WORLD TRADE
ORGANIZATIONWT/WGTCP/W/218
6 November 2002
(02-6115)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE UNITED STATES
The following is the final text of a paper re ceived from the Permanent Mission of the United
States which was circulated as an advance copy for the Working Group's meeting of 26-27 September
2002.
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TRANSPARENCY AND NON-DISCRIMINATION
The United States previously addressed the WTO fundamental principles of transparency and
non-discrimination (both national treatment and most-favored nation treatment (MFN) in its July 1999
submission, "Relevance of Fundamental WT O Principles to Competition Policy."1  That submission
provided background on each of these principles, including their treatment in the WTO and US-
antitrust contexts.  Relying on that background, this submission addresses fundamental questions
raised by the application of these principles to antitrust policy and enforcement.  We address
procedural fairness concerns in a separate, accompanying paper.
Whereas both trade and antitrust laws promote a competitive environment for national and
foreign producers and service providers, they differ significantly in application.  Trade law aims toreduce tariffs and other trade barriers by addressing governmental, rather than private, action, with
limited exceptions (e.g , antidumping).  Antitrust laws, by contrast, generally provide for the
assessment of individual, private transactions and/ or agreements to determine whether they promote
the central objectives of economic efficiency and consumer welfare.
2  Antitrust authorities typically
review each case individually, balancing a wide array of factors as part of a complex analysis todetermine whether a particular transaction or agreement meets these goals.  As discussed more fully
below, many questions regarding the application of the WTO’s fundamental principles of
transparency and non-discrimination to antitrust law and enforcement arise from the focus of antitrust
on individual cases involving private rather than governmental actions.
                                                     
1 Communication from the United States of 13 July 1999 (WT/WGTCP/W/131).
2 As noted in the Secretariat’s paper of the Fundamental Principles of Competition Policy, the goals of
promoting economic efficiency and consumer welfare are central objectives of competition policy in many, ifnot most, jurisdictions with antitrust laws.  Background Note by the Secretariat (WT/WGTCP/W/127) of
7 June 1999, at § III.  Other objectives cited in various antitrust rules include, inter alia,  the promotion of
business rivalry and entrepreneurial opportunity, the protection of small business, the creation of nationalchampions, employment, and assistance to industries in crisis.  Many jurisdictions also use antitrust rules toaddress state aids and other governmental conduct.WT/WGTCP/W/218
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I. NON-DISCRIMINATION (NATIONAL TREATMENT AND MFN)
A. BACKGROUND SUMMARY
Background Summary
Fundamental WTO principles of  non-discrimination include national treatment and MFN.  As
a general matter, national treatment requires that WTO Members treat like goods and services from
other WTO Members no less favorably than those of their own nationals.3  While the terms of the
MFN principle differ across the varying WTO documents, the basic principle requires that a WTO
Member treat like goods, services and persons of another Member no less favorably than those of any
other country -- what we have previously deemed "general (overall) reciprocity."4  Together, these
WTO non-discrimination principles aim to promote equality of competitive opportunity for Members’
goods, services and enterprises, to avoid distortions of the competitive process.  Importantly, these
principles are applied in the WTO context to both de jure  and de facto discrimination, respectively,
against facially discriminatory legislative provisions and the discriminatory application of facially-neutral legislative provisions.
What is Discrimination in the Antitrust Context?
The US experience has been that antitrust rules and their application are supportive of and
consistent with the WTO’s basic non-discrimination principles.  Antitrust enforcement should beaimed at the protection of competition and not individual competitors.
5  Thus, discrimination on the
basis of nationality, in favor of an individual competitor or group of competitors, is inconsistent with
the purpose of antitrust rules.  This is clearly the case in the United States, where the Department of
Justice (DOJ) and Federal Trade Commission (FTC) Antitrust Enforcement Guidelines for
International Operations explicitly state that "[t]he Agencies do not discriminate in the enforcement ofthe antitrust laws on the basis of the nationality of the parties."
6  Moreover, this is supported more
generally by the consumer welfare goal of US antitrust law, pursuant to which the nationality of a
firm is irrelevant because foreign firms provide healthy rivalry, stimulating lower prices and
innovation.
Nevertheless, the application of WTO national treatment and MFN principles in the antitrust
context raises complex issues.
                                                     
3 See e.g., Article III of the General Agreement on Tariffs and Trade (1947); Article XVII of the
General Agreement on Trade in Services (1994) (applying only to areas subject to sector-specific commitments)and Article 3 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (1994).  TheCommunication from the United States "Relevance of Fundamental WTO Principles to Competition Policy,"WT/WGTCP/W/131 of 13 July 1999 and Background Note by the Secretariat, "The Fundamental WTOPrinciples of National Treatment, Most-Favoured-Nation Treatment and Transparency," WT/WGTCP/W/114 of
14 April 1999 provide additional detail with respect to these provisions.
4 See e.g., Article I of the General Agreement on Tariffs and Trade (1947); Article II of the General
Agreement on Trade in Services (1994) and Article 4 of the Agreement on Trade-Related Aspects of IntellectualProperty Rights (1994).  We have referred to this as general or overall reciprocity in Communication from theUnited States "Relevance of Fundamental WTO Principles to Competition Policy," WT/WGTCP/W/131 of13 July 1999 at para. 19.
5 See supra. n. 1.
6 Antitrust Enforcement Guidelines for International Operations, issued by the US Department of
Justice and the Federal Trade Commission, April 1995, available athttp://www.usdoj.gov/atr/public/guidelines/internat.htm, at § 2.WT/WGTCP/W/218
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As a preliminary matter, both WTO national treatment and MFN principles are generally
applied with respect to Alike@ products or services.7  Pursuant to these rules, discrimination can be
determined only when two products or services are considered sufficiently comparable, and when the
law, regulation or other government measure treats an imported good or service less favorably, either
de jure or defacto.  WTO disputes regarding discriminatory treatment may be fact intensive, but they
rarely involve examination of individual prosecutorial or judicial decisions for alleged patterns ofbias.  Competition analysis and enforcement is, however, case and fact-specific, and no two situations
will be wholly similar.
An antitrust authority assessing domestic and foreign firms under the same rules and
procedures might come to differing decisions with respect to similar conduct, based on the facts of the
cases rather than discriminatory purpose.  For example, the United States may deny a merger of two
foreign firms that increases anti-competitive potential in the United States but creates efficiencies onlyoutside of the United States.  However, a similar domestic transaction, which creates efficiencies in
the United States, may be permitted.  Similarly, the United States may require a less restrictive
remedy with respect to a transaction involving foreign firms from country A vis-à-vis foreign firms
from country B, because the antitrust authority from country A is enforcing its national antitrust rules
with respect to the first transaction.  Whereas thes e two actions may appear to be discriminatory, the
differentiated treatment should in fact be consistent with the WTO’s national treatment and MFN
principles, respectively, based on the differing factual situations of the two cases.
In practice, it is extremely difficult to determine whether de facto discrimination exists with
respect to antitrust enforcement actions, given their individual focus.  For example, a Memberenforcing its competition provisions with any eye toward protecting small and medium-sized firms
may disparately impact foreign firms which are less likely to be small and medium-sized enterprises.
Should this be considered discriminatory under a WTO Competition agreement?  These difficulties
are exacerbated by the extensive prosecutorial discretion
8 afforded antitrust authorities in many
countries, and discussed more fully in our accompanying submission on procedural fairness.9  Thi s
raises fundamental questions with respect to the application of the WTO non-discrimination
provisions to de facto discrimination.  For example, is it possible to determine whether de facto
discrimination exists in the antitrust context?  If this can be assessed, what is the standard by which
this determination should be made?
Even assuming that the possible future application of WTO national treatment and MFN
principles were to be limited to de jure discrimination, questions, such as those discussed below, stillremain.
How should Sectoral Exemptions to Antitrust Rules be Treated?
Most, if not all, countries exempt certain sectors from the application of antitrust rules or
regulate them through sectoral legislation, in lieu of or in addition to standard antitrust rules.  Nationalantitrust exemptions reflect important policy choices for each WTO Member.  But, what if a
Member’s exemptions do not apply to firms operating outside its territory and that Member’s rules are
challenged as discriminatory?  Should a prospective Competition agreement address such issues?  For
example, are there factors that might make otherw ise discriminatory antitrust exemptions acceptable,
such as the need for effective, national regulatory oversight?  Given the myriad of national
                                                     
7  See e.g., Articles I and III of the General Agreement on Tariffs and Trade (1947) and Articles II and
XVII of the General Agreement on Trade in Services (1994).  But see Articles 3 and 4 of the Agreement on
Trade-Related Aspects of Intellectual Property Rights (1994) (applying to nationals of Members, not products).
8 The term "prosecutorial discretion" generally refe rs to the freedom conferred on an investigative
agency to decide which civil, criminal and administrative cases or matters are appropriate to pursue.
9 "Procedural Fairness," Submission of the United States prepared for the Meeting of the Working
Group on the Interaction between Trade and Competition Policy, 26 & 27 September 2002.WT/WGTCP/W/218
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exemptions concerning antitrust rules and enforcement and the policy choices that they reflect, is it
practicable or even appropriate to adopt specific WTO non-discrimination rules regarding such
legislation?  In the alternative, might mandatory publication and notification of such legislation
suffice to minimize the discriminatory object and/or enforcement of such exemptions?
GATT Article XX Exceptions, e.g., pertaining to the protection of public morals, law
enforcement, and human health,10 would be available for such national exemptions.  Are there specific
elements to assess in the context of a competition case, e.g , the state of market liberalization, that
might have a particular bearing on an Article XX Exception analysis in the competition domain and
which should be addressed in a prospective Competition agreement?
In addition to these issues, fundamental questions arise with respect to the application of the
WTO’s MFN principle to cooperation agreements.
Might MFN be used to Challenge Bilate ral/Multilateral Cooperation Agreements?
The Secretariat’s recent note on "Modalities for Voluntary Cooperation" states that a
multilateral agreement on voluntary cooperation could be an efficient tool to facilitate cooperation,
and adds that "[m]ore intense cooperation could still be pursued with individual partners, asdesired."
11  Many countries have entered into bilateral and/or multilateral agreements to promote
antitrust cooperation.  The United States summarized its successful experiences with such agreements
in its submission to this Working Group in July 2002.12  However, cooperation with one Member and
not another could arguably  raise discrimination concerns in a potential WTO Competition agreement.
The United States believes that such cooperative situations should not be considered "like," and alsonotes that discrimination against a foreign government divorced from a particular trade application,
such as may be the case with antitrust cooperation agreements, should not be considered to violate
MFN.  Nevertheless, it is unclear whether this position is shared by other Members.
Thus, even with strong support for bilateral and multilateral cooperation outside of the WTO
context, it is not assured that such cooperation would be considered valid in a potential WTO
Competition agreement including MFN provisions.  Similarly, could a country cooperate with a
particular Member, without the benefit of a particular agreement, but deny similar assistance to a
second Member?  Would such situations require a specific exception from the MFN principle?  If so,
how should this be phrased?  Might guidelines, as suggested by the Secretariat,
13 rather than an
exception, be sufficient to remedy this potential incongruence?  Moreover, if both enforcement cases
and bilateral/multilateral cooperation agreements were to be excluded from the purview of a potentialWTO antitrust MFN principle, would the remaining elements subject to any such MFN provision be
sufficiently meaningful to warrant the adoption of such a principle?
A similar host of questions is raised with respect to the application of the WTO’s
transparency principle in the antitrust context.  We limit ourselves to a discussion of three issues:  (i)Types of decisions subject to the publication obligation;  (ii) Transparency and the Protection of
Confidential Information;  and (iii) Transparency and Resource Allocation.
A similar host of questions is raised with respect to the application of the WTO’s
transparency principle in the antitrust context.  We limit ourselves to a discussion of three issues:  (i)
                                                     
10 See e.g., Article XX of the General Agreement on Tariffs and Trade (1947) and Article XIV of the
General Agreement on Trade in Services (1994).
11 WT/WGTCP/W/192 of 27 June 2002 at para. 29.
12 Submission of the United States, "Modalities for Voluntary Cooperation," of 15 August 2002
(WT/WGTCP/W/204).
13 See Background Note by the Secretariat, "Modalities for Voluntary Cooperation, of 27 June 2002
(WT/WGTCP/W/192) at para. 29.WT/WGTCP/W/218
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Types of decisions subject to the publication obligation;  (ii) Transparency and the Protection of
Confidential Information;  and (iii) Transparency and Resource Allocation
II. TRANSPARENCY
Background Summary
Transparency, in the WTO context, is generally understood as comprising two separate
components:  (i) an obligation to publish, or otherwise make publicly available, relevant measures of
general application prior to their entry into force;  a nd (ii) the notification of such measures to either a
WTO body or WTO Members.14  Importantly, these requirements are subject to an exception for the
protection of confidential information.15  As indicated in our prior submission, the United States
advocates the transparency of rules, laws, and enforcement procedures.  Transparency is important to
the sound application of antitrust law and maintaining the effectiveness, impartiality and credibility of
such law.  However, a number of questions remain concerning the application of transparencyprinciples in a potential WTO Competition agreement.  As in the non-discrimination context, these
concerns generally arise at the point at which WTO rules and fundamental principles are discussed as
applying to individual enforcement actions.
A. W
HAT IS SUBJECT TO PUBLICATION AND NOTIFICATION ?
WTO transparency obligations generally cover laws, regulations, judicial decisions and
administrative rulings of general application.  The Panel in the Japan – Film  case found that
administrative rulings in individual cases are to be considered rulings of general application if such
individual rulings establish or revise principles or criteria applicable in future cases.16  W T O
transparency provisions require the publication and notification of such administrative rulings.17
Antitrust laws generally are written in broad language.  As noted above, many, if not most,
jurisdictions’ laws have, as their central objectives, the promotion of economic efficiency and
consumer welfare.18  In determining whether a particular transaction or agreement meets these goals,
antitrust authorities assess each case individually, which may involve a complex analysis of factors.Each such individual assessment potentially raises issues that may establish principles or criteria
applicable to future cases (e.g , market definition analysis).  Accordingly, if the existing WTO
transparency principle were to be adopted in a potential WTO Competition agreement, governments
may attempt to rely on the Japan-Film  case to challenge a Member’s non-publication of individual
antitrust rulings.  Should the transparency provisions in a potential WTO Competition agreement
apply to individual antitrust cases?  Can administrative assessments that do not result in formal
decisions, e.g , determinations not to pursue a merger or third-party complaint or decisions to use
compulsory process during the course of an investigation, potentially be subject to publication
requirements under this logic?
                                                     
14 See Communication from the United States "Relevance of Fundamental WTO Principles to
Competition Policy," WT/WGTCP/W/131 of 13 July 1999 and Background Note by the Secretariat, "TheFundamental WTO Principles of National Treatment, Most-Favoured-Nation Treatment and Transparency,"WT/WGTCP/W/114 of 14 April 1999.
15 See e.g., Article X:1 of the General Agreement on Tariffs and Trade (1947); Article III bis of the
General Agreement on Trade in Services (1994); and Article  of the Agreement on Trade-Related Aspects ofIntellectual Property Rights (1994).  The Communication from the United States "Relevance of FundamentalWTO Principles to Competition Policy," WT/WGTCP/W/131 of 13 July 1999 and Background Note by theSecretariat, "The Fundamental WTO Principles of National Treatment, Most-Favoured-Nation Treatment and
Transparency," WT/WGTCP/W/114 of 14 April 1999 provide additional detail with respect to these provisions.
16 Japan – Measures Affecting Consumer Photog raphic Film & Paper, para. 10.388, WT/DS44/R.
17See e.g., Article X of the General Agreement on Tariffs and Trade (1947) and Article III of the
General Agreement on Trade in Services (1994).
18 Background Note by the Secretariat (WT/WGTCP/W/127) of 7 June 1999, at § III.WT/WGTCP/W/218
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The role, if any, of private persons in enforcing WTO transparency provisions would also
have to be considered.  In order to comply with transparency provisions in a WTO Competition
agreement, would Members be required to enact legislation or regulations that would give private
parties, including competitors of investigation targets, the ability to challenge antitrust agency non-
disclosure decisions in national courts?  What limits should be placed on this to prevent "gaming" and
other abuses by private persons?
The potential application of the WTO’s transparency rules to individual enforcement actions
also raises implications concerning, inter alia,  the protection of confidential information, and
resources allocation.
B. CAN THE BALANCE BETWEEN TRANSPARENCY AND THE PROTECTION OF CONFIDENTIAL
INFORMATION BE MAINTAINED AT NATIONAL LEVEL ?
As noted above, the WTO transparency principle includes an important exception for
confidential information.  This exception provides that Members are not required to disclose
confidential information, the disclosure of whic h would impede law enforcement, or otherwise be
contrary to the public interest, or which would prejudice legitimate commercial interests of particular
enterprises, public or private.19
Each Member interprets this exception differ ently, according to its own legal culture and
traditions.  As noted in the prior submission of the United States, US statute or regulation requires
much of the information obtained in the course of US antitrust enforcement proceedings to be treated
as strictly confidential.20  This is particularly the case with respect to the investigative stage of an
enforcement proceeding, where commercially sensitive information, including the identity of
informants and witnesses, is protected, and special secrecy rules apply to criminal investigations.
These confidentiality safeguards were adopted, in part, to ensure that respondents are not prejudiced
by the submission of confidential information to th e antitrust agencies enforcing the antitrust rules.21
Thus, these provisions, which clearly fall within the WTO’s confidentiality exception, would impede
the US agencies from publishing basic information, including clearance reports, on notified merger
transactions.
Given the varying national approaches to the protection of confidential information provided
in antitrust cases, could obligations requiring publication and notification effectively be required with
respect to individual cases in a possible Competition agreement?  Instead, might any such provision
be limited to the publication and notification of antitrust laws and guidelines?  If not, should apotential WTO Competition agreement explicitly require Members to adopt procedures allowing
private parties to challenge an antitrust agency’s assertion of confidentiality?  Finally, with respect to
notification, should a possible Competition agreement address remedies that might be available to a
notifying Member for failure of a recipient Member to adequately protect the confidentiality of such
information?
                                                     
19 See e.g., Article X:1 of the General Agreement on Tariffs and Trade (1947) and Article III bis of the
General Agreement on Trade in Services (1994).
20 Communication from the United States "Relevance of Fundamental WTO Principles to Competition
Policy," WT/WGTCP/W/131 of 13 July 1999 at para. 9, highlighting such laws as the Hart-Scott Rodino Pre-
Merger Notification statute, 15 U.S.C. §18a, the Antitrust Civil Process Ac t, 15 U.S.C. §§1311-14, and
Rule 6(e) of the Federal Rules of Criminal Procedure.
21 See e.g., Lieberman v. FTC, 771 F.2d 32, decided 20 August 1985, citing to Senator Hruska’s
remarks regarding the legislative history of the HSR Act at n. 14.WT/WGTCP/W/218
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It is important to address these and related questions prior to the adoption of a WTO
Competition agreement that includes transparency provisions, so that these provisions do not
jeopardize current national antitrust enforcement mechanisms.  To ensure the continued cooperation
of private parties in antitrust proceedings, answers to these and related questions should be clarified as
part of the Working Group’s discussions.
C. WHAT RESOURCES ARE NEEDED TO COMPLY WITH WTO T RANSPARENCY REQUIREMENTS ?
It is our understanding that all countries with antitrust laws publish such laws and
accompanying regulations.  However, many countries, including the United States, do not publish
and/or notify other Members of various individual case assessments, including whether to follow-up
on a complaint and/or pro-forma merger control reviews, and doing so could cause a significant drain
on resources for both the Member subject to the publication and notification requirements as well as
potential recipients of such information.  For example, in fiscal year 2000, the US antitrust agenciesreceived notification of 4,926 proposed transactions pursuant to the notification and filing
requirements of the Hart-Scott-Rodino Antitrust Improvements (HSR) Act alone.
22  This is in addition
to numerous non-merger enforcement investigations.  Extrapolating from these statistics, the sheer
number of possible publications and notifications that could potentially be required pursuant to WTO
transparency in the antitrust context is staggering.
Given these concerns, the Working Group may wish to consider both the costs and benefits of
the transparency principle in the antitrust context,  particularly with respect to requiring publication
and notification of individual rulings of general application.  What are the costs involved in such
publication and notification?  To respond to this question, Members must have a clear idea as to thespecific obligations required by the WTO’s transparency rules.  For example, what form and content
would be considered adequate for publications and notifications?  Would a strict timetable for
publication and notification be imposed on notifying Members?  What mechanism would or should be
employed to ensure proper distribution of both required and voluntary notifications to Members?
These latter practical questions regarding the form and substance of, and mechanisms for, publicationand notification apply equally to antitrust laws, regulations and judicial decisions.
In balancing these costs and benefits, it is of interest to note that of the 4,926 cases reported
under the HSR Act in fiscal year 2000, the US Antitrust agencies allowed over 97% of these
transactions to proceed within the statutory 30-day waiting period, and granted over 70% of such
transactions early termination of the statutory waiting period.
23
III. CONCLUSIONS ON TRANSPARENCY AND NON-DISCRIMINATION
Like our accompanying submission on procedur al fairness, this communication raises only
some of the many questions surrounding the application of the WTO principles of transparency and
non-discrimination in the antitrust context.  Within the transparency and non-discrimination context,
many questions stem from the overarching issue of the application of such principles to individualenforcement assessments and rulings.  Whereas these questions need not create intractable issues, they
deserve to be adequately addressed as part of the discussion on these core principles, and the United
States looks forward to examining and clar ifying these issues in the Working Group.
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22 See Federal Trade Commission, Performance Report Fiscal Year 2000, 31 March 2001, at p. 18,
available at http://www.ftc.gov/opp/gpra/prfy2000.pdf.
23 Id.