WORLD TRADE
ORGANIZATIONWT/WGTCP/W/214
24 September 2002
(02-5131)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM SWITZERLAND
The following communication, dated 24 September 2002, has been received from the
Permanent Mission of Switzerland with the request that it be circulated to Members.
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Core Principles in a Multilateral Framework on Competition Policy
Doha Ministerial Declaration Paragraph 25
1. Building on earlier written contributions of Switzerland addressing core principles1, we would
like to communicate the current state of our views on how to integrate core principles into amultilateral framework to enhance the contribution of  competition policy to international trade and
development.  As the Working Group is in a phase of clarification and mutual exchange of opinions,
we consider the views presented below as preliminary and are open to other ideas and suggestions.
I. RELEVANCE OF CORE PRINCIPLES
2. Considering that the principles of transparency, non-discrimination (most-favoured-nation
treatment, national treatment), and due process are important principles throughout the WTO
rules-based system it would appear appropriate to embody these principles in a multilateralframework on competition policy as well.  In doing so, adaptation to the circumstances will be
necessary; and the principles should be applied in a flexible, different manner, comparable to the way
the principles are applied across the WTO agreements  being tailored to the respective agreement and
adapted to the context to which the agreement applies.
3. Transparency would seem essential for the understanding and acceptance of competition
policy in the public at large; it seems of predominant importance given the fact that, often, a rule-of-
reason approach is used in applying a usually rather general competition framework to a concrete
case; therefore, it may be advisable to put emphasis on an extensive interpretation of the transparency
obligation.  Given the fair amount of discretion inherent in any competition regime, due process, or
procedural fairness, would seem as another element for a well-working competition regime which isto meet broad acceptance by the economic actors.  Due process largely depends on transparency and
guarantees for non-discrimination.  Finally, non-discrimination is an overarching issue, which is
absolutely indispensable for the functioning and th e application of any competition law, but which
also leaves room for competition policy in a broader sense to open up possibilities to deal with other
goals of, e.g., economic and social policy.
                                                     
1 WT/WGTCP/W/89 (Relevance to Competition Policy of the Basic Principles), WT/WGTCP/W/117
(Impact of Basic Principles) and WT/WGTCP/W/151 (Possible Elements).WT/WGTCP/W/214
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4. This short description, to be elaborated in more detail below, may serve as an indicator to
show that the three mentioned principles are closely interlinked and reinforce each other; discarding
any of them would weaken the remaining principles  and the functioning of competition policy as a
whole.
II. TRANSPARENCY
5. It can be reasoned that above-average standards for transparency are very important in areas
where the scope for seemingly discretionary measures is  relatively large, as is the case in competition
policy due to the rule-of-reason approach.  In a background note2, the Secretariat identified as two
components parts to the concept of transparency:  (i) publication of the relevant regulations, and
(ii) notification to the WTO.
6. We would find it appropriate for WTO Members to make publicly available, in a timely
manner and subject to protection of confidential information, the following:  relevant laws includingexceptions and exemptions, and including procedural rights and obligations, as well as procedures for
investigations, and important case decisions including reasoning and facts.  Such interpretation of the
general WTO practice of requiring publication of "laws, regulations, judicial decisions and
administrative rulings of general application" would seem justified in view of the objective of
increasing the predictability of all competition-re lated activities of the authorities for all economic
actors.  Thus, transparency could assist substantially in creating a "culture of competition" which
necessitates well-informed economic actors.
7. Transparency would include notification of the above-mentioned information to the
respective WTO body supervising competition-related matters, such as a WTO Competition Policy
Committee.  Furthermore, it could also be worth considering whether to include in a notificationobligation information on international agreements addressing competition-related issues and certain
non-public (non-confidential) information which might be of interest to particular WTO Members.  In
analogy to antidumping, this could mean notifying authorities of other WTO Members potentially
concerned of the opening of an investigation, or when new evidence so suggests, during the course of
an investigation.  Such notification would facilitate contacts between Members where appropriate andwould tend to increase coordination and cooperation between authorities concerned.
III. NON-DISCRIMINATION
8. We deem important to point out that it is difficult to imagine any competition framework
which is not, in its fundament, based on the pr inciple of non-discrimination:  since any such
framework should basically aim at promoting competition by opposing the harmful effects of
restraints of competition and to achieve a market economy in which enterprises may use their
resources efficiently and react to changes quickly (including innovation-related adaptations), it wouldnot be credible if the authorities were basing their views, in a first instance, on a differentiation
according to the origin of competitors.  In concrete terms, in applying a competition law, the principle
of non-discrimination implies that economic actors approaching the competition authority are treated
the same way, no matter if they are domestic or foreign.  A competition law, and authorities mandated
to apply it, ought to focus on the well-functioning of markets abstracting from the origin of the
subjects.
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9. Agreeing on most-favoured-nation treatment (M FN) will probably not pose a great problem
for Members in the context of applying the competiti on law; it is hardly conceivable that an authority
                                                     
2 See WT/WGTCP/W/114.
3 Canada, in a recent contribution (WT/WGTCP/W/183), set out a very succinct principle saying that
the focus is on "protection of competition and the competitive process, not competitors".WT/WGTCP/W/214
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would accept certain anti-competitive behavior of firms originating in one country while prohibiting
for those originating in other countries.  In the br oader frame of competition policy, with regard to
voluntary cooperation, a general commitment to cooperate would ensure that MFN is respected as a
guiding principle in this context.  The voluntary character of cooperation, and the fact that gradual
building-up of confidence and converging views on competition policy are preconditions forcooperation, limit the applicability of MFN in this context.  Certain procedural steps could be
considered which might work in favor of MFN, such as a commitment to respond to foreign
authorities requesting case-specific cooperation and giving reasons if the request cannot be taken into
consideration.  Further, the WTO Secretariat could keep track of the requests and responses and
occasionally report on the developments in cooperation.
10. Deliberations so far have shown that the principle of national treatment (NT) is more
contentious.  For instance, concerns have been expressed by some developing countries fearing that amultilateral agreement on competition policy, and the principle of NT, might undermine their
capability to have some form of industrial policy, as such policy is directed at privileging domestic
over foreign enterprises.  Switzerland has pointed out on earlier occasions, for instance during the July
2002 meeting of the WGTCP, that ways ought to be  found to design the minimum standard of a
multilateral framework on competition in such manner that it does not put in doubt countries'sovereignty to regulate and to fully apply their own competition laws.  Embedding NT in its pure and
literal meaning is likely not to serve the purpose.  Instead, it might be advisable to include in a
competition framework a modified interpretation of the NT principle.  A multilateral framework
would therefore not contravene exemptions and exclusions in the national framework, if presented in
a transparent way.  A compilation by the Secretariat (WT/WGTCP/W/172) demonstrates the widearray of sectoral and non-sectoral exceptions and exemptions addressed in existing national
competition laws.  Notwithstanding, where a government decides to engage in industrial policy
activities, competition policy may have a role to play in advising on how to best introduce efficiency
issues.  Impediments to competition are often also due to government interventions, and
interventionist policies may lead to sub-optimal re sults by advancing the interests of specific groups
within society only.  Therefore, it may be useful to allow authorities dealing with competition policy
to bring in their opinion when industrial policy or other legislation that may affect competition is
being designed, in order to make transparent those cases where government action impairs economic
efficiency.
11. In short, we view NT as appropriate as a basic principle of a competition framework, which
basically makes sure that the national competition regulation as well as its interpretation allow for
equal treatment and do not discriminate on grounds of nationality, but in specific instances allows forindustrial policy based on public benefit tests if a country wishes to take action to affect the mix of its
industrial activities, and allows for other policy choices like, for instance, in the area of public
services, if the process is transparent and in accordance with the rule of law.
IV. DUE PROCESS
12. Similar to a number of WTO agreements, it would seem appropriate in the competition
context to agree on certain procedures which would provide for fair access to the investigation
authorities at all stages of an investigation procedure and for rights of appeal.
4   These procedures
would also contain elements of transparency (e.g. information of parties concerned of the initiation of
an investigation) and of national treatment.  According to the Swiss law, for instance, domestic and
foreign-based firms have equal rights for application of a competition case and for appeals.
                                                     
4 In the case of Switzerland, appeals against decisions by the Competition Commission may be
addressed to the Competition Appeals Commission. Appeals under administrative law against the decisions of
the Competition Appeals Commission can be addressed to the Federal Supreme Court.WT/WGTCP/W/214
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V. CONCLUSION
13. For an effective competition policy, the combined  exertion of the principles of transparency,
non-discrimination and due process are imperative.  As argued above, not all principles can be of
equal and absolute importance in all cases.  A multilateral framework should, however, assure that the
national competition regime complies with high standards on transparency and that in its applicationdomestic and foreign firms have similar access to the competition authorities.  Non-discrimination
would, however, not prevent definition of exemp tions and exclusions, including the design of
industrial policy, if dealt with in a clear and transparent way.  Accordingly, the principle of NT would
need to be devised in a more restricted manner.  At a later stage, Members having gained experience
in implementing competition policy and with increa sing convergence of views, further refinement of
the principle could be foreseen.
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