RESTRICTED
WORLD TRADE WT/WGTCP/M/1
2September 1997
ORGANIZATION(97-3541)
Working Group ontheInteraction
between Trade andCompetition Policy
REPORT ONTHE MEETING OF7AND 8JULY 1997
Note bytheSecretariat
1. TheWorking Group ontheInteraction between Trade andCompetition Policy helditsfirst
meeting on7and8July1997 under thechairmanship ofProfessor Frédéric Jenny.
2. TheWorking Group invited UNCTAD andtheOECD toattend thismeeting. TheIMFand
theWorld Bank attended themeeting intheir capacity asobservers pursuant tothecooperation
agreements concluded between theWTO andthese organizations.
3. Theagenda forthismeeting consisted ofthefollowing items: (i)contributions fromMembers
raising issues forstudy; (ii)presentations byrepresentatives ofUNCTAD, theOECD, theWorld Bank
andAPEC member economies; (iii)competition-related provisions ofWTO agreements;
(iv)organization ofwork, including arrangements forcooperation withUNCTAD andotherappropriate
intergovernmental fora. Themeeting alsoconsidered thescheduling ofremaining meetings tobeheld
in1997.
Contributions from Members raising issues forstudy
4. Therepresentatives oftheEuropean Community anditsmember States, Switzerland, Peru,
Japan, theRepublic ofKorea, theUnited States, Canada, Australia, Egypt, Pakistan, Norway, Mexico,
Venezuela, Hong Kong-China, Nigeria, thePhilippines onbehalf ofASEAN WTO Members, New
Zealand, Poland and India introduced written contributions that had been submitted
(documents WT/WGTCP/W/1-10, 12-16, 19-20 and23-24, respectively). Inaddition, Argentina,
Brazil, theDominican Republic, Côte d'Ivoire, andMorocco presented theirviews orally. Itwas
understood thattheseinitial contributions would notforeclose thepossibility forMembers toraiseissues
orally orinwriting atalaterstage.
5. Many Members emphasized theeducational nature oftheGroup 'smandate andthedesirability
ofapproachingtheworkinabalancedandcomprehensivemanner,withoutpre-conceptionsastopossible
future work oncompetition policy issues intheWTO. Theneedtogiveactive consideration tothe
implications ofthevarious issues tobeconsidered foreconomic development, atallstages oftheGroup 's
work, waswidely stressed. Athirdgeneral perspective noted byseveral Members wastheimportance
ofdrawing effectively onandavoiding duplication ofwork under wayinother intergovernmental
organizationsandWTObodies.Inthisconnection,referencewasmadetothedesirabilityofcoordination
withtheWorking Group ontheRelationship between Trade andInvestment. Other points highlighted
byspecific delegations included theimportance oftheactive involvement ofexperts, bothfromnational
governments andfrom other intergovernmental organizations, andtheneedtoconsider therolethat
model legislation could play.
6. Specific suggestions weremade byMembers forissues tobestudied bytheWorking Group.
These formed thebasisfortheconsideration given bytheGroup totheorganization ofitsfuture work,
under agenda item(iv).WT/WGTCP/M/1
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PresentationsbyrepresentativesofUNCTAD,theOECD,theWorldBankandAPECmembereconomies
7. Presentations weremade byrepresentatives ofUNCTAD, theOECD, theWorld Bank and
APECmembereconomiesregardingrelevantactivities.Thesepresentations,togetherwithsupplementary
information made available, havebeencirculated indocuments WT/WGTCP/W/17-18, and21-22,
respectively.AnumberofMembersexpressedappreciationforthesepresentations,whichweregenerally
thought tobeveryrelevant andinformative. Asummary ofquestions posed byMembers andanswers
provided byrepresentatives ofUNCTAD, theOECD, theWorld Bank andAPEC member economies
canbefound atAnnex 1.
Competition-related provisions ofWTO agreements
8. TheWorking Group hadbefore itaninformal noteprepared bytheSecretariat (document
No.3347)onCompetition-RelatedProvisionsinExistingWTOAgreements.SomeMembersexpressed
concern thatthenotehadanalmost exclusive emphasis onWTO provisions relating toprivate practices
affecting competition andtherefore didnotpaysufficient attention togovernmental measures which
hadthesameimpact, notably traderemedies. Theyconsidered thatthenoteshould berevised toprovide
amore balanced picture. Forexample, itwassuggested thatcountervailing duties andsubsidies should
becovered. Another view expressed wasthattheoverall coverage ofthenotewasappropriate;
expanding thecoverage ofthenotetoinclude government measures thataffect competition would
essentially involve revisiting theprincipal results oftheUruguay Round negotiations. Compared to
other WTO bodies, thework oftheGroup would addvalue byfocusing onprivate practices which
restricted ordistorted international trade.
9. TheWorking Group tooknoteoftheSecretariat informal paper, noting thatitdidnotprejudice
thework oftheGroup, andagreed torevert tothismatter atitsnextmeeting.
Organization ofwork
10. TheWorking Group tooknoteofaChecklist ofIssues Suggested forStudy which wasprepared
bytheChairmanonthebasisofthecontributionsandstatementsmadebyMembersunderagendaitem(i)
andwhich hadbeenrevised afterdiscussion inaninformal session oftheWorking Group. Acopy
ofthisChecklist isattached atAnnex 2.
11. Some delegations saidthattheywerehappy toproceed onthebasis thattheWorking Group
wasnotbeing asked toagree totheChairman 'sChecklist, butonlytotakenoteofit.Adelegation
expressed awishthat,withaviewtoensuring thatdiscussion onItemIIIproceeded effectively, two
meetings oftheWorking Group beheldin1998 before theWTO Ministerial Review Conference to
beheldinMay1998. Several delegations requested theChairman toattempt, totheextent possible,
toavoid conflicts inscheduling between theWorking Group ontheInteraction Between Trade and
Competition Policy andother WTO meetings. Adelegation emphasized thattheChecklist could in
nowayreinterpret orsupersede theterms oftheSingapore Ministerial Declaration, which clearly
established thatthework oftheWorking Group would beconducted onthebasisofissues toberaised
byMembers.
12. Onthebasis ofthediscussion attheinformal session, theChairman proposed, onhisown
responsibility, thefollowing regarding theorganization ofthework oftheGroup atitsforthcoming
meetings. Twoadditional meetings would beheldintheremainder of1997, oneinSeptember and
oneinNovember. Atthemeeting inSeptember, Items I(relationship between theobjectives, principles,
concepts, scope andinstruments oftrade andcompetition policy) andII(stocktaking andanalysis of
existing instruments, standards andactivities regarding tradeandcompetition policy) oftheChecklist
would betaken up.Items IandIIwould receive further consideration atthemeeting inNovember.
Atthefirstmeeting in1998, therewould beageneral discussion ofItemIII(interaction between tradeWT/WGTCP/M/1
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andcompetition policy), together withadetailed examination ofthefirsttiretunder thisiteminthe
Checklist (theimpact ofanti-competitive practices ofenterprises andassociations oninternational trade).
Thesecond tiret(theimpact ofstatemonopolies, exclusive rights andregulatory policies oncompetition
andinternational trade) andthefifthtiret(theimpact oftrade policy oncompetition) under ItemIII
would betaken upatthesecond meeting in1998. Thethirdtiret(therelationship between thetrade-
related aspects ofintellectual property rights andcompetition policy) andthefourth tiret(therelationship
between investment andcompetition policy) under ItemIIIwould bediscussed inthethird meeting
in1998. (Theabove proposals aresummarized inAnnex 3.)Remaining meetings in1998would be
reserved forfurther work onissues thathadnotreceived adequate attention atprevious meetings and
fordiscussion onItemIVoftheChecklist, namely theidentification ofanyissues meriting further
consideration inthecontext oftheWTO.
13. TheGroup agreed toproceed assuggested bytheChairman.
14. TheChairman encouraged Members tomake written contributions ontheitems fordiscussion
attheSeptember 1997 meeting, inadvance ofthatmeeting.
Arrangements forcooperation withUNCTAD andother appropriate intergovernmental fora
15. TheWorking Group agreed toinvite UNCTAD toattend itsfuture meetings, noted thatthe
IMFandtheWorld Bank hadobserver status intheWorking Group pursuant tothecooperation
agreements concluded bytheWTO withthese organizations, andagreed thatrequests forobserver
status fromotherintergovernmental organizations would beconsidered inaccordance withtheapplicable
WTO guidelines (document WT/L/161, Annex 1).
16. TheChairman noted thatrequests forobserver status hadalready beenreceived fromtheOECD
andSELA. TheWorking Group agreed togrant observer status totheOECD, onthebasisthatthere
would bereciprocity withrespect toproceedings, documents andother aspects ofobservership and
torevert toSELA 'srequest atitsnextmeeting.
Scheduling ofremaining meetings in1997
17. TheGroup agreed toholdmeetings on16-17 September and27-28 November 1997.WT/WGTCP/M/1
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ANNEX 1
Questions andAnswers Regarding Presentations made bytheRepresentatives ofUNCTAD,
theOECD, theWorld Bank andAPEC
UNCTAD
1. Twodelegationsposedquestionsrelatingtothedesirabilityofpreferentialordifferentialtreatment
fordeveloping countries intheareaofcompetition lawandpolicy, andwhether thisquestion hadbeen
addressed inUNCTAD studies ordiscussions intheUNCTAD Group ofExperts onCompetition Law
andPolicy. Inresponse, therepresentative ofUNCTAD saidthattheinterests ofdeveloping countries
wereunlikely tobebestserved bygeneral preferential treatment forexisting monopolies orsweeping
derogations fromtheimplementation ofcompetition law.Theissuemeriting consideration waswhether
there wasaneedfortime-limited exceptions withrespect tospecific sectors ofnational interest. The
Setdidenvisage certain exceptions, especially withrespect totheestablishment ordevelopment of
domestic industries.
2. Inresponse toaquestion regarding thescope ofUNCTAD 'sroleinassessing issues relating
totheinterface between tradeandcompetition policy, therepresentative ofUNCTAD noted that,while
thismatter hadnotbeenthesubject offormal study intheUNCTAD Group ofExperts totheextent
thatmight bedesirable, theSetofMultilaterally Agreed Equitable Principles andRules fortheTreatment
ofRestrictive Business Practices wasitselfverymuch concerned withtheinterface between trade and
competition policy andprovided auseful starting point foranalysis oftheissues.
3. Inresponse tootherquestions, therepresentative noted theimportance ofUNCTAD 'supcoming
high-level meeting inOctober which willcontain asegment oncompetition policy withinput from
senior representatives oftheWTO, OECD andvarious governments, inaddition tothenextExpert
Meeting onCompetition Policy tobeheldinNovember.
OECD
4. Aquestion wasposed regarding theextent oftheOECD 'sinvolvement inassisting non-OECD
member countries inimplementing competition lawsandpolicies. Inresponse, therepresentative of
theOECD referred tovarious activities, including: (i)theforthcoming publication ofaManual on
theimplementation ofcompetition lawandpolicy indeveloping countries andeconomies intransition,
asajointproject withtheWorld Bank; and(ii)various seminars thathavebeenpresented forofficials
incompetition offices innon-OECD member countries, often incollaboration withtheWorld Bank.
5. Inresponse toaquestion regarding studies thathadbeen prepared onissues relating to
competition policy andinvestment, theOECD representative responded thatanumber ofsuchstudies
wereavailable. These dealtwithmatters suchasmarket access aftertheUruguay Round, exemptions
fromcompetition policy asafactor affecting market access, newperspectives onmarket access, and
theOECD'srecentworkonregulatoryreform,whichisamatterwithimplicationsfortrade,competition
andinvestment.
6. Aquestion wasposed regarding theextent towhich theOECD supported standardization of
competition lawsandpolicies internationally. Inresponse, therepresentative saidthattheterm
"convergence" waspreferable tothatof"standardization". Furthermore, intheOECD 'sexperience,
asignificant degree ofconvergence innational approaches tocompetition lawenforcement could be
achieved without requiring uniformity inactual competition laws. Rather, convergence wasbeing
achieved through aproliferation ofcommon analytical techniques andmethodologies andshared
understanding ofthegoals ofcompetition policy.WT/WGTCP/M/1
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7. Adelegate observed thattheOECD 'spresentation comprised atleastthreedimensions: (i)the
implications ofcompetition andcompetition policy fortrade; (ii)theeffects oftrade policy on
competition; and(iii)theimplications ofregulation forcompetition andtrade. Hewelcomed this
approach.
8. Inresponse toquestions regarding theOECD 'sanalytical workontradeandcompetition policy,
theinstitutionalstructureofcommitteesresponsibleforthiswork,andrelatedmatters,therepresentatives
oftheOECD made thefollowing observations: (i)therewasnoexpectation thattheOECD Committees
onTrade andonCompetition LawandPolicy would bemerged, notwithstanding thesuccess ofjoint
workundertaken bythetwoCommittees; (ii)thestudy conducted withtheassistance ofProfessor Barry
Hawk provided acomprehensive assessment ofexemptions from competition lawthatmight affect
market access, butdidnotgoasfarasassessing specific trade effects (thiswould bethesubject of
future work); (iii)theissueofprivate standard-setting activities hadbeennoted inOECD discussions
asanareainwhich competition lawenforcement could address trade policy concerns; and(iv)the
recently completed OECD project onRegulatory Reform hadimportant implications forbothtrade
andcompetition policy. Inparticular, theSummary Report oftheproject stresses theimportance of
reducing exemptions fromcompetition lawandofenabling competition agencies toengage inadvocacy
activities relating toregulatory reform, asameans ofaddressing market distortions.
World Bank
9. Aquestion wasposed astowhether theWorld Bank hadconducted studies ontherelationship
between competition policy andinvestment. Therepresentative oftheWorld Bank indicated thathe
wasnotaware ofanyBank studies dealing specifically withthissubject. Ingeneral terms, theBank's
experience suggested thatimplementing acompetition lawandpolicy tended tohaveapositive effect
ontheenvironment forinvestment indeveloping countries, totheextent thatitprovided atransparent
andmarket-oriented framework forresolving disputes, andthereby enhanced investors 'confidence.
Inresponse toanother question, therepresentative oftheWorld Bank indicated thathewould provide
copies ofpapers prepared byBank staffoncompetition policy issues totheWTO Secretariat, tobe
made available toMembers through anappropriate channel.
10. Another delegation inquired astowhether theWorld Bank representative wasfamiliar with
examples ofspecific cases illustrating anti-competitive business practices eveninthefaceoftrade
liberalization thathadoccurred invarious countries. Therepresentative oftheBanknoted thathecould
notprovide detailed information since: (i)theBank wasnotitselfdirectly inthebusiness ofenforcing
competition laws; and(ii)itwasimportant torespect theconfidentiality ofalleged offences thatmight
beunder investigation. Nonetheless, hereferred totwogeneric examples oftypes ofcompetition law
cases thatcould havetrade implications. Thefirstgeneric example concerned alarge international
firmthatmanufactured consumer products which hadfound itdifficult toentermarkets foritsproducts
inaforeign country, since thedistribution facilities fortherelevant products intheforeign country
werecontrolled byadominant localproducer, anditwasnoteconomical toreplicate thedistribution
facility. Thesecond example concerned asituation inwhich amultinational firmhadbeenprecluded
frommarketing itsproducts inadeveloping country through anti-competitive practices engaged inby
another multinational firmwhich hadeffectively monopolized thelocal market. Thesituation was
compounded byalleged inadequate enforcement ofcompetition lawinthehostcountry.WT/WGTCP/M/1
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APEC
11. Aquestion wasposed astospecific initiatives thatwere under wayinAPEC tofoster
implementation ofcompetition lawsinmember economies and,specifically, cooperation between
competition authorities inmember countries. Inresponse, therepresentative speaking onbehalf of
APEC member economies emphasized thediversity thatexisted among member economies inAPEC,
bothgenerally andwithrespect totheimplementation ofcompetition law.Inparticular, approximately
onehalfofAPEC members hadnotyetimplemented competition laws. Astudy wasplanned within
APEC ofissues relating tothebenefits ofimplementing competition laws, theconsistency of
implementing competition lawswithefforts topromote theinternational competitiveness ofacountry 's
firms, thequestion ofwhether competition lawswere needed inhighly deregulated economies, and
various related matters. Inthepast,APEC hadalsohelddiscussions regarding thescope forcooperation
between national competition authorities.WT/WGTCP/M/1
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ANNEX 2
Job3804
Working Group ontheInteraction 8July1997
between Trade andCompetition Policy
CHECKLIST OFISSUES SUGGESTED FOR STUDY
Non-Paper bytheChair
Revision
Itwaswidely recognized thattheWorking Group 'swork programme should beopen, non-
prejudicial andcapable ofevolution asthework proceeds. Itwasalsoemphasized thatallelements
should bepermeated bythedevelopment dimension. Particular attention should bepaidtothesituation
ofleast-developed countries. Inpursuing theitems ofitswork programme, theWorking Group should
drawuponandavoid unnecessary duplication ofthework ofother WTO bodies concerned withspecific
trade measures aswellasthework under wayinUNCTAD andother organizations.
_______________
I. Relationship between theobjectives, principles, concepts, scope andinstruments oftradeand
competition policy.
Their relationship todevelopment andeconomic growth.
II. Stocktaking andanalysis ofexisting instruments, standards andactivities regarding trade and
competition policy, including ofexperience withtheirapplication:
- national competition policies, lawsandinstruments astheyrelate totrade;
- existing WTO provisions;
- bilateral, regional, plurilateral andmultilateral agreements andinitiatives.
III. Interaction between trade andcompetition policy:
- theimpact ofanti-competitive practices ofenterprises andassociations oninternational
trade;
- theimpact ofstatemonopolies, exclusive rights andregulatory policies oncompetition
andinternational trade;
- therelationship between thetrade-related aspects ofintellectual property rights and
competition policy;
- therelationship between investment andcompetition policy;
- theimpact oftrade policy oncompetition.
IV. Identification ofanyareas thatmaymerit further consideration intheWTO framework.WT/WGTCP/M/1
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ANNEX 3
Work Programme forMeetings, Autumn 1997 andFirstPartof1998
ThefollowingindicativeworkprogrammeidentifiesissuesdrawnfromtheChairman'sChecklist
onwhich theGroup willfocus inparticular ateachofthemeetings inautumn 1997 andthefirstpart
of1998.
16-16 September 1997 Items IandII
27-28 November 1997 Continuation ofItems IandII
Firstmeeting 1998 ItemIII:
- General discussion.
- First bullet point (theimpact ofanti-competitive
practices ofenterprises and associations on
international trade).
Second meeting 1998 ItemIII:
- Second bullet point (theimpact ofstatemonopolies,
exclusive rights andregulatory policies oncompetition
andinternational trade).
- Fifth bullet point (theimpact oftrade policy on
competition).
Third meeting 1998 ItemIII:
- Third bullet point (therelationship between the
trade-related aspects ofintellectual property rights and
competition policy).
- Fourth bullet point (the relationship between
investment andcompetition policy).