
INTERACTION BETWEEN TRADE AND COMPETITION POLICY
102. This item was discussed by the Working Group at its meetings of 22-23 March and
5-6 July 2001.  Written submissions on this item were provided by the representatives of Argentina,
Morocco and Uruguay  introduced written contributions on this item (documents W/178, W/170 and
W/169, respectively) and the representative of the Ukraine introduced a non-paper.  The
representatives of Benin; Georgia ; Indonesia ; Kenya ; Mexico ; Morocco ; Pakistan  and Tanzania  made
oral statements regarding their national competition laws.  In addition, Members had access to anupdated version of the Overview of Members' Nati onal Competition Legislation (W/128/Rev.2) and a
table and related information concerning Exceptions and Exemptions from National Competition
Legislation (W/172) prepared by the Secretariat.  As requested by the Working Group at its meeting
on 5-6 July, an information note prepared by the Secretariat on the Impact of Cross-Border Mergers
and Acquisitions on Domestic Companies, Particularly Small and Medium-Sized Enterprises (W/180)was made available to the Group at its meeting on 28 September.
103. A number of Members made presentations on the design and implementation of competition
law and policy in their respective countries.  Among the issues raised in those presentations were the
following:  the aims and objectives of competition laws;
247  the importance and role of competition
policy in deregulation, privatization and market liberalization initiatives;248  competition policy as a
complement to other policies and relevant statutes; 249  competition policy in countries with small
markets;250  regional competition initiatives;251  the importance of competition policy for developing
and developed countries alike;252  efforts to create a culture of competition;253 per se  approaches
compared with rule-of-reason approaches; 254  the need for an autonomous, independent competition
authority;255  powers vested in competition authorities;256  rights of appeal from decisions of
competition authorities; 257  the relationship between competition authorities and other regulatory
bodies;258  the importance of early adoption and implementation of competition laws and
institutions;259  the role, types and the importance of competition advocacy;260  the importance of
technical assistance;261  challenges faced by competition authorities;262  exceptions, exemptions and
authorisations under competition laws and policies;263  the existence and role of WTO principles in
domestic competition laws;264 and the importance of international cooperation.265
                                                     
247 M/15, paragraph 92.
248 M/14, paragraph 93; M/15, paragraphs 91 and 99.
249 M/15, paragraphs 91, 92 and 94.
250 M/14, paragraph 92.
251 M/14, paragraph 92.
252 M/14, paragraph 92.
253 M/14, paragraph 93.
254 M/15, paragraph 91.
255 M/15, paragraphs 91, 92, 94, 95, 96 and 100.
256 M/15, paragraphs 94, 95 and 96.
257 M/15, paragraphs 95 and 99.
258 M/15, paragraph 91.
259 M/15, paragraph 91.
260 M/15, paragraphs 92, 95 and 98.
261 M/15, paragraphs 92, 94 and 99.
262 M/15, paragraphs 92, 99 and 100.
263 M/15, paragraph 94.
264 M/15, paragraphs 92 and 94.
265 M/15, paragraph 97.WT/WGTCP/5
Page 36
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 agreeto:
/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, includinganti-competitive practices, in order to identify any areas that may
merit 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 asprovided for in the Midrand Declaration and the contribution it can make to the
understanding 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 willdetermine after two years how the work of each body should proceed.  It is clearly
understood 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/5
Page 37ANNEX 2
CONTRIBUTIONS PROVIDED TO THE WORKING GROUP ON THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY IN 2001
Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/128/Rev.2 Secretariat M/15, para. 101 Overview of Members' national legislation
W/159 Australia M/14, paras. 76-77 Competition advocacy
W/160 EC and member States M/14, paras. 5, 7-8
paras. 20 & 25International cooperation in competition law/policy
W/161 Romania M/14, paras. 20 & 28 Internati onal cooperation in competition law/policy
W/162 Colombia M/14, paras. 20 & 29 International cooperation in competition law/policy
W/163 Hong Kong, China M/14, paras. 76 & 78 Cont ribution of competition policy to WTO objectives
W/164 United States M/14, paras. 20, 30-31 Admi nistration of competition law and policy
W/165 Czech Republic M/14, paras. 5-6,
paras. 20 & 32International cooperation in competition law/policy
W/166 Republic of Korea M/14, paras. 20 & 33-34 Competition policy and economic development
W/167 Japan M/14, paras. 20-22 Economic development and a WTO framework on competition
policy
W/168 Japan M/14, paras. 20, 27, 35-37 International cartels
W/169 Uruguay M/14, paras. 20 & 40
para. 92National competition law;  competition policy and economic
development
W/170 Kingdom of Morocco M/14, para.93;
M/15, para. 93National competition law
W/171 Slovak Republic M/14, paras. 76 & 79 National competition law;  competition advocacy
W/172 Secretariat M/15, para. 101 Exceptions, Exem ptions and Exclusions contained in Members'
National Competition Legislation
W/173 Canada and Costa Rica M/15, paras. 52, 57-60 In ternational cooperation in competition law/policy
W/174 Canada M/15, paras. 5-6, 52 Internationa l cooperation in competition law/policy
W/175 EC and its member
StatesM/15, paras. 5, 7-9,
paras. 52, 61-64,paras. 88-89Economic development and a WTO framework on competition
policyWT/WGTCP/5
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W/176 Japan M/15, paras. 52-55 Competition policy and economic development
W/177 Japan M/15, paras. 52, 56 Exemp tions from national competition law
W/178 Argentina M/15, paras. 90-91 National competition law/experience
W/179 Trinidad and Tobago M/15, paras. 5, 28-29 Progressivity and flexibility in developing competition regimes
W/180 Secretariat M/16, para. 2. Impact of cross-border mergers and acquisitions on domestic
companies, particularly small and medium-sized enterprises.
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