WORLD TRADE
ORGANIZATIONWT/WGTCP/2
8 December 1998
(98-4914)
REPORT (1998) OF THE WORKING GROUP ON THE INTERACTION BETWEEN
TRADE AND COMPETITION POLICY TO THE GENERAL COUNCIL
TABLE OF CONTENTS Paragraph Nos.
A. INTRODUCTION 1-4
B. PROCEDURAL INFORMATION ON THE GROUP'S 
ACTIVITIES
(a) Sources and materials used in the Group's work 5
(b) Cooperation with other intergovernmental organizations 6-8
(c) Meetings held to date 9-16
(d) Cooperation with the Working Group on the Relationship 
between Trade and Investment17
C. SUBSTANTIVE WORK DONE IN THE GROUP 18
I. THE RELATIONSHIP BETWEEN THE OBJECTIVES, PRINCIPLES,
CONCEPTS, SCOPE AND INSTRUMENTS OF TRADE AND 
COMPETITION POLICY;  THEIR RELATIONSHIP TO 
DEVELOPMENT AND ECONOMIC GROWTH
(a) The relationship between the objectives, principles, concepts, 
scope and instruments of trade and competition policy19-31
(b) The relationship of the objectives, principles, concepts, scope 
and instruments of trade and competition policy to development 
and economic growth32-43
II. STOCKTAKING AND ANALYSIS OF EXISTING INSTRUMENTS, 
STANDARDS AND ACTIVITIES REGARDING TRADE AND 
COMPETITION POLICY, INCLUDING OF EXPERIENCE WITH 
THEIR APPLICATION
(a) National competition policies, laws and instruments as they 
relate to trade44-56
(b) Existing WTO provisions 57-64
(c) Bilateral, regional, plurilateral and multilateral agreements 
and initiatives65-71
III. THE INTERACTION BETWEEN TRADE AND COMPETITION 
POLICY72-80
(a) The impact of anti-competitive practices of enterprises and 
associations on international trade81-96
(b) The impact of state monopolies, exclusive rights and regulatory 
policies on competition and international trade97-111WT/WGTCP/2
Page 2
TABLE OF CONTENTS Paragraph Nos.
(c) The relationship between the trade-related aspects of 
intellectual property rights and competition policy112-122
(d) The relationship between investment and competition policy 123-134
(e) The impact of trade policy on competition 135-152
D. RECOMMENDATION TO THE GENERAL COUNCIL 153-154
ANNEX 1:  CHECKLIST OF ISSUES SUGGESTED FOR STUDY
ANNEX 2: CONTRIBUTIONS PROVIDED TO THE WORKING
GROUP ON THE INTERACTION BETWEEN TRADE
AND COMPETITION POLICYWT/WGTCP/2
Page 3
A. INTRODUCTION
1. The Working Group on the Interaction between Trade and Competition Policy ("the Working
Group") was established by a decision taken at the WTO Ministerial Conference held in Singapore inDecember 1996.  The relevant paragraph (paragraph 20) of the Ministerial Declaration
(WT/MIN(96)/DEC) reads as follows:
"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 agree
to:
/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, including
anti-competitive practices, in order to identify any areas that maymerit 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 as
provided for in the Midrand Declaration and the contribution it can make to theunderstanding 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 will
determine after two years how the work of each body should proceed.  It is clearlyunderstood 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."
2. At its meeting of 24 April 1997, the General Council appointed Professor Frédéric Jenny
(France) as Chairman of the Working Group.
1
3. The present report provides an overview of the work done to date in the Working Group.  It is
submitted by the Working Group to the General Council in the light of the provision in paragraph 20of the Singapore Ministerial Declaration that the General Council will keep the work of the Working
Group under review and will determine afte r two years how its work shall proceed.
4. The report is organized as follows.  Part B provides a procedural summary of the Group's
activities to date.  Part C provides an overview of the substantive work done in the Group to date.
The description in that part is organized according to the elements of a Checklist of Issues Suggestedfor Study
2 which the Group used to structure its substantive work.  Part D contains the Group's
recommendation to the General Council.
                                                     
1 WT/L/215
2 Reproduced in Annex 1 of this reportWT/WGTCP/2
Page 4
B. PROCEDURAL INFORMATION ON THE GROUP'S ACTIVITIES
(a) Sources and materials used in the Group's work
5. The Group's mandate makes it clear that its task is to study issues raised by Members.
Accordingly, its work has been based on written contributions by Members (a total of 104 to date) and
on oral statements, questions and answers by Members in the Group.  This material has been
supplemented by information received from observer intergovernmental organizations (see following
paragraph) and notes prepared by the Secretariat.  An index of written contributions is attached as
Annex 2.
(b) Cooperation with other intergovernmental organizations
6. The Singapore Ministerial Declaration (paragraph 20) encouraged 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 ensure that the development dimension is taken fully
into account.  In this regard, the IMF and the World Bank attended the Working Group's meetings in
an observer capacity, pursuant to the cooperation agreements concluded between the WTO and theseOrganizations.  UNCTAD and the OECD also attended the meetings as observers, on the basis of an
invitation from the Working Group.  These Organizations were requested at the Working Group's first
meeting to make written and oral presentations on the work of their respective Organizations.  At
subsequent meetings, they kept the Group updated on relevant activities of their Organizations and
contributed to the debate.  The Working Group was also kept informed of relevant work under way invarious regional contexts, such as APEC.  The Working Group is highly appreciative of the valuable
contributions to its work made by the observers.
7. A number of regional organizations also reque sted observer status in the Group.  SELA was
invited to attend the meetings on 16 and 17 September and 27 and 28 November 1997, on an ad hoc
basis.  A decision on requests for attendance by regional organizations was subsequently put on hold
pending the outcome of more general consultations on the issue of observer status in the context of the
General Council.
8. As a further aspect of cooperation, two special symposia were organized by the WTO
Secretariat jointly with UNCTAD and the World Bank.  The first, on the subject of Competition
Policy, International Trade and Economic Development , was held on 29 November 1997 in the
Centre William Rappard;  the second, on the subject of Competition Policy and the Multilateral
Trading System:  Issues for Consideration in the International Community , took place on
25 July 1998 in the same location.  Although formally separate from the work programme of the
Working Group, these were aimed at facilitating its work.
(c) Meetings held to date
9. To date, the Working Group has held seven formal meetings.  The dates of these meetings
were:  7 and 8 July 1997;  16 and 17 September 1997;  27 and 28 November 1997;
11-13 March 1998;  27 and 28 July 1998;  28 and 29 September 1998;  and 17-19 November and
4 December 1998.  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 with those of relevant UNCTAD bodies.  Reports on the first six meetings have beencirculated in documents WT/WGTCP/M/1-6.  A report on the seventh meeting will be circulated
shortly as document WT/WGTCP/M/7.
10. At its meeting of 7 and 8 July 1997, Members made general statements on the nature of the
work to be pursued under the mandate contained in the Singapore Ministerial Declaration andWT/WGTCP/2
Page 5
identified specific issues for study in the Working Group.  Twenty written submissions were received
from Members.  Representatives of APEC memb er economies, the OECD, UNCTAD and the World
Bank made statements on their activities relevant to the Working Group.  The Working Group also
discussed competition-related provisions in existing WTO agreements, based on an informal note
prepared by the Secretariat (Job No. 3347).  The Working Group took note of the paper, while alsonoting that it did not prejudge the work of the Group.  The Group also took note of a Checklist of
Issues Suggested for Study prepared by the Chairm an (reproduced in Annex 1), in the light of the
suggestions made by delegations, as a basis for the organization of the future work of the Group.
11. At its meeting of 16 and 17 September 1997, the Working Group started its substantive
discussion on the first two areas identified in the Checklist of Issues Suggested for Study:  (i)  the
relationship between the objectives, principles, concepts, scope and instruments of trade and
competition policy, and their relationship to development and economic growth;  and (ii) stocktakingand analysis of existing instruments, standards and activities regarding trade and competition policy,
including of experience with their application.  With respect to the latter item, the Group took up, in
turn, each of three sub-items, namely national competition policies, laws and instruments as they
relate to trade, existing WTO provisions, and bilateral, regional, plurilateral and multilateral
agreements and initiatives.  In addition to oral interventions, 19 written submissions were receivedfrom Members.  The Working Group had a further discussion of the informal note by the Secretariat
on competition-related provisions in existing WTO agreements, noting that it in no way restricted the
scope of issues to be examined by the Group and did not preclude any WTO provision from being
raised.
12. At its meeting of 27 and 28 November 1997, the Working Group continued its work on
items I and II of the Checklist.  It divided its discussion of item I into two components:  the
relationship between the objectives, principles, concepts, scope and instruments of trade and
competition policy;  and the relationship of trade and competition policy to development and
economic growth.  As at the previous meeting, item II was taken up by examining in turn each of the
three sub-items.  In addition to oral interventions, 12 written submissions and two non-papers werereceived for the meeting.  With regard to the organization of its future work, the Working Group
agreed to hold meetings in March, July, September and November of 1998.  While specific elements
of the Checklist of Issues Suggested for Study were designated for consideration at each of these
meetings, the Group also agreed that the work woul d be approached with sufficient flexibility to
ensure that all the elements of item III of the Checklist were adequately discussed.  It was understood
specifically that, at the Group's meetings in September and November of 1998, an opportunity would
be provided to revisit any elements of the work programme on which Members felt further work wasnecessary and also to have a general review of the work of the Group with a view to the preparation
and adoption of the Group's report.
13. At its meeting of 11-13 March 1998, the Working Group commenced its consideration of
item III of the Checklist (the interaction between trade and competition policy), beginning with a
general discussion on interaction issues (chapeau discussion on item III) and proceeding subsequentlyto a discussion of the impact of anti-competitive practices of enterprises and associations on
international trade (first tiret under item III).  It also continued its work on stocktaking and analysis of
existing instruments, standards and activities rega rding trade and competition policy (item II of the
Checklist), with reference to existing WTO provisions, bilateral, regional, plurilateral and multilateral
agreements and initiatives, and national legislation and policies.  In addition to oral interventions,11 written contributions on these matters were received from Members.  With regard to its
consideration of the relationship of trade and competition policy to development and economic
growth (topic under item I of the Checklist), the Grou p decided that the Secretariat would be asked to
prepare a paper bringing together the issues raised and points made on this topic, based on the oral
and written contributions to the Group relevant to the topic, including the work done in UNCTAD andother intergovernmental organizations that had been  brought to the attention of the Group.  The GroupWT/WGTCP/2
Page 6
discussed the desirability of making more of its documents publicly available.  It agreed that the
Secretariat would contact Members to enquire as to whether their contributions to date could be
derestricted, and that this would be done on the basis of instructions to be received from individual
Members (done in Job No. 2252, dated 24 April 1998).  Subsequent to the meeting, a number of
delegations requested that their contributions be designated for early derestriction.
14. At its meeting of 27 and 28 July 1998, the Working Group held substantive discussions on
two further tirets under item III of the Checklist of Issues Suggested for Study:  the impact of state
monopolies, exclusive rights and regulatory policies on competition and international trade (second
tiret under item III) and the impact of trade policy on competition (fifth tiret).  It also continued its
work on stocktaking and analysis of existing instru ments, standards and activities regarding trade and
competition policy (item II of the Checklist), with reference to existing WTO provisions and national
legislation and policies.  In addition to oral interventions, 13 written contributions on these items werereceived from Members.
15. At its meeting of 28 and 29 September 1998, the Working Group considered the two
remaining tirets under item III of the Checklist, namely the relationship between the trade-related
aspects of intellectual property rights and competition policy (third  tiret) and the relationship between
investment and competition policy (fourth tiret).  It held a further discussion on the relationship oftrade and competition policy to development and economic growth (topic under item I of the
Checklist).  The Group continued its work on stocktaking and analysis of existing instruments,
standards and activities regarding trade and competition policy (item II of the Checklist), with
reference to national legislation and policies.  In addition to oral interventions, 11 written
contributions and three non-papers on these items were received from Members.  For the discussionon the relationship of trade and competition policy to development and economic growth, the Group
had before it a synthesis paper on the relationship of trade and competition policy to development and
economic growth (WT/WGTCP/W/80), prepared by the Secretariat in response to the request made
by Members at the Group's meeting in March (see paragraph 13, above).
16. At its meeting on 17-19 November and 4 December 1998, the Working Group reviewed and
approved, subject to minor modifications, a draft of the descriptive sections of the present report
(Parts A, B and C) which had been prepared by the Secretariat.  Following informal consultations, the
Group adopted the recommendation set out in Part D of the report, below.  In addition, as had been
agreed at previous meetings
3, an opportunity was provided for Members to revert to any elements of
the Group's work programme.  In this regard, a Member made a statement expressing concern
regarding the impact on trade and competition of  exclusive territorial limitations in licensing
agreements, and calling for further study of this matter in the Group.
(d) Cooperation with the Working Group on the Relationship between Trade and
Investment
17. The Singapore Ministerial Declaration (WT/MI N(96)/DEC, paragraph 20) provided that the
Working Group on the Interaction between Trade and Competition Policy and the Working Group onthe Relationship between Trade and Investment should draw upon each other's work, if necessary.  In
this regard, the Chairmen of the two Working Groups kept in close contact with a view to
coordinating the work of the two Groups on relevant  issues.  At the meeting of the Working Group on
the Relationship between Trade and Investment on 1-2 October 1998, the Chairman of the Working
Group on the Interaction between Trade and Competition Policy, Professor Jenny, made an oralstatement on a discussion held in the Working Group on the Interaction between Trade and
Competition Policy on the subject of the relationship between investment and competition policy.
                                                     
3 WT/WGTCP/M/3, paragraph 71WT/WGTCP/2
Page 7
C. SUBSTANTIVE WORK DONE IN THE GROUP
18. This Part of the report is an overview of the substantive work done in the Group, pursuant to
the mandate given in paragraph 20 of the Singapore Ministerial Declaration.  By its very nature, such
an overview cannot reflect everything that was said and capture all nuances, such as can be found inthe detailed records of the individual meetings of the Working Group (WT/WGTCP/M/1-7) and in the
written contributions of Members (see Annex 2).  The work undertaken was structured on the basis of
the Checklist of Issues Suggested for Study (Annex 1) which the Group took note of at its meeting on
7 and 8 July 1997.  This summary uses the same structure.
I. THE RELATIONSHIP BETWEEN THE OBJECTIVES, PRINCIPLES, CONCEPTS,
SCOPE AND INSTRUMENTS OF TRADE AND COMPETITION POLICY;  THEIRRELATIONSHIP TO DEVELOPMENT AND ECONOMIC GROWTH
(a) The relationship between the objectives, principles, concepts, scope and instruments
of trade and competition policy
19. The matter of the relationship between the objectives, principles, concepts, scope and
instruments of trade and competition policy (item I of the Checklist of Issues Suggested for Study)
was considered by the Working Group at its meetings on 16 and 17 September and on 27 and
28 November 1997.  Written submissions on this item were provided and were introduced orally by
the representatives of Canada (W/42 and 57);  the European Community and its member States (W/45);
Hong Kong, China (W/26);  Japan (W/32 and 52);  Mexico (W/58);  Morocco (W/43);  New Zealand
(W/30);  Pakistan (W/41);  Peru (W/36);  the Ph ilippines on behalf of AS EAN WTO Members (W/33);
Romania (W/38);  Singapore (W/28);  Turkey  (W/40);  and the United States (W/35).
4
20. Views were expressed on the scope of the term "competition policy" for the purposes of the
work of the Working Group.  The point was made that the term, in principle, included the full range ofgovernment measures that could be used to pr omote competitive market structures and behaviour,
including trade liberalization measures.
5  One view was that a satisfactory competition policy could be
implemented with or without the inclusion of a competition law.6  Another view expressed was that it
was difficult to imagine how a fully satisfactory competition policy could exist without a specific law
dealing with anti-competitive practices of enterprises.7
21. In the discussions in the Group on the overall relationship between trade and competition
policy, the view was expressed that the two policies could be mutually consistent and reinforcing butcould also be in contradiction with each other, depending on the way they were applied.  There was
also a view that there could, in certain situations, be a relationship of substitutability.  In this
discussion, a distinction was made by many speakers between trade liberalization as a process and
objective or direction of trade policy, on the one hand, and trade measures which might restrict trade,
on the other.
22. With regard to areas where the two policies were mutually reinforcing, the view was widely
expressed that the basic objectives of trade liberalization and of competition policy were consistent
                                                     
4 In this Part of the report, documents issued in the series WT/WGTCP/M/- are referred as "M/…".
Documents issued in the series WT/WGTCP/W/- are referred to as "W/…".
5 M/3, paragraph 12
6 M/3, paragraph 12
7 M/3, paragraph 13.  The question of whether there could be an effective competition policy without a
competition law was discussed further in the context of other aspects of the Group's work programme.  See, in
particular, the section on stocktaking of national approaches (Part C(II)(a), below ).WT/WGTCP/2
Page 8
with one another.  Both contributed towards making domestic markets more competitive and thus to
an improved allocation of resources and therefore promoted efficiency and consumer welfare.  The
view was expressed that the central function of the WTO in promoting equality of competitive
opportunities for Members in the world trading syst em illustrated the interdependence of trade and
competition policy.8
23. The point was made that trade liberalization and competition policy were complementary;
neither one could fully achieve its objectives without th e other.  In this regard, it was noted that the two
policies operated in somewhat different areas.  Trad e policy was basically concerned with governmental
action, whereas competition policy focused on the behaviour of enterprises.  Trade policy was
traditionally focused on measures at the border, whereas competition policy regulated competitive
conditions and the behaviour of enterprises within the country.  In illustrating this complementarity,
reference was made to the role of competition policy in ensuring effective market access and the role of
trade liberalization in facilitating the removal of go vernmental measures that facilitated anti-competitive
behaviour by enterprises.9
24. The question of the sequencing of the introduction of competition policy with trade
liberalization and other economic reforms was discussed.  It was said that two "extreme" views should
be rejected:  (i) the view that countries should liberalize first and implement competition policy at alater stage of development;  and (ii) the view that countries should first industrialize their economies
through government targeting of industries, and im plement competition policy later.  While the first
view reflected an underestimation of the possibilities for private market failures, the second was based
on an underestimation of the likelihood of government failures in targeting industries and firms for
support.  A better approach would be to adopt  competition policy simultaneously with trade
liberalization and other economic reforms such as privatization and deregulation.  In this way,
competition policy would act as a catalyst for economic reform and development based on
market-oriented principles.
 10
25. The possible inconsistencies between trade and competition policies were discussed by
reference to trade policies that might have an adverse effect on competition and competition policies thatmight have an adverse effect on trade.  The point was made that restrictive trade measures had the effect
of limiting competition.  Reference was made, in this regard, to the application of trade defence
instruments.  It was suggested that such measur es might not only curtail market access for foreign
suppliers but also facilitate anti-competitive behaviour by domestic ones.
11  It was suggested that this
contradictory interface, and its ramifications for development and economic growth, should be
examined in depth in the Group.  Exclusions and exemptions from competition law as well as lack of
enforcement thereof were cited as illustrations of competition policies, or failures of competition
policies, that might have a negative impact on trade or, at least, limit the positive, complementary role
that competition policy might play.12
26. A number of reasons why trade policy and competition policy might sometimes have divergent
aims and effects were put forward.  It was sugg ested that, whereas competition policy focused on the
effect of enterprise behaviour on the welfare of  consumers, trade policy tended to focus on producer
interests, and was more amenable to capture by special interest groups.13  Competition policy was
described as being more concerned with protecting competition and trade measures with protecting
competitors.  It was also stated that, in addition to  providing a measure of protection, trade policy often
                                                     
8 M/2, paragraph 7;  M/3, paragraph 4
9 M/2, paragraphs 8 and 9;  M/3, paragraphs 4 and 9
10 M/3, paragraph 29
11 M/2, paragraph 12;  M/3, paragraphs 5 and 10
12 M/2, paragraph 12
13 M/3, paragraph 6WT/WGTCP/2
Page 9
had objectives which could lead to divergences from competition policy goals, such as raising revenue,
promoting self-sufficiency and encouraging exports.  Another difference referred to in this connection
was that, whereas nationality was a key element in trade policy, it was not generally a consideration in
competition policy.14  On the other hand, it was suggested that competition policy was susceptible to
application in ways that gave excessive weight to  the interests of national consumers and producers, to
the neglect of the interests of consumers in other c ountries - as evidenced, for example, in the exemption
of export cartels from many countries' competition legislation.  Moreover, the point was made that
competition policy sometimes encompassed producer-ori ented goals such as the protection of small
businesses or the pursuit of national industrial policy.15
27. Another perspective offered on the relationship of trade policy (including trade instruments)
and competition policy was that insistence on a convergence of objectives was unrealistic and would
obscure understanding of the issues.16  While competition policy indeed focused primarily on the
goals of efficiency and consumer welfare, trade policy often sought to protect or advance the interests
of a country's individual producers.  There was nothing intrinsically objectionable to this.  Different
policy instruments often served different objectives.  For example, with regard to the matter of market
access, depending on the facts in a particular market, it could be the case that the use of vertical
market restraints by firms would be considered acceptable from the standpoint of competition policy,perhaps due to the existence of a sufficiently la rge number of competing domestic firms.  The same
situation could, nonetheless, give rise to legitimate concerns from a trade policy point of view, if it
was deemed to impede access to the market by foreign firms.  Another distinguishing feature of
competition and trade policy was that, in many cases, competition policy issues could be resolved
through private actions by firms, whereas this was not true of trade policy.
28. The view was also expressed that competition policy and trade policy might be substitutable
in some respects.  For example, it was said that competition law provisions relating to price
discrimination might serve, in some circumstances, as a substitute for anti-dumping measures.
17  The
point was also made that elimination of existing tr ade barriers would have the effect of removing the
incentive for enterprises to engage in dumping, in that goods exported at dumped prices could beshipped directly back to the country of export.
18  Even if direct substitution of instruments was not
possible, it was suggested that, at least, it would be desirable to consider whether elements of
competition policy thinking could usefully be incorporated into trade policy formulation.19
29. It was suggested that an issue meriting attention by the Working Group was the consistency of
national competition legislation with traditiona l WTO principles relating to non-discrimination, in
particular national treatment.20  The Group was informed that a study of this question with reference to
NAFTA, which had considered both the scope and conten t of the participating countries' legislation, had
found that, in general, such legislation was cons istent with the principle of national treatment.21  It was
said that, in reflecting on the general issue of th e consistency of competition legislation with WTO
principles, it would be desirable for the Group to consider a range of institutional questions relating to
access to courts or other adjudicatory authorities and the exercise of enforcement discretion, with
reference to studies that had been undertaken at the OECD and other sources.22
                                                     
14 M/2, paragraph 10
15 M/2, paragraph 11
16 M/3, paragraph 7
17 M/3, paragraph 5
18 M/3, paragraph 5
19 M/3, paragraph 6
20 M/3, paragraph 14
21 M/3, paragraph 14
22 M/3, paragraph 14.  It should be noted that further consideration was given to this matter by the
Group in other contexts, including stocktaking of relevant WTO provisions (see Part C(II)(b), below).WT/WGTCP/2
Page 10
30. The point was made that, since competition law and policy was a new area for the WTO, it
would be useful to develop a common vocabulary of the key concepts and terms used.  Examples
given included the concepts of market definition, with reference to both its product and geographic
dimensions, entry barriers, market structure, mark et power, competitive injury, horizontal and vertical
restraints, and mergers.23  A number of these terms were explored in subsequent deliberations of the
Group, particularly in the context of stocktaking of national legislation and policies.24
31. Reference was made to the importance of enhanced international cooperation mechanisms for
competition law enforcement as a response to developments such as globalization and trade
liberalization.  In particular, it was said that globa lization and successive rounds of trade liberalization in
the post-World War II period had enhanced the risk of anti-competitive practices that could impact
adversely on international trade.  This created a need  for consideration of the benefits of strengthening
international cooperation mechanisms.25  It was suggested, further, that it was desirable to discuss
institutional linkages between trade and competition policy, and the feasibility and desirability of
expanded cooperation in competition law enforcement, at three levels.  First, within individual countries,
much would be gained through closer institu tional linkages and dialogue between institutions
responsible for trade policy and competition law enforcement.  Second, at the regional level, a
significant strengthening of cooperative approach es to competition law enforcement, coupled with
selective substitution of competition law for existing trade instruments, could be envisioned.  At the
multilateral level, a more cautious and gradual approach was warranted.  Consideration could be given
to two elements:  (i)  the fost ering of shared understanding and voluntary convergence through the
sharing of national experiences, legislation and juri sprudence;  and (ii) deliberations on possible basic
standards to be incorporated in Members' competition legislation.26
(b) The relationship of the objectives, principles, concepts, scope and instruments of
trade and competition policy to development and economic growth
32. The relationship of the objectives, principles, concepts, scope and instruments of trade and
competition policy to development and economic growth is noted as a specific topic for discussion in
the Checklist of Issues Suggested for Study (topic under item I of the Checklist).27  Furthermore, the
preamble to the Checklist notes that all elements of the Group's work should be permeated by the
development dimension of the issues.  The relationship of trade and competition policy to
development and economic growth was considered by the Group as a specific agenda item in its
meetings of 27 and 28 November 1997, 11-13 March 1998 and 28 and 29 September 1998.28  I n
addition, this relationship and/or the development dimension of the issues was considered withreference to other agenda items at all meetings of the Group, and is referred to in a large number of
written submissions by Members and observer in tergovernmental organizations, including those of
the European Community and its member States (W/1 and 45), Egypt (W/9), Pakistan (W/10 and 41),
Venezuela (W/14), Hong Kong, China (W/15 and 26), Nigeria (W/16), UNCTAD (W/17), ASEAN
WTO Members (W/19 and 33), Peru (W/36), the OECD (W/21 and Add.1), the World Bank (W/22),
India (W/24), Japan (W/25, 52 and 68), Korea (W/37 and 56), Australia (W/39), Turkey (W/40
and 76) and Kenya (W/46).  In introducing their ow n national competition legislation and policies, a
large number of developing and transition countries have commented on the specific reasons
                                                     
23 M/2, paragraph 4
24 Part C(II)(a) of this report (in particular, M/2, paragraphs 22 and 25; and the answers provided by
Canada, the European Community and its member States and the United States to questions posed by Members inprevious meetings of the Group (W/72, 61 and 67 respectively)).
25 M/3, paragraph 15
26 M/3, paragraph 16
27 "Checklist of Issues Suggested for Study", Annex 1 of this report
28 M/3, paragraphs 20-38;  M/4, paragraphs 75-78;  and M/6, paragraphs 61-80WT/WGTCP/2
Page 11
underlying the adoption of such legislation.29  These contributions gave rise to a rich discussion in the
Group and shed further light on the relationship between competition policy and economic
development.
33. It should be noted that the relationship of trade and competition policy to development and
economic growth overlaps with all aspects of the Group's work programme.30  To minimize
duplication in this report, matters addressed in other sections will be covered, in this section of the
report, largely by reference to those sections, with an indication of the special significance of the
matter for economic development.  In its consideration of this aspect of its work programme, the
Working Group had before it a synthesis paper on the relationship of trade and competition policy to
development and economic growth (W/80), prepared by the Secretariat at the request of the Group.31
The paper brought together the issues raised and points made on this topic in the written and oralcontributions of Members.  The following paragraphs draw upon the synthesis paper and the follow-up discussion on the paper that occurred at  the Group's meeting on 28-29 September 1998.
34. A point made by a number of Members in their oral and written contributions relevant to this
item was that, in many cases, competition law and policy had been implemented or strengthened in
those countries not in isolation, but rather as one element of a package of interrelated reforms of
policies aimed at promoting economic and social development.
32  A central feature of these reforms
had been greater reliance on market forces as an engine of development and adjustment and on the
creation of a framework aimed at ensuring that such forces operate in the public interest, notably by
promoting or maintaining competition in mark ets.  The related reforms included external
market-opening measures (including liberalization of trade and foreign investment regimes),
privatization and sector-specific regulatory reforms/deregulation.  The various elements of thepackage were considered to be mutually reinforcing.
35. A related point made in the discussion concerned the heightened importance of competition
policy as a tool of development in the current, globalizing economic environment, as compared to
previous eras.  The argument was made that, whereas in the past, countries could hope to achieve
development through other (possibly more interventi onist) tools and approaches, these approaches were
no longer workable in light of the extent of trade liberalization and globalization of business activities
that had taken place and the increased importance of fore ign direct investment as an engine of growth in
the present economic environment.  As a result of  these developments, anti-competitive practices of
enterprises were increasingly international in scope, and appeared to be relatively more significant than
in the past.  Consequently, according to this view, a vigorous competition policy was necessary to
respond appropriately to these concerns and to establish a climate conducive to investment and
economic growth.
33
                                                     
29 Contributions of Hungary (W/27), Peru (W/36 and 59), Korea (W/37), Romania (W/38), Turkey
(W/40 and 76), Colombia (W/44), Kenya (W/46), Mexico  (W/54), Argentina (W/55), Poland (W/69), the Czech
Republic (W/71), Chile (W/75), India (W/79), Venezuela (W/86), Brazil (W/93) and Bolivia (W/97).
30 Development-related issues are considered, in par ticular, in the sections on the relationship between
the objectives, principles, concepts, scope and inst ruments of trade and competition policy (Part C(I)(a)),
stocktaking of national legislation and policies (Part C (II)(a)), and the interaction between trade and competition
policy (Part C(III)) generally.
31 M/4, paragraph 78
32 M/3, paragraphs 43, 44 and 45
33 M/3, paragraph 22WT/WGTCP/2
Page 12
36. Beyond these two general points, a number of specific rationales for introducing competition
law and policy as a tool of development were noted in the Group.  While many of these overlapped, at
least to a degree34, they were also broken out as follows:
• the point was made that competition policy could serve the goal of enhanced
efficiency, in both its static and dynamic senses35;
• it was further suggested that an adequate legislative and policy framework was
required to protect consumers and industrial users from anti-competitive practicesthat raise prices and reduce output.
36  The Group was informed that a majority of
cases of anti-competitive practices in developing country settings encountered by an
intergovernmental organization involved in giving advice and assistance in these
matters involved the supply of intermediate products purchased by other businesses,
rather than goods purchased by final consumers.37  This underlined the potential
contribution of competition policy to development;
• a related rationale cited for introducing competition policy was to prevent excessive
market concentration and its associated deleterious effects.38  These, it was suggested,
included extensive inefficiencies, structural rigidity and non-adaptability to external
shocks39;
• it was suggested that the role of competition policy in addressing anti-competitive
practices of enterprises that affected international trade40 might be particularly
important in a developing country setting.41  In addition to other practices that
affected international trade generally, a view was expressed that it was increasingly
important that competition law in developi ng countries' trading partners should take
account of their export interests and that their own competition laws should protectthem against abusive practices in their import markets
42;
• the point was made with reference to various aspects of the Group's work programme
that the implementation of a transparent and effective competition policy could be animportant factor both in enhancing the attractiveness of an economy to foreign
investment, and in maximizing the benefits of such investment.43  It was said that
competition policy could enhance the attractiveness of an economy for foreign
investment by providing a transparent and principles-based mechanism for the
resolution of disputes involving such investment that was consistent with
international norms that were widely accepted internationally.  Vigorous competition
                                                     
34 In particular, it may be observed that most if not all of the various rationales relate, to a degree, to the
promotion of economic efficiency.
35 Contributions referenced in W/80, paragraph 9.  Static efficiency refers to the optimum utilization of
a society's existing resources to meet consumer wants ("allocative efficiency"), at the lowest possible cost
("productive efficiency").  Dynamic efficiency, which is posited by some economists to be even more importantthan static efficiency, relates to the optimal introduc tion of new products, more efficient production processes
and superior organizational structures over time.
36 Contributions referenced in W/80, paragraph 10;  and M/3, paragraph 6.
37 W/80, paragraph 36;  and M/3, paragraph 58
38 Contributions referenced in W/80, paragraph 11.
39 M/2, paragraph 15;  and W/80, paragraph 11
40 Further discussion is to be found in Part C(III)(a), below.
41 Contributions referenced in W/80, paragraphs 13 and 14;  and comments summarized in M/4,
paragraph 77.
42 M/2, paragraph 15
43 M/3, paragraphs 21 and 22;  and M/6, especially paragraphs 29, 31 and 56WT/WGTCP/2
Page 13
in markets, reinforced by competition policy, also helped to maximize the benefits of
such investment to host countries, by encouraging participating firms to construct
state-of-the-art production facilities, to transfer up-to-date technology into host
countries and to undertake appropriate training programmes, and by preventing the
exploitation of consumers.44  The suggestion was made that these effects could be
particularly important in developing countries, in view of the crucial importance for
such economies of the technology transfer that could accompany foreign direct
investment45;
• the point was made that competition policy could reinforce, and might be essential to
realizing, the benefits of privatization and deregulation programmes and initiatives.46
The argument here was that, unless appropriate measures were taken to ensure
inter-firm rivalry, and to prevent the continuation and/or re-establishment of
monopolistic market structures, no fundamental change would occur in the incentivesfacing firms that would improve their overall behaviour and performance.  In this
regard, it was also suggested that this benefit of competition policy could be
particularly important for countries undergoing transition to a market-based economy,
in that they faced particular challenges and dilemmas in introducing the necessary
pro-competitive reforms to accompany privatization and deregulation programmes
47;
• the point was also made that the existence of a competition law coupled with a
vigorous enforcement policy greatly facilitated effective competition advocacy work.
This was because a track record of effective enforcement activity enhanced both the
credibility and the expertise of the responsible agency.48  It was suggested that such
work could be a particularly important tool for addressing government measures thatlimited competition, and could be a particularly important function of competition
agencies in a developing country setting, in view of the severe resource constraints
that often faced competition agencies in such countries, and the critical importance of
market reforms and establishing a competition culture in developing economies.
49
37. While the view that competition had a role to  play in economic development received broad
support in the Group, a view was also expressed that a comprehensive competition law might not be
strictly necessary to ensure the desired degree of competition.  This reflected several underlying
considerations.  First, the argument was made that, at least in the case of small economies
characterized by a minimum degree of government intervention in markets, an open trade andinvestment policy could serve as a substitute for competition policy.
50  The argument here was that, in
such economies, competition from foreign sources co uld serve as an effective substitute for rivalry
among domestic producers in disciplining the exercise of market power.  Second, it was said that,
before the benefits of competition could be realize d, sufficient supply capability must be present in an
economy.51  The application of competition policy could make this objective more difficult to achieve.
Third, questions and concerns were raised in the Group regarding social and economic dislocation that
could result from reliance on competition policy as a tool of economic development.  In particular, itwas suggested that the application of competition po licy could create unemployment and/or could affect
the survival of firms and industries, including lo cally-based small and medium-sized enterprises and
                                                     
44 M/3, paragraph 22
45 Comments summarized in W/80, paragraphs 18-20.
46 Related discussion is contained in Part C(III)(b), below.
47 Contributions summarized in W/80, paragraph 25.
48 M/4, paragraphs 68-70
49 Comments summarized in W/80, paragraphs 25 and 26.
50 M/3, paragraph 48
51 M/3, paragraph 25WT/WGTCP/2
Page 14
that, perhaps particularly in developing countries, these effects could not be ignored.  Fourthly, apart
from arguments regarding the fundamental desirability of competition as a building block of
development, questions were raised regarding the need for a comprehensive competition law for
delivery of competition policy.52  Further to this point, the argument was made that competition policy
actually comprised the full range of government meas ures that had an impact on market structure and
conduct, including trade liberalization and sectoral measures.  Thus, it was suggested, a commitment
to competition policy might not entail the adoption of a traditional competition law.53
38. In response to the foregoing concerns, the following points were made.  First, while an open
trade policy was supportive of competition policy objectives, trade liberalization alone was unlikely to
be sufficient as a guarantor of competition in all circumstances.  The reasons for this included the
following factors:  (i) a large number of markets (e.g., non-tradeables or tradeables with high
transportation costs) remained local in nature, and were, therefore, not subject to effective discipline
from imports (although, in principle, they might still be subject to international discipline if
investment were liberalized)54;  (ii) even in regard to tradeable goods, and where formal trade barriers
had been removed, competition could be affected by a host of government or other measures
including regulations, standards and licensing requirements;  and (iii) even in the absence of the latter
type of measures, the ability of imports to discipline the exercise of market power could be affectedby a wide range of anti-competitive practices of firms.
55  Second, with regard to the matter of supply
capability and economies of scale, it was said that it should be possible to facilitate this, while still
maintaining appropriate competitive disciplines, if competition policy was introduced in conjunction
with external market-opening measures.  Furthermor e, on the whole, robust competition in a country's
home market contributed positively to the international competitiveness of firms.56  It did this by
providing incentives for the continual upgrading of products, production methods and marketing and
distribution channels.  Third, regarding the question of social and economic dislocation, including
unemployment, from the application of competition policy, it was said that even where a transition to
competition imposed high costs on individual incumb ent firms, these were likely to be more than
compensated for by gains accruing to new entrants in the market, and by society as a whole.57
Moreover, there was a danger of attributing to competition policy social costs that were really the
result of more systemic changes relating to a movement away from pervasive regulation and state
ownership.  Notwithstanding these points, the view was expressed that a degree of flexibility might
well be appropriate in the application of competition policy, perhaps particularly in a developing
country setting, including with respect to small and medium-sized enterprises and
efficiency-enhancing inter-firm arrangements.  Fourth, with respect to whether a generic competition
law was strictly necessary as an underpinning of competition law, it was said that, while it mightindeed be possible for a country to have a competition policy without having a competition law,
having such a law provided important benefits.  These included ensuring greater consistency in
enforcement approaches across industries;  giving the policy statutory character, enforceability and
stability;  enhanced ease of adaptation of new analytical techniques applicable across sectors;  and a
reduced danger of institutional "capture" of a comprehensive competition authority as compared to thesituation of regulators that focus on particular economic sectors.
58  A competition law and authority
would also facilitate obtaining the benefit of cooperation with other competition agencies in
enforcement and other matters.
                                                     
52 Related discussion contained in Part C(II)(a), below.
53 M/3, paragraph 12
54 See W/80, paragraph 31;  and comments reported in M/4, paragraph 44.
55 M/4, paragraphs 23-24
56 Comments summarized in W/80, paragraph 35.
57 W/80, section IV(a)
58 Comments summarized in W/80, paragraph 43.WT/WGTCP/2
Page 15
39. The point was made that the establishment of robust competition law regimes in developing
and transition economies depended critically on public acceptance of such policy and the development
of a "competition culture".59  This, in turn, was dependent on respect for and adherence to the rule of
law and related institutions and processes.60  In this regard, it was suggested that it would be desirable
to give further consideration in the Group to the question of ways and means of developing andputting in place transparent, rules-based enforcement and adjudicatory institutions and processes that
would enjoy a high degree of public understanding, acceptance and support, and thereby would help
to maximize the effectiveness of market-oriented reforms including, but not limited to, the
introduction of competition law and policy.
40. The point was made that, although anti-competitive practices of enterprises might well have a
detrimental impact on economic development, it was also important to consider the impact of
anti-competitive policies and measures of governments.  In many cases, this could be as great orgreater than that of purely private anti-competitive practices.
61  Furthermore, in many cases,
ostensibly private anti-competitive behaviour was itself prompted or facilitated by government
actions.
41. The discussion of the role of competition policy in developing market economies also gave
rise to a rich discussion on priorities for the im plementation of competition law in such economies.
These matters are discussed in Part C(II)(a), below, dealing with the stocktaking of national
approaches.
42. Reference was made, in the debate on the relationship of trade and competition policy to
development and economic growth, to the potential benefits of enhanced international cooperation, of
one form or another, for the implementation of competition policy.  A number of Members expressedsupport for an enhanced framework for international cooperation in competition law enforcement, for
the specific purpose of facilitating the effective use of competition policy as a tool of economic
development.62  However, the specific parameters of such cooperative arrangements were not defined,
and different views were put forward with respect to the desirability of new initiatives at the level of
the WTO in this area.63
43. In a related vein, the importance of technical cooperation as a vehicle for facilitating the
effective implementation of competition law and policy in developing economies was referred to by a
number of Members.64  The nature of specific requirements in this area was not extensively discussed.
II. STOCKTAKING AND ANALYSIS OF EXISTING INSTRUMENTS, STANDARDS AND
ACTIVITIES REGARDING TRADE AND COMPETITION POLICY, INCLUDING OF
EXPERIENCE WITH THEIR APPLICATION
(a) National competition policies, laws and instruments as they relate to trade
44. A large number of Members, including both developed and developing countries, made
presentations on their national competition policies and laws in relation to this item of the Checklist of
Issues Suggested for Study.  Information on these presentations is summarized in Table 1.  In
addition, a more extended table summarizing basic elements of national competition laws as set out inMembers' submissions to the Group will be circulated separately.
                                                     
59 Related discussion is contained in Part C(II)(a), below.
60 M/6, paragraph 63
61 M/6, paragraph 71
62 M/3, paragraph 35;  and related discussion summarized in M/6, paragraph 76
63 Related discussion is contained in Part C(III)(a), below.
64 M/2, paragraph 15WT/WGTCP/2
Page 16
45. Members' presentations on this item precipitated a number of questions on the design and
application of competition law and policy and related matters that were put to Members with long
experience of such matters.  The questions were answered by Members both orally at meetings of the
Working Group65 and in written form.66  In addition to matters regarding which the discussion is
summarized in paragraphs 46-56 below, the questions dealt, inter alia , with the following matters:
(i) the role of guidelines or other policy statements  in the implementation of competition law;  (ii) the
implications of regional trading or economic integration arrangements for the administration and
enforcement of competition policy;  (iii) the role of competition advocacy as an element of
competition policy, particularly in an economy in transition;  (iv) the appropriate scope of
involvement of competition agencies in the privatization process;  (v) the appropriate scope of
involvement in monitoring developments in capita l markets, as a tool for ensuring compliance with
competition policy;  (vi) what sort of special measures were appropriate in relation to the exit ofinefficient firms or industries in an economy in transition;  (vii) the interaction of competition and
other national laws that may incorporate provisions that limit competition;  (viii) the use of positive
comity principles as a tool for resolving competition policy problems while minimizing conflicts of
jurisdiction, and the question of whether this was workable in the presence of sectoral exemptions
from competition law in the jurisdiction where the practices were occurring;  (ix) the extent to whichcountries can "leapfrog" down the learning curve by drawing on other countries' experience in the
administration and enforcement of competition laws;  (x) appropriate measures to address tacit and
explicit government policies that tolerate and encourage anti-competitive practices by enterprises;
(xi) the optimal balance between enforcement and non-enforcement activities in a competition
agency, and the question of how an agency can avoid becoming "just another regulatory body";(xii) the promotion of a "competition culture", to supplement and reinforce the implementation of
competition law; (xiii) the question of whether competition authorities in jurisdictions in which
MNEs were headquartered considered the effects of MNE mergers in other (smaller) countries;
(xiv) the consideration given to factors other than "pure" competition concerns in the evaluation of
mergers;  (xv) the conditions that were deemed to gi ve rise to "appreciable trade effects" sufficient for
the EC Commission to exercise jurisdiction over a matter;  (xvi) the provision in the implementation
of EC competition law for information-gathering powers and the protection of confidential business
information;  (xvii) the extent to which anti-dumping measures should be a legitimate area of concern
for regulatory authorities or competition authoritie s;  (xviii) the extent to which a competition body
should be seen as a regulator;  (xix) the difficulties or problems that might be encountered during the
process of transformation from a narrow competition regime to a wider one and the institutional
framework that could facilitate such a transformation;  and (xx) the measures taken in the context ofthe agreement between Australia and New Zealand relating to the free movement of persons.
                                                     
65 M/3, paragraphs 26 and 27;  M/3, paragraph 61;  and M/4, paragraphs 61, 68, 70, 73 and 74
66 Written answers provided by Australia (in W/98), Canada (in W/72), the European Community and
its member States (in W/61) and the United States (in W/67).WT/WGTCP/2
Page 17
Table 1
Contributions provided on the subject of stocktaking and analysis
of national competition policies, laws and instruments as they relate to trade
Country
(in alphabetical order)Document
(WT/WGTCP/W/- number)Where discussed in Minutes
(WT/WGTCP/M/- number)
Members
Argentina W/55 M/2, paras. 23 and 26
Australia W/39
W/60
W/98 (Answers to questions)M/2, para. 20
M/4, para. 58 and M/5, para. 83
M/5, para. 83
Bolivia W/97 M/5, para. 82
Brazil W/93 M/5, paras. 3-4, 8, 17 and 21
Canada W/51
W/72 (Answers to questions)M/3, para. 40
M/4, para. 72
Chile W/75 M/3, para. 52
Colombia W/44 M/3, paras. 40 and 46
Czech Republic W/71
European Community and itsmember StatesW/34
W/61 (Answers to questions)M/2, paras. 20-22 and 27
M/4, paras. 72 and 74
Hong Kong, China W/53 M/3, paras. 40-42 and 56
Hungary W/27 M/2, para. 20
India W/79 M/5, para. 79
Japan W/32
W/52M/2, paras. 3 and 20
M/3, paras. 40 and 53
Kenya W/46 M/3, paras. 40 and 44
Korea W/37 M/2, para. 20
Mexico W/54 M/3, paras. 40, 43, 55, 61, 63
and 65
Norway W/31 M/2, para. 20
Peru W/36
W/59
W/96 (forthcoming)M/2, para. 3
M/4, para. 64
M/5, para. 81
Poland W/69
Romania W/38 M/2, para. 20
Switzerland W/29 M/2, para. 20
Turkey W/40
W/76M/3, paras. 40 and 45
(documents initially introduced
as non-papers)
United States W/35
W/67 (Answers to questions)M/2, para. 3
M/4, paras. 72 and 73
Venezuela W/86 M/5, para. 80
Observers
Croatia Non-paper M/6, para. 24WT/WGTCP/2
Page 18
46. A number of questions were the subject of general discussion in the Group.  Consideration
was given to the question of whether a competition policy must necessarily include a comprehensive
competition law.  The argument was made that competition policy comprises the full range of
government measures that had an impact on market structure and conduct, including trade
liberalization measures.  Where there was a strong commitment to an open economy with a minimumof government intervention, supplemented by sectoral rules if and where they proved necessary, an
effective competition policy would not necessarily entail the adoption of a comprehensive
competition law.
67  In fact, presentations by some Members indicated that they were committed to
maintaining a vigorous competition policy but had not found it necessary, at least for the present, to
adopt a comprehensive competition law.68
47. In response to this argument, the view was expressed that, while it might indeed be possible
for a country to have a competition policy without having a competition law, having such a lawprovided important benefits.  These included ensuring greater consistency in enforcement approaches
across industries;  giving the policy statutory character, enforceability and stability;  facilitating
adoption of new analytical techniques across sectors and a reduced danger of institutional "capture" of
a comprehensive competition authority as compared to the situation of regulators that focused on
particular economic sectors.69
48. The goals of national competition laws were discussed.  It was pointed out that, while the
national competition legislation of most focused pr incipally on the goals of protecting consumers and
promoting economic efficiency, a number of other goals were mentioned.  These included promoting
international competitiveness and preserving opport unities for small and medium-sized businesses to
participate in the national economy.70
49. Questions regarding the scope of competition policy, and particularly the matter of whether and
to what extent it should apply to government acti ons and measures, were discussed.  Reference was
made to the experience of several jurisdictions in which sectoral regulatory regimes and other
government measures were, at least to a degree, subject to the overall discipline of competition law.71  In
other jurisdictions, the role of competition law could be displaced by sectoral regulations that dealt
specifically with the relevant conduct, at least in some circumstances.  The point was made, however,that, even in jurisdictions where this was the case, considerable emphasis was being placed on this
being done in a clear and transparent fashion.  Furthermore, over time, competition authorities in
some countries had worked together with sectoral regulators and policy makers to limit the scope of
regulation and to ensure that such regulation as remained was implemented in as pro-competitive a
manner as possible, given the relevant constraints.
72
50. The differences between competition law and policy and sectoral economic regulation were
discussed.  It was pointed out that competition policy was based on the belief that markets generally
worked well, and that there was a need for intervention only in a minority of situations where there
were clear market failures.  Such policy left the vast majority of operational decisions to the firms
involved.  This was in contrast to regulation, wh ich reflected a view that there was a need for
continuing government oversight either because the government wished to pursue some specific
                                                     
67 Comments reported in M/3, paragraphs 42 and 48;  and related observations in M/3, paragraph 12;
and M/4, paragraph 44.
68 M/3, paragraphs 12, 42 and 48
69 M/3, paragraphs 31, 54 and 55
70 M/2, paragraph 25
71 M/3, paragraph 55;  and related comments in M/5, paragraph 5
72 M/6, paragraph 73WT/WGTCP/2
Page 19
social objective, or due to the existence of a natural monopoly.  It involved much more pervasive
supervision of the day-to-day decisions of regulated firms.73
51. There was an extensive discussion of the priorities for the implementation of competition law
and policy in developing and transition economies.  The point was made that these priorities must take
account of the circumstances and institutional endowments of such countries.74  For example, in
markets that had been characterized by a high le vel of state ownership and intervention, for example
through price controls, the environment for competiti on law was not comparable with that prevailing in
more market-oriented and advanced economies.75  In addition, developing countries might lack the
expertise and other resources to implement a comprehensive competition policy all at once.  In the
light of these considerations, the view was expressed that a phased approach to the implementation of
competition policy was appropriate.76  Under this approach, a national competition authority would
first focus on the suppression of horizontal cartels (the most unambiguously harmful type of
enterprise practice) and on basic competition advocacy activities relating to essential market reforms.After gaining adequate experience in these areas, it would then take on additional responsibilities for
matters such as merger review and dealing with anti-competitive vertical restraints.  In the last stage,
it would take on more sweeping responsibilities for competition advocacy activities relating to all
aspects of the interplay between competition policy and regulation.  The view was also expressed that
a key consideration in framing an agency's activities in its early stage should be to establish and preserveits independence from the domestic political process.  This might be undercut if the agency was too
broadly focused in its advocacy efforts.
77
52. A view was expressed that it might not be necessary or desirable for a developing or
transition economy implementing a competition law to address the area of mergers.  Indeed, it was
said that implementing a system of merger cont rol might, at least in the case of an economy
undergoing adjustment to foreign competition, pose an obstacle to beneficial rationalization, and
could also discourage inward foreign direct investment.78  Another view was offered that, even though
mergers (perhaps particularly in open economies) could often be efficiency enhancing, in some cases
they could also result in an accumulation of market power.  Furthermore (as was already reflected in
some national laws), it was possible to provide for consideration of potential efficiency gains in theapplication of competition law provisions relating to mergers, while still being in a position to block
mergers that resulted in a harmful accumulation of market power.
79
53. The importance of building a "competition culture", as a means of supplementing and
reinforcing the positive effects of implementing a competition law and policy, was emphasized.80
This involved a process of public education to facilitate acceptance of competition policy principles as
a central element of national economic policy, both politically and within the national business
community.   The view was expressed that the building of a competition culture could be facilitated
by:  (i) developing allies in government, in the business sector and among consumers or consumer
groups;  (ii) giving speeches that demonstrated to consumers the savings obtained from enforcement
actions;  and (iii) other measures that enhanced transparency and public understanding of competition
                                                     
73 M/4, paragraphs 58 and 61;  and the written responses provided by the European Community and its
member States, the United States, and Canada to questions posed by Members (W/61, 67 and 72, respectively).
74 M/3, paragraphs 29, 30 and 34
75 M/2, paragraph 15
76 M/3, paragraph 30
77 M/3, paragraph 34;  and M/4, paragraph 68
78 M/4, paragraph 64;  and M/5, paragraph 81
79 M/4, paragraphs 65-67
80 Answers provided by the European Community and its member States, the United States and Canada
(W/61, 67 and 72, respectively) to questions posed by Members.WT/WGTCP/2
Page 20
policy rules and decisions, including media contacts to help publicize important case developments.81
However, the point was also stressed that the building of a culture of competition also required
vigorous enforcement activities in appropriate cases, to underscore the message that rules regarding
anti-competitive practices must be respected.82  It was said that there were important synergies
between advocacy, enforcement and general public education activities in the implementation ofcompetition law and policy.
83  The point was also made that the effectiveness of competition law and
policy also depended heavily on adherence to and respect for the rule of law.  This, in turn, depended
on high standards of fairness and transparency in judicial and law enforcement processes.84
54. A number of aspects of competition policy analys is were discussed.  Concerning the concept of
market definition, it was said that this was an essen tial step in analysing most, if not all, competition law
cases.  The concept of a "relevant market" for competition law purposes had both a product and a
geographic dimension.  In regard to the product di mension of the market, the basic question to be
answered was with what other products and services  did a particular product compete?  With regard to
the geographic dimension of the market, the focus was on identifying the geographic area within which
competition took place.  Relevant geographic mark ets could be local, national, international or
occasionally even global, depending on the facts in each case.  Currently, there was evidence of an
ongoing process of integration so that markets which in the past had been local or national in scope were
increasingly found to be international or in some cases  even global.  It was suggested that this was an
underlying factor which called for the expansion of cooperative approaches to competition law
enforcement.85
55. The distinction between " per se  rules" and "rules of reason" was noted as was the great and
increased importance of the latter in competition la w enforcement.  While under the former, practices
were treated as objectionable without the necessity of showing harmful effects in specific cases (because
the practices were known to be universally harmful), under the latter, anti- and pro-competitive effects
would be weighed in particular cases.  Practices subject to the former approach, at least in some
jurisdictions, included horizontal pr ice fixing, bid rigging and market allocation.  Practices subject to the
latter approach (again, in some jurisdictions) include d vertical agreements and single-firm exclusionary
conduct.86
56. The applicability of domestic competition law to arrangements entered into outside a country's
borders was discussed.  This was a feature of the laws and enforcement policies of various Members.
The point was made that such "extraterritorial" or "effects-based" application of national laws entailed
some potential for conflicts betw een jurisdictions.  International cooperation, and in particular
agreements incorporating principles of "traditi onal" and "positive" comity, could be useful in
minimizing the actual extent of such conflicts between  countries participating in such arrangements.  It
was noted that the effectiveness of these approaches  and the ability of national competition laws to deal
with anti-competitive practices that potentially aff ected international trade generally was limited by
exceptions and exemptions from competition law in some  countries and that this matter merited further
consideration in the Group.87
                                                     
81 Answers by the European Community and its member States, the United States and Canada to the
questions posed by Members at the meeting of 27-28 November 1997 (W/61, 67 and 72, respectively).
82 W/67, answer 10
83 M/4, paragraph 69
84 M/6, paragraph 63
85 M/2, paragraph 22
86 M/3, paragraph 54
87 W/61, answer 8;  W/67, answer 6;  and W/72, answer 8WT/WGTCP/2
Page 21
(b) Existing WTO provisions
57. The matter of existing WTO provisions relevant to the work of the Group was discussed at the
meetings held on 7 and 8 July 1997, 16 and 17 September 1997, 27 and 28 November 1997,
11-13 March 1998 and 27 and 28 July 1998.  Written contributions relevant to this matter were receivedfrom Hong Kong, China (W/50 and W/64);  Korea (W/73);  and Switzerland (W/89).
58. At the first and second meetings of the Group, on 7 and 8 July and 16 and
17 September 1997, the Working Group had before it an informal note prepared by the Secretariat
(Job No. 3347) on Competition-Related Provisions in  Existing WTO Agreements.  In this paper, it
was noted that most WTO agreements could be regard ed as related to competition, in that they limited
the ability of governments to impose trade measures  that would have the effect of constraining or
distorting competition (particularly competition from foreign sources) in markets for goods or services.Accordingly, the paper focused on WTO provisions  that were concerned with the practices of
enterprises, whether public or private and whether ac ting individually or collectively, that might distort
or impede international trade and with what govern ments were allowed or required to do to regulate or
remedy such practices.
59. The view was expressed that the note had an excessive emphasis on WTO provisions relating
to private practices affecting competition and therefore did not pay sufficient attention to
governmental measures which had the same impact.
88  Despite 50 years of efforts in the GATT/WTO
toward liberalization, the restrictive or distortive e ffects of government measures, perhaps particularly
trade remedies, still appeared to be more harmfu l to trade and competition than those resulting from
enterprise practices.  Priority should be accorded to WTO provisions governing the more trade-restrictive or trade-distortive measures.
89  Another view expressed was that the overall coverage of the
note was appropriate;  expanding its coverage to treat specifically each government measure that
affected competition would require covering almost all provisions and would essentially involve
revisiting the principal results of the Uruguay Round negotiations.90  Following discussion, the
Working Group took note of the Secretariat note, while also noting that it in no way restricted the scope
of issues to be examined by the Group and did not preclude any WTO provision from being raised.
60. In subsequent meetings of the Group, contributions were introduced which aimed at
facilitating further work on stocktaking of WTO provisions in a way which was said to provide
greater balance.91  It was said that adherence by Member governments to the fundamental principles
of national treatment and most-favoured-nation treatment and strict observance of any rules
permitting limited departure from these principles were central to the role and mission of the WTO.
The Working Group should examine whether the rules governing allowable departures from thesefundamental principles were consistent with the overall need to safeguard competition at the
international level, as well as consistent with the principles by which Members regulated domestic
competition.  For example, the point was made that Members were clearly entitled to use measures
permitted under Article VI of the GATT (1947).  However, as a matter of principle, this situation was
less than ideal, capable of producing inappropriate re sults, and therefore in need of improvement.  The
Working Group offered a unique opportunity to discuss in a relatively low-key, non-negotiating
format the relation between WTO provisions such as Article VI with competition and the
liberalization of trade.
92  The view was expressed that anti-dumping measures could, in some
circumstances, be detrimental to competition and consumer welfare93, and therefore that it would be
                                                     
88 M/1, paragraph 8;  and related comments in M/2, paragraphs 30 and 32
89 M/2, paragraph 30;  M/3, paragraph 66
90 M/1, paragraph 8
91 M/3, paragraph 66;  and M/4, paragraphs 47-49
92 M/3, paragraph 66
93 M/4, paragraphs 47 and 48WT/WGTCP/2
Page 22
appropriate to examine the viability of introducing antitrust criteria in a possible reform of WTO anti-
dumping rules.94  Subsidy and countervailing duty provisi ons under Article XVI of the GATT (1947)
and the Agreement on Subsidies and Countervailing Measures were another area that Members might
wish to examine.95
61. It was said, further, that provisions meriting  consideration would include areas where trade
and competition were mutually reinforcing, such as GATS Article X and TRIPS Article 40, but also
areas of apparent conflict between trade and competition, for example where existing WTO
provisions threatened to undermine competition ob jectives.  In examining these issues, the three
concepts of non-discrimination, economic efficiency and general consumer welfare should be
employed.96  The WTO provisions relevant to the study of state monopolies (the second tiret under
item III of the Checklist of Issues) included Articles I and III, as well as Article XVII, of the
GATT (1947).  Other provisions of the WTO agreements and related instruments that were mentionedas being relevant to the work of the Group incl uded Articles IV, VII, V III, IX and XIX of the
GATT (1947), the Agreement on Textiles and Clothing, the Agreement on Safeguards, the results of
the negotiations on Basic Telecommunications Serv ices, the Agreement on Trade-Related Aspects of
Intellectual Property Rights, the General Agreement on Trade in Services generally, and the Agreement
on Trade-Related Investment Measures.
97
62. The point was also made that, although international cartels posed barriers to market access,
WTO rules had no mechanisms in place to deal with this kind of anti-competitive practice.  As there
were no multilateral rules for resolving competition-related disputes, at present there was no
alternative but to rely on the so-called non-violation complaints clause under Article 26 of the WTO
Understanding on Rules and Procedures Governing the Settlement of Disputes, which could beapplied to specific policies of trading partners even if such policies did not violate WTO rules.  Apart
from this, it was not clear how the interests of Members could be protected against restrictive business
practices by private firms.  Consideration of this matter in the Group should proceed by answering the
following questions:  could the efficiency of the international trading system be enhanced by applying
competition rules and principles, and how could such rules be implemented multilaterally?  Withrespect to the first question, it might be useful to take account of ongoing discussions at the OECD's
Joint Group on Trade and Competition.
98
63. The view was expressed that, while a full discussion on trade and competition issues was
welcome, and that such discussion should be diverse and reflective of the balance of important
interests arising in the area, the Group was not in a position to interpret any WTO provisions in terms
of the "correctness" of their application.  Furthermor e, in looking at specific WTO provisions, it was
important not to see them solely from the perspective of whether or not, taken in isolation, theyenhanced economic efficiency or competition, but also in terms of their effect in promoting trade
liberalization and their role in the careful balance underlying the WTO.
99
64. In regard to the application of two key WTO principles, national treatment and transparency
(as contained in Articles III and X of GATT 1994), in the field of competition law and policy, it was
said that these two principles responded to the complexity of anti-competitive practices whichaffected trade.  Moreover, both of these principles had been considered in the recent report of the
Panel on the Consumer Photographic Film and Paper case.
100  In considering the application of these
                                                     
94 Related discussion is contained in Part C(III)(e), below.
95 M/4, paragraph 47
96 M/4, paragraph 47
97 M/4, paragraphs 46 and 48;  M/2, paragraph 50
98 M/4, paragraph 48
99 M/4, paragraph 50
100 WT/DS44/RWT/WGTCP/2
Page 23
principles, a distinction had to be made between tw o types of markets, markets in which there was a
functioning competition law and markets in which there was no such legislation.  It was observed that
each of these principles was relevant to situations where competition legislation existed and was
applied.  The relevance of the principles in instances where no such legislation existed or was applied
was less clear and would have to be studied further.  If a more thorough analysis of the relevance ofthe two basic WTO principles of national treatment and transparency for competition-related matters
resulted in the conclusion that these principles should be applied in relation to competition law and
policy, the principles might have to be adapted to the specific needs of competition policy, as had
been done for services in the GATS or for intellectual property in the TRIPS Agreement.
 101
(c) Bilateral, regional, plurilateral and multilateral agreements and initiatives
65. This matter was the subject of discussion at the Working Group's meetings on 16 and
17 September 1997, 27 and 28 November 1997 and 11-13 March 1998.  Presentations concerning this
subject focused upon two aspects:  approaches to competition law and anti-dumping within free trade
agreements, and cooperative arrangements with respect to the enforcement of competition law.102
66. The Working Group was informed of experiences with respect to the Closer Economic
Relations Agreement (CER) between Australia a nd New Zealand, under which anti-dumping action
was no longer possible in their mutual trade.  It was explained that, although anti-dumping may
arguably be necessary to reduce distortions in international trade, as a single market developed
between the two signatories of this trade agreement, their bilateral trade became more typical of
domestic trade than international trade, and hence the retention of anti-dumping provisions in this
context became anomalous.  In any case, the accomplishment of free trade between the two countries,by facilitating arbitrage, substantially reduced the incentives for and the ability of exporters to dump.
Once free trade had been achieved, the real concern was predatory behaviour by firms with market
power within this joint market.  Therefore, it was not a question of competition law replacing
anti-dumping law; rather, anti-dumping was no longer appropriate in their joint market and
competition law was the right mechanism for protecting competition.
103  Although the competition
regimes of the two countries had already been very much alike, and their legal processes and
institutions had been similar, their competition laws had been amended to ensure that they fully
covered all areas of their bilateral trade.  In addition, changes were made so as to put in place
symmetrical jurisdictional, procedural and evidentiar y provisions in the two countries.  These changes
enabled each country's courts to sit, for certain prescribed purposes, in the other country and
facilitated enforcement of orders and judgements by them in the other jurisdiction.104  It was further
explained that this approach had been facilitated by commonalities in the legal and economic systemsof the two countries, a similar level of economic development and a common culture.  Hence, the
experiences of these two countries were not necessarily transferable to other free trade agreements.  It
was also said that not all the above circumstances might be necessary pre-conditions for the model to
work;  while the path outlined above might be a specialized approach that might not have a universal
application, other countries should be encouraged to emulate it to the extent possible and create anti-dumping free zones.
105
                                                     
101 M/5, paragraph 78
102 Written contributions were presented by New Zealand and the United States (W/47 and W/48,
respectively).
103 M/3, paragraph 64
104 M/3, paragraph 64
105 M/4, paragraph 52WT/WGTCP/2
Page 24
67. The Working Group was also informed that, under MERCOSUR's Protocol for the Defense of
Competition, signatories were to discuss the treatment of anti-dumping within this trade agreement
beginning in the year 2000.106
68. The view was expressed that in many cases cooperation between competition authorities was
crucial for the effective application of competition law.  Two themes underlay bilateral cooperationagreements:  cooperation in the implementation of the law and in the avoidance or management of
disputes.  The first aspect was most easily recognized in merger cases.  When merging firms were
subject to notification requirements in countries which were parties to an agreement, cooperation
between competition agencies helped to ensure that any remedies imposed did not conflict with one
another.  In most instances, existing cooperation agreements did not involve the exchange of
confidential information.  The exchange of such information required similar antitrust laws and laws
protecting confidential information.  The avoidance or management of conflict was seen increasinglyin areas like "positive comity".  Under this approach, cases involving anti-competitive practices
originating in one country but affecting another could be referred to the competition agency of the
country where such practices originated.  It was noted that cooperative relationships were often
iterative processes.  A relatively simple agreement might be concluded at the outset and, as
confidence was built, the level of obligation, indeed, of mutual benefit, was likely to increase.Progress could be made to the point where businesses agreed to waive their confidentiality
protection.
107  It was said that successful cooperative agreements required certain commonalities in
the enforcement of competition law and a traditi on of cooperation.  Developing common standards
was important and a balance between transparency and the protection of confidential information had
to be found.  An international consensus on the latter matter would facilitate countries entering intoagreements featuring deep cooperation between enforcement authorities.
108  It was also stressed that
cooperation in enforcement required close links at the bilateral level and that there was a need for
further discussion of cooperation in a multilateral context.109
69. The Working Group was informed that several cooperation agreements had been set up
between the competition agencies of the countries that formed MERCOSUR, establishing procedures
for reciprocal consultations and reciprocal technical assistance.  Especially close links had been
forged between the competition agencies of Argent ina and Brazil, and this had had a positive impact
in unifying the standards used by the two agencies.110  The operation of the NAFTA Working Group
on Competition was also described.  This Group had a mandate for five years, extending through the
end of 1998.  Its purpose was to study the relationship between competition policy and trade in the
context of the free trade area created by NAFTA.  It was required to make recommendations to the
NAFTA Commission by the end of its mandate.  Issues studied by this Group on a comparative basisincluded horizontal restraints, export cartels, merger control, abuse of dominance, national treatment
and private rights of action.  More recently, this Group had turned to studying competition cases with
a transborder dimension, for instance monopolistic practices impeding market access.
111
70. The Working Group was informed that the Agreement on the European Economic Area
(EEA) established competition rules applicable to undertakings in the EEA which corresponded toArticle 85 (general prohibition against anti-comp etitive practices), Article 86 (abuse of dominant
position) and Article 90 (public undertakings) of the EC Treaty and to the relevant secondary legislation.
The regime for merger control under the Treaty also applied under the EEA Agreement.  The EFTA
states that were contracting parties to the EEA Agre ement had established a separate institutional system
                                                     
106 M/4, paragraph 52
107 M/4, paragraph 54
108 M/4, paragraph 55
109 M/4, paragraph 56
110 M/4, paragraph 53
111 M/3, paragraph 65WT/WGTCP/2
Page 25
for the administration of these provisions.  The EEA Agreement also cont ained provisions on the
attribution of cases between the responsible EFTA authority and the EC  Co mmission in the field of
competition, with the guiding principle being that of the "one stop shop".
71. The Working Group was informed of the OECD Recommendation on Hard Core Cartels,
which called on OECD member countries to adopt measures to address such cartels and, to the extent
consistent with national legislation, to cooperate with each other in the investigation and prosecution
of relevant cases.112  It was said that effective action against hard core cartels was important from an
international perspective, because their distorting effects on world trade created market power, wasteand inefficiency in markets that would otherwise be competitive.
113 It was suggested that
consideration be given to the Recommendation by th e Group, as an aspect of possible future work on
measures to address the impact of anti-competitive practices of enterprises on international trade.114
The Working Group was also informed of the relevant activities in APEC.115
III. THE INTERACTION BETWEEN TRADE AND COMPETITION POLICY
72. Before taking up the individual elements of item III of the Checklist concerning the
interaction between trade and competition policy, the Working Group had, at its meeting on
11-13 March 1998, a general discussion on this matter.
73. Hong Kong, China;  Japan;  and the United States introduced written communications
(documents W/64, 68 and 66, respectively) relevant to this matter.  In addition, representatives of
Argentina, Australia, Brazil, Canada, the Dominican Republic, the European Community and itsmember States, Korea, Malaysia, Mexico, New Ze aland, Nigeria, Norway, Pakistan and Switzerland
made oral statements.
74. Much of the discussion focused on the priorities that the Group should have in taking up the
issue of the interaction between trade and competition policy and on the way in which it should carry
out its work.  Three broad sets of views were expressed in this connection.
75. One view was that, while not precluding the examination of private anti-competitive practices
that affected trade, priority should be accorded to governmental restraints and distortions on the
grounds that they continued to be the main threat to the attainment of competition as well as trade
policy objectives.
116  A Member put forward in this connection what it characterized as a "WTO
approach".  Under this approach, the Group w ould seek to draw upon and enhance the role of
fundamental WTO principles and basic objectives of competition policy, including
non-discrimination, economic efficiency and consumer welfare.  Duplication of the work of other
WTO bodies would be avoided by appropriate emphasis on the interaction between trade and
competition policy, rather than on trade or competition policies per se .  This approach could be
justified, from a legal perspective, on the grounds that WTO agreements had traditionally focused ongovernmental measures to protect legitimate expectations regarding conditions of competition, from
                                                     
112 Recommendation of the Council Concerning Effective Action Against Hard Core Cartels, OECD
document C(98)35/FINAL (approved by the OECD Council of Ministers on 25 March 1998). TheRecommendation urges countries to ensure that their respective laws provide sanctions to deter firms fromparticipating in hard core cartels, and provide the enfo rcement powers and procedures necessary to detect and
remedy such arrangements, including the power to obtain information and impose penalties for non-compliance.
The Recommendation also provides that exclusions and authorizations of cartels from competition laws shouldbe transparent and should be reviewed periodically to ensure that such measures were not broader thannecessary to achieve their objectives.
113 M/4, paragraph 65
114 M/4, paragraph 16
115 M/1, paragraph 11
116 M/4, paragraphs 4 and 5WT/WGTCP/2
Page 26
an economic standpoint on the grounds that competition would be more enhanced by trade
liberalization and by competition-oriented reforms of WTO rules than by the introduction of new
WTO rules and standards relating to national competition laws and international cooperation, and
from a political perspective on the grounds that the time did not appear to be ripe for detailed
discussions in the WTO on the harmonization of competition laws and practices.117
76. Another view expressed was that the Group s hould focus primarily on the anti-competitive
practices of enterprises that affected international trade118, in addition, possibly, to government
measures that tolerated or facilitated such practices.  It was argued that the prevalence of enterprise
practices that distorted or restrained international trade had become more evident as multilateral rules
to address governmental barriers had been extended and elaborated.  The benefits of trade
liberalization would not be fully realized unless su ch practices were effectively addressed.  Private
anti-competitive conduct could exist and block market access even in markets characterized by liberaltrade policies, especially if there were no competition laws.  Moreover, other WTO organs were
available to study government measures of the sort that had traditionally been recognized as being
within the purview of the WTO.  Given this, the study of private anti-competitive practices that
affected trade and investment was the special area of advantage of the Group.
119
77. Pursuant to this view, an analytical framew ork aimed at assisting the Group in understanding
the relationships between trade and competition policy and the nature of remedies to be applied vis-à-
vis the problems identified was put forward.  The framework recognized that neither trade policy nor
competition policy was individually sufficient to ensure market  contestability and global economic
efficiency.  It was based on two parameters:  (i) whether a restriction affected all competitors, or just
foreign competitors;  and (ii) whether the restriction fell within the category of measures that wastraditionally subject to competition law disciplines .  It was said that some implications of this
framework were that:  (i) real-world barriers to competition could result from situations in which
government or private sector activity distorted trade;  (ii) private anti-competitive conduct could deny
or impede market access to foreign competitors (in addition to affecting competition domestically);
(iii) some anti-competitive arrangements, for example discriminatory standard-setting practices orlicensing requirements, principally affected foreign firms;  and (iv) government-sponsored measures
such as state monopolies and state-trading enterprises, in addition to government industrial policies
and domestic regulations, all of which traditionally were outside the scope of competition law, could
restrict competition domestically while impeding market access to foreigners.  With regard to possible
remedies for such restrictions on competition and trade, the view was expressed that the framework
suggested that an effectively functioning competition law would normally be adequate to address
anti-competitive practices of enterprises, whether they affected both foreign and domestic orprincipally foreign firms.  Nonetheless, there coul d be situations where restrictions were deemed not
to warrant action under competition law, and yet a trade problem persisted, reflecting the "rule of
reason" approach that competition authorities take to many practices.  With regard to practices that
fell outside the traditional domain of competition law enforcement, remedying these would generally
require policy changes.  In many cases, there might be a natural convergence of interests betweentrade and competition policy officials in advocating the removal of barriers affecting trade and
competition.
120
78. It was said that there were three principal objectives that the ongoing discussions in the Group
should have:  (i) the securing of a basic commitment by Members to adopt and enforce a competition
law, as the appropriate means of addressing anti-competitive practices of enterprises that affectedinternational trade;  (ii) agreement on measures to address those anti-competitive practices which
                                                     
117 M/4, paragraph 4
118 M/4, paragraphs 6-8
119 M/4, paragraphs 6 and 7
120 M/4, paragraph 6WT/WGTCP/2
Page 27
were particularly harmful to trade;  and (iii) the adoption of measures to strengthen international
cooperation in this area.121  It was also said that the Group should undertake work on minimum
standards for competition law and policy and on promoting international cooperation in competition
law and enforcement.122
79. A third view expressed was that the Group shou ld adopt a balanced approach, covering both
the effects of the anti-competitive practices of enterprises on trade and the effects of trade measures
and other forms of government regulation on competition.  Reference was made in this connection to
the earlier discussion the Group had had about the complementary and contradictory relations
between trade and competition policy.123  In regard to the claim that governmental measures were
necessarily more important than private anti-competitive practices in their impact on trade and
competition, the view was expressed that this was an empirical question, the answer to which could
differ from country to country and, indeed, from economic sector to sector;  it should not be used as abasis for excluding work on either aspect.  The point was also made that private anti-competitive
practices and governmental measures were often closely linked and mutually interdependent.
124  The
view was expressed that, by way of a caveat, in looking at the area of government procurement,
discriminatory purchasing policies engaged in by developing countries should be assessed with due
regard for their developmental needs and priorities.125
80. An issue addressed by a number of speakers was the importance of basic WTO disciplines for
the application of competition policy, in particular transparency and national treatment.126  It was said
that their application to competition policy would stimulate both trade and foreign investment.127
Reference was also made to the competition elements already present in various WTO agreements.One view expressed in this connection was that these WTO provisions constituted a decentralized,flexible approach to the incorporation of rules on anti-competitive practices in the WTO, reflecting
the lack of an international consensus on optimal competition rules.
128  Another view was that the
degree of consensus that already existed regarding the core principles of competition policy and on
best practices for its implementation should not be underestimated.129
(a) The impact of anti-competitive practices of enterprises and associations on
international trade
81. The impact of anti-competitive practices of enterprises and associations on international trade
(item III(1) of the Checklist of Issues Suggested for Study) was a principal subject of discussion in the
fourth meeting of the Working Group, held on 11-13 March 1998.130  Written submissions on this
item were provided and were introduced orally at the meeting by the representatives of Argentina
(W/63);  Canada (W/70);  the European Community and its member States (W/62);  Japan (W/68);Norway (W/65);  Turkey (W/77);  and the United States (W/66).  In addition to these countries, the
Dominican Republic;  Poland;  Egypt;  Korea;  Hong Kong, China;  and Pakistan made oral
statements or posed questions regarding this item.  Observers from the OECD, UNCTAD and the
World Bank provided background information on relevant activities and studies of their organizations
(related documentation provided by the observer from OECD is provided in document W/21/Add.1).
                                                     
121 M/4, paragraph 7
122 M/4, paragraph 16
123 M/4, paragraph 9.  Related discussion  is summarized in Part C(I)(a), above.
124 M/4, paragraph 15
125 M/4, paragraph 13
126 M/4, paragraph 14
127 M/4, paragraph 14
128 M/4, paragraph 4
129 M/4, paragraph 14
130 M/4, paragraphs 21-46WT/WGTCP/2
Page 28
82. The discussion of this item in the Group had a number of dimensions.  An important focus
was on the presentation of national experiences with actual cases of anti-competitive practices that
had had an impact on international trade, supplemented by discussion of hypothetical cases that
illustrated related concerns.  The specific ways in which such practices could affect trade were
discussed, and an effort was made to place the various examples in broad analytical categories.Questions regarding the specific impact of private anti-competitive conduct in negating the benefits of
trade liberalization, the relationship of private anti-competitive conduct to the policy environment
prevailing in particular jurisdictions, and the adequacy of existing national laws (including with
reference to the matter of exceptions and exemptions  from such laws) to address such practices were
also discussed.  The question of whether a comprehensive national competition law was strictly
necessary to address such practices, or whether they could not be addressed effectively through other
tools was also discussed.  Consideration was given to the potential costs and benefits of strengthenedinternational cooperation to address anti-competitive practices of enterprises that affected
international trade.
83. A large number of specific examples of anti-competitive practices of enterprises that affected
international trade were provided by Members and observer intergovernmental organizations.  An
effort was made to discuss these practices with reference to certain analytical categories.  While notall Members employed the same categories in their initial presentations, the examples provided by
Members could generally be grouped in three categories, as was pointed out by some Members in the
subsequent discussion on this item
131:  (i) practices affecting market access for imports;  (ii) practices
affecting international markets, where different countr ies were affected in largely the same way;  and
(iii) practices having a differential impact on the national markets of countries.132
84. With regard to the first category, namely practices affecting market access for imports, the
specific examples cited by Members in the discussion included actual cases of domestic import
cartels, international cartels that allocated national markets among participating firms, the
unreasonable obstruction of parallel imports, control over importation facilities, exclusionary abuses
of a dominant position and vertical market restraints that foreclosed markets to competitors, certainprivate standard-setting activities and other anti-competitive practices involving industry
associations.
133  Observers from intergovernmental organizations also referred to examples of
practices that had come to light in their work, including vertical integration by local manufacturers
into distribution; contractual arrangements that mimicked the effects of vertical integration, such as
exclusive dealing and sole distribution rights;  cartels involving local producers;  anti-competitive
agreements involving both local and offshore producers;  possible instances of predatory pricing;  and
private standard-setting activities in addition to import cartels, vertical market restraints and moregeneral exclusionary abuses of a dominant position.
134
85. The point was made that anti-competitive practices of this type could have the effect of
reducing or eliminating the potential gains from trade liberalization.135  As one illustration of this
point, the Group was informed of a number of case studies of sectors in which conventional external
trade barriers had been removed in Argentina.136  The presumption underlying these studies was that,
in general, when a country implemented far-reaching trade liberalization, there was an expectation
that domestic prices should tend towards import parity levels.  In the case studies mentioned, the
competition agency of Argentina had identified several situations where this response had not been
forthcoming, due to the existence of anti-competitive practices of enterprises.  Factors that tended to
                                                     
131 M/4, paragraph 22
132 M/4, paragraph 22
133 M/4, paragraphs 23-24, and supporting references to national submissions contained therein
134 M/4, paragraph 24
135 M/4, paragraph 23
136 M/4, paragraph 26;  and the contribution of Argentina (W/63)WT/WGTCP/2
Page 29
facilitate or underlie such anti-competitive practices included high market concentration levels,
inelastic demand (reflecting a lack of substitutes), the prior existence of a cartel, and control by a
dominant enterprise of scarce facilities that were necessary for imports to occur.  A second illustration
of this point, provided subsequently, concerned the experience of Peru, where developments in
specific markets, in this case local transpor tation, flour, chickens and noodles, showed that
deregulation and trade liberalization alone were not enough to ensure competition in markets.137  I t
was noted, further, that anti-competitive practices by industry associations could play a significant
role in impeding market access, particularly where a close relationship existed between government
and industry.138  The point was also made that the importance of competition rules, particularly in
relation to essential facilities, for market access was already reflected in the Reference Paper on
Regulatory Principles which had been incorporated in many Members' commitments pursuant to the
WTO Negotiations on Basic Telecommunications Services.  This mirrored the national experience ofsome Members.
139
86. In reflecting on the effects of these practices and their implications for in ternational trade, the
point was made that the nature and severity of these effects would vary depending on the type of
practice, the market power of incumbent firms and other circumstances.  For example, although
vertical market restraints could be employed for market foreclosure purposes, they could also enhanceefficiency and competition in many circumstances.
140  The effects of such restraints, accordingly,
would have to be evaluated on a case-by-case basis.  The point was also made that the evaluation of
trade-offs between market power and efficiency effects could be particularly important in small,
developing countries, but that this was often not straightforward.141  For example, the negative effects
of vertical contractual arrangements could be particularly strong in small markets, given the low levelof inter-brand competition that often characterized such markets, and the high fixed costs of entry
relative to the size of the market.  On the other hand, vertical arrangements could facilitate beneficial
investments in distribution services, which were often less than optimal in developing countries.  In
contrast, the point was made that efficiency justifications were highly unlikely to be relevant in regard
to cases involving international cartels.  The vi ew was expressed that these were the arrangements
which were likely to have the greatest impact on market access.
142
87. A number of examples were also provided of practices falling in the second overall category
of anti-competitive practices of enterprises and associations affecting international trade, namely
those where the practice affected different countries in largely the same way.  The foremost example
was the problem of international cartels that affected price and output across multiple country
markets.  A large number of cases in which competition authorities in various countries had
uncovered such cartels were brought to the attention of the Group.143  The point was made that cartels
operating in certain service sectors such as international maritime shipping or financial services could
be particularly harmful to trade, since they not only restrained trade within the relevant service but
                                                     
137 M/5, paragraph 81
138 M/4, paragraph 23
139 M/4, paragraph 27
140 M/4, paragraphs 25 and 35
141 M/4, paragraph 25
142 M/4, paragraphs 25 and 35
143 M/4, paragraphs 29-30.  In particular, reference was made to the example of the international Heavy
Electrical Equipment Cartel, which had fixed prices at high er than competitive levels in many countries' national
markets over a period of several decades.  It was said  that this case illustrated the impact that cartel
arrangements could have not only on international trade, but also on economic development, in that heavyelectrical equipment was an important input to ener gy production.  More recent examples of similar
arrangements included the Citric Acid Conspiracy, an international price-fixing arrangement prosecuted by theUnited States antitrust authorities that involved actions by firms from various countries during the first half of
the current decade, and the Fax Paper case, a cartel that affected the price of thermal fax paper in Canadian and
United States markets and had involved firms headquartered in various countries.WT/WGTCP/2
Page 30
also raised the price of that service to exporters, introducing another level of distortion.
Anti-competitive arrangements involving rating agen cies could distort the way in which particular
countries received credit.144  It was said that it was important to take account of the inducement to
cartelization which was provided by industry associations, where they threatened the exporters of
other countries with anti-dumping actions if those exporters did not agree to some form of voluntaryexport restraint.
145  It was also suggested that, in some instances, mergers and abuses of a dominant
position involving firms operating in international markets could have similar effects.146
88. The point was also made that, notwithstanding the general condemnation of cartels and
similar arrangements, a flexible approach to the ap plication of competition law in regard to certain
types of inter-firm practices could often be warranted.  These practices might include:
(i) non-conventional horizontal arrangements, such as strategic alliances, joint ventures and R&D
consortia, whose effects were not necessarily the same as more conventional arrangements such asmergers and cartels, and tended to be very fact-specific;  and (ii) certain arrangements involving small
and medium-sized enterprises.
147
89. With regard to the third category of practices, namely those involving practices which
(potentially) had a differential impact on the affected countries, an example widely cited was that of
export cartels.148  It was said that the victims of export cartels would often include developing
countries which were importing machinery or consumer products.149  Furthermore, it was suggested
that the extent of such cartels and their deleterious effects on international trade and development
might well be greater than was widely known, since most countries did not insist on registration of
such cartels;  they simply turned a blind eye to them.  The matter of mergers which were judged to be
benign or even beneficial in one market, but were not necessarily so in other markets, was alsodiscussed.  The point was made that the incidence of such cases might well be less frequent where
countries employed a consumer welfare standard, rather than a total welfare standard, to evaluate
mergers.  The reason was that, under the latter approach, mergers that yielded significant efficiency
gains in the home market might be deemed acceptable even where they entailed substantial
anti-competitive effects, including effects which might be felt in foreign markets.
150
90. The Group had an extensive discussion of factors, including government policies and
measures, that could facilitate harmful anti-competitive practices by enterprises and thereby
undermine the potential benefits of trade liberalization.  Factors referred to in this context included 151:
(i) the existence or non-existence of a well-constituted competition law and policy;  (ii) statutory
exemptions or protective regulatory regimes covering the conduct in question;  (iii) a failure to
adequately enforce existing laws and policies relating to anti-competitive practices;  (iv) the existence
of other government policies that implicitly or explicitly sanctioned or encouraged anti-competitiveconduct
152;  and (v) the lack of effective rules governing access to essential facilities, in the context of
deregulation.153  Furthermore, it was noted that the problem of eradicating anti-competitive enterprise
                                                     
144 M/4, paragraph 30
145 M/4, paragraph 30
146 M/4, paragraph 29
147 M/4, paragraphs 38 and 42.  See also M/3, paragraph 58.
148 M/4, paragraph 31
149 Comments by the observer from UNCTAD, summarized in M/4, paragraph 30.
150 M/4, paragraph 32
151 M/4, paragraphs 27, 34, 37 and 39
152 In this connection, reference was made to the inducement to cartelization which could be provided
by industry associations, where they threatened the ex porters of other countries with anti-dumping actions if
those exporters did not agree to some form of voluntary export restraint.  M/4, paragraph 30
153 It was noted that the latter concern was reflected in the results of the WTO Negotiations on Basic
Telecommunications Services, in addition to the national legislation of a number of Members. M/4,
paragraph 27WT/WGTCP/2
Page 31
practices could be particularly challenging in circumstances where former state enterprises that had
exercised self-regulatory power were privatized without steps being taken to limit their market
power.154  The point was also made that, at least in some jurisdictions, even though effective
competition laws existed domestically, competition authorities lacked jurisdiction to deter anti-
competitive conduct originating abroad.155  It was further suggested that, currently, the international
trading system also lacked appropriate rules, standards and disciplines to remedy the proliferation of
anti-competitive practices, including export cartels, international cartels and anti-competitive practices
of transnational corporations.156
91. A question arose in this context as to whether it was strictly necessary, as part of an effective
national policy to deal with anti-competitive practices of enterprises and associations, to have a
comprehensive competition law.157  It was said that the need for such a law was debatable in the light
of:  (i) the fact that an agreed set of standards for national competition laws had yet to emerge;  (ii) thelimitations of such laws as reflected in the problems of extensive exceptions, exemptions and non-
enforcement, which were before the Group;  and (iii) evidence that foreign suppliers could experience
discrimination, even given the existence of a competition law.  In response, it was said that a growing
body of evidence supported the need for a competition law to address anti-competitive practices, both
by enterprises and by governments.
158  For example, even within the European Community itself, with
its strong policies relating to competition and freedom of movement at the Community level,
individual states found it important to have their own national competition laws.  These were
necessary both to address anti-competitive practi ces which continued to occur within their own
borders, and were not reached by the Community-level competition policy, and to act as an
interlocutor with the Community and other national authorities on matters of common interest.159
From an economic standpoint, while it was clear that imports could be a useful source of competitive
discipline in many markets, this would not be the case across the economy.  With regard to the current
lack of a widely agreed set of standards for national competition law, this did not mean that it was
pointless to discuss this possibility;  in fact, seeking a consensus on this matter was an important
purpose that could be served by the Group.160
92. The Group considered the potential benefits of, and considerations that might militate against,
a strengthening of international cooperation in the field of competition law and policy, to counteract
the harmful effects of the anti-competitive practices of enterprises and associations on international
trade.  It was recognized that cooperation already existed at a number of levels161, and had been an
important factor in the prosecution of a number of arrangements that had been discussed in the
Group.162  Moreover, the point was made that, to be of genuine value, cooperation had to develop over
time, and had to be founded on a mutuality of interest, trust and commonality of purpose.163
Nonetheless, the view was expressed that an expa nsion of cooperative approaches, including possibly
at the multilateral level, was warranted.  In particular, it was said that work was needed to address
gaps in the remedies available to the internati onal community in all three of the categories of
anti-competitive practices of enterprises and associations that had been discussed in the Group:
(i) practices affecting market access for imports;  (ii) practices affecting international markets, wheredifferent countries were affected in largely the same way;  and (iii) practices having a differential
                                                     
154 M/4, paragraph 26
155 M/4, paragraph 37
156 M/4, paragraph 34
157 M/4, paragraph 44
158 M/4, paragraph 44
159 M/4, paragraph 44
160 M/4, paragraph 44.  See also the related discussion of this question in the context of stocktaking of
national legislation and policies, in Part C(II)(a), above.
161 Related discussion is contained in Part C(II)(b) and (c), above.
162 M/4, paragraphs 29 and 41
163 M/4, paragraph 41WT/WGTCP/2
Page 32
impact on the national markets of countries.  With re gard to the first category, gaps could arise for the
following reasons:  (i) the non-existence of a law;  (ii) statutory exemptions or protective regulatory
regimes covering the conduct in question;  or (iii) a failure to adequately enforce a law which was
applicable.  Regarding the second category, the issue was how to enhance cooperation to provide
appropriate remedies for such practices, while minimizing conflicts of jurisdiction.  With regard to thethird category, the question was what new arrangements for international cooperation were needed to
better address these practices.
93. In addition, the following proposals were made for work to be done on specific
anti-competitive practices, based on the degree of consensus which already appeared to exist with
respect to each practice, and their clear importance fo r international trade.  First, regarding hard core
cartels, where it was said that there was a strong international consensus, there was a good prospect
for adoption of a common enforcement principle in the Group, and a framework for cooperative
enforcement efforts in this area.  Second, regarding export cartels, consideration needed to be given to
means to strengthen the application of competition law in this area.  Third, regarding vertical
agreements, it was generally recognized that a balancing of pro- and anti-competitive effects was
appropriate in this area.  It would be useful if the Group could identify an illustrative list of factors
that might be considered by enforcement author ities, in undertaking the required balancing in
particular cases.  Fourth, in the area of abuse of a dominant position, the Group might usefully
develop:  (i) a list of abusive practices that could have the effect of foreclosing markets;  and (ii) a set
of criteria to be used in identifying a dominant position in a market.  Fifth, with regard to mergers, the
Group might examine the scope for convergence in procedural requirements, and the feasibility of
enhanced inter-agency cooperation, in order that different jurisdictions' concerns could be addressedat minimal costs.
164
94. There was, however, a divergence of views in  the Group regarding the desirability and
practicality of these proposals.165  In response to the suggestions made regarding the three specific
categories of practices that had been discussed, other views expressed were as follows.  With regard
to the first category of practices, in most cases, domestic competition laws should be adequate tohandle this.  The implication was that all countries should have, and enforce, a well-constituted
competition law.  With regard to the second category of practices, it was clear that inter-agency
cooperation could be helpful in addressing practices such as international cartels.  At an appropriate
stage, it would be helpful if agencies could deep en cooperation to the extent of sharing confidential
information with each other.  However, a process of mutual confidence-building and, in some cases,
institution-building was needed if this was to take place.  With regard to the third category, all that
could reasonably be expected was that countries with overlapping interests in particular cases wouldconsult with each other.  For a variety of reasons, including different effects in different national
markets as well as differing legal standards, it was inevitable that, from time to time, different
jurisdictions would reach different conclusions regarding the acceptability of particular arrangements
and transactions.
166
95. A suggestion was made that it would be desi rable to obtain more systematic empirical
information on the frequency and impact of the various types of anti-competitive practices of
enterprises that had been discussed, and on whether the incidence of such practices was greater:
(i) among developed countries;  (ii) between developed and developing countries;  or (iii) among
developing countries.  Although systematic empirical evidence was lacking, the experience of one
                                                     
164 M/4, paragraph 39
165 M/4, paragraph 40
166 M/4, paragraph 40WT/WGTCP/2
Page 33
observer intergovernmental organization tended to confirm that such practices were most prevalent
between developing countries.167
96. At the Group's meeting on 17-19 November and 4 December 1998, a further concern was
raised with respect to the impact on trade and competition of territorial limitations in licensing
agreements.  It was said that such limitations precluded the possibility of licensees participating intrade outside of their assigned territories.  The practice generated protectionist attitudes on the part of
companies that were otherwise competitive, and merited further consideration in the Group.
(b) The impact of state monopolies, exclusive rights and regulatory policies on
competition and international trade
97. This matter was the subject of discussion at the Working Group's meeting on 27 and
28 July 1998.  The representatives of Brazil (W/93);  the European Community and its member States(W/78);  Hong Kong, China (W/94);  Kenya (W/95);  Korea (W/91);  New Zealand (W/82);  and the
United States (W/83) introduced written contributions.  In addition, the representative of Turkey
introduced a non-paper, the representatives of Japan, Canada, India, Singapore on behalf of ASEAN
WTO Members, Venezuela and Australia made oral statements or posed questions on this item, and
the observers from the OECD, UNCTAD and the World Bank provided updates on relevant activitiesof their organizations.
98. This report reflects first the discussion on state monopolies and exclusive rights and then that
on regulatory policies.
State monopolies and exclusive rights
99. The harm that state monopolies and exclusive rights could have on both competition and
market access was widely commented on.  It was noted that the WTO recognized that, in their
operations, enterprises enjoying such privileges might create serious obstacles to trade.168  T h e s e
effects could arise in:  (i) the market where the exclusive rights were being exercised;  (ii) upstream
markets;  and (iii) downstream markets.169  A wide variety of bodies enjoying monopolies or
exclusive rights were referred to in the discussion.  Particular reference was made to the impact that
single-desk buyers and sellers could have in restricting competition and trade, including by creating a
lack of transparency and serving as a tool for the implementation of national trade policies.  As a
result, they could have the effect of limiting imports and introducing market distortions.170
100. The issues of privatization, natural monopolies and "bottleneck" or "essential" facilities were
discussed.171  The point was made that state monopolies were often to be found in network industries
(e.g. telecoms, gas, electricity, water and transportation, including airports, harbours and bridges),which typically involved a large initial investment and might enjoy a natural monopoly.
172  A number
of Members outlined the steps that they had taken towards privatizing state concerns and introducing
competition into markets that had previously been monopolies.173  The point was made that, in many
cases, the justification for maintaining state monopolies and exclusive rights had been eroded by
technological developments which had made industries previously considered to be "naturalmonopolies" capable of functioning efficiently under competitive conditions, as well as by
                                                     
167 M/4, paragraph 36
168 M/5, paragraph 4
169 M/5, paragraph 13
170 M/5 paragraph 6
171 M/5, paragraphs 4, 7, 8 and 10
172 M/5, paragraph 10
173 M/5, paragraph 4WT/WGTCP/2
Page 34
globalization.  The view was expressed that the answers to such practical questions as how to go
about introducing competition, how to determine whether an industry was still a natural monopoly,
whether breaking up existing monopolies would enhance welfare given possible losses in efficiency
and other costs were still not always clear.174
101. The Group considered the range of ways in which national competition laws and policies
could impact on state monopolies and exclusive rights.175  The Group was informed of arrangements
in the European Community by which the general rule was that it was illegal for EC member States,
in the case of public undertakings and undertakings to which member States had granted special or
exclusive rights, to enact or maintain in force an y measure contrary to the Community's competition
and other rules.176  It was observed that, while some countries applied competition rules to the
activities of bodies enjoying state monopolies or benefiting from exclusive rights, other governments
exempted them, in whole or in part.  It was suggest ed that it would be desirable to develop a common
language with regard to the application of competition rules to government activities with
international implications, building on the concepts of sovereign immunity, state acts and foreign
compulsion.177  It was also suggested that exemptions or exceptions from competition regimes merited
further examination in the Group to see whether the rights and privileges which might therefore be
conferred could impede market access and thereby undermine non-discriminatory conditions ofcompetition.
178
102. The existing WTO rules were examined by some Members during the discussion.179
Reference was made in particular to Article XVII of the GATT (1947) and Article VIII of the GATS.
The point was made that Article VIII of the GATS, in referring to the concept of the abuse of a
monopoly position, constituted a clear example of a situation where competition law concepts had
already been incorporated into the framework of the multilateral trading system.  The view was
expressed that, while the current WTO rules in regard to state monopolies and exclusive rights under
the GATT and the GATS shared a common objective of preventing the circumvention of WTO
obligations, they had their limitations.  One suggestion, in this connection, was that there was a strong
case for examining the possibility of reinforcing thes e disciplines.  Another suggestion was that it was
still too early to consider the development of a multilateral framework of competition rules as a
complement to the current WTO disciplines.  Reference was also made to the treatment of state
monopolies and trading enterprises under Chapter 15 of NAFTA.180
103. The view was expressed that the limitation of th e applicability of WTO rules to enterprises
that enjoyed state-conferred monopolies or privileges, when the operations of private firms could have
similar effects on market access, constituted a significant gap in the multilateral trading framework.  It
was suggested that this pointed to three areas where further work was warranted in the Group:  (i) thescope for complementing existing WTO disciplines with a commitment by Members to adopt and
apply basic competition law disciplines applicable to all types of enterprises;  (ii) the need to apply
competition law on the same basis to private and public enterprises;  and (iii) the feasibility of and
need for limiting existing broad derogations from the application of competition law.
181
104. Reference was also made in the discussion in the Group to the positive role that state
monopolies and exclusive rights had played, particularly in developing countries where market forces
were sometimes still in their infancy.  Government s had often granted special or exclusive privileges
                                                     
174 M/5, paragraph 7
175 M/5, paragraphs 5, 10, 14, 15 and 26
176 M/5, paragraph 5
177 M/5, paragraph 10
178 M/5, paragraph 14
179 M/5, paragraphs 10, 13, 14 and 16
180 M/5, paragraph 12
181 M/5, paragraph 13WT/WGTCP/2
Page 35
to designated enterprises so as to ensure universal supply of a service to all citizens on specific terms
and at affordable prices.  This could ensure that development in these capital-intensive areas was
uniform throughout the national territory and that these services were provided at a uniform level of
quality.  While moves were under way in developing countries towards demonopolization and
deregulation, it was important to strike the right balance between the advantageous features of statemonopolies and the negative aspects of such enterprises.  In doing so, an over-simplified view of state
monopolies should be avoided.  Efficiency and equity were not necessarily mutually exclusive goals,
especially in an environment where market failure was more common than in developed countries.
Developing countries and economies in transition needed time to adjust to changes through
exclusions, exemptions and other temporary measures.  It also had to be taken into account that
market access, although important, was not the only issue to be addressed in examining the trade
effects of state monopolies and enterprises which enjoyed exclusive rights.  Apart from being majoremployers, they often fulfilled an important socio-political role and deregulation of any traditionally
reserved sector was not without its political connotations.
182
Regulatory policies
105. Many delegations said that the impact of regulatory policies was already figuring importantly
in diverse aspects of the work of the WTO.  The Group could make an important contribution to
enhancing understanding of the implications of regulation for competition and efficiency, and the
potential benefits of greater reliance on competition principles for market access, efficiency and
welfare.183
106. Some delegations shared with the Working Group their national experience with deregulation
and the benefits which had flowed from it.184  It was said that this experience had shown that a
commitment to competitive markets, rather than regulatory approach es, as the primary instrument of
economic governance yielded major benefits for competition, trade and consumer welfare, created
efficiencies and promoted innovation.  Results in te rms of reduced consumer prices had in many cases
exceeded expectations.185  The importance of a rigorous competition law and policy to complement
market-liberalizing regulatory reforms, in or der to prevent the continuation or emergence of
anti-competitive practices in a deregulated market, was emphasized.  The Group was informed of the
results of work in the OECD which had shown that there was ample evidence that regulatory reform,
properly carried out and with an adequate understanding of policy linkages, could improve
significantly sectoral and economy-wide economic performance, and at the same time enhance the
capacity of governments to protect important public interests such as environmental and consumer
protection.186  The Group was also informed of a recent study presented to the UNCTAD
Intergovernmental Group of Experts on Competition Law and Policy which had examined empirical
evidence concerning the benefits for development of applying competition legislation.  Evidence
summarized in the study indicated that the replac ement of administered pricing by liberal market
pricing could provide important gains in efficiency and consumer welfare.187
                                                     
182 M/5, paragraphs 15 and 16
183 M/5, paragraph 17
184 M/5, paragraphs 18, 20, 22, 23, 25, 26, 28 and 29
185 M/5, paragraph 18
186 Regulatory Reform:  Overview and Proposed OECD Work Plan [OCDE/GD(96)115];
M/5, paragraph 25
187 UNCTAD, Empirical Evidence of the Benefits from Applying Competition Law and Policy
Principles to Economic Development in order to Atta in Greater Efficiency in International Trade and
Development  (Geneva, document TD/B/COM.2/EM/10, 1997);  M/5, paragraph 26.WT/WGTCP/2
Page 36
107. It was said that regulation was nonetheless needed in certain situations, for example in
genuine situations of natural monopoly.  However, the point was made that the extent of such
situations was becoming smaller as a result of technological changes.188
108. The interface between regulation and the application of competition law was discussed.189  A
variety of situations were identified, ranging from the situation where competition law applied inprinciple across the economy without exceptions , through situations where there was broad
applicability of both competition law and regulatio n, to situations where competition was largely
excluded from regulated industries.  It was observed that one important aspect of deregulation was
that it could also expand the scope of application of competition law and policy.
190  The Group was
informed that the OECD report on regulatory re form had recommended the elimination of sectoral
gaps in the coverage of competition law as well as the vigorous enforcement of competition law.191
109. The important role that competition advocacy coul d play in respect of regulatory policies and
their impact on competition and trade was widely commented on.192  The Group was informed that
competition advocacy had acted as a catalyst for pro-competitive reforms of regulatory regimes.  It
was also informed that the intergovernmental organizations represented by observers in the Group
also placed great emphasis on the important role that competition advocacy could play in respect of
regulatory reform and that the OECD report on  regulatory reform had included a recommendation
urging competition authorities and trade officials to become active in advocating regulatory reform.193
110. The discussion on regulatory policies included comments on their impact on market access.
The point was made that the transition from regulation to reliance on competition policy (including,
where required, pro-competitive regulation) had the important beneficial side-effect of facilitating
access to markets by foreign suppliers.194  The following examples of regulatory situations having
adverse effects on competition and trade were advanced:  outmoded or unnecessary regulations;  a
failure by countries to recognize each others' technical standards;  state zoning laws or sanitary and
phytosanitary requirements that limited entry unnecessarily or served as disguised tools for excluding
competing suppliers;  legal systems that facilitated strategic use of the courts by firms to harass
competitors;  and discriminatory R&D funding practices.  It was suggested that the regulations thatneeded to be reviewed could be classified as follows:  regulation that openly discriminated in favour
of domestic suppliers;  regulations that were non-discriminatory on the surface but subtly
discriminatory in their substantive requirements;  re gulations that simply were no longer needed;  and
poorly designed regulations that were desirable in principle but unnecessarily intrusive.
195  Another
categorization that was put forward for regulatory policies that could have negative impacts on trade
was as follows:  regulations that were unnecessarily restrictive;  regulations that contained divergent
or duplicative requirements (an important example was where they imposed duplicative performancerequirements);  regulations that served as instruments of vested interests;  and regulations that lacked
transparency.
196
111. Various suggestions were made for further work that might be undertaken on this matter.
One was that there was an urgent need for empirical research on the consequences for trade and
competition of unnecessary, poorly designed and discriminatory regulations.197  Another was that the
                                                     
188 M/5, paragraphs 18, 22 and 23
189 M/5, paragraphs 18, 21, 22 and 25
190 M/5, paragraph 18
191 M/5, paragraph 25
192 M/5, paragraphs 19, 23, 25, 26 and 27
193 M/5, paragraphs 25, 26 and 27
194 M/5, paragraph 18
195 M/5, paragraph 20
196 M/5, paragraph 24
197 M/5, paragraphs 20 and 24WT/WGTCP/2
Page 37
Group should give further consideration to the ways in which WTO disciplines attempted to address
the trade and competition effects of regulatory policies.198  It was also suggested that the Group should
give consideration to developing a WTO guideline to provide for regular and systematic review of
national regulatory policies in the light of competition policy principles.  The view was expressed that
this would help to enhance the transparency and effectiveness of reform efforts and be a useful tool inpromoting freer access to markets;  and that such a guideline, administered by the WTO, would have
significant advantages for developing countries:  it would elevate the transparency and legitimacy of
reform efforts, provide access to relevant past experiences of other countries, and help to overcome
bureaucratic resistance.
199
(c) The relationship between the trade-related aspects of intellectual property rights and
competition policy
112. This matter was the subject of discussion at the Working Group's meeting on 28 and
29 September 1998.  The European Community and its member States (W/99);  the United States
(W/101);  New Zealand (W/103);  Hong Kong, China (W/104);  Korea (W/105);  and Japan (W/106)
introduced written submissions relating to this subject.  Turkey presented a non-paper.  Australia,
Canada, India and Pakistan as well as the observers from UNCTAD and Croatia made oral statementsregarding this subject.
113. The view was expressed that there was a basic complementarity between intellectual property
law and competition law.
200  An intellectual property regime, by preventing free riding on inventive or
creative activities and the use by others, without payment, of assets resulting from intellectual work,
aimed at preventing insufficient remuneration to those investing in this kind of capital, with aconsequent misallocation of resources and a negative impact upon economic growth and welfare.
201
One way of putting it that was presented was that intellectual property laws provided for intellectualproperty to be valued and exchanged;  competition laws ensured that the market assigned a fair and
efficient value to this property.
202
114. Another view expressed in the Group em phasized the apparent dichotomy between
intellectual property and competition law.  While the latter engendered competition, the former
endangered it.  In this regard, it was said that, for developing countries, the overriding objective of
facilitating economic advance required a careful meshing of intellectual property and competition
law.203
115. Comments were made on the way in which attitudes of competition authorities to intellectual
property protection had evolved in recent decades fr om a degree of hostility towards a recognition of
the value of intellectual property rights in promoting innovation and hence competition.  Newlydeveloping issues such as network effects in hi gh-technology industries were now being factored into
this thinking.
204  In particular, it was no longer considered that an exclusive right necessarily conferred
market power.  Often, there were enough substitutes in the market to prevent the holder of an
intellectual property right from actually gaining market power.  The availability of substitutes was an
empirical question that could only be determined on a case-by-case basis.  Further, even if theintellectual property right concerned generated market power, the right holder's behaviour might not
                                                     
198 M/5, paragraph 24
199 M/5, paragraph 21
200 M/6, paragraphs 4, 8, 12, 13, 14, 17 and 18
201 M/6, paragraph 16
202 M/6, paragraph 18
203 M/6, paragraph 17
204 M/6, paragraph 9WT/WGTCP/2
Page 38
necessarily constitute an abuse of a dominance.  Therefore, under current standards the exercise of an
intellectual property right as such was not restrained by competition law.205
116. The point was made that, in the application of competition law, there was also now a much
greater appreciation of the efficiency benefits arising from the licensing of intellectual property rights.
Licensing was regarded as generally pro-competitive;  it should not be subject to excessive regulationby national competition laws.
206  Some national competition laws defined safety zones or group
exemptions to reflect this presumption.207  Where an individual licensing practice needed to be
examined, this was generally done on a case-by-case basis according to a "rule of reason" standard by
which the pro-competitive benefits would be weighed against anti-competitive effects.208  Reference
was also made to the use of guidelines by nationa l competition authorities as a means of contributing
to predictability and transparency in the applic ation of competition law, for example to provide
guidance on licensing practices that would be presumed acceptable and on those that might requireexamination.
209
117. The view was expressed that, nonetheless, the compatibility of competition law and
intellectual property rights depended on competition law being properly applied to the exercise of
those rights.210  A proper application of competition law should avoid two extremes:  too stringent an
application could lessen innovation;  an ineffect ive or insufficient application could result in an
over-extended grant of market power.  Both outcom es would have an adverse effect on output as well
as an inhibiting effect on trade.211  A number of Members described the way in which their national
law addressed anti-competitive practices in the exercise of intellectual property rights.  Emphasis was
put on the need for a "rule of reason" analysis, weighing pro-competitive against anti-competitive
effects, the use of appropriate filters to identify potentially harmful practices and the importance ofnon-discrimination and transparency.
212
118. The view was expressed that a proper balance should be found also in the level of protection
to be accorded to intellectual property rights by intellectual property law and that more attention
should be paid to ensuring that the intellectual property rights themselves were underpinned by sound
competition principles and promoted global welfare.213  Over-protection of intellectual property rights
might contribute to the entrenchment of horizontal and vertical restraints, for example through patent
pooling among competitors and the prohibition of parallel imports.214  It was suggested that future
negotiations in the area of intellectual property rights should give equal weight to recognizing the
risks of both under- and over-protection of intellectual property rights.  Advocates of change should
be required to demonstrate empirically that the changes they proposed were likely to increase global
welfare.215  In response to these remarks, it was said that WTO Members had already agreed in the
TRIPS Agreement on what should be the appropriate level of protection of intellectual property rights.What was material for the purposes of the present work of the Working Group was not the level of
intellectual property right protection, but rather whet her right holders, in using such protection in the
market, behaved anti-competitively or not.  If they did, competition policy provided remedial
                                                     
205 M/6, paragraphs 4, 10 and 17
206 M/6, paragraphs 4 and 10
207 M/6, paragraphs 10 and 15
208 M/6, paragraphs 10, 13, 15 and 18
209 M/6, paragraphs 10 and 14
210 M/6, paragraphs 8, 14 and 18
211 M/6, paragraph 8
212 M/6, paragraphs 10, 13, 15 and 18
213 M/6, paragraphs 4, 11, 12, 13 and 17
214 M/6, paragraph 12
215 M/6, paragraph 11WT/WGTCP/2
Page 39
measures, without abridging the level of protection afforded either by the TRIPS Agreement or by the
national intellectual property rights regime.216
119. Provisions of the TRIPS Agreement that were  considered to relate to the treatment of
anti-competitive practices, in particular Articles 6, 8, 31 and 40, were discussed.  The point was made
that the TRIPS Agreement reflected the thinking that regimes for the protection of intellectualproperty rights should be balanced by safeguards intended to restrain anti-competitive practices
involving the use of intellectual property rights.
217  Comments were also made on the effectiveness of
these provisions and whether there was need for further international cooperation in this area.  It was
said that the TRIPS provisions did not clarify the practices that could be treated as an abuse and said
little about the remedies that Members could apply.218  WTO Members should seek to harmonize
domestic competition standards relating to the abuse of intellectual property rights.219  The question
was raised as to whether a cooperation provision devoted to a specific area of competition law was themost effective way to channel cooperation among national competition authorities, especially in the
light of the lack of evidence of use of the consultation and cooperation provisions of Article 40 so far.
It was suggested that a broader, horizontal framework was needed to create sufficient incentives
towards international cooperation.
220  It was noted that the TRIPS Agreement contained detailed
provisions on the enforcement of intellectual propert y rights, incorporating principles of effectiveness,
transparency and due process, concerns which were equally important to competition law and
policy.221
120. A number of speakers outlined their national practices in regard to the treatment of parallel
imports.222  The view was expressed that intellectual property rights that enabled right holders to
prevent parallel imports could be employed in an anti-competitive manner to segregate markets andrestrict international trade.
223  It was suggested that the issue of parallel imports and appropriate
regimes for the exhaustion of intellectual property rights might be a subject of further work by the
Working Group.224
121. The view was expressed that, in finding an appropriate balance between providing market
incentives and limiting monopolistic and unfair business practices in the field of intellectual propertyrights, account should be taken of the circumstances in which many developing countries found
themselves.  It was said, first, that developing countries had, in some cases, yet to exploit the
intellectual property rights provided for in their national laws to a substantial extent and that their
trade in products subject to intellectual property rights was mostly in areas that were not necessarily
covered by existing disciplines.  Second, developing countries needed to acquire technology from
advanced nations which might not be forthcoming given the desire of owners of intellectual property
rights to maximize profits.
225
122. The point was made that, in considering the re lationship between intellectual property and
competition policy, it was important to address the issue of the extent to which remedies for abuse of
intellectual property rights could and should be so ught within competition policy and to what extent
                                                     
216 M/6, paragraphs 21 and 23
217 M/6, paragraphs 5, 8, 12, 13, 16, 17 and 18
218 M/6, paragraphs 5 and 12
219 M/6, paragraph 13
220 M/6, paragraphs 6 and 23
221 M/6, paragraph 6
222 M/6, paragraphs 14 and 15
223 M/6, paragraph 15
224 M/6, paragraphs 14 and 15
225 M/6, paragraph 17WT/WGTCP/2
Page 40
they should be found by introducing or strengthening features of laws on intellectual property such as
compulsory licensing.226
(d) The relationship between investment and competition policy
123. This matter was the subject of discussion at the Working Group's meeting on 28 and
29 September 1998.  The European Community and its member States (W/99);  Hong Kong, China
(W/104);  Japan (W/108);  Korea (W/109);  the United States (W/102);  and Venezuela (W/107)
introduced written submissions relating to this item.  In addition, Brazil, Canada, India and Norway
made oral statements, as well as observers fr om UNCTAD, who also provided information on
relevant studies of their Organization.
124. Much emphasis was placed in the discussion on the mutually reinforcing nature of open
policies towards foreign direct investment (FDI) and a properly constituted and functioningcompetition policy.
227  It was said that the process of liberalization of FDI had drawn attention to three
aspects:  the reduction of restrictions on FDI, the establishment of standards of treatment and
protection for FDI, and the maintenance of the prop er functioning of markets;  competition policy
assumed importance in the third context.228
125. The point was made that, on the one hand, a liberal FDI regime could increase competition in
the market and, on the other, a well-functioning competition policy could help remove obstacles to
inward FDI resulting from the behaviour of incumben ts and contribute towards providing an attractive
legal framework for foreign investors.  It was said that, in developing and transition economy
countries in particular, FDI liberalization often constituted part of a broader policy package spanning
also such areas as trade liberalization, regulatory reform and privatization as well as competitionpolicy.  The issue of the possible sequencing of the introduction of new or strengthened competition
policies, on the one hand, and liberal FDIs on the other was discussed, the view being expressed that it
made sense for such policy reforms to be introduced hand in hand, given their mutual dependence.
Both to encourage increased FDI flows and to maxi mize national benefits from such flows, it was
important that competition policy be strengthened, especially in developing countries.
229
126. With regard to the effects of an open FDI regime in increasing competition, it was said that
such regimes increased the prospects for new entry and thus competition in specific markets.
Reference was made to studies that had supported this conclusion.  The point was made that this was
true not only for markets for tradeable goods and services but also for markets that were more local in
their geographical definition and where international trade could not or did not provide competition,
such as many service markets.  Liberal investment rules could mitigate or eliminate local distribution
bottlenecks that might stand in the way of competition through trade channels.230  It was said that
policies to permit entry into and exit from a market by foreign investors could increase pressure on
incumbents to behave more competitively even in  the absence of actual increased FDI flows, by
making the markets more contestable.231  Attention was also drawn to the role that open FDI policies
could play in enhancing the competitiveness of domestic firms, not only by reinforcing market
pressures on them to behave competitively, but also through technological and other spillovers fromforeign investors.
232
                                                     
226 M/6, paragraph 22
227 M/6, paragraphs 29, 30, 31, 34, 36, 37, 39, 41, 44 and 52
228 M/6, paragraph 43
229 M/6, paragraphs 40 and 45
230 M/6, paragraphs 30 and 37
231 M/6, paragraph 36
232 M/6, paragraphs 28 and 39WT/WGTCP/2
Page 41
127. In regard to the contribution that a well-formulated and operated competition policy could
make to promoting inward FDI, it was said that sound competition policies and laws could assist
investors by preventing local cartels or monopolies from abusing new entrants or driving them out.233
As barriers to inward FDI were reduced, incumbents should be prevented from negating the impact ofsuch policies by establishing alternative barriers to entry, in the form of vertical and horizontalrestraints or abuses of a dominant position.
234  The point was made that this was especially true for
network industries such as telecoms or electricity , where investors had to rely upon local bottleneck
transmission facilities to provide a competitive service.235  Reference was made in this connection to
the commitments that had been entered into by many WTO Members as a result of the GATS
negotiations on Basic Telecoms in the form of a so-called "Reference Paper".236
128. It was also pointed out that a sound competition policy and law could contribute to providing
an attractive environment for FDI by providing a st able and transparent legal framework of the kind
familiar to many foreign investors and signal ling a commitment to market institutions and
mechanisms.237
129. A further component of the synergy between open FDI policies and sound competition
policies that was discussed was the role of competition policy and law in safeguarding against
possible abuses of market power by foreign investors.238  It was said that there was a concern,
particularly among developing economies, that the liberalization of FDI might entail private
restrictive business practices by foreign investors if the host economy did not protect the
contestability of markets through proper competition policies.239  It was suggested that the conditions
that gave rise to multinational firms could also give rise to situations where such firms enjoyed market
power, which could be abused anti-competitively.240  A particular concern was expressed regarding
the possible effects of horizontal mergers that led to concentration of market power, and thereby
negated the beneficial effects of FDI.  Another con cern discussed in this connection was that the entry
of highly competitive foreign companies might lead to the displacement of local competitors.241  The
point was made in this connection that, provided a liberal investment environment and an effective
competition policy was maintained, any resulting market power could be expected, as a general rule,to be offset by the actual or potential entry of other multinational companies as well as possible local
start-ups.
242
130. The application of competition law and policy to mergers, acquisitions and joint ventures was
discussed.243  The point was made that frequently this  was the initial interface between inward FDI
and national competition policies.  Inward FDI might entail a number of scenarios that could give rise
to the need for ex ante  review of possible anti-competitive effects in this connection;  these included
mergers and joint ventures between foreign and local firms and between foreign firms that had localaffiliates in the market in question.
244  It was suggested that, as FDI increased, in particular in
conjunction with deregulation and privatization, a growing proportion of economic activity was being
affected by such reviews.  The view was expressed that the jurisdictional nature of these reviews
suggested the need for enhanced cooperation betwee n competition agencies to address issues arising
                                                     
233 M/6, paragraph 31
234 M/6, paragraphs 37, 40 and 52
235 M/6, paragraphs 31 and 37
236 M/6, paragraph 31
237 M/6, paragraphs 29, 41 and 55
238 M/6, paragraphs 31, 40, 41, 44 and 45
239 M/6, paragraph 34
240 M/6, paragraph 35
241 M/6, paragraphs 40 and 46
242 M/6, paragraphs 40 and 52
243 M/6, paragraphs 37 and 42
244 M/6, paragraphs 37 and 42WT/WGTCP/2
Page 42
from differing notification and procedural requirements applied by countries and possible duplication
of procedures.  Such enhanced cooperation could minimize costs and facilitate FDI.245
131. In the consideration of the relationship between investment and competition policy, the
inconsistencies or contradictions that could arise between these policies were also discussed.246  It was
suggested that excessive regulation of investment, for example through screening regulations orperformance requirements, could harm both investment and competition.  The view was expressed
that not only could such measures deter beneficial flows of capital and technology with the attendant
stimulation of competition in local markets, bu t also often proved an inferior and possibly
counterproductive policy instrument when dealing with competition policy concerns.
247  Others noted,
however, that the application of a screening process for investment was not, in itself, a form of
excessive regulation;  rather, it was the manner in which it was applied (more liberally vs. more
restrictively) which would determine whether it constituted excessive regulation.  The point was alsomade that competition policies that were not im plemented in a transparent, stable, neutral and
non-discriminatory (with regard to nationality) way, could constitute a deterrent to inward
investment.
248
132. A number of speakers referred to the role of appropriate trade policies in policy programmes
that also embraced open FDI and sound competition policies.249  It was suggested that all three types
of policy could be mutually reinforcing in engende ring contestability and competition in markets.
The three policy tools had a high degree of interdependence and could ensure efficient resource
allocation and economic development if they were appropriately configured to be consistent with one
another.  If they were not, distortions and reduced welfare gains might result;  for example, a
liberalized FDI regime in the context of a continuing restrictive trade policy might increase the scopefor foreign as well as domestic firms to abuse their market power.
250  It was suggested that, at the risk
of some over-simplification, trade policy could be regarded as determining the relevant market for the
purposes of the application of competition policy and investment policy as determining the relevant
players in that market.251  Another point made was that it was increasingly difficult to separate those
aspects of the conditions of international competition that related to trade in goods and services fromthose relating to movements of factors of production.
133. The point was made that the interlinkage between trade, investment and competition was
already recognized in a number of WTO instruments, such as the GATS and the TRIMs and TRIPS
Agreements.
252  Reference was also made to regional arrangements where the same interlinkage was
evident.  The view was expressed that, apart from providing for cooperation and consultation
procedures and paving the way for possibly more detailed rules, the existing WTO instruments fell
short of preventing restrictive business practices or limiting regulatory abuses in the field ofcompetition policy;  the challenge was to remove the inadequacies of existing WTO rules and to
increase the synergies between investment and competition policies in a more systemic manner.
253
134. The view was expressed that there may be a need in a developing country context for
competition rules to be introduced and applied in a flexible manner so as to take into account the
transition costs that may be entailed by economic reforms, including liberalization of FDI regimes.Short-run economic efficiency could not always be the only policy objective.  In the formulation of
                                                     
245 M/6, paragraph 42
246 M/6, paragraph 40
247 M/6, paragraph 32
248 M/6, paragraph 49
249 M/6, paragraphs 34, 38 and 44
250 M/6, paragraph 44
251 M/6, paragraph 38
252 M/6, paragraphs 34 and 42
253 M/6, paragraph 34WT/WGTCP/2
Page 43
FDI liberalization policies, account might have to be taken of the effect of inward FDI in giving rise
to excess capacity or diseconomies of scale and weakening the market position of domestic
enterprises.  Safeguarding national security, protecting labour rights, promoting positive and avoiding
negative externalities, and promoting small and medium-sized enterprises might also be important
objectives.  The special and differential needs of developing countries should be taken into accountwhen designing competition rules.  Other factor s that were said to be relevant were the
unpredictability of the effects of FDI on employment and its relationship with international
technological specialization and competition.  The view was expressed that, where conflicts between
policy objectives occurred, their resolution might require a mix of policies that limited  contestability
for a period of time and achieved the right balance between efficiency and non-efficiency objectives
in a dynamic context.  It would be relevant to look at existing experiences under which a number of
competition laws featured objectives not necessarily related to efficiency considerations, such ascontrolling the concentration of economic power, promoting the competitiveness of domestic
industries, encouraging innovation, supporting small and medium-sized enterprises and encouraging
regional integration.  Moreover, a number of competition laws contemplated exemptions and
exceptions for certain types of joint ventures, certain industries, small transactions or cooperative
arrangements among small enterprises.
254  Possible exemptions or exceptions to competition should be
the least damaging from an efficiency perspective, should be transparent and should be subject to
review in the light of changing conditions.
(e) The impact of trade policy on competition
135. This matter was the subject of discussion at the Group's meeting on 27 and 28 July 1998.  The
European Community and its member States (W/78);  New Zealand (W/81);  the United States (W/84
and 88);  Hong Kong, China (W/85);  Venezuela (W/87);  Korea (W/90);  and Japan (W/92)
introduced written submissions on the matter.  In addition, Argentina, Australia, Brazil, Canada,
India, Norway, Pakistan, Peru, Singapore on beha lf of ASEAN WTO Members, Switzerland and the
observer from the Russian Federation made oral statements regarding this matter.  The observer fromthe OECD provided background information on relevant activities and studies of this Organization.
136. A number of criteria were put forward for identifying the aspects of trade policy and the
WTO provisions that would be relevant to the task in hand.  Reference was made in this connection to
the earlier discussions in the Working Group concerning situations where trade and competition
policy could be mutually supportive and situations where they could operate in conflict with each
other.  The view was expressed that the Working Gr oup should look into the impact of trade policy on
competition on a global and non-selective basis, taking into account that the world trading system hadto be seen as a totality.  There were a number of WTO agreements that allowed Members to take or
maintain measures that affected competition within and outside their domestic markets.  The point
was made that this might be a very considerable task, greater than the Group could readily undertake,
especially since it would also require looking at the extent to which WTO agreements were
adequately implemented.
255  Another was that the Group should focus on how to minimize situations
where trade policy might negatively impact on competition and maximize situations where trade
policy would be pro-competitive.256  One suggestion was for a broad framework entailing four basic
categories of trade policy instruments:  (i) border measures;  (ii) internal regulations;  (iii) safeguard
measures;  and (iv) measures to counter unfair trade.257  Another was to examine trade policy
measures that reduced global economic welfare, with particular reference to those having the largestadverse impact bearing in mind that the Working Group should promote policy coherence and
                                                     
254 M/6, paragraph 47
255 M/5, paragraphs 33, 35, 41 and 63
256 M/5, paragraphs 42, 47, 52 and 55
257 M/5, paragraph 35WT/WGTCP/2
Page 44
pro-competitive policies throughout the WTO.258  A further observation in this connection was that
any trade measure which effectively protected domestic markets from foreign competition could
contribute to a certain degree of concentration in a domestic market and lead to a possible abuse of a
dominant position to the detriment of the consumer.  Accordingly, the impact of trade policy measures
on competition needed to be closely reviewed especially in those areas where there was an implicitinconsistency between the objectives of trade laws and those of competition laws.
259
137. A Member, recalling the "WTO approach" that it had proposed for the work of the Group260,
suggested that the work on the impact of trade policy on competition be guided by five main points.
First, the Working Group should aim to increase  the synergies between trade liberalization and
pro-competition policies, and to reduce the inconsistencies and welfare-reducing effects of trade
restrictions and exemptions from competition rules.  Second, consideration should be given to a
concept referred to as "Free Trade and Competition Commitments", under which the WTO mightconsider providing for the phasing-out of anti-dumping measures vis-à-vis WTO Members which
committed themselves to free trade and open competition.  The aim would be to encourage mutually
rewarding trade liberalization and effective competit ion, in contrast to the anti-competitive, mutually
harmful restrictions imposed under certain existing trade rules.  Third, a competition-oriented reform
of existing WTO rules was proposed, aimed at ensuring that the benefits of trade liberalization werenot eroded by anti-competitive measures which governments could use under existing WTO rules.
Fourth, the adequacy of existing WTO provisions which permitted "trade remedies" to be applied
based mainly or solely on price differentiation was called into question by the fact that international
price differentiation on its own was not disallowed under WTO rules, nor under conventional
competition rules.  Fifth, the Working Group should take into account the theory of optimalintervention, under which government policies should correct economic distortions at their source,
without generating other distortions as a by-product.  For instance, trade policy safeguards and
anti-dumping measures usually did not address the source of the alleged trade and competition
problems.  The root cause of such problems may be international market segmentation, comparative
disadvantage of import-competing producers, or distor tions of competition in the exporting or in the
importing economy.
261
138. The view was expressed that certain WTO provisions, considered narrowly, could be
interpreted as tolerating the existence and expansion of measures with both trade-distorting and
competition-distorting effects.  However, viewed from a broader perspective, they could be
acknowledged as a necessary component in the development of more coherent multilateral rules
governing trade.  For example, the distincti on made in the WTO Agreement on Subsidies and
Countervailing Measures between "green light" and othe r subsidies were largely the result of political
compromise which had been deemed appropriate in return for the enhanced legal certainty that they
conveyed and the stricter disciplines secured for other kinds of subsidies predicated on such clearly
distortive terms as export performance, import substitution, debt forgiveness and coverage of
operating losses.  The lack of a pure economic or scientific justification for the particular conditions
or criteria employed did not mean that such agreements were not pro-trade and pro-competitive.262
139. In the discussions, the impact on competition of a broad range of trade policy instruments and
WTO provisions were referred to.  These included:
                                                     
258 M/5, paragraphs 41 and 52
259 M/5, paragraph 63
260 See paragraph 75 of this report, above.
261 M/5, paragraphs 46 and 47
262 M/5, paragraph 33WT/WGTCP/2
Page 45
- the implications for competition of non-compliance with the Agreement on
Preshipment Inspection263;
- the WTO Agreement on Subsidies and Countervailing Measures which, it was said,
took a rather low-key approach to the disciplining of subsidy practices even though
they could affect significantly both trade and competition.264  Reference was also
made to the use of export subsidies265;
- Articles II, III and XI of GATT 1994266;
- high levels of tariff protection which persisted in many sectors in many countries, as
well as cases in which tariffs were not bound or where bound tariffs were much
higher than the ones actually applied267;
- tariff quotas268;
- technical barriers to trade.  In this connection, it was noted that WTO disciplines
addressed the practices of private bodies involved in the setting of standards and
conformity assessment.269  It was stated that excessive requirements could undermine
market contestability, discourage new entrants and condone economic
inefficiencies.270  Reference was also made to the anti-competitive and
trade-distorting effects that could result from sanitary and phytosanitary measuresthat were set at a level much higher than the generally accepted international level.  It
was said that, while such measures were always adopted with the ostensible purpose
of protecting human, animal or plant life, they could, to a degree, insulate domestic
industries from outside competition
271;
- safeguards.  In this connection, attention was drawn to the fact that the preamble of
the WTO Agreement in this field recognized the need to enhance rather than to limit
competition in international markets.  In addition, the WTO Safeguards Agreement
had introduced a prohibition on voluntary export restrictions, orderly marketing
agreements and other similar arrangements on the export and import side and,
furthermore, required Members not to encourage and support equivalent measuresadopted or maintained by public and private enterprises.  However, this provision did
not cover arrangements to restrict imports or exports entered into by private or public
enterprises in the absence of government involvement
272;
- import quotas273;
- discriminatory rules on government procurement274;
                                                     
263 M/5, paragraph 33
264 M/5, paragraphs 33, 37 and 41
265 M/5, paragraphs 55 and 63
266 M/5, paragraph 33
267 M/5, paragraph 36
268 M/5, paragraph 63
269 M/5, paragraphs 37, 41 and 52
270 M/5, paragraphs 54, 60 and 63
271 M/5, paragraph 63
272 M/5, paragraphs 38 and 47
273 M/5, paragraph 55
274 M/5, paragraphs 41 and 47WT/WGTCP/2
Page 46
- regional development policies275;
- services276;
- state trading277;
- discriminatory rules of origin278;
- the regime for trade in textiles and clothing as provided for in the Agreement on
Textiles and Clothing.279  The point was made that, without this system, exporting
economies would have conducted trade in the most efficient manner without the
ephemeral windfalls of a quota system, while import-competing industries would
have undertaken, earlier on, necessary adjustments to compete in a free and
non-discriminatory environment280;
- reference was also made to intellectual property protection.  The question was asked
whether what was perceived as ever-increasing levels of protection in the area ofintellectual property was consistent with the objective of promoting global economic
welfare, for example the requirement of the TRIPS Agreement for a minimum term
of patent protection of 20 years.
281  Concern was expressed about the absence of
empirical studies on the economic effects of strengthened intellectual property
regimes.282
140. References were made to the use of trade remedies, in particular in regard to anti-dumping.
One view was that anti-dumping rules aimed at protecting competitors from allegedly unfair trade,
whereas competition rules sought to protect the competition.283  It was also said that anti-dumping
measures were often used by firms as a strategic tool to restrain or eliminate competition in the market
and that even the threat of anti-dumping measures could have restrictive effects on competition andinduce exporters unilaterally to reduce their exports, raise their prices, or change their production
location.
284
141. The view was expressed that, whereas both dom estic competition laws and anti-dumping laws
were concerned with predatory pricing, one in domestic trade and the other in international trade,
anti-dumping measures could be imposed much more easily than competition law measures to remedylow-priced sales.  The point was made that, under competition law, low-priced domestic sales were
illegal when there was predatory intent and a probability that, through predatory pricing, competition
would be eliminated and the predator would be able to realize subsequently monopolistic prices and
profits.  The criterion of predatory intent, which had been incorporated originally in a national
anti-dumping law, did not have to be met before imposition of anti-dumping remedies.  Moreover,
export prices higher than average variable costs were considered to be dumped simply if they were
lower than domestic prices, whereas competition law had no problem with export prices set at this
                                                     
275 M/5, paragraph 41
276 M/5, paragraph 47
277 M/5, paragraph 47
278 M/5, paragraph 47
279 M/5, paragraph 52
280 M/5, paragraph 54
281 M/5, paragraph 41
282 M/5, paragraph 60
283 M/5, paragraph 45
284 M/5, paragraphs 42, 45, 53, 55 and 60WT/WGTCP/2
Page 47
level.  Competition law did not prohibit price discrimination itself, recognizing that it occurred as a
result of normal business behaviour.285
142. The view was expressed that there were also other anti-competitive aspects of the way the
anti-dumping system worked.  First, although the WTO Anti-Dumping Agreement had introduced
several significant reforms in anti-dumping practices, under current rules national authorities couldstill exercise enormous discretion.  In particular, the criteria for determining the margin of dumping,
injury and the causal link between the dumped imports and injury to the domestic industry were
neither stringent nor specific.  Likewise, there were no specific criteria to determine the existence of
material injury and no generally accepted mechanism to examine the cause or relationship between
dumping and injury.  Second, anti-dumping rules, by allowing exporters to avoid anti-dumping
measures if they agreed to raise their prices, encouraged cartelization.  Third, anti-dumping was sold
on the grounds that it was a justifiable attempt by importing-country governments to offset marketaccess restrictions in the country of export that underlay the ability of firms to dump.  However,
anti-dumping measures did nothing to solve this prob lem because they did not get at its source, that is,
foreign market closure.
286  Fourth, anti-dumping rules were inconsistent with key WTO principles,
i.e. national treatment and MFN treatment, as such rules were applied selectively rather than to all
foreign exporters and domestic producers.287
143. A number of suggestions to reform anti-dumping laws from a competition policy perspective
were put forward.  It was suggested that the price standard in dumping cases should be average
variable cost and the authorities should also need to prove predatory intent and the probability of
future success in predation.288  A positive injury determination should be made only if dumping had
been proven to have anti-competitive effects.289  The Working Group might undertake a study of
anti-dumping cases from the perspective of competition law and a case study on competition rules and
anti-dumping rules in regional arrangements.290
144. Another view expressed was that it was misguided to intend to replace anti-dumping laws by
competition laws, or modify them in a way that would make them reflect competition policy and
principles.  Anti-dumping laws and competition laws had different objectives, were founded ondifferent principles and sought to remedy different problems.
291  Anti-dumping rules were not
intended to address predatory pricing and there was no reference to this effect in the WTO
Anti-Dumping Agreement.  Rather, they were premised on the notion of "fairness", and envisioned
that producers would only use natural comparative advantages, rather than artificial advantages, when
engaging in international trade.  Injurious dumping usually resulted from market-distortive
government industrial policies, including the absence of meaningful soundly enforced competition
laws.  Dumping was a private practice generally made possible by governmental policies andpractices, whereas competition laws addressed private anti-competitive behaviour.  If anti-dumping
rules were eliminated in favour of competition laws or modified, the problems which anti-dumping
rules sought to remedy would go unaddressed.
292  Any problems that might exist in connection with
anti-dumping were best addressed through ensuring the strict application of the rules of the Anti-
Dumping Agreement and, particularly, in its Ad-Hoc Group on Implementation.293  What the Working
                                                     
285 M/5, paragraphs 42, 43, 45 and 55
286 M/5, paragraphs 48 and 53
287 M/5, paragraphs 45 and 67
288 M/5, paragraphs 43 and 45
289 M/5, paragraph 45
290 M/5, paragraph 43
291 M/5, paragraphs 39 and 48
292 M/5, paragraphs 48 and 49
293 M/5, paragraphs 39, 48 and 51WT/WGTCP/2
Page 48
Group might most usefully be able to do in this connection was to explore the circumstances which
gave rise to the need for anti-dumping remedies.294
145. It was further argued that anti-dumping rules were a remedial mechanism which WTO
Members had agreed was necessary for the maintenance of the multilateral trading system.  In fact,
the overall understanding embodied in the WTO had been achieved only because Members,particularly those with open markets, had been able to negotiate mechanisms like the Anti-Dumping
Agreement.
295  The notion that GATT Article VI or the WTO Anti-Dumping Agreement constituted
an exception to Articles I-III of the GATT was no t supported by any concrete reference in the WTO
system.  What should be read into the existing language was that the non-discriminatory provisions in
the WTO system were intended to be applied only to fairly traded imports.296
146. In regard to the scope for eliminating the use of the anti-dumping remedy in regional trading
arrangements, the view was expressed that it was important to recognize that competition law andanti-dumping law applied in different economic, legal and institutional contexts.  Competition law
applied within the context of an integrated market.  In contrast, anti-dumping applied in an economic
setting characterized by border measures and other regulatory obstacles and distortions of
international trade;  it applied to pricing practices  between markets rather than within them.  The
formation of an integrated market would imply not only the elimination of all border measures, butalso conditions to ensure full freedom of movement for services, investment and labour.  Further, the
effective application of competition law required the establishment of a competition authority with
comprehensive powers of investigation and enforcem ent and a uniform interpretation of the law by a
judicial law or by a common arbitrator.
297  It was also said that pre-conditions for eliminating the
anti-dumping remedy in regional agreements generally included strong similarities in nationaleconomic systems and the substantial removal of government industrial policies, as well as the free
movement of labour and capital and the existence of meaningful national competition laws.
298
147. Another view expressed was that, although anti-dumping was a legitimate tool to remedy
unfair trade practices, the Working Group could play a useful role in exploring how some practical
competition concepts could be introduced into anti-dumping practices in order to ensure a balancebetween consumer and producer interests.  It was suggested that, first, provision could be made for a
broader constituency to be engaged in the anti-dumping process, with a role for consumers and
end-users in determining the levels of duty.  Second, a greater role could be envisaged for competition
authorities in providing advice on the competitive impact of anti-dumping actions.
299
148. In regard to the view that anti-dumping was a practical response to objectionable
trade-distorting governmental industrial policies, it was said, by way of response, that this appeared to
confirm that anti-dumping could be phased out vis-à-vis WTO Members who made "free trade andcompetition commitments", thus providing an in centive for pro-competitive trade liberalization.
300
The problem with the characterization of the theoretical underpinnings of anti-dumping as a practical
response to objectionable trade-distorting policies was that it was entirely theoretical.  Neither
Article VI of the GATT (1947) nor the WTO Anti-Dumping Agreement dealt with anti-dumping in
this way, nor did national laws and regulations on anti-dumping.  In no anti-dumping investigationwas there a need to show or prove government involvement.  In fact, even very open and deregulated
economies were targeted for anti-dumping action.  Regarding the view that the need for anti-dumping
                                                     
294 M/5, paragraphs 48 and 58
295 M/5, paragraph 49
296 M/5, paragraph 68
297 M/5, paragraph 39
298 M/5, paragraphs 49 and 58
299 M/5, paragraph 61
300 M/5, paragraph 66WT/WGTCP/2
Page 49
remedies reflected differences between economic systems, the point was made that the WTO
agreements were not an instrument for harmonization of policy objectives or of economic systems.
The point was also made that, if trading partners had problems with allegedly market-distortive
industrial policies in other countries, the appropriate response was through the dispute settlement
procedures of the WTO rather than anti-dumping measures, especially since some industrial policieswere legitimate under WTO rules, in particular for developing countries.  Moreover, if ineffective
implementation of national competition laws might justify anti-dumping measures, the best course of
action would be to seek to improve their implementatio n of such laws rather than resort to the use of
anti-dumping.
301
149. In response to these points, it was said that anti-dumping remedies only offset the injurious
effects of distortive industrial policies rather than the policies themselves.  This was why neither the
GATT (1947) nor the WTO Anti-Dumping Agreement referred to any specific practices on the part ofexporters as a prerequisite for imposing anti-dumping measures and why anti-dumping measures
constituted an indirect response to such practices.  It was, of course, preferable to address such
policies directly, through working to open foreign markets, to foster a culture of competition where
needed, to discipline subsidies and generally to liberalize trade.
302
150. It was also said that it should be borne in mind that there was an important complementarity
between trade liberalization and competition policy.  For example, trade policies with a positive
impact on competition included tariff reductions, the roll-back of non-tariff measures and trade
facilitation measures.303  However, a concern was that inadequate action in one area could offset
action in the other area.  For example, trade liberalization could be nullified by ineffective action
against anti-competitive practices.304
151. Views were expressed on the way competition concerns should be taken into account in trade
policy as a whole and vice-versa.  It was said that, when considering and applying trade measures,
competition concerns should be duly taken into consideration.  It was also pointed out that trade
policy measures were very important from a competition policy perspective.  For instance, in a
competition case, competition authorities would need to consider the presence of trade policymeasures in order to define the relevant market.  If such measures were in place, it was much more
likely that the market would be defined on a national level and this would have the implication that
firms would be more likely to be subject to competition law sanctions if indeed they had undertaken
an anti-competitive practice.  The competition advocacy role of competition authorities also applied in
the trade policy field.  Competition authorities could support an overall open trade policy by
highlighting the benefits of trade liberalization on consumer welfare and the enhancement of
competition in the market.
152. A view was expressed that the interaction between trade and competition could be approached
in a different direction;  namely, that of discussing how the WTO infrastructure and principles might
be useful for competition policy.  It was suggested that, taking advantage of the WTO infrastructure, it
would useful to arrange for cooperation especially re garding two kinds of issues:  first, establishing
"formats for cooperation", such as standard cooperation agreements, channels of communicationbetween agencies and a databank of public information on international cartels, on cross-border
mergers and other issues of interest for competition policy;  in addition, the WTO could produce a
regular report on world competition policy having international cooperation as its main focus;
second, harmonizing merger notifications and pr ocedures.  Moreover, WTO principles could be
applied to competition policy to serve as guidelines for the national competition legislation, in
                                                     
301 M/5, paragraphs 67 and 69
302 M/5, paragraph 72
303 M/5, paragraphs 34, 35 and 52
304 M/5, paragraphs 34 and 35WT/WGTCP/2
Page 50
particular the principles of transparency (taking into account the delicate balance between desirable
publicity in an administrative process and adjudication and the confidential nature of much of the
information related to antitrust) and the principle of national treatment.305
D. RECOMMENDATION
153. Paragraph 20 of the Singapore Ministerial Declaration provides, inter alia , that the General
Council will keep under review the work of the Working Group on the Interaction between Trade and
Competition Policy established under that provision and will determine, after two years, how the work
of the Working Group should proceed.
154. The Working Group recommends that the General Council decide as follows:
The Working Group shall continue the educative work that it has been undertaking
pursuant to paragraph 20 of the Singapore Ministerial Declaration.  In the light of the limitednumber 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 tocompetition policy and 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.  Itis understood that 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.
                                                     
305 M/5, paragraph 64WT/WGTCP/2
Page 51
ANNEX 1
CHECKLIST OF ISSUES SUGGESTED FOR STUDY
Non-Paper by the Chair
Revision
It was widely recognized that the Workin g Group's work programme should be open, non-
prejudicial and capable of evolution as the work pr oceeds.  It was also emphasized that all elements
should be permeated by the development dimension.  Pa rticular attention should be paid to the situation
of least-developed countries.  In pursuing the ite ms of its work programme, the Working Group should
draw upon and avoid unnecessary duplication of the wo rk of other WTO bodies concerned with specific
trade measures as well as the work unde r way in UNCTAD and other organizations.
_______________
I. Relationship between the objectives, principles , concepts, scope and instruments of trade and
competition policy.
Their relationship to development and economic growth.
II. Stocktaking and analysis of existing instrument s, standards and activities regarding trade and
competition policy, including of experience with their application:
- national competition policies, laws and instruments as they relate to trade;
- existing WTO provisions;- bilateral, regional, plurilateral and multilateral agreements and initiatives.
III. Interaction between trade and competition policy:
- the impact of anti-competitive practices of enterprises and associations on international
trade;
- the impact of state monopolies, exclusive rights and regulatory policies on competition
and international trade;
- the relationship between the trade-related aspects of intellectual property rights and
competition policy;
- the relationship between investment and competition policy;
- the impact of trade policy on competition.
IV. Identification of any areas that may mer it further consideration in the WTO framework.WT/WGTCP/2
Page 52 ANNEX 2
CONTRIBUTIONS PROVIDED TO THE WORKING GROUP ON THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY
Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/1 EC and member States M/1, para. 4 G eneral submission on issues for study
W/2 Switzerland M/1, para. 4 General submission on issues for study
W/3 Peru M/1, para. 4 General submission on issues for study
W/4 Japan M/1, para. 4 General submission on issues for study
W/5 Korea M/1, para. 4 General submission on issues for study
W/6 United States M/1, para. 4 General submission on issues for study
W/7 Canada M/1, para. 4 General submission on issues for study
W/8 Australia M/1, para. 4 General submission on issues for study
W/9 Egypt M/1, para. 4 General submission on issues for study
W/10 Pakistan M/1, para. 4 General  submission on issues for study
W/11
W/11/Rev.1Chairman M/2, para. 39 Bibliography on trade and international competition
W/12 Norway M/1, para. 4 General submission on issues for study
W/13 Mexico M/1, para. 4 General submission on issues for study
W/14 Venezuela M/1, para. 4 General submission on issues for study
W/15 Hong Kong, China M/1, para. 4 General submission on issues for study
W/16 Nigeria M/1, para. 4 General  submission on issues for study
W/17 UNCTAD M/1, para. 7 Presentation on relevant activities of organization
W/18 APEC M/1, para. 7 Presentation on relevant activities of organization
W/19 ASEAN WTO Members M/1, para. 4 Gen eral submission on issues for study
W/20 New Zealand M/1, para. 4 Gener al submission on issues for study
W/21
W/21/Add.1OECD M/1, para. 7 and
M/4, para. 21Presentation on relevant activities of organization
W/22 World Bank M/1, para. 7 Presentation on relevant activities of organization
W/23 Poland M/1, para. 4 General submission on issues for study
W/24 India M/1, para. 4 General submission on issues for study
W/25 Japan M/1, para. 4 Statement on issues for studyWT/WGTCP/2
Page 53W/26 Hong Kong, China M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/27 Hungary M/2, para. 20 Stocktaking of national competition policy/laws
W/28 Singapore M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/29 Switzerland M/2, para. 20 Stocktakin g of national competition policy/laws
W/30 New Zealand M/2, para. 3 Relationship between  objectives, principles, concepts, scope and
instruments of trade and competition policy
W/31 Norway M/2, para. 20 Stocktaking of national competition policy/laws
W/32 Japan M/2, para. 3
M/2, para. 20Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Stocktaking of national competition policy/laws
W/33 ASEAN WTO Members M/2, para. 3 Relationship betw een objectives, principles, concepts, scope and
instruments of trade and competition policy
W/34 EC and member States M/2, paras. 20-22 and 27 Stocktaking of national competition policy/laws
W/35 United States M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Stocktaking of national competition policy/laws
W/36 Peru M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Stocktaking of national competition policy/laws
W/37 Korea M/2, para. 20 Stocktaking of national competition policy/laws
W/38 Romania M/2, para. 3
M/2, para. 20Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Stocktaking of national competition policy/laws
W/39 Australia M/2, para. 20 Stocktakin g of national competition policy/laws
W/40 Turkey M/2, para. 3
M/3, paras. 40 and 45Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Stocktaking of national competition policy/laws
W/41 Pakistan M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/42 Canada M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/43 Morocco M/2, para. 3 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/44 Colombia M/3, paras. 40 and 46 Stocktaking of national competition policy/lawsWT/WGTCP/2
Page 54W/45 EC and member States M/3, paras. 3-4, 9-11, 14-15
and 17
M/3, paras. 20-22, 29, 33 and
35Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Relationship of trade and competition policy to development and
economic growth
W/46 Kenya M/3, paras. 40 and 44 Stocktak ing of national competition policy/laws
W/47 New Zealand M/3, paras. 63-64 and M/4,
para. 52Stocktaking of bilateral, regional, plurilateral and multilateral
agreements and initiatives
W/48 United States M/3, para. 63 (elaboration of
oral presentation made in
September 1997 meeting)Stocktaking of bilateral, regional, plurilateral and multilateral
agreements and initiatives
W/49 Secretariat Draft Report (1997) to the General Council
W/50 Hong Kong, China M/3, para. 66 Stocktaking of existing WTO provisions
W/51 Canada M/3, para. 40 (follow up to
oral presentation made in
September 1997 meeting)Stocktaking of national competition policy/laws
W/52 Japan M/3, paras. 3-5 and 11, 15
and 17
M/3, paras. 20-21
M/3, paras. 40 and 53Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
Relationship of trade and competition policy to development andeconomic growth
Stocktaking of national competition policy/laws
W/53 Hong Kong, China M/3, paras. 40-42 and 56 St ocktaking of national competition policy/laws
W/54 Mexico M/3, paras. 40, 43, 55, 61, 63
and 65Stocktaking of national competition policy/laws and of bilateral,
regional, plurilateral and multilateral agreements and initiatives
W/55 Argentina M/2, paras. 23 and 26 Stockt aking of national competition policy/laws
W/56 Korea M/3, para. 24 Relationship between trade and competition policy
W/57 Canada M/3, paras. 3, 14 and 17 and
M/4, para. 14Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/58 Mexico M/3, paras. 3-6 and 15 Relationship between objectives, principles, concepts, scope and
instruments of trade and competition policy
W/59 Peru M/4, para. 64 Stocktaking of national competition policy/laws
W/60 Australia M/4, para. 58 and
M/5, para. 83Stocktaking of national competition policy/laws
W/61 EC and member States M/4, paras.  72 and 74 Stocktaking of national competition policy/laws (answers to
questions)
W/62 EC and member States M/4, paras. 21-23, 25, 29,
31-32, 37-39 and 44The impact of anti-competitive practices of enterprises and
associations on international trade
W/63 Argentina M/4, paras. 21, 23, 26, 29, 37
and 41The impact of anti-competitive practices of enterprises and
associations on international tradeWT/WGTCP/2
Page 55W/64 Hong Kong, China M/4, paras. 3-4 and 14-15
M/4, para. 47The interaction between trade and competition policy, in general
Stocktaking of existing WTO provisions
W/65W/65/Rev.1Norway M/4, paras. 21, 23, 31-32, 37
and 41The impact of anti-competitive practices of enterprises and
associations on international trade
W/66 United States M/4, paras. 3, 6, 15 and 17
M/4, paras. 21-23, 29, 32,
37-38, 40 and 43The interaction between trade and competition policy, in general
The impact of anti-competitive practices of enterprises and
associations on international trade
W/67 United States M/4, paras. 72-73 Stocktaking of  national competition policy/laws (answers to
questions)
W/68 Japan M/4, paras. 3 and 9
M/4, paras. 21, 23, 31 and 37The interaction between trade and competition policy, in general
The impact of anti-competitive practices of enterprises and
associations on international trade
W/69 Poland Stocktaking of national competition policy/laws
W/70 Canada M/4, paras. 21, 23, 27, 29,
31, 37 and 41The impact of anti-competitive practices of enterprises and
associations on international trade
W/71 Czech Republic Stocktaking of national competition policy/laws
Interaction between trade and competition policy, in general
W/72 Canada M/4, para. 72, Stocktaking of national competition policy/laws (answers to
questions)
W/73 Korea M/4, para. 48 Stocktaking of existing WTO provisions
W/74 Peru The interaction of trade and competition policy, in general
W/75 Chile M/3, para. 52 Stocktaking of national competition policy/laws
W/76 Turkey Document initially
introduced as non-paper in
M/3, paras. 40 and 45.Relationship between the objectives, principles, concepts, scope and
instruments of trade and competition policy
W/77 Turkey M/4, paras. 21, 23, 29, 34, 37
and 41 (initially introduced
as a non-paper)The impact of anti-competitive practices of enterprises and
associations on international trade
W/78 EC and member States M/5, paras. 3-5, 13 and 17
M/5, paras. 32, 35-40 and 71The impact of state monopolies, exclusive rights and regulatory
policies on competition and international tradeThe impact of trade policy on competition
W/79 India M/5, para. 79 Stocktaking of national competition policy/laws
W/80 Secretariat M/5, para. 77
M/6, paras. 61-80The relationship of trade and competition policy to development and
economic growth
W/81 New Zealand M/5, paras. 32 and 41 The impact of trade policy on competition
W/82 New Zealand M/5, paras. 3-4, 17 and 20 The impact of state monopolies, exclusive rights and regulatory
policies on competition and international tradeWT/WGTCP/2
Page 56W/83 United States M/5, paras. 3-4, 6, 17-19 The impact of state monopolies, exclusive rights and regulatory
policies on competition and international trade
W/84 United States M/5, paras. 32-34, 65, 68 and
72The impact of trade policy on competition
W/85 Hong Kong, China M/5, paras. 32, 46-47, 66-67 The impact of trade policy on competition (builds on theme of earlier
submission W/64)
W/86 Venezuela M/5, para. 80 Stocktakin g of national competition policy/laws
W/87 Venezuela M/5, paras. 32 and 50 The impact of trade policy on competition
W/88 United States M/5, paras. 32, 48-49, 65, 68
and 72The impact of trade policy on competition
W/89 Switzerland M/5, para. 78 Stocktaking of existing WTO provisions
W/90 Korea M/5, paras. 32, 45 and 70 The impact of trade policy on competition
W/91 Korea M/5, paras. 3-4, 7 and 17 The impact of state monopolies, exclusive rights and regulatory
policies on competition and international trade
W/92 Japan M/5, paras. 32, 42-44, 69 and
73The impact of trade policy on competition
W/93 Brazil M/5, paras. 3-4, 8, 17 and 21 Stockt aking of national competition policy/laws
The impact of state monopolies, exclusive rights and regulatory
policies on competition and international trade
W/94 Hong Kong, China M/5, paras. 3-4 and 14 The impact of state monopolies, exclusive rights and regulatory
policies on competition and international trade
W/95 Kenya M/5, paras. 3-4 and 9 The impact of state monopolies, exclusive rights and regulatory
policies on competition and international trade
W/96 Peru (forthcoming) M/5, para. 81 Stockt aking of national competition policy/laws
W/97 Bolivia M/5, para. 82 Stocktaking of national competition policy/laws
W/98 Australia M/5, para. 83 Stocktaking of na tional competition policy/laws (answers to
questions)
W/99 EC and member States M/6, paras. 3-7 and 23
M/6, paras. 27-29The relationship between the trade-related aspects of intellectual
property rights and competition policy
The relationship between investment and competition policy
W/100 Brazil M/6, paras. 86 and 90 The Group's report  to the General Council at the end of 1998
W/101 United States M/6, paras. 3, 8-10 and 21 The relationship between the trade-related aspects of intellectual
property rights and competition policy
W/102 United States M/6, paras. 27 and 30-33 The relationship between investment and competition policy
W/103 New Zealand M/6, paras. 3 and 24 The relationship between the trade-related aspects of intellectual
property rights and competition policyWT/WGTCP/2
Page 57W/104 Hong Kong, China M/6, paras. 86 and 91
M/6, paras. 3 and 12
M/6, paras. 27 and 34The Group's report to the General Council at the end of 1998
The relationship between the trade-related aspects of intellectual
property rights and competition policy
The relationship between investment and competition policy
W/105 Korea M/6, paras. 3 and 13 The relationship between the trade-related aspects of intellectual
property rights and competition policy
W/106 Japan M/6, paras. 3 and 14 The relationship between the trade-related aspects of intellectual
property rights and competition policy
W/107 Venezuela M/6, paras. 27 and 35 The relationship between investment and competition policy
W/108 Japan M/6, paras. 27 and 39-40 The relationship between investment and competition policy
W/109 Korea M/6, paras. 27 and 36-38 The relationship between investment and competition policy
W/110 India (Related comments
summarized in M/5,
paras. 15-16)The impact of state monopolies on trade and competition
W/111 India (Related comments
summarized in M/5,
para. 63)The impact of trade policy on competition
__________