RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTCP/M/22
9 July 2003
(03-3705)
Working Group on the Interaction
between Trade and Competition Policy
REPORT ON THE MEETIN G OF 26-27 MAY 2003
Note by the Secretariat
1. The twenty-second meeting of the Working Group on the Interaction between Trade and
Competition Policy took place on 26-27 May 2003, under the Chairmanship of
Professor Frédéric Jenny.
2. As had been agreed at the informal meeting of the Working Group on 17 January 2003, the
agenda for the Working Group's meeting consisted of the following items:
- Elements contained in paragraph 25 of the Doha Ministerial Declaration, including
matters raised and questions posed in 2002 to which delegations wish to revert;
- The nature and scope of compliance mechanisms that might be applicable under a
multilateral framework on competition policy
- Possible elements of progressivity and flexibility that might be included in an
eventual multilateral framework on competition policy
- Technical assistance, as called for in paragraph 24 of the Doha Ministerial
Declaration;  and
- Other business, including stocktaking of national experience and legislation.
I. ELEMENTS CONTAINED IN PARAGRAPH 25 OF THE DOHA MINISTERIAL
DECLARATION, INCLUDING MATTERS RAI SED AND QUESTIONS POSED IN 2002 TO
WHICH DELEGATIONS WISH TO REVERT
3. The representatives of Australia, Kuwait , Kenya , Malaysia  and China  introduced written
submissions relevant to this item (documents WT/WGTCP/W/232, 237, 238, 239 and 241,
respectively). In addition, the Working Group had before it the final text of a Study prepared under
the responsibility of the Secretariat, with the assistance of a consultant, on Issues Relating to a
Possible Multilateral Framework on Compe tition Policy (document WT/WGTCP/W/228).   The Group
also had before it a background note by the Secretariat on  Provisions on Procedural Fairness in
Existing WTO Agreements (WT/WGTCP/W/231).   The representatives of the European Community
and its member States; Hong Kong, China ; Morocco ; Nigeria ; Canada ; Switzerland ; India ; Egypt ;
Cuba; Venezuela ; Thailand ; Norway ; Chinese Taipei ; Tanzania  and Indonesia  made oral statements
or posed questions on this item.  The observers from the UNCTAD and the World Bank provided
updates on relevant activities of their organizations.
4. The representative of Australia, introducing document WT/WGTCP/W/232, said that the
Doha Ministerial Declaration had recognized the case for a multilateral framework on competition
policy to enhance the contribution of competition policy to trade and development (paragraph 23);WT/WGTCP/M/22
Page 2
Australia supported this.  Its own experience was that competition law and policy had provided an
important underpinning of Australia's economic welfare by enhancing its efficiency, productivity and
consumer welfare.  The strengthening of Australia's competition policy framework in the 1990s had
contributed to strong economic performance at a time when much of the world had been faced with
significant economic challenges.  The importance of competition policy to Australia's performancehad been recognized by all of the major international organizations including the IMF and the OECD;
for Australia, this underscored the compatability of competition policy with economic growth and
development; and would reinforce an open multilater al trading system that raised the growth and
development potential of all its participants.
5. Continuing, he said that the Study of Issues Relating to a Possible Multilateral Framework on
Competition Policy prepared by the Secretariat (document WT/WGTCP/W/228; discussed further
below) had systematically addressed the benefits and costs of a possible multilateral framework oncompetition policy and had presented strong eviden ce that such a framework would have significant
net benefits.  It had also shown that there wa s no fundamental incompatibility between such a
framework and the objectives of national industrial policies, including the promotion of dynamic
efficiency gains.  In addition, expert presentations at the Symposium that had been organized by the
Secretariat in conjunction with the Working Group's meeting of 20-21 February had provided anumber of complementary perspectives.  In his view , some of the key observations to be drawn on the
basis of the expert presentations at the Symposium were the following:  first, the harm caused by
cartels and other anti-competitive practices was substantial.  The costs were even heavier for
developing as compared to developed countries, in that developing countries often lacked the tools
necessary to deal with such practices.  This was a key consideration underlying the need for amultilateral role in this area.  Second, the costs of enforcing competition legislation would be minor as
compared to the benefits.  Third, cooperation in the context of a multilateral framework offered the
prospect of significantly shortening the time frames that developing countries would need to build and
embed competition laws and policies that would support their development goals; a key consideration
in this regard was the more supportive environment it would provide for better-targeted assistance andcapacity building.  Notwithstanding this, the n eed for flexibility and progressivity in the
implementation of such a framework was obvious.  Furthermore, the need for technical assistance and
capacity building in this area could not be over-stated and clearly outstripped existing capabilities;
multilateral organizations had a key role to play in this area, with the support of developed countries
acting in their individual capacities.
6. With regard to key themes of the discussion  to date in the Working Group regarding the
proposed multilateral framework, he noted that th e question of binding vs. non-binding commitments
in a multilateral framework was an important threshold consideration which would have implications
for the extent of guarantees of flexibility and progressivity that would be necessary in relation to such
a framework.  The proposal of the European Comm unity and its member States, as it was understood
by Australia, was that the main elements of the provisions regarding core principles and hardcore
cartels would be binding in nature, but with the significant qualification that the framework wouldaddress only de jure  instances of discrimination.  Even so, a number of questions had been put by
Members as to the appropriateness of binding commitments in this area.  Further to this point,
Australia agreed with the view that had been expressed by Hong Kong, China that Members needed to
have information on the breadth and depth of possible obligations that they were being asked to
assume.  On the question of whether a multilatera l framework would imply a commitment to have a
competition law and a related enforcement capability at some point in the future, it was noteworthy
that a large and growing proportion of WTO Members had by now adopted or were in the process of
adopting competition laws and enforcement capabilities; moreover, no Members were going in the
opposite direction in the sense of abolishing such laws.  Supporting reasons for this trend were the
significant net welfare gains that could accrue to countries from adopting such legislation as had beenreflected, for example in the Study of Issues Relating to a Possible Multilateral Framework on
Competition Policy (document WT/WGTCP/W/228; discussed below).  Significant support for the
adoption of such legislation was already being prov ided by various international organizations andWT/WGTCP/M/22
Page 3
individual Members.  The proposal for a multilate ral framework on competition policy offered the
opportunity to endorse and enhance this trend.  For those Members that currently lacked such laws,
the question was whether there was any evidence of adverse effects from the adoption of such laws
that would cause them to oppose a commitment in th is area, particularly if due provision was made
for flexibility and progressivity in its implementation.
7. With regard to the proposed elements concerning core principles and hardcore cartels, while
operational details remained to be worked out, no one had argued that competition law and policy
were fundamentally consistent with these elements; rather, they were widely be viewed as being
central to any effective competition regime.  There was also a wide recognition that these elements
could involve an administrative burden for develo ping countries currently lacking these tools; the
solution to this was in appropriate flexibility and progressivity frameworks supported by continuing
commitments with regard to technical assistance a nd capacity building.  A key aspect of the current
proposal for a multilateral framework that would limit any unforeseen repercussions was that it would
deal only with obligations concerning general la ws and regulations, and would not seek to limit
Members discretion in respect of individual cases.   With regard to hardcore cartels, Australia
supported a clear prohibition of such arrangements that was sufficiently broad to cover both domestic
and international cartels.  A rule of reason (case-by-case) approach should apply to any arrangementswith the potential for significant efficiency benefits.   The OECD Recommendation on Hardcore
Cartels provided a useful source of guidance for WTO Members in this regard.
8. Regarding the types of information that would be shared within a multilateral framework,
Australia agreed with other Members that a WTO framework should not require the sharing of
confidential information; this would be counter -productive and potentially damaging to existing
enforcement capabilities.  Bringing together the foregoing points, he offered the suggestion that, in
addition to the by now well-established mantra in the Working Group that "Competition is good", a
second mantra should be adopted, namely that "cooperation [in the implementation of competition
law and policy] is good".  A question that Australia wished to pose, in this regard, was whether it was
possible for developed country Members to give assurances to developing country Members that, inthe course of exercising their enforcement capabilities, careful attention would be given to
international dimensions of decisions taken, for example in the context of existing leniency
programmes.
9. The representative of the European Community and its member States said that 
the paper
submitted by Australia (WT/WGTCP/W/232) had raised a number of pertinent questions, some of
them along the same lines as those raised by the submission of Hong Kong, China(WT/WGTCP/W/224) to the Working Group's meeting of 20-21 February.  With regard to the various
issues concerning international cooperation that were raised in the paper, he reiterated for the record
that in the view of his delegation, the modalities for cooperation that were referenced in paragraph 25
of the Doha Ministerial Declaration should be voluntary in nature.  Furthermore, his delegation was
not suggesting that a multilateral framework shoul d provide for the exchange of confidential
information, which would be inappropriate and counter-productive in the context of the WTO.  As
had been discussed in previous meetings of the Working Group, important benefits could be achievedmerely through the exchange of information which was non-confidential in nature.  On the other hand,
the protection of confidential information was a value that was recognized in various existing WTO
Agreements, for example the GATS and TRIPS Agreements.  If individual Members wished to go as
far as exchanging confidential information, this wa s a matter to be pursued in their bilateral relations
with other Members interested in this possibility .  With regard to the costs of implementing an
effective competition regime, while agreeing with the observation that had been made by the
representative of Australia that the costs were likely to be minor in comparison to the benefits, he also
recognized the need for flexibility and progressivi ty to ensure that any attendant costs could be
effectively managed.WT/WGTCP/M/22
Page 4
10. Another representative of the same delegation said that the Australian paper
(WT/WGTCP/W/232) was useful in providing conc rete examples of how competition policy and
industrial policy operated in a complementary fashion,  and thereby helped to show that the concerns
that had been expressed on many occasions in the Working Group about possible conflicts between
competition policy and industrial policy were, in fact, not justified.  In particular, the examples citedin the paper showed that it was possible to achieve specific industrial policy and market development
goals without going so far as to grant a total exclusion from competition policy to particular sectors.
In fact, competition itself provided an important stimulus to dynamic efficiency and productivity
enhancement.  The experience of the European Community also confirmed these points.
11. The representative of Hong Kong, China affirmed  that, as had been recognized by Australia,
it was necessary to know the breadth and depth of the obligations that would arise under a possible
multilateral framework on competition policy in order to enable Members to make an informeddecision regarding the launching of negotiations in this area.  Australia had also made the argument
that, with appropriate guarantees of technical assistance in addition to flexibility and progressivity
such that no-one was forced to make changes befo re they were ready, a commitment to having a
competition law and enforcement agency at some point in time might not be demanding.  While Hong
Kong, China agreed with the need for appropriate gu arantees of flexibility and progressivity in any
possible multilateral framework, it wished to highlight that a Member's decision not to have a
competition law did not necessarily reflect only considerations such as capacity constraints.  Rather, it
could reflect other valid public policy considerations relating to the Member's economic situation or
other circumstances.  Given this, the domestic policies and concerns of individual Members should be
fully respected in framing any possible multilateral obligations.  In this regard, he enquired whetherthe phrase "enhanced flexibility of commitments" in paragraph 31 of the Australian paper
(WT/WGTCP/W/232) would provide for flexibility to be applied across all Members or only to a
selected group of Members? In response, the representative of Australia said that his delegation did
not have a particular approach in mind; it was seeking to stimulate discussion by setting out a menu ofpossibilities and relevant considerations.
12. The representative of Morocco said that the contribution of Australia (WT/WGTCP/W/232)
embodied a pragmatic approach that took account of the needs of developing countries.  He agreed, in
particular, with the emphasis that had been placed on the importance of flexibility and progressivity
and the need for continuing, long term technical assistance as key elements of a multilateral
framework.  As had been pointed out by Australia, there was not a one size fits all approach in this
field and the advocates of a multilateral framework on competition policy were not seeking this. The
forging of appropriate links with civil society and consumers was vital to creating a viable culture ofcompetition.
13. Reflecting on the comments of the European Community and its member States, the
representative of Australia agreed that cooperation under a multilateral framework should not go as
far as requiring the sharing of confidential informa tion.  In this context, he posed the question as to
whether mechanisms could be developed to ensure that, in the course of relevant enforcement actionssuch as in the context of leniency programmes, consideration could be given to the international
ramifications of particular courses of action.  In other words, could mechanisms be developed to at
least ensure that information regarding the effects of anti-competitive practices on other countries was
not suppressed?  He recognized careful consideration was required in this regard – leniency
programmes were an important enforcement tool th at the advocates of a multilateral framework would
not wish to undercut.
14. The representative of Nigeria, referring to paragraph 19 of the contribution of Australia
(WT/WGTCP/W/232), said that there were many reasons for the reticence of some developing
countries in regard to the adoption of competition law and the establishment of relevant enforcement
agencies.  These included not only the fact that, for some countries, competition policy wasovershadowed by higher priorities but also a con cern as to the extent to which the current proposalsWT/WGTCP/M/22
Page 5
would allow for the preservation of policy space in  regard to developmental objectives as opposed to
promoting market access and market presence or harmonization objectives; difficulties arising from
disparities between countries and/or their firms in respect of levels of development and
competitiveness, experience in the adoption or implementation of competition laws and the capacity
to implement such legislation; and the lack of clarity of and operational difficulties pertaining to thecurrent proposals relating to core principles, hardcore cartels and related matters.  Moreover, there
were questions concerning the relationship between existing WTO principles of transparency, non-
discrimination and procedural fairness and the proposed multilateral framework on competition
policy.  Similar questions arose regarding the relationship of existing WTO provisions regarding
confidentiality, consultations and safeguards, on the one hand, and relevant provisions of a
multilateral framework, on the other hand.  Questions regarding the nature and treatment of de jure  vs.
de facto discrimination, the role of exceptions and the implications of the principle of non-discrimination for the treatment of local firms as compared to transnational corporations and the
industrial policies of developing countries required clarification.  In addition, clarification was needed
regarding the responsibility of exporting countries to  take action in respect of export or international
cartels; the scope of confidentiality provisions; modalities and experiences relating to voluntary
cooperation; the relationship between cooperation in a multilateral framework and efforts to facilitatecooperation at the bilateral and regional levels; the balance and sequencing of commitments regarding
the adoption of competition legislation and international cooperation in relation to exports, imports
and the role of bilateral competition or trade pressures; compliance mechanisms in a multilateral
framework, including dispute settlement and peer reviews; implications for national sovereignty and
the balance of rights and obligations of WTO Members; the scope and content of any provisionsregarding special and differential treatment, flexibility and progressivity; the appropriateness of the
WTO as a forum for cooperation in this area.  The representative of Australia had made the point that
more and more developing countries had adopted or were in the process of adopting national
competition laws; while this might be true, it seemed that a period of perhaps ten years was needed to
establish the required enforcement agencies.  Within this period, it would be impossible to undertakethe obligations that a multilateral framework on competition policy would entail.  He noted that the
multilateral framework that was contemplated in the contribution of Australia (WT/WGTCP/W/232)
would seek only to enforce a minimum set of principles in regard to general laws and regulations, and
not specific cases; in this respect, a set of general principles that would guide the application of
competition law and policy would be a better idea than a multilateral framework.
15. The representative of Malaysia, referring to relevant paragraphs of the contribution of
Australia (WT/WGTCP/W/232), said that it both highlighted the perceived requirement of a
compliance mechanism in any multilateral framework  and underscored the need for flexibility and
progressivity in this area.  The relationship betw een these two aspects of the proposed framework
would be need to be clarified.
16. In response to the foregoing comments, the representative of Australia said that the issues and
questions that had been set out by the representative of Nigeria were important and legitimate ones
and were precisely the kinds of issues that needed to be clarified in the course of the Working Group's
meeting.  The representative of the European Community and its member States agreed that the points
that had been set out in the various interventions were reasonable ones on which reassurance neededto be provided.  In fact, the submissions that had been provided for the meeting by his and other
delegations provided a significant degree of clarification on most of these questions.  The problem, inhis view, was that it was difficult to provide definitive and categorical reassurance on these points
outside the scope of a negotiation since, to do so, on e would have to look at specific textual proposals.
In this context, he asked colleagues to bear in mind the stage of the process in which Members were
currently engaged and the limitations inherent in this stage.  He acknowledged that, in the course of
negotiations, it would be incumbent on the proponents to provide clear and convincing answers to the
kinds of questions that had been posed -  and that, in the absence of such answers, Members would
not be in a position to reach agreement.WT/WGTCP/M/22
Page 6
17. With regard to the Study on Issues Relating to a Possible Multilateral Framework on
Competition Policy (document WT/WGTCP/W/228), the representative of the Secretariat recalled
that it had been requested by the Working Group at the Group's meeting on 1-2 July 2002(WT/WGTCP/M/18, paragraphs 96-98), had been circulated in preliminary form prior to the Working
Group's meeting of 20-21 February (JOB/03(31), circulated 18 February 2003) and had been thesubject of an initial discussion at that meeting (WT/WGTCP/M/21, paragraphs 51-60).  Concerning
the main differences between the two versions of the study, although the current (final) version was
somewhat amplified as compared to the previous one, it had the same overall structure.  The revised
text took into account comments that had been prov ided in the course of the initial discussion at the
meeting in February in addition to written and oral comments that were received subsequent to the
meeting.  In addition, it had been possible for the consultant who had prepared the study (Dr. Simon
Evenett, Director of Economic Research at the World Trade Institute, University of Bern) toincorporate additional coverage of existing literature and factual developments, particularly in Part III
of the study.
18. The representatives of Canada; the European Community and its member States
; Switzerland ;
Hong Kong, China and Australia  said that the Study had collated useful information and provided
insights into many of the questions before the Working Group.  Continuing, the representative of
Canada said that the analysis in the study of the ways in which competition policy and a possible
multilateral framework on competition policy might contribute to the realization of dynamicefficiency gains was particularly useful.  Supplementing the coverage of the Study, it was worth
highlighting that competition policy, in addition to embodying the policy considerations that were set
out therein, was based on empirical methods and data  analysis.  The history of competition policy,
particularly in the past 20 years, had been extensively influenced by the branch of economics known
as industrial organization; without this theoretical and empirical underpinning, competition policy
would be just another legal or regulatory regime.  In particular, the usefulness of competition policy
was derived from its empirical orientation in relation to anti-competitive effects, its capacity to adapt
to advances in the understanding of the operat ion of markets and its principled "rule-of-reason"
approach.  It would be desirable to give greater attention to such methodological issues in both the
Working Group's discussions and related capacity building activities.  From this standpoint, the Study
could be looked at as a living document;  when delegations came across relevant information and
studies, these could be brought to the attention of the Working Group and would enrich the Group's
understanding.  As an example, he made reference to a recent study prepared for the World Bank
1
which had looked at the magnitude of benefits arising from the application of competition law ondomestic economies.    Essentially, the study had found that competition law and enforcement yieldbenefits at least commensurate with their costs.  More specifically, some of the key findings of the
study were as follows:  first, the implementation of competition policy generally results in lower
prices for consumers and user industries; this is confirmed for a large sample of developed and
developing countries.  In addition, competition policy encourages a larger number of firms and
therefore a greater degree of consumer choice in most markets.   For the most part, competition law isalso more cost-effective in achieving these ends than industry-specific regulatory regimes.  The
authors caution, nonetheless, that such regimes may still be needed in so-called natural monopoly
situations (markets which are more efficiently served by a single supplier).
19. The representative of the European Community and its member States noted that, although
the discussion in the Working Group had highlighted the role of exceptions from competition law as a
tool for managing any possible conflicts between competition and industrial policy, the Study
(document WT/WGTCP/W/228) had identified five ways in which such conflicts had historically
been managed.  These were:  (i) the use of industrial policy instruments which, even where they tend
to restrict competition in markets, are not actio nable under the competition laws of most countries
                                                     
1 Hoekman, B. and H.L. Kee, Imports, Entry and Competition Law as Market Disciplines (World
Bank, 2003); also discussed in Study on Issues Relating to a Possible Multilateral Framework on CompetitionPolicy (WT/WGTCP/W/228), paragraphs 278-281.WT/WGTCP/M/22
Page 7
(e.g., tariffs, subsidies, training programmes and public ownership); (ii) the explicit incorporation of
these goals in national competition laws; (iii) the explicit taking into account, by responsible officials,
of dynamic as well as static efficiency considerations in the application of national laws, which was
increasingly common in countries having such laws; (iv) where necessary, the provision for
exemptions, exceptions, and exclusions from comp etition law; and (v) allowing for a governmental
body to overrule a decision made by the competition enforcement agency in the event that national
development priorities might be compromised.  Furthermore, the study showed that, by and large, the
adoption of a multilateral framework on competition policy along the lines that had been proposed
was consistent with and would not jeopardize the ability of Members to continue to use these five
tools through which any possible conflicts between competition policy and industrial policy
objectives could be managed.  Of course, the study had also shown that, in the main, competition
policy was likely to contribute positively to the attainment of dynamic efficiency gains and otherdevelopmental objectives.
20. Another representative of the same delegation affirmed that, as had been outlined in the
Study, there were a large number of ways in which competition policy could be integrated with
industrial policy.  One of the ways in which this should not be done was through the toleration of
hardcore cartels, in view of the clear harmful effects that such cartels had on consumers and userindustries, and the lack of any significant welfar e benefits.  Continuing, he said that, in the
terminology of European Community competition policy, the term "exemption" corresponded to that
of "authorization" in some other jurisdictions, in that it referred to a decision that an agreement or
practice be allowed to stand notwithstanding its potential anti-competitive effects, because it provided
compensating welfare benefits of the type referred to in paragraph 150 which outweighed its anti-competitive effects.  Such an "exemption" would never be given to a hardcore cartel, since by
definition in such a case the harmful effects outw eighed any conceivable welfare benefits. Concerning
outright exclusions from competition law, the Community had few of these.  Even in the agriculture
sector, anti-competitive agreements were excluded from the scope of article 81 of the Treaty only if
they were necessary for the implementation of the Common Agricultural Policy.  This was not thecase for hardcore cartels in this sector;  as an illustration, the Commission had recently imposed a fine
on a price cartel among beef producers in one member State.
21. The representative of Switzerland said that the Study (WT/WGTCP/W/228) provided a
systematic overview of the costs and benefits of a possible multilateral framework on competition
policy.  As had been made clear in the Study , the costs of such a framework could not be
meaningfully assessed in isolation from the benefits that would flow from it.  The examples and other
evidence presented particularly in Part III of the study had shown the feasibility of attacking cartels,including in developing countries, and the important benefits for economic and consumer welfare that
would flow from this.  The recent Vitamins cartel was a particularly telling example of the costs that
cartels had been shown to inflict on both developed and developing economies, particularly those that
lacked effective competition laws.
2  In order for the potential benefits of a multilateral framework to
be realized, effective implementation of the framework was necessary.  To ensure this, a commitmenton long run technical assistance and capacity building would be a key element of the proposed
framework.  The amount of technical assistance that would be required should not be under-estimated.
22. The representative of Hong Kong, China said that, as had been pointed out at the Working
Group's meeting of 20-21 February (WT/WGTCP/M/21, paragraphs 52 and 54), in discussing the
competition situation in Hong Kong, China, th e Study had relied heavily on a recent IMF paper.3
                                                     
2 See Study on Issues Relating to a Possible Mul tilateral Framework on Competition Policy (document
WT/WGTCP/W/228), paragraphs 299-302 and Table III.T7 "Estimated overcharges from the vitamins cartel,1990-1999, in year 2000 US dollars; by importer".
3 International Monetary Fund, [Hong Kong, China]: Selected Issues  (Washington, D.C.:
2000).WT/WGTCP/M/22
Page 8
The conceptual approach adopted in the IMF paper was debatable. In particular, the different
measures of profit margins used in the paper gave results which were not entirely consistent.  On this
basis, his delegation did not agree with the IMF's suggestion that competition in Hong Kong, China
had become less intense as a result of the shift toward services during the past decade.  The revised
version of the study continued to rely on the IMF paper and even seemed to imply there could beentry-impeding private anti-competitive practices in Hong Kong, China.  However, no evidence was
cited in the paper to substantiate such an inference.  Certainly, his colleagues dealing with competition
policy in Hong Kong, China had not been able to fi nd any concrete evidence to suggest the existence
of extensive cartels or other entry impeding private anti-competitive practices.  Nevertheless, Hong
Kong, China remained vigilant against the existence of any such practices.
23. In response to a suggestion by the representative of Australia, the Working Group requested
that the Secretariat issue a revised version of the tables summarizing the contributions of Members
(document WT/WGTCP/W/228, Annexes II(A-D)).
24. In response to the suggestion by the representative of Canada (paragraph 18, above), the
representative of the Secretariat said that, if delegations became aware of studies or other
documentation that would be of interest to the Group, these should be communicated to theSecretariat which would bring the appropriate references to the attention of Members.
25. The representative of the Secretariat, introducing the Background Note on Provisions on
Procedural Fairness in Existing WTO Agreements (WT/WGTCP/W/231), said that the Note
attempted to summarize various provisions on procedural fairness that could be found in existing
WTO Agreements.  As was reflected in paragraphs 5 and 16 of the Note, it had been deemed useful in
preparing the Note to divide the various provisions into two broad categories.  First, there were certainbroad principles of procedural fairness which could be found in each of the three main WTO
agreements (the GATT, the GATS and the TRIPS Agreement); the main characteristics of these
principles were summarized in subparagraph 16(a) of the paper.  Secondly, a number of more detailed
provisions on procedural fairness could be found in certain WTO agreements, notably the Agreements
on Anti-dumping, Subsidies and Countervailing Measures, Safeguards, TRIPS and GovernmentProcurement.  Much of the paper was concerned with summarizing those more detailed provisions.  In
particular, the paper sought to focus on provisions that were relevant to situations in which there was
an allegation that a private party was engaged in conduct that involved some measure of wrongdoing
(e.g., infringement of intellectual property rights) or was otherwise actionable (e.g., dumping or
subsidization) and where remedies were being sought.  As was pointed out in paragraph 5 of the Note,
although these provisions were summarized in the Note in some detail, it was important not to over-
generalize them in the overall scheme of the WTO Agreements.  In particular, these provisions hadbeen negotiated in response to the specific needs of individual agreements and subject-matters, rather
than as part of any common overall design or pattern.
26. The representatives of Switzerland; the European Community and its member States
; and
Hong Kong, China said that the Secretariat Note (WT/WGTCP/W/231) provided a comprehensive
summary of Members' previous discussions on pr ocedural fairness as well as identifying and
categorising relevant provisions in existing WTO agreements.  The Note made it clear that there was
there was no single model of procedural fairness in the WTO which was applicable to all subject-
matters.  Rather, in regard to each of the agreem ents which had been surveyed in the Note, basic
principles of procedural fairness had been adapted as Members saw fit, having regard to the
requirements of the particular subject-matter addressed by the agreement.  Continuing, therepresentative of Switzerland said that the Note (WT/WGTCP/W/231) showed that provisions on
procedural fairness had been incorporated in severa l existing Agreements dealing with subject-matters
that were as complex as that of competition policy.  These provisions set certain basic guidelines
while taking account of the reality of diverse legal and political cultures and not attempting to enforce
a harmonized approach across different legal systems.  Second, the particular issues that wereaddressed in the various agreements were similar to those that were likely to come up in the context ofWT/WGTCP/M/22
Page 9
a multilateral framework on competition policy.  These included, for example, issues regarding access
to justice by private parties; procedures for informing the targets of an investigation; the protection of
confidential information and other legitimate interests of parties; and the rights of defendants in
relevant proceedings.  In this context, it appeared  that the same kinds of elements that would have to
be considered in providing assurances of procedural fairness in a multilateral framework oncompetition policy had already been considered in framing relevant provisions of existing WTO
Agreements; in other words, appropriate reference points existed and there was no need to start from
scratch.  What remained to be done was to identi fy the relevant elements and adapt them  to the
subject-matter of competition policy, as needed.  Another point to note was that the elements
discussed in the Note were basically elements of good governance, which should be reflected in one
way or another in any legal system, regardless of its specificities.  In this sense, it was unlikely that
ensuring appropriate elements of procedural fairness in national competition regimes would require anoverhaul of the overall legal system, at least in most cases.
27. The representative of the European Community and its member States said that the Note
(WT/WGTCP/W/231) showed clearly that issues of procedural fairness could be addressed
meaningfully in a WTO agreement – there were ampl e precedents for this in the various Agreements
that had been surveyed in the Note.  Furthermore, this could be done even in complex fields of lawwithout unduly intruding on the operation of national legal systems.  As the Note had shown that, in
regard to each of the Agreements which had been surveyed, the basic principles of procedural fairness
had been adapted to the requirements of the particular subject-matter addressed by the agreement,
there appeared to be no barrier to adapting the same principles to the needs and operational exigencies
of competition policy.
28. The representative of Hong Kong, China said th at the relevance of some of the provisions in
existing WTO agreements that were set out in the Note was unclear and needed to be considered
carefully in the context of the work of the Working Group.  As his delegation had repeatedly stressed,
given the diversity in legal or legislative infrastructure among Members, it was important that any
possible multilateral framework on competition policy should avoid prescriptive provisions  and retain
Members' discretion to choose the appropriate instrument in implementing any obligations.  In this
connection, the Note (paragraph 31) indicated that the GATT and GATS required that "judicial,
arbitral or administrative tribunals or procedures" be available for the prompt review and correction of
administrative action relating to customs matters and matters affecting trade in services, respectively.
The fact that these provisions did not specify the means through which individual Members
implemented the obligation did not hamper the effectiveness of their enforcement.  Other Agreements
such as the plurilateral Agreement on Government Procurement, the Anti-dumping Agreement andAgreement on Subsidies and Countervailing Measur es were also flexible in regard to the
characteristics, judicial or otherwise, of relevant domestic bodies or procedures.  His delegation had
confidence in the practicability and desirability of such general and non-prescriptive multilateral
obligations on procedural fairness.   On the other hand, it was of the view that some of the more
specific provisions in existing WTO Agreements would be too prescriptive and burdensome if appliedin the context of a possible multilateral framework on competition policy.  This was the case, for
example, with regard to provisions prescribing the types of information to be contained in public
notices of the initiation of investigations, specifying the kinds of factors to be taken into account and
the criteria to be used in determining the magnitude of seriousness, and requiring the preparation of
non-confidential summaries of confidential inform ation.  His delegation would be opposed to the
adoption of provisions of this type in a multilateral framework.  Overall, he emphasized that, since
Members differed extensively in their socio-economic development levels, competition cultures, legal
and institutional infrastructure, it was important that sufficient flexibility be built into any possible
procedural fairness obligations in this area, and the domestic policies and concerns of individual
Members should be fully respected.
29. The representatives of India; Egypt
; Kenya ; and Cuba  said that, notwithstanding the view
expressed by the representative of the European Community and its member States regarding theWT/WGTCP/M/22
Page 10
difficulty of specifying more precisely the scope and content of an eventual multilateral framework on
competition policy outside a negotiating context, such clarifications were a prerequisite for
confidence-building.  Continuing, the representative of India said that the application of national
treatment in the area of competition policy raised a range of issues requiring clarification.  Some ofthe proponents of a multilateral framework had suggested that a provision on non-discrimination
would apply only to de jure  and not to de facto discrimination.  However, even with such a limitation,
questions remained.  For example, there was the question of the compatability between national
treatment and the pursuit of certain economic or other policies, particularly when there were
articulated so as not to be facially non-discriminatory, but could be applied de facto in a way that
would only benefit national firms, e.g. special regimes for SMEs based on sales thresholds.  A key
proponent in this area had earlier reacted to this statement by accepting that the questions raised
merited attention and could be addressed effectively once the nature of obligations to be undertakenbecome more clear.
30. Continuing, he said that competition policy in respect of mergers and cartels could have
different welfare effects on different countries, depending on where the producers and consumers
were located.  Since developing countries had few products that were exported under conditions of
imperfect competition, they were likely to be predominantly on the losing side of mergers andrestrictive business practices with cross border effects, and might have little to gain from the
application of the national treatment principle.  In the context of meeting the needs of developing
countries, in his view it was more appropriate to adopt the concept of non-discrimination in terms of
the need to treat different countries with different capacities in a differential manner, and of the need
and responsibility to provide assistance, positive measures and affirmative action to local firms andinstitutions in developing countries to ensure their viability and competitiveness.  For these and other
reasons, the principle of non-discrimination had the potential of being abused if not properly
addressed.  In addition, many legal systems interpreted the concept of non-discrimination as
permitting affirmative action in favour of the disadvantaged in order to order to promote equality in
outcomes.  Developing countries needed the flexibil ity to resort to a range of developmental tools,
including those that normally fell under the rubric of "industrial policy".  Consequently, the resolution
of conflicts between competition and development problems needed to be left to each Member, whilst
a prescriptive or intrusive approach was to be avoided.  Sufficient clarification had not been provided
in response to these questions.  Accordingly, serious concerns remained that a binding multilateral
commitment with regard to national treatment could seriously limit the flexibility and policy space of
developing countries.  Therefore, it was India' s view that the national treatment principle was
inappropriate and was likely to lead to undesirable effects where applied in the context of amultilateral framework on competition policy.
31. The representative of Egypt said that legitimate differences in the social, cultural, political
and economic policy objectives of countries would require specific and flexible policy measures and
mechanisms to achieve them. Differences in competition policies were significant, and were often
reflected in the goals of competition laws.  Furthermore, in the pursuit of their policy objectives,countries might differ in their assessment on whether and to what extent non-efficiency goals (such as
fairness, opportunities for SME's market integration, etc.) should be taken into account in the context
of competition policy.  This was one area where countries should be free to choose the nature of rules
and the scope of their application; accordingly there should not be identical competition rules across
the board, for all countries.  With this background, the speaker offered the following set of concernsand questions regarding the core principles mentioned in relevant paragraphs of the Doha Declaration.
With regard to the principle of non-discrimination, a uniform application of this principle could
produce severe inequalities between developing and developed country Members. The thrust of the
non-discrimination principle was to give all nationals no less favorable treatment than that given to
another, either on a most-favoured-nation (MFN) or national treatment (NT) basis.  The latterprinciple (NT), if applied to competition rules, would give large multinational corporations unlimited
access to the developing countries' domestic markets. Therefore, a uniform application of this
principle in relation to competition would be to the detriment of local host country firms which, if notWT/WGTCP/M/22
Page 11
able to sell and produce domestically on a competitive basis, would, ultimately, exit the market.
Another difficulty for developing countries relating to the non-discrimination principles was the lack
of ability, in some cases, to adopt a competition law which could be due either to a lack of resources,
or to concerns that a competition  regime would have encroached on the scope of implementation of
development-oriented industrial policies – i.e., concerns about "policy space".  Nonetheless, coreprinciples were fundamental and should be reflected in the competition regime of every jurisdiction
that chose to adopt one.  His delegation was convinced that any competition regime should apply the
MFN principle and that government should not engage in " de jure " discrimination between foreign
firms in similar situations, whereas "de facto"  discrimination in many instances was justifiable.
32. Continuing, he said that, as had been noted by the International Chamber of Commerce
(ICC),
4 de jure  discrimination should not be viewed from the broad angle of requiring all countries to
abide by common rules.  A distinction should be made between discrimination based on corporatenationality or ownership, which was unacceptable, and discrimination based on the location of a firm's
activities and the nature of the market in which a competition regime was applied. The aim of this
distinction was to enable countries to take into consideration, when enforcing a competition regime,
their respective needs and levels of development.  Moreover, important questions remained to be
answered before any binding principle could be adopted even with respect to  de jure  discrimination,
such as those related to the treatment of bilateral and regional cooperation agreements whereby two or
more governments might set more favorable terms for cooperation with each other than those of a
prospective multilateral framework on competition policy.
33. The application of a rule against de facto discrimination could result in a number of
complexities such as those related to the investigative powers of competition authorities (which variedfrom one country to another) and the availability of data.  Besides, there could be no like "business
transactions" since the circumstances and facts relating to each transaction were not wholly
comparable or analogous.  Moreover, de facto discrimination, if required to be justifiable, would
create enormous difficulties for developing countries.  Justifying discrimination on a case-by case
basis would, in itself, require countries to apply a rule of reason approach (which would require
complex case-by-case analysis) and, as such, would put developing countries in the position of either
sacrificing large resources for the purpose of analysis and proof or else being inconsistent with their
prospective obligations.  Developing countries might well opt to choose a straightforward kind of a
rule as it involved lower costs, personnel and time for enforcement.  In this context, the Working
Group would need to examine the issue of whether de facto discrimination should be allowed, and if
so under what criteria?  As far as the NT  principle was concerned, developing countries, while
pursuing their policy objectives, might need to discriminate in favor of their domestic firms,  inparticular small and medium-sized enterprises.  (In Egypt,  SMEs constituted over 90% of the
businesses in the market and, as such, were the major source of most citizens' livelihood). Applying
the non-discrimination principle in a uniform manner would result in relative "de facto
discrimination" between domestic firms and  MNEs, simply because the latter were more
economically powerful.  Therefore, in order to take the developing countries' concerns on board, itwas necessary to leave to them the right to assist their local firms either directly, for example by
granting them subsidies, or indirectly by allowing for mergers, acquisitions, export cartels, resource
pooling or otherwise as each country deemed appropriate for its policy objectives.  With regard to
other issues related to the principle of non-discrimination, many developing countries were of the
view that a future multilateral framework on competition – if any - should include provisions for
home government obligations to prevent restrictive business practices of MNEs operating in host
developing countries and RBPs taking place within their jurisdiction having an impact on developing
countries (e.g., export cartels).  These obligations should be subject to non-discrimination and other
core principles.
                                                     
4 Competition policy in the WTO:  Doha Declaration issues (International Chamber of Commerce,
9 April 2003).WT/WGTCP/M/22
Page 12
34. Continuing further, he said that application of the core WTO principle of transparency to
competition law and policy should be dealt with carefully. Members had different legal and
administrative systems.  The proponents of a multilateral framework we re of the view that
transparency should apply to all aspects of competition regime.  This was a source of concern, as it
might open the door for pressures on developing members to change their legislations or enforcementpractices or even the scope of exemptions within  their domestic laws.  In addition, some developing
country Members lacked domestic laws/regulations/policies relating to competition per se ; this
compounded the complexities that could be involved in applying transparency provisions in this area.
The following were some specific questions that remained to be answered:  (i) what was the nature
and scope of the transparency commitments or obligations of countries which lacked competition
regimes?; (ii) how and to what extent would transparency commitments on home country obligations
be satisfied, given that such obligations were a core demand of developing countries in this area?Unless convincing answers to these questions were provided, it would be difficult to judge the extent
to which binding transparency obligations were required in the context of any future agreement on
competition policy; moreover, the nature and scope of any transparency obligation was dependant on
the nature and scope of the substantive provisions of the agreement that was contemplated.  In
addition, developing countries had to be convinced that the proposed transparency requirementoffered them more benefits than costs.
35. With regard to the potential application of the principle of procedural fairness in this area, the
theory of competition policy held that "due process" or "fair administration" of such policy/law was
essential to provide stakeholders, consumers, the public and competitors the assurance that the
competition regime would produce fair results.  It  was, therefore, an enforcement tool, according to
which relevant authorities were required, while making a decision, to use fair procedures; if they do
not, courts may step in and render the decision void.  More precisely, procedural fairness consisted of
a set of rules that the courts will imply into legislative schemes.  Countries have different legal
systems tailored to respond to their different economic, social, political and cultural realities.  Given
this fact, developing countries should have the right to implement the legal system that suits theirspecific conditions and needs.  Proposals had been put on the table by the proponents to deal with the
following specific aspects of procedural fairness:  mechanisms for bringing matters before a
competition agency; rights of parties to be notified of  investigations;  rights of parties to be advised of
progress and reasons for decisions; the right to make submissions; rights to have access to a system of
appeal and/or review; timeliness of decisions; and the ability to challenge investigatory measures.  In
thinking about how these components might be appl ied in the context of a multilateral framework on
competition policy, a number of complex issues may arise. These include the following:  if it isproposed that each country sets its own mechanism, then to what extent will this be subject to the
transparency  provision, i.e. what is it that the country will be required to publish or notify?  On the
right of parties to be notified of investigations, what is the definition of "parties" and what information
should a notification carry?  Will the content of the notification differ according to the nature and
level of interest of the relevant parties concerned?  Could the provision of differential right to accessthe system for different parties be considered to be discriminatory?  What are the parameters, which,
if satisfied would indicate that the right of parties to be advised of progress and reasons for decisions,
has been maintained or violated?  On the right to make submissions, would it be possible that
competition authorities set rules regarding the content of submissions by different parties?  What is a
"timely decision"?  On the ability to challenge investigatory measures, could a competition authoritybe accused of being unfair or discriminatory if it decides to take no action where a complaint by a
foreign firm does not fit in with its list of enforcement priorities, given its resources?  Countries may
set fair procedures without stating on their substantive content or way of application, which could
result in de facto discrimination.  How would a multilateral framework address this matter?  Last but
not least, developing country members, which do not have competition policy or law in place,question the relevance of procedural fairness provisi on to their situation.  Finally, he emphasized that,
like many other developing countries, his delegation considered special and differential (S&D)
treatment to be the fourth element in the discussi on on core principles.  This additional element wasWT/WGTCP/M/22
Page 13
needed to balance the costs and benefits of any prospective agreement on competition policy in the
WTO.
36. The representative of Kenya, in an intervention the text of which was subsequently issued as
document WT/WGTCP/W/238, said that the requirement in paragraph 25 of the Doha mandate that
"full account shall be taken of the needs of developing and least developed country participants andappropriate flexibility provided to address them" implied that the right of a country to choose whether
and when to have a competition law and the kind of competition policy to adopt must be preserved. In
particular, countries should have the right to adopt a phased approach in terms of discussion,
implementation and enforcement of a competition law, concomitantly ensuring an appropriate role for
national industrial policies.  Sufficient clarification had not been provided as to whether the proposals
by the proponents in this area would allow such flexibility to be preserved, or would restrict it in the
interest of promoting market access for developed country enterprises and the harmonization ofcompetition regimes.  The core principles of transparency, non-discrimination and procedural
fairness, as they had been developed in the context of trade policy, were not intended as universal
principles applicable to all issues including competit ion policy.  In this context, it was not self-evident
that it would be appropriate or desirable to apply these principles to competition policy.  Clarifying
the manner in which the so-called core principles wo uld operate in practice in the area of competition
policy was of critical importance in order to assess the effects on development.
37. Turning to the topic of transparency, he pointed out that the application of this principle
required that careful consideration be given to differences that existed in national legal systems as
well as to issues of the scope, coverage and the nature of obligations.  In particular, he was concerned
that transparency requirements could impose an unnecessary burden on developing countries.  Arealistic assessment of transparency would not be possible until all substantive issues had been
satisfactory clarified, enabling developing countries to have a more realistic assessment of the costs
and benefits of proposals in this area.  For example, the applicability of transparency to case-specific
information in the possession of national or regional competition authorities needed to be clarified.  In
addition, secret registers of export cartels were kept in certain countries on grounds of confidentiality.It appeared that the regulators might be bound by the transparency principle but not the firms they
were supposed to regulate.  In other words, vital evidence on the practices of foreign firms was
"protected" by their governments in the name of commercial confidentiality. This potential
contradiction required clarification.
38. Continuing, he suggested that, in a trade policy context, "non-discrimination" was normally
taken to mean the application of most-favoured nation (MFN) and national treatment principles in
regard to "like products" or services. The application of these concepts to competition analysis andenforcement, which was case – specific, remained unclear. For instance, it had been pointed out that
difficulties could be experienced in determining whether de facto discrimination existed with respect
to anti-trust enforcement actions given the individual focus of such actions.  Even if the application of
non-discrimination principles was limited to de ju re discrimination, as the proponents had proposed,
questions remained. For example, how would sectoral exemptions to competition rules be treated?Would GATT Article XX exceptions be available in this area?  With regard to national treatment,
there was a need to clarify how it would apply with regard to anti-competitive practices or mergers
among small and medium scale producers in developing countries, which could be intended to
achieve efficiencies, as compared to mergers among big firms and multinationals in developed
countries which could result in anti-competitive practices and the exercise of market power.Furthermore, the application of the national treatment principle could easily spill over and introduce
distortions in other areas of economic policy formulation including industrial policies and
development strategies.  With respect to the applica tion of MFN, it remained unclear as to what would
be the status of bilateral and regional cooperation arrangements in relation to administration of
competition law.WT/WGTCP/M/22
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39. Concerning procedural fairness, as had been pointed out in previous discussions in the
Working Group, no broad consensus existed on the meaning of this concept in the context of
competition law enforcement.  This reflected differing notions of fundamental fairness, which were
also influenced by the political and legal cultures of different countries. A number of specific
questions had been posed regarding how this princi ple would work in practice, including with respect
to its implications for developing countries and the resources implication that it would entail.  As had
already been stated, there was a need for more studies and discussions to enable developing countries
to have a more realistic assessment of the costs and benefits of such provisions; among other matters,
it would be useful to clarify whether Article X of the GATT was an appropriate reference for
discussion of this issue in the Working Group or whether a more specific concept of procedural
fairness would have to be developed for competition policy.
40. With regard to provisions on hard core cart els, there was indeed a growing recognition among
the Members that their harmful effects undermined the potential benefits of the multilateral trading
system and, therefore, should be addressed on a priority basis. However, there was a lack of
consensus among Members on the definition and scope of possible obligations in this area, which
need to be further clarified.  In particular, detailed analysis of the definition of hard core cartels was
needed in order to establish their relevance in the case of developing countries. Lack of suchclarification would give rise to significant operational problems and costs for developing countries
while jeopardizing the potential benefits. The appropriateness of the WTO as the venue for
international action on this issue also needed to be clarified, taking into account that it was already
being addressed in various bilateral, regional and plurilateral arrangements.
41. Concerning modalities for voluntary cooperation, an important observation had been that
purely voluntary cooperation might be ineffective because more advanced competition authorities,
with greater information and capabilities, would have little incentive to provide information or
assistance to less developed authorities that were not in a position to offer reciprocal benefits.
Furthermore, while the sharing of information by developed countries could not be enforced by
developing countries in voluntary cooperation arrangements, given the power asymmetry betweendeveloped and developing countries, voluntary cooperation by developing countries' competition
authorities would in practice become mandatory.  In this context, the proponents were called upon to
clarify the precise cooperation tools that would be used and the nature of potential obligations in this
respect.  Concomitantly, further clarification was sought on how developing countries without
competition law and competition authorities would participate in voluntary cooperation arrangements
at multilateral level.  A further, general question concerned how a multilateral framework on
competition policy would address development needs and concerns of developing countries was alsohighlighted by the speaker as insufficiently addressed.  The Group should continue working until
sufficient clarification was provided regarding these important questions.
42. The representative of Cuba, in an intervention the text of which was subsequently issued as
WT/WGTCP/W/242), reminded delegations that paragraph 25 of the Doha mandate referred
specifically to the needs of the developing and least developed country participants and required thatappropriate flexibility be provided to address them.  Three specific issues that needed to be addressed
were as follows: (i) clarification of the implication of competition policy for trade and economic
development, which was indispensable in order to permit members to carry out an effective evaluation
of proposals submitted to the Group; (ii) resolution of the developmental needs and interests of
developing countries; and (iii) clarification of the kinds of flexibility needed to accommodate theseneeds and interests.  A key element of flexibil ity involved preserving the sovereignty of each
developing country, allowing it to choose when and how to adopt competition policy and what type of
competition policy it required.  Importance was also attached to the ability to adapt policies and
measures to strengthen and protect the international strength of domestic enterprises, and to modify
and amend these policies as required.  In this regard, numerous questions remained unanswered; forexample, no consensus had been achieved on the application of core WTO principles in this area
which was a matter of capital importance in evaluating their effects on development.  As a furtherWT/WGTCP/M/22
Page 15
example, in the absence of a concrete definition of procedural fairness or the scope and meaning of
transparency, the requirements of countries that had little experience in the field of competition policy
had not been clarified.  A Secretariat study was needed on this subject, given the lack of experience of
many countries in this area and the disadvantage they might find themselves at if negotiations were to
commence.  Continuing, she said that what might be considered anti-competitive behaviour by onecountry might be a necessary means of achieving a central objectives in another (developing) country.
This compounded the difficulty of introducing uniform multilateral rules in this area.  Current
technical assistance was inadequate, given that over 50 countries had neither legislation nor
functioning competition regimes.   Studies were needed on each of the subjects before the Working
Group before decisions could be made on modalities for negotiations in this area.
43. The representative of China, in an intervention the text of which was subsequently issued as
document WT/WGTCP/W/241), said that his delegation believed that an effective multilateral
solution to the problem of hardcore cartels could be achieved only when the anti-competitive practices
covered by this term were clearly defined.  Related to this, some developing countries, like China, did
not yet have a comprehensive competition law.  Although some anti-competitive practices were
addressed by various existing legislations, there was no single definition of a hardcore cartel.
Consequently, further reflection was needed before Members could decide, for example, whether thedefinition in the OECD Recommendation on Hardcore Cartels
5 could be incorporated in the future
multilateral framework on competition policy.  From the perspective of developing economies, it was
also important to note that excessive competition in certain sectors could sometimes have negative
effects.  Consequently, as had been stressed by a number of Members, it was important that adequate
flexibilities be incorporated into any provisions re garding cartels in the future multilateral competition
framework.  For example, provision should be made for exemptions for small and medium-sized
enterprises for industrial development purposes.
44. Continuing, he said that full-fledged cooperation at the multilateral level would be possible
only when all Members had realized the harmfulness of hardcore cartels, established adequate
domestic regulatory systems and accumulated sufficient administrative experience.  To this extent, heagreed with views expressed in the contributio n of Hong Kong, China to the Working Group's
meeting of 20-21 February (document WT/WGTCP/W/224). For this reason, it was vital that the
future multilateral competition framework take into consideration the current situations of developing
countries, including the disparity of experiences in this area.  In fact, one of the main tasks of the
multilateral framework would be to promote the sharing of information and experience among
Members through capacity building, facilitate the formation of consensus and establish a good basis
for further cooperation.   In other words, capacity building was not only an important method but alsoan integral part of the future framework.
45. Continuing further, with regard to some speci fic issues, he said that developing countries
suffered from their weak positions in market access and international technology transfer which
hampered their effective participation in economic globalization.  If developed countries continued to
permit the operation of export cartels, it would put developing Members at an even worse position ininternational trade.  Given this, he shared the view that had been expressed by Thailand that the future
multilateral framework on competition policy should incorporate restrictions on the maintenance of
export cartels by developed country Members.  Concerning international hardcore cartels, it was clear
that these had negative effects on both developing and developed Members.  At the same time, he
agreed with the view of other developing Members' that such cartels were largely a developed countryphenomenon, in that low-income countries and LDCs were home to none of the notorious
international cartels that had been discussed in the Working Group.  Given this, China called for
developed Members to expand their efforts in combating international cartels since developing
Members frequently lacked adequate domestic legislation or enforcement experience to do this.
                                                     
5 OECD Council Recommendation Concerning Effective Action Against Hardcore Cartels (adopted by
the OECD Council at its 921st Session on 25 March 1998 [C/M(98)7/PROV]).WT/WGTCP/M/22
Page 16
Clearly, the sharing of experience and provision of technical assistance in this area was important to
enable developing Members to initiate their own anti-cartel programmes.  China also believed that
attention should be given in the Working Group to anti-competitive practices relating to intellectual
property rights (IPRs).  The TRIPS Agreement provided, in principle, for control over the abuse of
such rights by rights holders.  The future multilateral competition framework could also make acontribution in this area, consistent with better protection for IPR, realization of social and public
interests and the balancing of rights and obligations in this area.
46. Another representative of the same delegation said that, with globalization, the negative
effects of cross-border anti-competitive practices on the economic and trade development of WTO
Members had become more and more obvious, especially to developing Members.  Given this, WTO
Members needed to strengthen their ability to undertake meaningful cooperation in this area.  The
required cooperation had two dimensions: first, cooperation in the enforcement of competition law;and second, cooperation in capacity building and the formation of a competition culture.  As had been
noted, cooperation in the enforcement of competition law was only possible when the participating
Members had established their own competition law and enforcement system; consequently, the two
aspects of cooperation were closely linked.  Experiences with cooperation at the bilateral or regional
levels would be useful in promoting cooperation under a multilateral framework.  Nonetheless, the
diversity that was evident among Members with regard to legislation and enforcement of laws,
especially between developed and developing Members, had to be taken into consideration in framing
any commitments on cooperation in the WTO.  For ex ample, implementation of "positive comity" in a
multilateral framework would pose significant difficulties. 
 He noted that China was working hard
on the development of its own anti-monopoly law, and attached much importance to receiving
cooperation and assistance in this area.  In fact, it had already benefited from bilateral cooperationwith some WTO Members.  The major part of this cooperation involved capacity building and
information exchange, for example joint studies and expert consultations on the drafting of the anti-
monopoly law and other relevant legislation.
47. In view of the foregoing, China suggested that  voluntary cooperation be incorporated into the
future multilateral framework of competition pol icy in the WTO.  The major aspect of such
cooperation would be cooperation in capacity building and the construction of a competition culture.
In the implementation of voluntary cooperation, the following points merited attention by Members.
Firstly, cooperation should be undertaken progressiv ely, with the precondition of not over-burdening
developing Members.  The scope of cooperation could be expanded gradually, as developing
Members improved their capacity.  Secondly, future arrangements on cooperation should be flexibleenough to reflect the variety of different approaches to competition policy and legal cultures.  In
particular, the establishment of a single competition authority should not be a pre-requisite for
international cooperation, although it was considered optimal.  Rather, developing Members should be
allowed flexibility with regard to the establishmen t of their own competition authorities, considering
the extent of diversity among Members in levels of economic development, legal cultures and
conditions of market competition. Thirdly, as a key element of cooperation, China envisaged that
Members would exchange information and experiences with regard to laws, regulations andenforcement issues at the multilateral level, on the voluntary basis and through mutual trust.  Fourthly,
it would be worthwhile to discuss closer international cooperation, for instance on specific cases.
However, careful attention must be given in such discussions to the diversity of Members experiences
in this area; in any case, cooperation should not be mandatory, i.e. if a Member was not yet prepared
to undertake cooperation with other Members, it should not be susceptible to being forced tocooperate, for any reason.
48. The representative of the European Community and its member States, responding to the
foregoing concerns, reiterated the difficulty of going beyond the degree of specificity that had already
been introduced in the discussions in the current phase.  He acknowledged that the questions posed
and views expressed by delegations were legitimate, even if he did not reach the same conclusions insome cases.  In any case, to say precisely how provisions on procedural fairness would work, how farWT/WGTCP/M/22
Page 17
would it go, would involve specifying the elemen ts of a provisional agreement – something which
could only be done meaningfully at the negotiation stage.  Responding to questions that had been
posed as to the application of national treatment in this area, he affirmed that his delegation had
recognized the concerns that had been expressed by various delegations about unreasonable
interference in the implementation of their national competition policies.  Certainly, there was nointention that principles adopted in a multilateral framework on competition policy should constrain
national industrial policy options.  The approach that had been proposed by his delegation and, in
particular, the distinction that had been drawn between de jure  and de facto violations was intended to
respond to this concern.  In particular, as his delegation envisioned it, the principle of national
treatment would apply only to discrimination that was evident on the face of a national competition
law.  This would limit the scope of dispute settlement and avoid intrusion on enforcement practices at
the national level.
49. In parallel, he reminded Members that non-discrimination did not imply "no differentiation".
In particular, WTO jurisprudence made it clear that differential treatment based on objective
circumstances not related to nationality was perfectly acceptable.   For example, differential treatment
based on firm size had nothing to do with discrimination as it was dealt with in the WTO.
Furthermore, as had been emphasized by his delegation, no constraints other than transparency wereproposed to be placed on the ability of Members to implement exceptions and exclusions from
competition law.  Affirmative action policies, in particular, should not be interfered with by a
competition or any other WTO agreement.  More br oadly, he agreed with the point that had been
made by various delegations that a multilateral framework should not attempt to impose uniform
approaches to competition law and policy.  This was emphasized in his delegation's paper onflexibility and progressivity (WT/WGTCP/W/234; discussed below in Part III).  The point of a
multilateral framework was not to impose uniformity or harmonization but to enable the WTO's
Membership to help each other in an area in which they faced well-documented problems and had
many interests in common.
50. Continuing, he said that, in the view of his delegation, countries could fulfil the requirements
of the proposed multilateral framework through a national or a regional competition regime.
Certainly, the framework would provide for the possibility of a phased-in implementation of
competition law, with the timing of implementation to  be a function of the level of development.  As
to whether there would be a need for a comprehensive competition law of any type, he remained open
to the possibility of finding a means of giving effect to competition principles without a law, but did
not currently see how this could be done.  On the concern about a market access agenda, the proposal
for negotiation of a multilateral framework on competition policy was of a different character fromwork under way in the Organization on market access.   Competition policy was important not
principally for reasons related to market access, but to ensure that markets functioned efficiently and
that the benefits of liberalization for development and growth were not undermined by practices such
as cartels.  Nonetheless, it was also true that anti-competitive practices could have the effect of
restricting market access.   To this extent, a multilateral framework on competition policy would notentail new market-access commitments but could help to ensure that existing commitments were not
impaired through the growth of anti-competitive practices.  Finally, he accepted that a WTO
agreement would not be a panacea; rather it was one element of ongoing efforts to enhance
cooperation on competition policy at the international level.  Although other efforts also had their
place, work in the WTO had the advantage of being conducted in a fully multilateral organization, andof engaging the support of national governments in the struggle against anti-competitive practices that
undermined economic welfare.
51. The representatives of Venezuela, Nigeria
, Thailand , Malaysia , and Tanzania , building on the
views that had been expressed by India, Kenya and other delegations, affirmed that further
clarifications were needed regarding the scope and content of a possible multilateral framework oncompetition policy, taking account of the needs of developing countries and LDCs and the flexibility
that they needed in this area.  Addressing the ma tters of core principles and modalities for voluntaryWT/WGTCP/M/22
Page 18
cooperation, the representative of Venezuela said that it the relevance and benefits of the these
principles in the case of competition were less cl ear than in relation to trade. Furthermore, more
sophisticated questions cropped up from this process, increasing uncertainty, for example with respect
to the principle of non-discrimination. On the other hand, the dimension of international cooperation,
including the modalities of voluntary cooperation, was seen as both necessary and important.Referring to the statements of the other delegations, the representative said it was not clear how the
principle of non-discrimination would function in relation to sectoral exemptions in developing
countries who would like sectoral exemptions.  The development process was often slow, sometimes
unequal and erratic; in this context, although competition policies could undoubtedly play a positive
role on the national level, concerns might arise regarding the maintenance of  adequate policy space
for developing countries.  In particular, a multilateral framework might lock developing Members into
the core principles and prevent them from using n ecessary policy tools in the future, tools which were
not in evidence today due to the evolution of productive structures.  For example, developing
countries might need to rely on industrial polices; the decision on the relevance of such tools should,
in his opinion, remain in the hands of these countries.  On the issue of hardcore cartels, there was no
consensus on the definition of this concept in the WGTCP.  The interests of all WTO members,
including the developing countries, needed to be taken into account (the particular concern of import-related activities of SMEs was cited in this regard).  In addition, a need was expressed for the
inclusion, in any multilateral framework on competitio n policy, of an explicit exemption of state-to-
state agreements and related anti-competitive practices. (see paragraphs 66-68, below).
52. The representative of Nigeria said that th e Doha Development Agenda contained a whole
section devoted to implementation issues, which appeared to have since been largely ignored.  Under
paragraph 25 it had been agreed that, in the period until the Fifth Session, the Working Group on the
Interaction between Trade and Competition Policy  would focus on clarifying the following issues
related to the interaction between trade and competiti on policy: (i) core principles of transparency; (ii)
non-discrimination and procedural fairness; (iii) provisions on hardcore cartels; (iv) modalities for
voluntary cooperation; and (v) support for progressive reinforcement of competition institutions indeveloping countries through capacity building.  Paragraph 25 also explicitly required that full
account be taken of the needs of developing and least-developed country participants and appropriate
flexibility provided to address them.  On this basis, he set out three topics that needed to be addressed:
(i) a process of clarification of these issues and their implications for trad e, competition policy and
development so as to enable Members to make an effective and satisfactory evaluation of the
proposals which had been presented to the Working Group; (ii) as part of 'i', a central focus should be
on how to meet the objective of fulfilling th e development needs and interests of developing
countries; and (iii) identifications of the types of, and approaches to flexibility that were needed to
reflect those needs and interests.  Referring to earlier interventions in the Working Group in the
course of the meeting, he expressed his view that it was necessary for Members to know the breadth
and depth of possible obligations, as well as of related flexibility, in order to assess the interests of
developing countries and the LDCs.
53. Continuing, on the issue of transparency, he said that given differences in national legal
systems, issues of scope, coverage and the nature of obligations, he felt that careful considerations
was necessary, and until further clarification of substantive issues, a realistic assessment of
transparency was not possible.   The speaker expressed the concerns of his delegation about the
potential burden of transparency requirements.  On non-discrimination, in the GATT context theconcept was normally taken to mean the most-favoured nation (MFN) and national treatment
principles.   Therefore, the main focus here was identified as the application of national treatment,
which raised a range of issues requiring clarification.   Raising some, the representative was not
convinced that sufficient clarification had been provided in response to the questions that were raised
earlier.   Consequently, serious concerns remained  - binding multilateral commitments with regard to
national treatment had the potential to seriously limit the flexibility and policy space of developing
countries.   In conclusion, it appeared that the national treatment principle was inappropriate and was
likely to lead to undesirable effects where applied in the area of competition and competition policy.WT/WGTCP/M/22
Page 19
Citing the similarity of the Nigerian views on Procedural Fairness, Provisions of Hard Core Cartels
and Modalities for voluntary Cooperation to those expressed earlier, these were not read-out by the
speaker to save time.   His emphasised that these issues could only be properly considered within the
overall context of the discussions on all elements of the clarification process.  In order for the special
needs of developing countries to be taken into account, and adequate flexibility provided, thedeveloping countries should be enabled to choose  their own approach to competition law and policy
which in their opinion is suited to their developmental needs and national objectives, without being
constrained by obligations in a multilateral framewor k.   With the relevance and applicability of such
a framework to those WTO Member developing countries without competition laws remaining to be
clarified, Nigeria did not want to see the options of such countries limited in this area limited by
multilateral obligations entered into before careful consideration in the light of their national interests
and concerns. Developing countries should be allowed to choose whether to establish a competitionlaw, and the nature of such a law together with th e timing of its establishment, without this flexibility
being constrained by a multilateral framework.
54. Addressing the interests of developing countries, six additional issues and/or principles arose:
(i) the obligations of foreign firms to the host country; (ii) the obligations of home governments to
ensure that foreign firms meet their obligations; (iii) measures to be taken by domestic firms andgovernments to enable local firms, especially sma ll firms, to remain viable, to become competitive
and to grow, particularly in the context of liberalisation and globalisation; (iv) impediments to
competition caused by government actions, for example anti-dumping actions and agricultural
subsidies; (v) impediments to competition by intelle ctual property rights protection; (vi) impediments
to competition caused by global monopolies and oligopolies, and their effect on local firms indeveloping countries; and (vii)  large mergers and acquisitions by transnational companies, and their
effects on developing countries.  In closing, he informed the group that Nigeria was in the process of
establishing a competition law and requested the assistance of other delegations in doing this.
55. The representative of Thailand said that she believed that there was not yet sufficient
convergence in views concerning a possible MFC, making an explicit consensus on modalities of
negotiations difficult to achieve at this point of time.  She also believed that, to date, developing
countries' concerns had not been properly addressed and responded to.  Hence, the Working Group
should be allowed to extend its mission until it was clear how developing countries would benefit
from the proposed multilateral framework on competition policy and how "full account of the needs
of developing and least developed countries" had been taken in pursuant to the paragraph 23 of the
Doha Ministerial Declaration.  As had been stated in paragraph 17 of the Report on the Meeting of 20-
21 February 2003, (WT/WGTCP/M21) "with regard to hardcore cartels , the discussions on this point
had revealed a substantial divergence of views".  For example, concerns had been raised as to whether
the OECD Recommendation on hardcore cartels that prescribed a voluntary cooperative framework in
fighting international cartels would be equally effective in the context of developing countries.
Certain developing Members believed that they could not offer reciprocal benefits from cooperation
and therefore might be treated discriminatorily.  Proposals had been made to have export cartelexemptions removed from national competition laws.  On the issue of core principles, most
developing Members had misgivings as to the requiring of a competition regime by a multilateral rule
as no substantive and comprehensive cost and benefit analysis of the establishment of a competition
regime had been done taking into account the needs of countries of various sizes and economic and
social structures and backgrounds. Concerns had also been raised about compliance cost associatedwith such an agreement since certain Members would have to promulgate a competition regime and to
establish administrative and enforcement procedures that would satisfy the principles of non-
discrimination and due process.  In contrast, most developed Members would already have the
prescribed principles installed and thus, incur little or no compliance cost.
56. With regard to progressivity and flexibility, it was not seen how these elements would provide
an advantage to developing Members.  Progressivity meant transition periods in complying with an
obligation.  Transition periods of any length would not be of use if the imposed obligation, such as aWT/WGTCP/M/22
Page 20
requirement to have a national competition law, was not to the benefit of developing countries to
begin with.  On the other hand, flexibility meant th e ability to exempt certain sectors or industries
from national competition laws.  In reality, this was "equal treatment" rather than "special treatment"
since developed members would continue to exempt certain sectors, such as export or shipping
cartels.  Meaningful special and differential trea tment would need to involve non-reciprocity on the
part of developed Members.  For example, it had been proposed that developed Members might offer
unilateral binding commitments to core principles or cooperation.  However, that the discussion thus
far had been narrowly focused on "market access" aspects of competition policy, while little attention
had been paid to the more important trade-related co mpetition issue, in particular cross border cartels.
This orientation was clearly reflected in the proposed compliance mechanism, which was strong on
the application of core principles to domestic regulations and weak on cross border cartels which
would be addressed through voluntary cooperation.  As the work went forward, the discussion should
concentrate on issues at the "interaction between trade and competition policy" and not on
competition policy per se .  The issue of modalities for negotiations and the drafting of these
modalities would also need to be discussed.
57. The representative of Norway said that the pu rpose of his intervention was to illustrate how
the Nordic countries had gradually developed their cooperation in the field of competition.  Nordic
cooperation in the field of competition dated back to the late 1970s and early 1980s, at the time when
the Nordic countries first started implementing modern competition laws. The heads of the
competition authorities of Denmark, Finland, Iceland, Norway and Sweden had, for many years, met
biannually to discuss topics of mutual concern.  More recently, they had been joined by the Faeroe
Islands and Greenland.  From this platform a much broader and more structured cooperation haddeveloped.  This was due, for instance, to the fact that throughout the latter part of the 1990s, there
was a steady increase in the number of mergers and acquisitions that affected the markets of more
than one of the Nordic countries.  Also, Nordic enterprises increasingly formed cartels with other
Nordic partners, and these often had effects outside national markets.  It was therefore gradually
acknowledged that a more formalised basis for coope ration was needed to deal more effectively with
anti-competitive practices in one Nordic country that could affect markets of other Nordic countries.
In this context, while the legislation of all Nordic  countries provided for the sharing of confidential
information with the European Commission and its EEA counterpart, the EFTA Surveillance
Authority, there were at the time no provisions in their national legislations allowing for such
exchanges between the Nordic countries themselves.  In 1998 a committee consisting of
representatives of the five Nordic countries was established with a mandate to propose increased
cooperation between the national competition authorities in their application of national law.  In theshort term, the committee made its recommendations on the basis of what could be achieved under
existing legislation.  As a first step, it proposed that its recommendations should be formalised in a set
of non-binding guidelines which the five countries adopted in 2000.  In the guidelines, the parties
agreed to the exchange of non-confidential information of general interest or concerning specific
cases under investigation. If domestic legislation prohibited the sharing of confidential information,any such sharing was subject to the consent of th e individuals who supplied the information in the
first place.  The guidelines also recommended increased consultation and co-ordination between
authorities to make investigations more effective and to avoid contradictory decisions. To the extent
that national law permitted, a party might carry out investigations ("dawn raids") on behalf of another
Nordic country.  The guidelines contained procedures for consultation and the exchange ofinformation related to negative and positive comity.  The committee appointed in 1998 proposed that
in the longer term, the Nordic countries should en ter into a binding international agreement in the
areas covered by the guidelines. It suggested that under the agreement, national legislation should
allow for the exchange of confidential information, without the consent of the individual concerned.
Compulsory assistance in investigations for the collection and securing of evidence on behalf ofanother Nordic country was also proposed.  Denm ark, Iceland and Norway concluded an agreement
on 16 March 2001 containing provisions to this effect which entered into force on 1 April 2001.
Sweden signed the agreement on 10 April 2003.  So far, the experience of Nordic cooperation was
encouraging.  In all important competition cases of Nordic interest, contacts were now established atWT/WGTCP/M/22
Page 21
the earliest possible stage in order to exchange views and, when appropriate, case-specific
information. Moreover, enforcement activities, includ ing investigations, were routinely co-ordinated.
Particularly with respect to hardcore cartel cases,  the results have been positive.  So, both the
guidelines and the agreement have led to more efficient use of resources.  Finally, the following
observations might be drawn from the Nordic experience: (i)  any kind of cooperation arrangementshould be allowed to develop gradually; (ii) a country needed a minimum of enforcement structures at
the national level - along with the political will to use them - in order to participate effectively in a
network that exchanges any type of information on competition; (iii) much could be achieved by
exchanging basic non-confidential information.  Th is could be information of a general nature or
information in relation to specific cases or sectors.  Until two years ago, practically all information
exchanged between the Nordic countries was non-confidential; (iv) any cooperation arrangement
should be founded on complete mutual trust; (v) cooperation on enforcement at the region level wasan important supplement to national enforcement, which in turn contributed to more effective overall
enforcement.
58. The representative of Malaysia, introducing document WT/WGTCP/W/239, said that there
was a growing awareness of the importance of regulatory controls to deal with anti-competitive
conduct of firms and multinational companies as such practices unnecessarily burdened consumerswith inflated prices for goods and services and adversely affected the trading environment.
Consequently, concerted efforts needed to be undertaken to counter the effects of these practices on
developing countries.  The primary objective of a domestic competition policy or law was to improve
market efficiency and to enhance consumer welfare.  Malaysia, however, remained concerned with
the application of the core WTO principles to competition policy.  Paragraph 25 of the DohaMinisterial Declaration gave the following mandate to the Working Group: "to focus on the
clarification of: core principles, including transparency, non-discrimination and procedural fairness
and provisions on hardcore cartels; modalities for voluntary cooperation; and support for progressive
reinforcement of competition institutions in developing countries through capacity building.  Full
account shall be taken of the needs of developing and least developed country participants andappropriate flexibility provided to address them." The Doha Conference thus sought only clarification
of the above-mentioned elements and not to discuss negotiations.  If one were to agree that the
proposed core principles were those that had been discussed in the Working Group, these principles
should not be allowed to impose additional burdens on developing countries.  With respect to the
principle of non-discrimination, the Working Group had considered how the principles of MFN
national treatment might apply in the context of competition rules.  A number of issues had been
raised.  On procedural fairness, Malaysia believed that each Member should be entitled to design,establish and maintain its own procedural fairness system consistent with the normal checks and
balances inherent within the legal structure of the economy in question.  The issue of Special and
Differential treatment (S&D) had to be given more emphasis and due consideration. Exemptions,
including possible carve-outs, were absolutely necessary for developing countries as they strove
towards a higher level of economic development.   The much needed policy space for attaining
developmental objectives including affirmative action programmes had to be an integral element of
the structure of any agreement. Transparency considerations should be implemented in stages in pace
with developmental needs as S&D requirements varied and were often country-specific.
59. Continuing, he said that the case for a multilateral discussion and consensus on hardcore
cartels was stronger.  It was accepted that there should be no place for hard core cartels in anycountry, regardless of its level of economic development. Thus, it was more appropriate for the
Working Group to concentrate its efforts on discussing anti-competitive practices, particularly those
related to hardcore cartels. Malaysia recognized that hardcore cartels were a developed country
phenomenon that had burdened developing countries with excessive costs.  As yet, there was no
generally accepted definition of a hardcore cartel. Although the OECD had one, a clear and precisedefinition was necessary.  Considering the enormous burden that hardcore cartels had created,
Malaysia was of the view that concerted action should be undertaken to tackle these practices.
However, many if not most developing countries, and even countries which had introducedWT/WGTCP/M/22
Page 22
competition law over the last few years, lacked both the experience and capacity to tackle anti-
competitive practices.  In this context, modalities on voluntary cooperation and their impact on
developing countries must be explored. The discussions on hardcore cartels should not prejudge the
outcome as regards the ultimate form of an agreement - be it a multilateral, regional or bilateral
framework.  Cooperation through a multilateral framework was not necessarily the only appropriateand effective way to address hardcore cartels.  It was also necessary at this juncture to build capacity
in terms of effective legislation and cooperation mechanism. Bilateral and regional cooperation
among competition authorities to address hardcore cartels had proven to be beneficial.  Bilateral
cooperation could be a starting point for voluntary cooperation in a wider context and a step towards
building capacity.  Capacity building and technical assistance to developing countries should not be
time bound.  Countries with established competition regimes and authorities had the benefit of
decades and even a century of experience in competition policy and law enforcement.  On the otherhand, many developing countries, like Malaysia, did not have a comprehensive competition policy
and law regime.  The start-up process was beset with problems and was difficult to maneuver, with
capacity constraints abounding as both the government and private sectors were confronted with the
prospect of a new business environment.  Consequently, the international community had to continue
to focus and give priority to providing technical assistance to developing countries.
60. Continuing further, he emphasized that negotiations on competition law-related matters were
not part of the Doha work programme.  Domestic competition policy-law might or might not be a
major consideration for developing countries, implying that national priorities and limited capacity
might require that scarce resources were allocated for the implementation of other policies.
Alternative domestic approaches to enhance competit ion in the form of regulatory reform might be
needed.  With this in mind, developing countries had to be given time and flexibility to implement
competition policies.  As had been pointed out by some Members, it was premature at this juncture to
assume that all WTO Members would eventually adop t a competition law.  In seeking to implement
competition policy, factors such as exemptions and exceptions within the domestic economy required
in-depth discussion and research before any conclusion could be drawn.  There was also a need toclarify core principles and modalities for voluntary cooperation, ensuring that deliberations in the
Working Group kept the perspective of the special needs of developing countries.  Although ideas and
suggestions had been floated, the Working Group had yet to achieve any concrete decisions that could
be said to constitute a consensus.  Malaysia di d not want to be locked into an agreement whose
implications were not clear and in which the app lication of specific rules and disciplines could
undermine efforts to build domestic industries to face globalization.  In closing, he noted that
Malaysia was in the process of preparing a competition policy and fair trade law and requiredinternational in this regard.
61. The representative of Chinese Taipei said th at the "explicit consensus" referred to in
paragraph 23 of the Doha Declarations was the key to a multilateral framework on competition policy.
An "explicit consensus" was needed to determine the "modalities of future negotiations" after the
Cancun Ministerial Conference.  His delegation supported the launching of negotiations on amultilateral framework on competition policy at Cancun in order to facilitate trade and development
among Member economies and hoped that an "explicit consensus" could be reached on this matter at
the coming Ministerial Conference.  The modalities of negotiations on competition policy could be
multilateral or plurilateral. A plurilateral approach had been suggested for competition policy, for
example in the 1995 European Union group of experts report on "Competition Policy in the NewTrade Order: Strengthening International Cooperation and Rules".
6  As contemplated in that report, a
plurilateral agreement on competition and trade (PACT) , open to all countries, could also be annexed
to the WTO, enabling complementary interaction betw een trade and competition rules.  Nevertheless,
a plurilateral approach might encounter a problem: if a major trading country was unwilling to
participate, it undermine regulatory efforts concerning anti-competitive practices in other countries.
                                                     
6 Competition Policy in the New Trade Order:  Report of the Group of Experts (Brussels:  1995;
http://europa.eu.int/comm/competition/international/strengh_en.pdf).WT/WGTCP/M/22
Page 23
On the other hand, if a multilateral approach was used, more extensive regulation might difficult due
to dissimilar market structures and legal differences among countries.  In order to resolve these
concerns, a two-tier approach was proposed: (i) establishment of a set of principles that was
acceptable to all Members (core principles, prohibition of hardcore cartels, technical assistance, etc.)
in a multilateral agreement.  Minimum standards would be set, and all Members would participate inthe negotiation;  (ii) a more comprehensive regulation and cooperation framework, dealing, for
example, with cross-country merger regulation, voluntary cooperation, peer review and dispute
settlement, could be addressed in a plurilateral negotiation.  The presence of competition laws in a
Member economy would not be a precondition to participating in such a negotiation.
62. Continuing, he said that, it was important to minimise time and cost burdens for Member
countries in relation to a commitment on transparency.  In this regard, the WTO should consider
establishing a competition policy database in order to facilitate inquiries, reduce the cost ofinformation, and offer the convenience of a "one-stop shop".  The Fair Trade Commission of Chinese
Taipei, had had a good experience in building a Competition Policy and Law Database for APEC
countries, and was willing to offer its experience to the WTO.  With the experience of GATS in mind,
he suggested that the WTO might request all Members to set up information centers to take charge of
notifications and answer questions from Member countries on measures relevant to competition
policy.  Regarding non-discrimination principles (national treatment and most favoured nation), he
said that the basic requirement was to have non-discriminatory procedures – i.e. investigation and
appeal procedures of cases should be the same for all concerned and should not differ on the basis of
nationality.  Special and differential treatment should be available for developing and least developed
countries.  However, such treatment should be transparent to all Members and subject to periodicreview.  On hardcore cartels, the following suggestions were made: (i) all Members should pay close
attention to the OECD Recommendation which provid ed a worthy model for reference; (ii) it was
appropriate to use clear and simple, 
enumerated list of conducts to define hardcore cartels, and to
extend the coverage of the list gradually .  A "minimum standard" approach including the adoption
of a rule of reason should be considered; (iii) each country could address hardcore cartels with
flexibility based on its level of domestic social and economic development.  However, exemptionsshould be transparent and be reviewed periodically to assess whether they were still necessary; (iv) all
Members should improve their domestic law enforcement capacity vis-à-vis hardcore cartels.
International cooperation should be pursued, observing the principle of positive comity and sharing
documents or information. Developed countries, in turn, should provide technical assistance to
developing countries, and provide them with the necessary resources to facilitate the fight againsthardcore cartels.  As regards voluntary cooperati on, he suggested an asymmetric approach. Developed
countries should bear more obligations than developing countries.  This would entice developing
countries to willingly join the multilateral competition structure, and establish the foundation for
regional cooperation.  In the short term, technical assistance and capacity-building would help
developing and least-developed countries to develop the capacity to partake in the benefits of the
multilateral competition framework.  In the long term, emphasis should be placed on assisting
countries to effectively implement competition law and policy by building a "competition culture" anddevelop a "tailor-made" law.  To achieve these goals, developing and least-developed countries
should be given a guarantee of "flexibility" (application of exemptions and exclusions, adaptation
period, etc.) and countries should be encouraged  to join the internat ional trade framework.
Concerning compliance mechanisms, a peer review system was more appropriate to a WTO
framework on competition policy and facilitate beneficial sharing of experience among Members.  Inthe long run, strengthened international cooperation was vital to the successful enforcement on
competition law.  A voluntary peer review system  would contribute to this goal by helping all
Members to strengthen their enforcement capacities and build a competition culture.  Finally, he noted
that trade policies promoted by the WTO were focused on issues concerning market entry;
competition policy was concerned with the related goal of building and maintaining a fair, open, andcompetitive market.  The WTO's focus was on competition policies as they related to trade, and it
would be unrealistic to expect the WTO to resolve all competition policy issues.WT/WGTCP/M/22
Page 24
63. The representative of Tanzania, associating itself with the views expressed by the delegations
of India, Egypt, Kenya, Cuba, China, Nigeria and Venezuela, underlined the need for more time for
the Working Group clarify the different issues that had been raised, especially with regard to the
practical implications for developing country Members of applying the core WTO principles of
transparency, non-discrimination and procedural fairness in a multilateral framework on competitionpolicy.  Like other delegations, he did not consider tenable the proposition that the issues raised could
be clarified after entering the negotiations mode.  Developing countries needed to understand and gain
confidence regarding the long term effects of a possible multilateral framework on competition policy
before plunging into a negotiation process that would almost invariably be dominated by those with a
deeper understanding of the issues and stronger institutional capacities for negotiations.  He wondered
whether the whole process was not replicating a framework that already existed under the auspices of
the United Nations, namely the United National Set.  A question to be addressed then was what werethe shortfalls in the United Nations Set, especially  in so far as it provided a mechanism for dealing
with restrictive business practices?  A clear answer to this question would provide unambiguous
testimony as to the need for and efficacy of a WTO agreement.   There was also the question of
procedure which was brought into focus by the intervention of the representative of the European
Community and its member States when a draft of the multilateral framework on competition policywas held out.  His understanding of the Doha mandate was that a decision whether or not to proceed
with negotiations would be based on consideration of their modalities which should define the scope
and breadth of the negotiations, as well as the procedural aspects. Because these modalities were not
yet agreed upon and the process that would be used to develop them was not clear, to suggest looking
at a draft of the multilateral framework on competition policy implied departing from the terms ofreference of the Working Group.
64. The representative of Indonesia said that the principles mentioned in paragraph 25 of the
Doha Ministerial Declaration were central for the credibility and effectiveness of any competition
policy. In his country, these principles were considered at the heart of the current democratisation
process.  Within this process, the key obligation of domestic authorities was to provide the climate toensure that the rights of the people in general would be respected.  This involved many adjustments
and reforms in the administrative system.  It also entailed educational measures to offset certain
imbalances in the community.  This process was complex as well as time and resource consuming.
The same considerations applied within the competition policy context. Regarding a possible
multilateral agreement, the situation was even more complex.  In the light of Indonesia's domestic
experience, it was not seen as desirable for such an agreement to put additional burdens on the
authorities. It would be counterproductive for developing economies and, in the end, would putpeople's rights in jeopardy.  Therefore, it was hard to see how a multilateral framework on
competition policy would be beneficial.
65. The representative of the European Community and its member States, responding to a point
made by the representative of Tanzania, said that his delegation did not offer to table a draft
agreement because the Membership would not allow it to do so.  On the other hand, it was difficult toprovide the degree of precision in the clarifications requested by a large number of Members without
going into negotiations.  If the Membership was no t able to collectively offer Members like Tanzania
the assurances they sought, they would anyway have the option to oppose initiating negotiations.  But
it was contradictory to require, on the one hand, more precision on how certain elements would work
in practice and also require that the discussion be limited to general study and reflection.  Alsostarting a negotiation did not mean concluding it.
66. The representatives of Venezuela and Kuwait
 called for inter-governmental agreements and
restrictive business practices implemented pursuant to such agreements to be explicitly excluded from
the ambit of any multilateral framework on competition policy.  Continuing, and introducing
document WT/WGTCP/W/237, the representative of Kuwait said that hardcore cartels posed a serious
threat to competition, and should not be condoned.  The OECD Recommendation on hardcore cartels
provided a useful point of reference in this regard.  However, for developmental and related purposes,WT/WGTCP/M/22
Page 25
it would be important to ensure, in any future multilateral framework on competition policy, that
inter-governmental agreements and restrictive business practices implemented pursuant to such
agreements were explicitly excluded from the ambit of such an agreement and the definition of
hardcore cartels.  In addition, the multilateral framework on competition should address the negative
impact of mergers and acquisitions on competition – especially in developing and least developedcountries.  The merger rules of developed countries intended to safeguard against abuses in their
domestic markets, seldom considered the impact of such mergers and acquisitions on foreign markets.
Certain merging companies were so powerful that in several developing and least developed countries
no domestic company or even the government had a chance to compete with them.  Quantitative
evidence on this issue was provided in the submission of his delegation.  The representative of
Venezuela said that good precedent for the exclusion of intergovernmental agreements and related
anti-competitive practices could be found in the United Nations Set.  In particular, in the UN Set,
there was a specific provision (Paragraph B.9) which made it clear that the Set did not apply to
intergovernmental agreements nor to restrictive business practices directly resulting from such
agreements.  Such an exclusion was particularly important in regard to the marketing of commodities.
Commodity markets could not always be left to be free operation of market forces because of the
nature of the product and required a more active participation by the governments and internationalcoordination.  The stabilisation of these prices, said the speaker, went hand in hand with legitimate
developmental objectives, for example productive diversification, the backing to depressed regions
and sustainable development.
67. The representative of Hong Kong, China reiterated that any obligation to be included under
the possible multilateral framework for competition required consensus amongst Members and all
Members could be brought onboard only when sufficient flexibility was provided.  Further
examination of hardcore cartels would be necessary to see whether and how, possible obligations
could be developed in this respect.  One possibility was to have non-binding or optional obligations.
On Kuwait's paper, clarification was sought on the term 'restrictive business practices relating to inter-
governmental agreements' that Kuwait had proposed to be excluded from the definition of hardcorecartels.  In response, the representative of Kuwait stressed that a definition of hardcore cartels should
exclude agreements between governments and states even where the business was actually carried outby private companies on behalf of such governments and states.
68. The observer from the World Bank said that the primary goals of the World Bank Group were
to assist member countries to reduce and eliminate poverty, and foster broad-based sustainable
economic development.  In this regard, trade, investment, and competition were intertwined and
played critical roles.  Drawing on empirical analysis contained in the 2003 Report on Global
Economic Prospects ("GEP Report")7 and other research conducted by the World Bank Group, he
made the following points: (i) while FDI was important because it often brought with it new products,
skills, technologies and organizational methods, it was on average about one-fifth of domesticinvestment across countries.  Both foreign and domestic investment tended to move in parallel
directions and were highly correlated.  The prevailing business conditions determining investment in
the domestic economy were as important for domestic firms as they were for foreign firms; (ii) the
level and the rate of growth of per capita GDP of countries were positively correlated with the degree
of competition:  the more intense was competition in the domestic economy, the greater were thelevels and rates of increase in per capita income; (iii) the level and growth of per capita GDP was also
positively correlated with the entry of new firms in the market.  In other words, new business
formation, which resulted in greater income and we alth, was positively determined by the degree of
prevailing competition; (iv) surveys of individual firms (including domestic firms) indicated that
many barriers to entry and related costs of doing business arose from government policies, associatedcorruption and bureaucratic red tape.  The higher were government policy-based barriers, the lower
was the productivity of firms.  Moreover, the greater were the regulatory costs of entry (in the form of
time and number of procedures required to obtain licenses), the lower was the level of FDI;
                                                     
7 World Bank, Global Economic Prospects and the Developing Countries (Washington DC: 2003).WT/WGTCP/M/22
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(v) economies that could be characterized as being more open to competition tended to be more
integrated into the global trading system in terms of exports and imports.  The greater was the relative
exposure to international trade, the higher were the levels of per capita income.
69. The World Bank Group, in cooperation with member countries, was conducting "Investment
Climate Assessments" and "Doing Business Indicators" which presented standardized measures,identifying the constraints and track changes in th e investment climate conditions prevailing in and
across countries. These indicators were useful in identifying the principal impediments to investment
and competition, and could assist in the formulating of policy initiatives such as competition
advocacy.  However, developing countries also faced  significant challenges relating to international
anti-competitive practices—some "legally" sanctioned by industrial nations.  The 2003 GEP Report
found that: (i) developing nation exporters faced higher barriers exporting to industrialized countries
than industrialized country exporters exporting to  developing nations; (ii) illegal international
hardcore cartels consisting of firms based primarily in industrialized countries had substantially raised
the  costs of developing countries imports and (iii) industrial countries' competition laws contained
exemptions for export cartels, and for liner shipping conferences, which also affected the welfare of
developing countries.
8  Finally, it was emphasised that industrialized countries could do much to
foster the economic growth of developing countries by addressing these anti-competitive practices.The World Bank Group had assisted several member countries in developing competition law and
policy.  Such assistance had ranged from providing advice on the appropriate design of competition
law and policy to training workshops and seminars.  Such assistance was often provided in
collaboration with other multilateral organizations such as the WTO, OECD and UNCTAD as well as
with bilateral donors.
70. On the issue of peer reviews, the observer of UNCTAD drew attention to the UN Set on
Principles and Rules on Competition, which under Section F, para.4 provided for consultations
procedures taking place annually during UNC TAD's Intergovernmental Group of Experts on
Competition Law and Policy.  In this respect, for developing countries interested in voluntary peer
reviews of their competition authority, UNCTAD woul d be in a position, if requested, to organize
such reviews, in a similar manner as those undertaken by the OECD.
II. THE NATURE AND SCOPE OF COMPLIANCE MECHANISMS THAT MIGHT BE
APPLICABLE UNDER A MULTILATERAL FRAMEWORK ON COMPETITION POLICY
71. The representatives of European Community and the member States, Australia , United States ,
Korea and Japan  introduced written submissions relevant to this item (documents
WT/WGTCP/W/229, 232, 233, 235 and 236, respectively).  The representatives of Canada, India ,
Switzerland, Brazil , the United States , Egypt , Korea , Tunisia , the European Community and its
member States, Nigeria , Venezuela , Hong Kong, China  and Kuwait  made oral statements or posed
questions on this item.  The observers from the UNCTAD and the OECD provided updates on
relevant activities of their organizations.
72. The representative of the European Community and its member States, introducing document
WT/WGTCP/W/229, said that it dealt with two issues; dispute settlement and peer review, although it
had a doubt on whether peer review should be properly classed as a compliance mechanism, since it
had a much broader scope and purpose.  His delegation had proposed both mechanisms for inclusion
in a Multilateral Framework for Competition.  Dispute settlement had been proposed because the
framework should contain a number of basic, narrowly crafted, but legally binding rules.  If it
contained that kind of obligations, it was normal that these were enforced through dispute settlement.Many of the questions that had been raised in the group on dispute settlement were largely concerned
with the underlying legal obligations.  There was a close correspondence between the scope of legal
obligation that the WTO Members chose to undertake under a competition agreement and their
                                                     
8 World Bank, ibid, chapter 4.WT/WGTCP/M/22
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actions being subject to dispute settlement.  Peer review was a concept which came from the OECD
but it was not new in the WTO.  It was an instrument that should help Members to better understand
how to write their laws, how to implement their policies and make them more effective.  The written
submission described this procedur e without proposing a model.  Instead, it proposed questions and
answers from which the membership could cons truct a model of peer review for the WTO.
73. A second representative of the same delegation said that the purpose of his delegation's
written contribution was to stimulate debate on dispute settlement.  On qualification, the WTO had at
its disposal a well known and well functioning dispute settlement mechanism.  Only governments had
access to it.  The proposal on competition would not de part from this model. In other words, private
companies would not have access to dispute settlement mechanism. Secondly, on the question of the
scope of jurisdiction of dispute settlement, the ac tual negotiated commitments and binding obligations
of an agreement would dictate the scope of jurisdiction, and only de jure , and not de facto
discrimination would be covered by the dispute sett lement.  In other words, the task of any WTO
dispute settlement mechanism would be one of assessing merely whether a domestic competition law
regime was in conformity with the obligations rela ting to the core principles and the prohibition of
hard core cartels.  On the other hand, individual decisions by domestic competition authorities and
pattern of individual decisions would not be covere d. This guarantee  could be expressly included in
the agreement, which would also include the usua l provisions on consultations helping to minimise
recourse to formal settlement proceedings.  With regard to participation of competition experts,
Article 13 the DSU provided for a general authorization for panels to seek the information they
needed and this provision could be easily applied to competition matters.  However, in order to
provide an additional guarantee that appropriate level of expertise was available, the establishment ofa permanent group of experts on competition policy and law could be considered.  Similar approaches
could be found in existing WTO agreements that dealt with other technical and complicated matters
like such as agreement on subsidies and countervailing measures.  Concerning the terms of reference
for any dispute settlement panel, Article 7 of the DSU contained a standard terms of reference.
Further, as was pointed out in paragraph 23 of his delegation's submission, any panel hearing a
dispute relating to a WTO agreement on competition would be under the obligation to read the terms
of reference in light of the substantive provisions of that agreement.  This would rule out the
intervention of a panel in individual decisions and in de facto discrimination. Regarding the role of the
appellate body, consistent with current WTO practices the scope of the any review would be strictly
limited to issues of law covered in the panel report and legal interpretation developed by the panel.
Consequently, the appellate body could not examine or gather new evidence because it was bound by
the initial panel proceeding.
74. The third representative of the same delegation said that peer review also had an important
role to play in a WTO agreement on competition policy. As concerns peer review, document 30 was
much an option paper, and was not prescriptive. In particular, her delegation did not wish to lay down
any rules about how often peer review should take place, how it should be triggered for a particular
country, who should carry out the review, and what follow-up there should be?  However, peer review
could cover a wider range of issues than those which would be subject to dispute settlement; that is, it
would even cover matters where no commitments were made.  In particular, it could look at the
successes and difficulties which a country experienced in enforcing its competition regime, with a
view to identifying good practices which could be disseminated and aspects where further
improvement would be welcome.  However, peer review, like dispute settlement, should avoidlooking at decisions in individual competition cases, which involved judgements on legal and
economic questions, and at questions which concerned prosecutorial discretion.
75. One important question was, how could peer review in the WTO be distinguished from peer
review in the OECD, in order to avoid any overlap?  Part of the answer was that it could be focused
on those areas linked to a WTO agreement on competition. For example, for a developed country, thiscould include the question of how well it cooperated with competition authorities in other countries,
particularly developing ones, and its provision of competition-related technical assistance andWT/WGTCP/M/22
Page 28
capacity building to those countries. For a developing country, it could include how well a culture of
competition was being established and whether knowledge of the competition law and regime had
been successfully propagated in the public and private sectors. She had heard with interest the
suggestion made by the representative of UNCTAD about how peer review for developing countries
could be carried out by UNCTAD, and by the OECD for developed countries. This suggestion couldbe explored, the purpose being to take advantage of the different synergies available. Peer review
could play an important role in identifying techni cal assistance and capacity building needs, and for
encouraging cooperation.  Because peer review was non-conflictual, and not linked to any dispute
settlement process, it would be a positive experience for developed and developing countries alike.
76. The representative of Australia, introducing document WT/WGTCP/W/232, said that his
delegation agreed that some form of compliance mechanism would be an important element of a
Multilateral Framework on Competition.  Earlier discussions in the Group had shown somedivergence of views about the potential application of the DSU and, initially, Australia had
reservation about it, although ultimately its position would depend of the negotiated proposal that was
being considered for inclusion in a multilateral framework on competition policy.  A fuller
understanding of the form of dispute settlement mechanism being proposed would be important for
Members to refine their views on this issue.  Australia also considered that a peer review mechanismcould be a useful component of a multilateral fr amework on competition policy that would encourage
the adoption of best practices, and facilitate the delivery of technical assistance to developing country
Members.  In implementing a peer review mechanis m, there was a number of issues for consideration
including definition of a peer, frequency of reviews, and whether reviews were voluntary or
mandatory.  Naturally, resource implications would also be a consideration.  Australia supported thesuggestion of the European Community and its member States that individual decisions or questions
relating to the strategy or priority of a competition enforcement body would be excluded from peer
review.  On the definition of a peer, Australia had no preference on whether countries should be
reviewed by the whole membership or by selected Members, although in the latter case, selection of
peers would need to be defined.  The peer group should include competition experts, since amultilateral framework on competition policy would involve the distinct areas of both competition
and trade, and it would be important to ensure coherence between them.  When a developing country
was reviewed, the panel should involve other developing countries Australia also saw advantages in a
review approach that used an independent assessor to prepare an initial draft review that followed an
agreed template.  Subject to appropriate resourcing, the WTO Secretariat could be a key participant in
such a process.  On the sequencing of reviews, Australia agreed with the European Community and its
member States that in the early days of a possible multilateral framework on competition policy, avoluntary selection process could apply, although Members that had recently implemented or were in
the process of implementing domestic competition law and policies could be given priority if they
wished.  Subsequently, Australia would prefer a peer review mechanism to progressively attain
comprehensive participation.  A related question might be whether there should be any capacity for
complaints or disputes to trigger a review mechanism. The frequency of reviews would need to bediscussed at the appropriate stage.  The Trade Policy Review Mechanism (TPRM) might not provide
relevant guidance for competition reviews.  For larger developed countries, the TPRM approach of
reviews every two years appeared excessive as unde rlying competition frameworks normally changed
little in such a timeframe.  Conversely, while most developing countries were currently reviewed by
the TPRM every six years, there might be an advantage in a more frequent competition review whencompetition frameworks were first commenced.  To facilitate engagement of developing countries in
the process, the links with technical assistance funds and capacity building activities would have to be
emphasised.
77. The representative of the United States, introducing document WT/WGTCP/W/233, said that
as the Fifth Ministerial approached, the Group must consider how best  to carry forward the work that
had been done, taking into account the different needs and different levels of experience and
institutional capacity of WTO Members.  The best way to proceed forward at this point, to help
enhance the worldwide culture of competition for the benefit of all Members, was to begin with aWT/WGTCP/M/22
Page 29
WTO competition peer review process.  He welcomed the submission of Canada after the February
Working Group meeting (WT/WGTCP/W/226), and the recent submissions by the European
Community and its member States, Korea, Japan, and Australia as well as the remarks of Chinese
Taipei earlier in the meeting, which reflected the interest of other Members in a WTO Competition
peer review process.  His delegation's contribution described the benefits of a peer review system,drawing on experience in other competition fora in which it had been successfully employed.  (i) peer
review facilitated learning through sharing of experience and expertise.  The system of competition
laws that existed today developed organically through cross-fertilization of ideas, with many
jurisdictions in drafting their laws considering mode ls used in other jurisdictions, and then adapting
them to the particular needs of their jurisdiction. As with drafting a competition law, agencies dealing
with implementation and enforcement of the law could benefit from drawing on the experiences of
those in other jurisdictions.  Peer review provided a mechanism to ensure that participants got regular
feedback on their own laws and policies, while learning from others' experiences.  This not only
improved domestic enforcement but, because competition agencies often dealt with cross-border
issues, might also result in benefits to the international trading system; (ii) peer review could
contribute to the transparency of competition laws and policies and their implementation; (iii) peer
review promoted convergence.  Peer review broug ht out how different approaches to competition
policy and enforcement had been successful or unsuccessful.  Participants acquired a shared base of
knowledge that was likely to help shape how they would approach competition issues in their
jurisdictions.  While harmonization of approaches was neither feasible nor desirable, over the long
term, this shared experience was likely to result in greater convergence in competition enforcement,
with corresponding benefits to the international trading system; (iv) peer review promotedinternational cooperation.  Through participation in peer reviews, competition policy officials from
different countries not only learnt more about one another's policies, they also made increased
personal contacts, which could facilitate increased international cooperation in implementing
competition laws and policies; (v) peer review en couraged constructive problem-solving.   Peer
review provided a forum for Members who have concerns about the reviewed Member's laws orpractices to raise those concerns.  However, peer review was conducive not only to identifying
problems but also to finding solutions, in that participants might include countries that had confronted
similar problems in the past and could recommend practical solutions from their own experience.  In
this setting, Members were likely to be responsive to constructive suggestions to address problems
that had been identified; (vi) peer review contributed to fulfilling the capacity building objectives of
the Doha mandate.
78. Continuing, he said that while all Members could benefit from peer review, developing
countries could especially benefit, both from being the subject of a review and from participating in
reviews of other jurisdictions.  There was a high degree of commonality of issues facing competition
agencies – e.g., institutional design, independence,  setting priorities given scarce resources, handling
of cross-border issues, etc. – so that most of the issues relevant to developed country authorities
would also be relevant to developing country authorities as well.  Taking part in peer reviews waslikely to be a highly efficient way for developing countries to increase their knowledge base, without
a burdensome resource requirement.  By participating in peer review sessions, developing countries
could broaden and deepen their understanding of competition issues, and put that knowledge to work
toward improving their domestic systems.  Over time, the peer review process would contribute to a
key goal of developing countries seeking to establish competition policy: the dissemination of aculture of competition.  A peer review mechan ism could be flexible, recognizing the needs of
developing countries.  It could differentiate among Members based on, for example, their levels of
development or their experience with competiti on law and policy.  From the experience from the
OECD, sponsored peer review of competition authorities in its Competition Committee showed that
recommendations from a peer review process, and the accompanying international support, could be awelcome stimulus for a reviewed member to making needed and desired changes to its domestic
competition regime.  The US submission discussed the example of Greece, which had endorsed the
OECD's recommended improvements to its competition regime, and implemented substantial changes
based on the OECD report.  OECD peer review  had recently been applied to two non-OECDWT/WGTCP/M/22
Page 30
developing countries: South Africa and Chile.  Based on the successful experience with these two
reviews from the point of view of the examiners and the examined parties, other non-OECD members
had expressed interest in being reviewed.  Introdu cing competition peer review into the WTO would
make the benefits of such reviews available to a much wider range of countries, and particularly to
developing countries.  There were many issues as to how a peer review system could be structured,
but the US submission focused on highlighting the benefits of peer review in general.  In conclusion,
he said that peer review could be an effective tool in enhancing national competition regimes, and by
helping disseminate the culture of competition to a ll Members, could benefit the world trading system
as well.
79. The representative of Korea, introducing document WT/WGTCP/W/235, said that in its
previous submission to the Working Group (document WT/WGTCP/W/225) Korea suggested the
implementation of peer review as a compliance mechanism in the WTO Competition Committee. As afollow-up, his current paper provided specific im plementation guidelines of peer review under a
multilateral framework on competition policy in the WTO.  Given that the WTO was an international
organization based on binding rules, it would be more meaningful for peer review in the WTO to be
of binding nature than purely voluntary as in ot her international organizations, such as the OECD. In
the multilateral framework on competition policy in the WTO, peer review should aim at helping tofacilitate sharing of information and experience be tween Member countries, to enhance transparency
in enforcement of competition law and policy, ther eby enhancing international cooperation. Such a
process would have the following features (i) targeting all Member countries - in principle, all
Member countries should be subject to peer review thereby bolstering the role of peer review as a
compliance mechanism.  However, developing countries, which had not yet developed institutions ormeasures to deal with competition policy related issues in some way, or are in beginning stages,
should be given a grace period; (ii) periodical review of implementation of the policy
recommendations suggested in peer review: it could help promote compliance to review periodically
the level and degree of implementation by the Member countries under review of the policy
recommendations suggested by peer review; (iii) increasing the level of peer pressure by publicizingfinal reports and information through publication and the Internet, compliance by peer pressure could
be strengthened.  Korea had no objection to applying WTO dispute settlement mechanism to
obligations in a WTO competition agreement to complement the peer review process.  However,
given wide differences in competition policy institutions and in the levels of experience with
competition policy, it was of the view that it might be more practical to begin with competition
policy-specific peer review.  The goals of peer review were: (i) promoting compliance by the Member
countries of the multilateral framework on competition could be placed as the priority; (ii) by sharingand exchanging experience and related information of competition policy enforcement, Member
countries could enhance the effectiveness of competition policy enforcement; (iii) the process of peer
review itself could help enhance the enforcement capability of developing countries and the least
developed countries, which had no or less experience in competition policy implementation.  Peer
review could be carried out in three stages: (i) at the investigation stage, a Member country underreview would be required to draw  up a report including a brief overview of its competition law and
policy enforcement, in accordance with a standard preliminary review list, and to present it to the
Secretariat. The Secretariat would draw up the Secretariat Report mainly based on the Government
Report; (ii) at the examination stage, all Member countries in the Competition Committee would
discuss competition law and policy enforcement of the given Member country on the basis of theGovernment Report and the Secretariat Report. After collecting and reflecting the opinions and
recommendations from Member countries, the Secretariat would produces the final report by revising
the Secretariat Report; (iii) at the dissemination stage, the final report would be drawn up and
publicized by disclosing the government report, the final Secretariat report and minutes, transparency
and confidence in peer review could be enhanced.
80. Continuing on related matters, he said that considering peer review mechanism's positive
effects upon technical assistance to developing countries, it was desirable to select countries with
sufficient experience in competition policy enforcem ent to be reviewed first. In this way, moreWT/WGTCP/M/22
Page 31
experienced countries could provide developing countries with useful information on their experience
in enforcing competition law and policy, which could contribute to easing developing countries'
concerns about introduction and enforcement of a domestic competition law and policy.  Factors to be
examined in the Peer Review should include at le ast core principles, hardcore cartels, voluntary
cooperation and technical assistance stipulated in  the Doha Development Agenda.  TPRM was a peer
review mechanism that covered a wide range of trade policy of a given WTO Member.  Therefore, its
goal and scope were different from those of peer review on the competition law and policy.  TPRM
aimed to enhance transparency in overall trade policies and practices of Member countries.  A
separate peer review in competition sector enabled an effective competition-specific peer review in a
detailed manner.  It would also enhance transpar ency in competition law and policy enforcement and
promote compliance of a multilateral framework on competition policy.
81. The representative of Japan, introducing document WT/WGTCP/W/236, said that the
following four points should be taken into accoun t when discussing the issue of compliance: (i) a
discussion should take place, at the subsequent negotiations, about the approach to be taken to ensure
compliance under a MFC; (ii) at the present meeting of the Working Group, therefore, it was desirable
that the Group discuss the pros and cons of several approaches that were currently used for
compliance of the WTO and other multilateral rules.  Such discussions would greatly contribute to thefuture negotiations; (iii) peer review was one of the possible approaches for compliance, being multi-
purpose, it could serve as a useful mechanism to encourage compliance of a MFC; (iv) with regard to
application of dispute settlement to competition policy, however, there were various views at the
present stage.  Dispute settlement was a cornerstone of the multilateral rule-based system, as the
European Community and its Member States described in its paper. He shared the views expressed by
the latter delegation on the merits of dispute settlement. However, 
individual cases should not be
brought into a dispute settlement procedure unde r a MFC.  At any rate, compliance approaches
should be determined in accordance with th e rules and principles that the Members were
subsequently going to negotiate  and multilaterally agree upon.
82. The representative of Canada said that the submissions from the European Community and its
member States, the US, Japan, Korea and Australi a provided a source of optimism about areas of
commonality and a basis for moving forward in the area of compliance mechanisms.  The USsubmission outlined the key benefits of peer review effectively.  Canada had long been an advocate of
this mechanism in the context of a WTO compet ition agreement and had spent some time during the
meeting of the Group in 20-21 February, 2003 outlining the key benefits of such an approach. The
benefits of peer review would transcend the spec ifics of any methodology.  Her delegation believed
the work done by Japan, Korea and Australia on this issue would provide an excellent starting pointfor the design of a peer review mechanism when negotiations would begin.  As had been suggested in
the US submission, peer review in the WTO would be  a starting-point for advancing the objective of a
world-wide culture of competition while taking into account different needs and the level of
experience of WTO Members.  Nonetheless, in her delegation's view, a system of peer review in the
WTO must be appropriately grounded in or guided by a clear set of provisions or non-binding
obligations, towards which Members could shape th eir developing competition systems.  The Doha
elements, in particular to the core principles of non-discrimination, transparency and proceduralfairness as well as to provisions on hardcore cartels, voluntary cooperation and capacity building,
should provide the basis for such a framework or set of guiding provisions.  She therefore envisaged
the post Cancun negotiations as focusing not only on the details of a strong and robust system of peer
review as had been described by the US delegation, but on the clarification and clear articulation of
these important guiding elements, which would form a necessary part of a Multilateral Framework onCompetition.
83. Referring to the submission by the European Community ad its member States
(WT/WGTCP/W/229), she saw merit in many of their suggestions contained therein regarding the
objectives and procedures of a peer review mechanism, in particular it would act as a valuable
"service-check" on a WTO Member's competition law and policy and help identify areas whereWT/WGTCP/M/22
Page 32
improvement could be made.  With regard to scope, while her delegation had argued for a multilateral
framework on competition policy made up of a set of non-binding obligations, she agreed that peer
review should cover a wider range of competition law and policy matters than would be the subject of
obligations in the multilateral framework.  The paper of the European Community and its member
States also made reference to the effectiveness of a consultation and cooperation mechanism, distinctfrom the consultations under the DSU Article 4, that might consider a range of issues.  She also
agreed with the effectiveness of such a consultative process or dialogue, outside of the existing DSU,
acknowledging that it would provide an essentia l complement to the more public processes of
discussions on peer review.  In fact, Canada woul d support a complementary system of peer review
with a consultative process or dialogue, whose collective aim would be to address specific concerns of
Members and to facilitate information sharing, capacity building and compliance, while furthering the
objectives of creating a culture of competition and promoting convergence over time on competitionpolicy matters. A peer review mechanism, coupled with provisions for consultations or dialogue
between Members could effectively apply pressure for compliance, particularly if backed by a
sophisticated system of follow-up.  On the issue of dispute settlement, her delegation struggled to see
the value or need for the DSU at this stage in the competition context, particularly given the vast gap
in the level of experience and differing needs of WTO Members in the area of competition policy.  Insum, her delegation's preference would be for a non-confrontational approach aimed at capacity
building and sharing information and experience with a view to creating a culture of competition and
forum for eventual policy convergence, coupled with a means of addressing particular concerns of
Members in a cooperative environment.
84. The representative of India, commenting on the efficacy of voluntary cooperation, said that
along with other delegations, India feared that economically weak countries would be forced to
comply with a multilateral framework through peer and other pressure, whilst there would not be any
mechanism in place to make the more powerful players comply.  On the proposal by the European
Community and its member States to apply dispute settlement procedures to core in relation to
domestic competition laws of Members, concern was expressed that this would penalise Memberswho had put in place a comprehensive competition law on an autonomous basis.  Those Members
whose laws had a wider coverage of competition law provisions, specifically agreements, both
horizontal and vertical, dominance and mergers and acquisitions, would have to apply non-
discrimination on a binding basis on all the provisions of domestic competition law.  With reference
to the EC's earlier comment that competition policy per se  would not be covered under the proposed
WTO framework, limiting coverage to trade-related competition policy, it seemed that the European
Community and its member States sought application of the core principles not only to provisionsrelated to hardcore cartels, but to the entire scope of the national competition laws.  On the subject of
the peer review mechanism and a general consultation process in the pattern of the TPRM, India did
not see the need for such a general review mechanism.  This would put pressure on the limited
resources of Members.  Other fora , like the UNCTAD where such reviews and formulation of
modern law were being undertaken, were available.  As such, issues like comprehensive competitionlaw per se , including issues of dominance, mergers and acquisitions did not belong to the WTO, and
the proposal to have such matters addressed in reviews in the WTO was difficult to understand.
Continuing, he said that anti-competitive practices of a cross-border nature could not be addressed
effectively in the absence of information-sharing among competition authorities concerned.
Prohibition in the domestic jurisdiction would not have any real effect unless effectiveimplementation procedures, including requirements for the sharing of information were in place,
especially sharing of information already available.  There should be an element of mandatoriness
even for sharing of confidential information.  Resource and capacity constraints faced by developing
countries needed to be taken into consideration and flexibility provided.
85. Responding to the foregoing comments, the representative of the European Community and
its member States suggested that the issue of application of a dispute settlement mechanism had two
basic elements: to what it was applied and how was it applied?  There were several examples in the
WTO agreements of special provisions to adapt the DSU to a specific policy area – in this regardWT/WGTCP/M/22
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competition would not be an exception.  With regard to the argument that countries which had already
adopted laws would be penalised, in the presence of an agreement there must be concurrence on the
substantive obligations in that agreement.  Agreemen t on the utility of the core principles in such an
agreement, should lead to their application ac ross the board.  In this context, the European
Community and its member States proposal not to have dispute settlement in individual cases or notto have dispute settlement apply to de facto discrimination was not a variation on the mechanism of
the DSU but an extension of the fact that the obligation itself was framed in qualified terms.  The
European Community and its member States believed that if the agreement was properly drafted to
apply only to de jure  instances of discrimination, a panel would not be in a position to extend this to
de facto.  However, if necessary, a fail-safe to this provision can be added.  Concerning sanction,
although it was especially difficult to apply counter-measures or to calculate the amount of
counter-measures outside pure market access issues, this was not a novel phenomenon in the WTO.Similar issues arose in services and intellectual property.
86. Carrying forward the subject of Dispute Settleme nt, the representative of Hong Kong, China
said that it must not be assumed that this must apply in a possible MFC.   The use of the term
"multilateral framework" instead of "multilateral agreement" in the Doha Ministerial Declaration
implied the possibility of a different approach.  This responded to the EC's concern that nonapplication of dispute settlement in an multilateral framework on competition policy was an anomaly
from a systemic and institutional point of view.  "Framework" was less definite and did not
necessarily include binding and justiciable rules, unlike an 'agreement'.  The dispute settlement system
for the multilateral framework on competition policy proposed by the European Community and its
member States could also be regarded as an anomaly, because it insisted that the dispute settlementshould apply only to the letter of the law and not to their application.  Prof. Ehlermann, the former
Chairman of the Appellate Body, had observed in a recent paper that "already under existing trade
rules, national competition law and practice are not ex empt from, but rather subject to, the application
of the dispute settlement system.  Both competition laws as such and their application in individual
cases must comply with the substantive standards of the WTO Agreement [an example is Art. III.4 ofGATT on national treatment], and complaints can be brought against both."
9  If new binding rules
were to be developed under a possible MFC, it woul d only be logical that the application of laws,
regulations, and guidelines would be subject to such  rules.  Such application would impose significant
and far-reaching obligations on Members, which underlay Hong Kong, China's strong reservations
against the application of the DSM in this context.  The proposal of the European Community and its
member States to set up a permanent group of experts might have the effect of expanding the scope of
dispute settlement down the road.  Article 13 of the DSU already empowered panels to seek technicaladvice should the need arise as had been pointed out.  The establishment of a permanent expert group
could only be justified if the substantive obligations in an multilateral framework on competition
policy were to cover the application of laws and re gulations in individual cases which would be fact-
intensive, complex, and technical. In other words, it was not clear why the European Community and
its member States wanted a permanent expert group if its delegation did not want to addressindividual cases.
87. Continuing, he sought clarification on the proposals in paragraph 11(b) of the submission by
the European Community and its member States which suggested that certain provisions in a domestic
competition regime which were not substantive requirements of the framework (such as provisions on
monopolies or mergers) could become subject to the overriding core principles such as non-discrimination and transparency.  If the overriding co re principles were binding and subject to dispute
settlement, would the proposal not bring these domestic provisions under the scrutiny of dispute
settlement?  What would be the rights and obligations of Members in respect of these provisions?
Members were duty-bound to clearly define the limits of an agreement.  On the idea of a general
consultation mechanism, paragraph 41 of the EC paper stated that, "a range of issues could be raised
                                                     
9 Claus-Dieter Ehlermann and Lothar Ehring, WTO Dispute Settlement and Competition Law
(European University Institute Florence, Policy Paper 02/12 (2002)).WT/WGTCP/M/22
Page 34
under the consultation provisions" including assessment of whether a Member's domestic legislation
met the standards contained in the MFC.  Furtherm ore, the terms of reference of the consultation
provision would be "any matter relating to the operation of the Agreement or the furtherance of its
objectives".  Clarification was required on this point – would the consultation mechanism be confined
to the obligations of the possible multilateral framework on competition policy or would it extend toissues outside the scope of the framework.  In the latter case, what would be the rights and obligations
of the Member requesting the consultation and the Member being requested and how would
duplication with the proposed peer review mechanism be avoided?
88. On the issue of peer review, there was no doubt that it could bring benefits to Members,
regardless of their levels of development and e xperiences in implementing competition policies or
laws.  However, it was essential for Members to know exactly what was intended to be achieved
under the proposed system and what were the rights and obligations of Members.  For the TPRM, itwas clear that "the purpose ... is to contribute to improved adherence by all Members to rules,
disciplines and commitments made under the Multilateral Trade Agreements.  It was not, however,
intended to serve as a basis for the enforcement of specific obligations under the Agreements or for
dispute settlement procedures, or to impose new policy commitments on Members."   Turning to the
Korean paper, its proposals for periodic peer review, the policy recommendations of which would bebinding on the Member under review, seemed to depart from what Korea had said at the Working
Group's meeting 20-21 February, 2003.  There, it had been suggested that Members would not be
required to change their policies based on the outcome of the review.  In regard to the paper by Japan,
it was accepted that the peer review mechanism should be based on a voluntary request. Nevertheless,
it appeared that Japan envisaged exerting pressure on the Members under review through policyrecommendations and a follow-up procedure to evaluate implementation of the recommendations.  In
the paper by the European Community and its member States, the following aspects were highlighted:
"the effectiveness of enforcement  of domestic competition laws over a period of time"; helping
"identify ways of improving the legislative framework ; and "attaining a greater degree of international
convergence  in competition policy on a range of issues".  The question here was what standards or
benchmarks would be set?  Developing Members were apprehensive that the multilateral framework
on competition policy would be used to put pressure on them to align their policies with those of the
developed Members.
89. Continuing, he suggested that the vast diversity in socio-economic development across the
WTO Membership, together with the additional resource burden that a competition-specific peer
review mechanism would entail, called into question its desirability.  Perhaps, peer review for trade
and competition policy could be folded-in to be a part of the existing TPRM.  Further questions wereposed: on what basis did a possible multilateral framework on competition policy warrant special
treatment as compared to other WTO agreements?  How would duplication with the TPRM be
avoided?  What was the cost effectiveness of having a separate mechanism if the TPRM did not
prohibit interested Members from raising questions and providing information on issues relating to
trade and competition policy?  How could the proposed Competition Policy Committee ensure thatthe process would be resource effective?  How would the idea of drawing upon relevant work from
other fora,  including the OECD Global Foru m on Competition, the International Competition
Network (ICN) and UNCTAD work in practice?  Finally, he noted that some Members might be
reluctant to provide information to, and be scrutinised by an outsider, other than the Secretariat or
other Members.
90. The representative of Switzerland concurred that dispute settlement and peer reviews should
be seen as complements rather than substitutes.  A competition framework which was part of the
WTO should indeed have similar compliance mechanism as the other agreements.  To exclude certain
areas of the rules-based system from Dispute Settle ment (DS), which was one of the core functions of
the system, set an undesirable precedent.  With reference to the observation by Hong Kong, China onthe terms "competition framework" and "competition agreement", the content rather than the term
used had to be decisive.  Binding provisions w ould necessitate some form of mechanism to settleWT/WGTCP/M/22
Page 35
eventual disputes.  To be sure, having recourse to dispute settlement in relation to national
competition policy should be a matter of last resort and limited only to the severest breaches of a
WTO agreement, which would be rare.  This approach would be consistent with the main thrust of the
agreement which was to promote the culture of competition throughout the world, through
cooperation and know-how transfer, and avoid disput es.  The obligation regarding the core principles
would only be violated if the law were worded in a way contrary to these principles.  This was
something which seemed unlikely in any competition law.  In any case, individual cases would not be
looked into.  Third, recognition of the role of prosecutorial discretion and the right of agencies to set
priorities in the light of limited resources would minimise the likelihood of disputes regarding
hardcore cartels.
91. Addressing points made in the submissions of various other delegations, he affirmed the
usefulness of peer review as the most important compliance mechanism in a multilateral frameworkon competition policy in facilitating the exchange of information and experiences on best practices,
and its general educational benefits.  Reviewed countries had a chance to have the quality and
effectiveness of their policies, laws and institutions assessed, helping to achieve voluntary
convergence of competition laws and enforcement practices.  This was a 'soft compliance' mechanism
because it was non-binding.  Given this, the effectiveness of the peer review process depended greatlyon effective participation.  This was a key matter to be taken up when negotiating on peer reviews,
taking account of budget and political constraints.  One possible solution might be to hold group peer
reviews of various countries, so that a number of countries would be examined at the same time.
92. The representative of Brazil said that it would be easier to discuss the application of dispute
settlement procedures once a clear idea of the precise set of obligations to which Members would be
bound was established.  Without prejudging Brazil's position on this issue, he attached importance to
non-application of specific cases, as opposed to assessing the overall conformity of the actual
legislation as well as possible substantive provisions to be adopted, such as on hard core cartels.  He
saw  merit, in principle, in the proposal of peer reviews.  A voluntary mechanism as far as the
decision of the country to submit itself to the review is concerned was preferred. There were severalmodels for a possible future WTO peer review system and the details of the process could be devised
at a later stage.  Brazil wanted to see the discussion of peer review mechanisms prioritised.  Other
issues to which he attached importance were: a) the future implementation of an information
exchange system; b) the possibility of joint analysis of cases in the cooperation provisions; and c) the
disciplines on repression of international cartels.
93. The representative of the United States expressed his agreement with key aspects of Section
2, of the submission of the European Community and its member States, pertaining to peer review.  In
particular, the US concurred with the paper's endorsement of the application of peer review to the
competition-related work of the WTO and, in particular, as a vehicle to assist Members in developing
and implementing their competition laws and policies.  It also agreed that peer review could promote
greater international convergence in competition policy and could contribute to the efforts of the
WTO and others in competition capacity building.  The papers by the European Community and itsmember States and other delegations went further than that of the US' in suggesting specific ways in
which a competition peer review could be organized.  The US remained open-minded on these
practical issues.  Merit was seen in the suggestion that peer review be organized under a WTO
Competition Policy Committee, as was also set out in the US delegation's paper.  Peer review should
extend to the full range of a Member's domestic competition laws and policies, rather than beinglimited to the specific issues in the Doha Declar ation.  Examination of the OECD's competition peer
review process supported the conclusion that such  reviews could provide valuable input on a wide
range of competition-related issues including legislative and regulatory frameworks, institutional
design, and enforcement policies and practices.  With regard to the idea that the peer reviews would
be conducted on the basis of a report provided by the reviewed country, as contemplated in the papersby Korea and Japan,  in any case it would be useful to have an independent report prepared by the
WTO Secretariat.  If such were the case, was there any further utility to have a self-reporting systemWT/WGTCP/M/22
Page 36
basis for peer review?  On the issue of dispute settlement which was addressed in part 1 of the EC
paper, the most appropriate course for the WTO to follow at this point was to focus on a peer review
mechanism.  Establishing a dispute settlement mechanism for competition raised a number of
questions.  The appropriateness of applying the dispute settlement to competition policy should be
assessed on its own merits in an open-minded way, without pre-conceptions drawn from other fields.
As had been pointed out by Canada and others, the wide disparity of Members' experiences with
competition law and policy, and the gaps in their institutional capacities called into question the
usefulness and feasibility of dispute settlement in this area.  As to the EC's  emphasis on idea that
dispute settlement would be limited to de jure  violations, the US questioned the ability to build into
the terms of reference sufficient safeguards on this point.  Moreover, the EC's paper was silent about
the consequences that would ensue once a WTO Panel had found that a Member had not complied
with its obligations under a WTO Competition Agreement.  In this regard, it would be important thatany sanctions applied in a multilateral framework on competition policy would have a
pro-competitive effects. Overall, he felt that there was broad support for implementing a peer review
mechanism as the next stage of work in the trade and competition area in the WTO, whereas
significant questions remained about the role, if any, of dispute settlement in this area.
94. The representative of Egypt said that, like other developing countries, he had reservations as
to whether applying dispute settlement to core principles was beneficial to developing countries.  This
was particularly so given the fact that these countries were in the process of drafting their competition
laws and that there were wide disparities between them.  On the other hand, Egypt wished to see
elaborations on how the DSU would be applied to the obligations of developed Members under a
WTO framework.  Continuing, he said that the discu ssion of peer review had to take into account the
interests of developing countries, for example when facing the TPRM.  For example, developing
countries suffered from resource and other constraints which might prevent them from participating
effectively in, and realising the benefits of, a peer review process.  In this regard, note was taken of
the suggestion, that had been made, of granting grace periods to countries without developed relevant
institutions.  Finally, with regard to the voluntar y nature of the OECD review raised by the US, this
was the correct path to follow, whilst doubt was voiced about the WTO taking over this responsibility.
95. The representative of Korea identified three goals of the proposed peer review process: (i)
promoting compliance; (ii) sharing of information and experience and (iii) technical assistance.
Korea emphasised that the implementation of the mu ltilateral framework for competition should not
be excessively burdensome on the WTO Members, in particular on the developing countries. The
proposed system of peer reviews was  consistent with this objective and would contribute importantly
to the implementation of the multilateral fram ework and to the promotion of the a culture of
competition internationally.  The effective incorporation of the multilateral framework for
competition into the domestic framework was seen as equally important.  In this respect, an obligatory
system of peer review was a balanced way forward.  This would involve subjecting all Members to a
peer review with certain flexibilities, such as a grace period. Korea also recognised the difficulties
faced by developing countries, and was open to di scussions of necessary special treatment to ensure
smooth implementation of the multilateral framework into domestic legislation.  In closing, he asked
how it would be possible to monitor the implementation of the multilateral framework without some
form of review mechanism.
96. In response to the comment by Hong Kong, China based on Korea's previous statements, he
said that the DSU was a strong legal enforcement m echanism, whilst peer review was a different kind
of mechanism. It was a non-binding in the sense of that a Member could not sanction another who did
not follow the recommendations of the peer review .  A peer review was consequently less than the
DSU, but more than nothing.  With regard to the point raised by the US, regarding preparation of the
Secretariat report, mainly based on the country's own input, Korea's suggestion reflected limited
resources of the Secretariat.  Hence the Secretariat's report should be based on the information of thereviewed country.WT/WGTCP/M/22
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97. The representative of Tunisia noted that none of the previous statements had referred to the
UNCTAD Set of Multilateral Agreed Rules on Competition Law and Policy, which were not
compulsory but had been in existence for over twenty years and questioned whether and how these
could be capitalized on, in particular in light of their implementation.  The relevance of these rules
had been well established in work undertaken in UNCTAD, which had shown the importance of theserules in promoting a culture of competition at the international level as well as helping to improve
national legislation and implementation.  Whilst recognizing the advantages of a peer review system,
many of these aspects needed further study.  For example, the mechanism of peer review would focus
on national approaches while the problems were of an international dimension.  He acknowledged that
an improvement in national capacity to implement co mpetition rules would contribute to development
and a more healthy market economy, but it would not solve all the existing problems, especially those
related to extraterritoriality and the difficulty in  investigating trans-border anti-competitive practices,
especially since cooperation between the national authorities was on a voluntary basis.  Given this, the
suggestion was offered that competition authorities assessing anti-competitive practices with an
international dimension, (in particular hardcore cartels) should consider not only the harm caused in
their internal domestic market but also the simultaneous effects on other countries' markets, especially
in the imposition of sanctions.
98. The representative of the European Community and its member States said that the WTO was
based on binding rules, necessitating application of dispute settlement.  All covered WTO agreements
were subject to dispute settlement, albeit with slight modifications.  In reflecting on the appropriate
scope of compliance mechanisms in the area of competition policy, some important questions were
offered: Compliance with what?  Was it necessary? How should it be adopted?  Addressing thesequestions, the paper by his delegation had looked towards existing agreements, including the DSU
and a number of specific agreements dealing with particular subject areas, which had stood the test of
time. In response to a point made by the repr esentative of Switzerland, he acknowledged that
jurisprudence relating to general provisions of the WTO agreements made it clear that they were
potentially applicable to law enforcement procedures as well as substantive laws and requirements, and
could indeed give rise to dispute settlement proceed ings in particular cases involving the administration
or enforcement of competition law.  However, by definition, cases brought under the existing WTO
agreements as opposed to a possible multilateral framework on competition policy would be decided
principally according to the principles embodied in those general provisions and related jurisprudence.
In contrast, a multilateral framework as had been proposed by his delegation offered the advantage of
explicitly taking into account the operational exigencies of competition law. In response to the
concern raised by the US delegation regarding the possibility of 'slippage' in dispute settlementproceedings, he felt that it could be avoided through an adequately phrased agreement.  Turning to the
questions posed by Hong Kong, China, he suggested that the nature of compliance mechanisms in this
area should be based on what was necessary to achieve appropriate compliance and not on semantic
distinctions.  As to whether there was any precedent in the WTO agreements for focusing on de jure
rather than de facto violations, he cited the Agreement on Subsidies and Countervailing Measures,Article 3.1(a) which referred to 'in law' or 'in f act' whereas 3.1(b) did not; as a result, the latter
provision had been consistently interpreted as applying only to de jure violations.  On the purpose of a
general consultation provision which would be included in the multilateral framework, this would
afford WTO Members an opportunity to consult bilaterally and privately on matters important to them
but were felt to be inappropriate for discussion in a broader context of a Competition PolicyCommittee.  As an example of such a general consultation clause, the delegate cited Article 17.2 of
the Anti-Dumping Agreement.
99. Another representative of the European Community and its member States addressed the
concern that reliance on a permanent roster of competition experts could lead to panels looking into
individual competition decisions of national authorities.   First, the EC paper was not prescriptive on
the exact form of the involvement of competition experts in the dispute settlement process; a
permanent roster of competition experts was only one option.  Second, given the specificities of
competition policy as compared with other subjects in the WTO, involvement of competition expertsWT/WGTCP/M/22
Page 38
would be useful even for " de jure  only" dispute settlement.  Finally, the involvement of competition
experts would be also a safeguard against slippage in that competition experts had the best
appreciation of the delicacy of enforcement procedures, as well as the fact-intensity involved in
decisions on individual cases.  As an example, if a panel wanted to look at de facto non-discrimination
it would have to look at two different specific competition cases, one involving a domestic and one aforeign company, where the facts were identical bu t interpretations were different – something that
would be difficult or impossible in a context of a panel.  The second example concerned a situation
where company A asked company B for a document but was refused on the grounds that it was a
business secret.  Competition experts would be appropriately sensitive to this situation; hence their
involvement would safeguard against slippage.
100. The representative of Nigeria said that, notwithstanding the discussion that had taken place,
important questions remained to be clarified.  Panel remedies in the context of a competition
agreement could be anti-competitive rather than pro- competitive.  The partial application of dispute
settlement could upset the balance of rights and obligations accruing to different Members and reduce
the incentives to cooperate.  Countries undergoing peer review risked being criticised and having their
competition regimes disapproved with consequent multilateral or bilateral pressures to abolish
exemptions which they were legally entitled to ma intain. Concerns remained on implications of the
proposed multilateral framework for industrial policy.  There was a need to clarify many issues,
including the extent of the effects of the reviewed country's competition policy on other countries, the
effects of other countries' policies on the reviewed country and experiences with international
cooperation in this connection as well as any unilateral or bilateral trade or competition pressures.
101. The observer from UNCTAD expressed support for peer reviews, especially as they seemed
to provide an excellent means of exchange of experience and capacity building, and enhanced the
dissemination of a culture of competition, one of  UNCTAD's long-term objectives. As for the use of
peer reviews as a means of compliance, he said that in his view peer reviews should rather be used as
means of soft convergence , especially with regard to developing countries, which were new in the
field. He reiterated his proposal to offer UNCTAD's premises as a forum for peer reviews, along withOECD and WTO, as this was in accordance with existing provisions in the UN Set of Principles and
Rules on Competition. He also drew attention to the forthcoming session of UNCTAD's annual
Intergovernmental Group of Experts on Competition Law and Policy, on 2-4 July 2003, at which a
secretariat paper on "Roles of Possible Dispute Mediation Mechanisms and alternative Arrangements,
including Peer Reviews, in Competition Law and Policy" would be discussed.
102. The observer from the OECD introduced three papers (subsequently issued as documents
WT/WGTCP/W/240, 243, and 244), which had been discussed in the OECD Joint Group on Trade
and Competition, examining a series of issues surrounding peer review and compliance mechanisms.
The first paper, entitled "Peer Review: Merits and Approaches in a Trade and Competition Context",
examined the merits of peer review in promo ting convergence, transparency, information and
experience sharing and improved domestic policy-making as well as functioning as a policy
examination mechanism and to determine TA/CB need s for developing countries.  Part two of this
paper examined strengths and weaknesses of vari ous peer review mechanisms, including the TPRM
and OECD regulatory reform exercises.  These techniques were the 'bread and butter' of the OECD
committee approach to government policy areas.  The second paper, entitled "Practical Modalities of
Peer Review in a Multilateral Framework on Competition", dealt with several options for
implementing a peer review mechanism in a possible future multilateral framework.  Part one of thesecond paper provided a comparative analysis encompassing a range of criteria and issues for a
Competition Policy Review Mechanism, including: (i) frequency of reviews; (ii) appropriate review
criteria for a CPRM; (iii) treatment of previous recommendations; (iv) who should compose the peer
group; (v) role of lead examiners; (vi) voluntary or compulsory participation; (vii) costs and resource
implications; (viii) role and duties of Secretariat and Members; (ix) relationship with TPRM.  Thesecond part of the paper provided details about each of these issues-criteria for a much wider range of
existing mechanismsWT/WGTCP/M/22
Page 39
103. Continuing, he said that the Joint Group having  looked at peer review mechanisms, wished to
address the larger question of compliance mechanisms.  Consequently, the third paper canvassed a
range of generic compliance and/or enforcement mechanisms that feature in multilateral, regional and
bi-lateral agreements.  The paper asked whether these could be adapted or transposed into a
multilateral set of rules negotiated within the WTO.  This paper covered 4 general sets of compliancemechanisms: (i) the "soft" compliance mechanisms of good offices, consultation, mediation and
conciliation; (ii) arbitration; (iii) peer review and (iv) WTO Dispute Settlement Understanding.  These
approaches were not mutually exclusive and could be combined. The analysis suggested that it could
be necessary to tailor the compliance mechanism(s) to fit the kinds of compliance issues which might
arise. Without suggesting that a consensus existed at present, the following types of issues might be
relevant: (i) the non-existence of a national competition law; (ii) the inadequacy of an existing
competition law (e.g. due to non-inclusion of agr eed core principles); (iii) the non-application/non-
enforcement of a competition law; (iv) the discriminatory or non-transparent application of a
competition law and (v) the non-enforcement of a ban on hard core cartels.
104. In response to a suggestion by the Chairman, the Working Group agreed that the three papers
presented by the OECD observer be issued as "W" documents.
III. POSSIBLE ELEMENTS OF PROGRESSIVITY AND FLEXIBILITY THAT MIGHT
BE INCLUDED IN A MULTILATERAL FRAMEWORK ON COMPETITION POLICY
105. The representatives of Australia and the European Community and its member States
introduced written submissions relevant to this item (documents WT/WGTCP/W/232 and 234,
respectively).  The representatives of Hong Kong, China, Brazil , India , Philippines , the European
Community and its member States and the Secretariat  made oral statements or posed questions on this
item.
106. The representative of Australia, introducing the relevant part of document
WT/WGTCP/W/232, expressed the view that there was a clear agreement in the Working Group that,
in the area of competition policy, "one size did not fit all".   The concepts of progressivity and
flexibility would be a crucial element of a potential multilateral framework on competition policy,particularly in respect of developing countries and those that did not have a law or an enforcement
structure.  The principle of flexibility and the possibility of exemptions would apply to all Members
that had a competition law, subject to requirements for transparency and periodic review.  As to
whether progressivity and flexibility themselves should be a core principle – these were different
concept from those elements that had been discussed as core principles in the Working Group.  The
Australian paper treated core principles as absolute, while progressivity and flexibility dealt with
transitional issues and comparative relative issues.  This did not diminish their importance.  Regardingthe relationship between competition policy on the one hand and social and industrial policy priorities
on the other hand, the attachment to Australia's paper provided a range of practical examples of how
some of these issues operated.  In particular, th e example showed that a vigorous competition policy
can coexist comfortably with policies designed to  achieve specific social and industrial goals.
107. The representative of the European Community and its member States, introducing the
relevant part of document WT/WGTCP/W/234, said that since the Doha Conference, developing and
less-developed Members had raised extensive concerns about the capacity constraints that would need
to be addressed in relation to the implementation of a WTO agreement on competition policy.  She
also acknowledged that many Members felt it necessary to identify ways to adapt a WTO framework
and related domestic law to special situations. The concepts of 'flexibility' and 'progressivity'addressed these concerns.  Equally, this discussion  could be held under the heading of 'special and
different treatment', which would not change the content.  It was noted that the issues of 'flexibility'
and 'progressivity' affected in a disproportionate way the developing or least-developed countries.WT/WGTCP/M/22
Page 40
108. Another representative of the same delegation,  responding to the comment by Australia,
agreed that there was a fundamental difference betw een "flexibility" and "progressivity" and the three
core principles that were under discussion.  His delegation also had reservations with regard to
elevating S&D to be a fourth core principle; it was different concept, cutting across the entire WTO
system and a belief that permeated the EC proposal throughout.  In fact, the current proposal for amultilateral framework already embodied a high degree of flexibility.  Essentially, it only called for
incorporation of the three core principles as well the ban on the hardcore cartels into domestic
legislations, accompanied by sanctions that had a sufficient deterrent effect.  This was a modest but
still meaningful level of ambition.  In response to the concern raised by India that a multilateral
framework would penalise Members for autonomously implementing competition law, the EC
delegate pointed out that the such au tonomously-adopted competition laws would ipso facto  meet the
standards set out in the proposed framework – hence the question of penalty did not arise.   Exclusionand exemptions also fell within the discussion of flexibility and progressivity, but went under
different names in different jurisdictions.  As had been pointed out earlier on the day, the Secretariat
study on Issues Relating to a Possible Multilateral Framework on Competition Policy had identified
five different ways in which industrial policy objectives could be accommodated in a domestic policy
frameworks and any conflict with competition law could be avoided.  This reinforced his delegation'sbelief that a multilateral framework on competition policy would not limit the policy space available
to developing countries to implement other important policies that also responded to their social,
economic and developmental objectives.
109. Continuing, he said that another dimension of  flexibility under the WTO agreement would be
the use of regional, as opposed to national legal instruments.  The Community had a naturalpropensity towards this approach – as was well known, regional competition rules were central to the
original EC treaty and it was only recently that the Community reached a point at which all individual
member states had their own regimes.  Two additional examples of innovative regional arrangements
were CARICON and COMESA.  Resource implicati ons of implementing competition regimes were
addressed in both the Evenett study as well as the last World Bank GEP Report 2003, provided
numbers and arguments and considered questions of cost and net benefits that would arise in the
medium and longer term.  Both documents suggest that significant benefits will arise in the medium
and long term.  With respect to progressivity, this was a concrete form of differential treatment,
applying to those countries that either had not, or were in the process of, adopting domestic
competition law or establishing a related authority.   Two further points were emphasised: there would
be a need for more traditional transitional phases and secondly, a new and more progressive approach
to the provision of technical assistance and capacity building, to ensure benefits from as early stage aspossible.  In particular, the WTO competition policy committee would play a key role in
implementing and generating support for technical assistance and capacity building.
110. The representative of Hong Kong, China agre ed with the view expressed by the European
Community and its member States (WT/WGTCP/W/234) that any core principles should remain
general and a multilateral framework should not dictate how they were going to apply in the domesticcompetition framework.  He welcomed the reference in the paper to a minimal set of multilateral
provisions which would influence and guide the WTO Members' policies rather than imposing
compulsory requirements.  However, this approach had not been consistently applied throughout the
paper.  In regard to hardcore cartels, the Euro pean Community and its member States was suggesting
that the WTO dictates how each and every Member should apply its own domestic framework.  Inparticular, all members would have to enact domestic competition law that baned hardcore cartels.
Yet even the definition of 'hardcore cartels' had not  been agreed on by the Group.  In fact, the same
non-prescriptive approach should apply consistently to all elements of the possible multilateral
framework and Members should be free to choose appropriate means, legislative or otherwise for
implementing any related obligations, taking into accounts their own domestic economic situation andpolicy objectives.WT/WGTCP/M/22
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111. The representative of Brazil said that the notions of progressivity and flexibility were
intrinsically linked with special and differential trea tment for developing countries.  This concept was
a central feature of the WTO and should be applied in the area of competition.  The issues of capacity
constraints and the scope and applicability under the overall heading of flexibility and progressivity
affected exclusively or disproportionately developing countries.  In particular, the discussion onexceptions must take into account, in a fair manner, the different needs for flexibility of developing
and developed countries.  Quoting again the text: "exclusions and exceptions constitute a question of
great sensitivity and complexity both among developing countries as well as OECD Members,
including the European Community and its member States", the representative said that this was of
particular significance for those developing countries that did not yet have a domestic competition law
or whose law was still relatively recent and untested.  On a technical level, progressivity could be
understood as a form of flexibility.  Therefore it was essential for developing countries to be entitledto transition periods to implement any new obligation that might stem from the process, indeed, this
was a common practice in the WTO and should also have been applied to competition.  Yet transition
periods should not be the only aspect of S&D.  The question of sectoral exceptions might be
particularly important to developing countries whose industries might present specific vulnerabilities.
The group had to bear in mind that developed countries with a long tradition in the area ofcompetition frequently excluded several sectors from the application of their legislation.  A proper
treatment of the question had to take into account these different needs for exclusions among
developed and developing countries.  Turning to the issue of export cartels, which were discussed
earlier but having an impact on the current discussion, these were tantamount to a licence to hurt other
economies, especially developing countries.  Therefore the group had to be careful that this sort ofpractice did not find a safe haven under a broad umbrella of exceptions.  He emphasised an
underlying assumption in the process – transparency had to be a principle guiding the establishment of
exceptions.  Proper treatment of these concepts would be fundamental to adequately address the
development dimension of competition policy.
112. The representative of India noted that there was particular reference to India by the European
and Australian papers.  India was making a point related largely to the application of non-
discrimination, if it were to be a binding principle, to other areas of domestic policy a country may
have dealt with autonomously.
113. The representative of the Philippines accepted that the core obligation the European
Community and its member States proposes on flexibility was for the WTO Members to enact in their
domestic competition law a ban on hardcore cartels, and any additional substantive provisions would
have been a matter of policy choice of each Member.  Note was taken of the EC's plan for substantiveprovisions in domestic law to be rooted in the three core principles.  With respect to transparency, he
agreed with the EC's point that any multilateral obligation could not prescribe the means to achieve
this. The representative of the European Union and its member States had said that the Community
was only interested in seeing obligations in resp ect of what was in the law.  Nevertheless, the
European Community and its member States needed to elaborate on transparency in respect of thede facto aspects of competition policy, law and enforcement.  Regarding non-discrimination, the
Philippines attached particular to the point that this principle would not be applied to individual
decisions of national competition authorities or governments.  Further clarification was requested as
to how this approach would relate to the broade r concept of economic, industrial and developmental
policy space, a matter of overriding concern for the Philippines.  Flexibility as to how competition lawwas enforced was also vital.  Whether competition law was enforced through administrative decisions,
or judicially, there could be enormous costs and difficult institutional adjustments, especially for
countries in the early stages of implementing a law.  The European Community and its member States
was asked therefore, to provide other examples clarifying what it envisaged with respect to core
principles in a multilateral framework for competition.
114. Continuing, on the subject of exclusions and exemptions, the qualification on agriculture,
referring to "authorization" rather than "exclusions and exemptions", was a disappointment for theWT/WGTCP/M/22
Page 42
Philippines.  The European Community and its member States appeared to downplay competitive
realities in this sector.  The agricultural sector was not only an important carve-out, it was a huge one,
perhaps too large to justify the use of exclusions as the fourth way in the Evenett study to manage
tension between competition policy and industrial policy.  Consequently, the group was recommended
to look at subsidies as an important instrument of competition policy and law.  On progressivity, therewas a reference to tiering of WTO Members with the EC's use of concepts like "principally WTO
Members who have yet to adopt a competition law and/or establish a competition agency."  It was
asked how the European Community and its member States viewed those Members who already had
institutions but which were fledgling, untested and in need of experience and resources?  The use of
concepts like "individualised time periods" and "indicative implementation plans" gave rise to
concerns.  He felt it was premature to discuss the subject of a WTO competition policy committee, at
this stage.  Finally, he noted a conceptual contradiction in the paper submission.  On the one hand, theEuropean Community and its member States spoke of core principles and provisions that would guide
the actions of Members.  On the other hand, it underscored that no harmonisation was envisaged.  Yet
once a common set of core principles was enshrined, no matter how minimalist, a certain degree of
harmonisation would have been imposed in the process.
115. The representative of the European Community and its member States, responding to
concerns raised by Hong Kong, China, said that in the example of judicial review, his delegation was
not proposing a prescriptive approach.   Certaionly. his delegation's view was that judicial review
would have to be made available somehow, but th e European Community and its member States was
not proposing to dictate how it would be carried out.  Similar considerations applied on the issue of
transparency.  This mirrored the approach taken in a number of other WTO agreements.  In otherwords, his delegation was simply trying to ensure that basic elements of transparency and procedural
fairness were present in relevant national legislation, but was not going as far as saying what specific
form those elements should take, and was certainly not trying to impose a harmonized approach.
116. Another representative of the same delegation,  responding to the comments of Hong Kong,
China, discussed three possible dimensions of flexibility in the context of the proposed ban onhardcore cartels:  first, the use of horizontal vs. sectoral approaches; secondly, with respect to
implementation and enforcement; and thirdly, a legislative vs. an administrative approach.  Looking at
the horizontal vs. sectoral approach, there was no reason why a WTO Member should not implement
a ban on hardcore cartels sector by sector.  Whilst admittedly this would involve more work for the
WTO Member compared with a horizontal law, a priori no reason existed why this should not be the
case.  If a ban on hardcore cartels was introduced for certain sectors before others, then the sectors
which were not covered by a ban on hardcore cartels would logically be exclusions.  Yet this was feltto be a question for the negotiations phase; if the Group started talking about exclusions now, it would
effectively be starting negotiations.  Similarly, there was no reason why implementation and
enforcement had to be taken via the creation of authority called an anti-trust or competition authority,
though an increasing number of countries found this to be an efficient approach.  There was a variety
of other ways, for instance through the granting of additional powers to some existing body or again,on a sector by sector basis.  On the question of le gislative vs. administrative approach, the question by
Hong Kong, China as to whether the ban on hardcore cartels would always have to implemented by
legislation was taken up.  The representative of the European Community and its member States
asked, in turn, whether if a ban on hardcore cartels was implemented via an administrative and not a
legislative approach, how could it be guaranteed vis-à-vis parties and vis-à-vis other WTO Membersthat the core principles would be clearly and verifiably respected?  More specifically, if there was no
legal document which said the parties had the right to appeal, how could parties be confident that they
had such a right?  This argument also applied to other procedural rights.  Indeed, it was difficult to
conceptualise how such guarantees could be provided by other than legislative means.
117. With regard to the comments made by the representative of the Philippines concerning the
agricultural sector, she suggested that the European Community wanted to see competition rules
applied to the agricultural sector except where specific regulations established limitations in the wayWT/WGTCP/M/22
Page 43
that such rules applied to this sector.  She referred to a particular case example in which firms had
been sanctioned for engaging in a cartel in relation to a particular agricultural product.  She further
clarified that, in the Community, the term "exemption" did not refer to an outright "exclusion" from
the application of the competition rules but was used more in the sense of an "authorization".
118. The European Community and its member States representative, responding to a question
from the Philippines as to what specifically would be covered by the proposed transparency
obligation, said that his delegation had already dealt with this question at some length in its
submission tabled in November 2002 (document WT/WGTCP/W/222).  In general, the intention was
that it would apply to laws, regulations and guidelines which were of general application.
119. The Secretariat, responding to a question posed by Australia on the implications of broader
discussions under way in the WTO on the issue of S&D, said that these discussions had delved into
different overall approaches to the issue of special and differential treatment in the WTO Agreements.In addition, they had been concerned with a number of specific proposals or suggestions regarding
special and differential treatment in the WTO framework.  There did not appear to be any specific
proposal or suggestion regarding the area of trade and competition policy that had been made in those
discussions, outside the context of the Working Group.
120. The Chairman, reflecting on the discussions that had taken place in regard to agenda items I,
II and III, drew attention, inter alia , to the following points, emphasizing that they were not in any
way implied to be comprehensive and were simply personal impressions which had no official
standing:
- There had been a number of requests for clarifications on questions regarding the
depth and breadth of possible obligations under a multilateral framework oncompetition policy and their compatibility with development agenda included some
of the following specific queries.  A number of explanations had been provided;
- A fruitful discussion had taken place on issues concerning discrimination, and
transparency and procedural fairness, including with respect to the application of
these principles;
- Although the discussion had been carried on principally with respect to the four
elements of a possible multilateral framework on competition policy that were set out
for clarification in paragraph 25 of the Doha Ministerial Declaration, references had
also been made to possible alternative ap proaches to a WTO agreement in this area.
For example, reference had been made to the possibility of instituting a system of
peer reviews in the WTO as a way of carrying forward the WTO's work in the area of
competition law and policy.  The possibility of non-binding approaches tocooperation and a WTO committee that would encourage but not require the adoption
of national competition laws had also been noted.  As well, reference had been made
to the possibility of a two-tiered approach, which could involve asymmetrical
obligations, the establishment of competition policy database and also the integration
of technical assistance and capacity building through countries which had alreadybegan the process of development.
- In relation to making the potential agreement more effective it was asked if
cooperation was to be mandatory – the degree of competition policy and
developmental heterogeneity made discussion difficult.
- On the matter of possible compliance mechanisms in a multilateral framework on
competition policy, a wide-ranging and penetrating discussion had taken place.  Many
delegations had referred to the potential benefits of a system of peer reviews in theWT/WGTCP/M/22
Page 44
WTO, not only as a compliance mechanism but also as a tool for facilitating capacity
building and the exchange of national experience.  Some concerns had been
expressed about the burden that such a system might place on developing countries,
and a variety of approaches to managing this burden had been discussed.  A range of
views had been expressed on the role and desirability of applying the WTO DisputeSettlement Understanding in this area. Developing countries, in particular, continued
to express concerns about this.
- Turning to the matter of flexibility and progressivity, as had already been evident in
previous meetings of the Group, all sides of the debate had emphasized that a one-
size-fits-all approach was not appropriate in the field of competition law and policy.
In any possible agreement in the WTO, much attention would have to be given to theevident diversity of national approaches in this area and to the related diversity in
stages of development, institutional endowments and legal cultures.  In this context, a
range of views had been expressed with regard to the feasibility and desirability of
(potentially) binding obligations in relation to core principles, provisions on hard
cartels, and other possible elements of a multilateral framework.
- Specific approaches to flexibility and progressivity had been discussed.  As one
example, it had been made clear that flexibility could involve  regional approaches
for countries that chose not to have competition policy, perhaps helping to addressing
resource-burdens.  A more far-reaching concept of flexibility equated it with acompletely non-prescriptive approach.  It had been acknowledged that flexibility was
more urgent in developing countries and required specific tools.
IV. TECHNICAL ASSISTANCE AND CAPACITY BUILDING, AS CALLED FOR BY
PARAGRAPH 24 OF THE DOHA MINISTERIAL DECLARATION
121. The representative of Australia introduced the relevant portion of a written submission
relevant to this item (WT/WGTCP/W/232).  In addition, the Group had before it a Note prepared by
the Secretariat on its Technical Assistance Activities Pursuant to Paragraph 24 of the Doha Ministerial
Declaration (document WT/WGTCP/W/230).  The representatives of the European Community and
its member States, Japan , Egypt  and Brazil  made oral statements or posed questions on this item.
122. The Working Group took note of the Note by the Secretariat on its Technical Assistance
Activities Pursuant to Paragraph 24 of the Doha Ministerial Declaration (document
WT/WGTCP/W/230).  The Note covered the following aspects:  (i) the scope of activities undertaken
and cooperation with other intergovernmental organizations; and (ii) the design and content of
workshops and symposia organized by the Secretariat in this subject area.  It indicated that, in the
period subsequent to the Doha Ministerial Conference, the Secretariat had organized regional
workshops on the relationship between competition policy, development and trade and relevantproposals before the WTO and/or had participated in similar workshops organized by UNCTAD in
most regions of the developing world.
123. The representative of Australia, introducing relevant portions of document
WT/WGTCP/W/232, said that a summary of recent/pending technical assistance activities of the
Australian Competition and Consum er Commission was provided in paragraphs 33 through 36 of that
document.  It highlighted current activities of the Commission with respect to work on the
implementation of competition policy in Barbados, Fiji and Thailand.
124. The representative of the European Community and its member States said that since the
publication of the European Commission Communication on trade-related technical assistance
(TRTA) in September 2002, TRTA (under which heading competition-related assistance wasclassified) was being mainstreamed in the Commission's development policy.  This meant thatWT/WGTCP/M/22
Page 45
competition was among the priority areas for the majority of countries and regions that benefitted
from the Community's development assistance. This allowed, but did not oblige, the beneficiary
countries and regions to request technical assistance relating to competition policy.  He drew the
Working Group's attention to the 9th European Development Fund for African Caribbean and Pacific
countries was coming on stream, with a pluriannua l budget of EUR 13.5 billion, which presented a
particular opportunity for competition-related technical assistance to be requested.
125. The representative of Japan noted that his country had contributed a speaker to almost all of
the workshops carried out in Asia that were mentioned in Annex 1 of the Note by the Secretariat
(WT/WGTCP/W/230).  He referred to various technical assistance activities organized recently by his
country, including annual training courses and workshops on competition law and policy in Osaka and
Tokyo together with plans to co-organize two APEC training seminars on competition policy with
Viet Nam and Malaysia, in 2003, modelled on a seminar conducted in Thailand in 2002.  The JapanFair Trade Commission had opened a website on the subject of "East Asia competition policy
forum".
10  The website contained a number of papers outlining developments regarding the
implementation of competition policy at the national level in the region, and other issues of interest to
the Working Group.
126. The representative of Egypt expressed his appreciation to the Secretariat for having
organized, in cooperation with the Government of Egypt, a regional workshop on trade and
competition policy that had been held in Cairo earlier in May, for the benefit of countries from the
Arab and Middle-Eastern region. Experts from 14 Arab countries had participated.  The level of his
country's participation in the workshop reflected the importance that it attached to the issue of
competition policy. Competition policy was a necessity for development and complemented othersocial, economic, industrial and cultural policy instruments.  Technical assistance was essential for the
Arab countries to develop their capacity in this area and to enhance the culture of competition across
the state, especially in the business community.  The workshop organized by the Secretariat had
contributed to raising awareness regarding the importance of competition policy as a tool for realizing
economic progress.  Egypt was now in the process of finalising its domestic competition law, and wastaking substantial part in the development of the COMESA regional competition framework.  The
importance of competition law had also been recognised in the agreement establishing the Arab Free-
Trade Area.
127. Continuing, he said that Egypt had established a national inter-agency co-ordination group on
WTO issues with a sub-committee whose mandate was to examine the various issues that had been
raised in the context of the Working Group's deliberations.  Egypt's general assessment was that a
uniform set of competition rules would not serve the needs of developing countries.  In the light ofthis, discussions should focus on how competition could contribute to the developing countries'
economic development, especially in the case of those that did not yet have a domestic compeition
law.  Continuing technical assistance and capacity building would contribute to effective participation
in related discussions by Egypt and other developi ng countries. The Doha Development Agenda had
stressed that technical assistance and capacity building activities should focus on helping developingMembers to acquire the necessary level of expertise to better analyse the relationship between
competition policy and market economic development and evaluate the implications of a prospective
multilateral framework on competition policy for their own development, before taking a decision by
explicit consensus on modalities to launch negotiations after the Fifth Ministerial.  In this regard,
Egypt welcomed more targeted technical assistance activities from WTO, UNCTAD and otherorganizations as well as those provided by members on a bilateral basis.
128. The observer from UNCTAD recalled the Doha mandate in which "international
organizations, including UNCTAD" were invited to provide technical assistance and capacity-
building, to enable developing and least-developed countries to "better evaluate the implications of
                                                     
10 See http://www2.jftc.go.jp/eacpf/01_01.htmlWT/WGTCP/M/22
Page 46
closer cooperation in this field".  Subsequently, UNCTAD's Intergovernmental Group of Experts on
Competition Law and Policy had requested that the UNCTAD Secretariat undertake close cooperation
with the WTO Secretariat in this area.  In this regard, UNCTAD had already undertaken a first round
of  four regional seminars in close cooperation with WTO last year, the results of which had been
summarised in a Consolidated Report that had been made available to the Working Group in May2002 (WT/WGTCP/W/197).  UNCTAD had also participated in several workshops organized by the
WTO Secretariat.  In 2002, both Secretariats had continued to participate actively in each-other's
meetings and workshops.  For its part, UNCTAD was organizing four more post-Doha regional
meetings on competition law and policy, three of which had already taken place (in Kuala Lumpur,
Nairobi and Sao Paolo, for the benefit of countries in Asia, Africa and Latin America, respectively).
The fourth such meeting would take place shortly in Tashkent (Uzbekistan), for East-European and
CIS) member countries.  A consolidated report on these meetings would be submitted to the Julymeeting of UNCTAD's Intergovernmental Group of Experts on Competition Law and Policy (2-4 July
2003).
129. The observer from the OECD said that most of the assistance provided by that Organization
was of a long term nature of the type which was contemplated in paragraph 25 of the Doha Ministerial
Declaration (WT/MIN(01)/DEC/1)  as opposed to that which was called for in paragraph 24 of the
Declaration.  The assistance provided by the OECD in the drafting and implementation of competition
laws favoured economic efficiency in the beneficiary countries, better preparing them to become
significant protagonists in international trade.  Three global fora had been held on competition (the
last in February of the current year), addressing issues relating to economic development and various
other matters that were relevant to the work of the Group.  Particularly relevant to paragraph 24 hadbeen the recent Global Forum on Trade and Competition Policy, which had taken place on 15-16 May
and had been attended by 33 non-OECD member count ries (in addition to OECD delegations).  The
WTO Secretariat, UNCTAD and the World Bank had also participated.  The agenda had been focused
on the Doha mandate on trade and competition policy, and had included specific sessions relating to
core principles, provisions on hardcore cartels, modalities for voluntary cooperation, capacity buildingand compliance mechanisms.  Two other themes had permeated the discussions – special and
differential treatment and the scope of application of competition law.  Extensive documentation on
the Global Forum was being prepared for posting on the OECD website (www.oecd.org), and would
be of interest to Members of the Group in relation to preparations for Cancun.  At the recent Global
Forum, developing countries had repeatedly appealed for enhanced and more in-depth technical
assistance in this subject area.  Such assistance needed to be provided on a long term basis and, to be
effective, had to go beyond training for competition authorities and to seek to educate publicauthorities in general – tribunals, the media, business and consumer organizations.  Finally, reference
was made to the recent publication of a major report to the OECD Council entitled Hardcore Cartels:
Progress Achieved and Challenges Ahead.
11
130. Subsequently, in response to a question posed by the representative of Australia, the observer
from UNCTAD said that two studies relevant to  the Working Group's work would be published
shortly by UNCTAD – one on core principles by Professor Mathis and another on developing
countries' interests with respect to negotiations on hardcore cartels which would be authored by
Dr. Simon Evenett.
131. The representative of Brazil expressed his delegation's thanks to UNCTAD for the workshop
that had been held in April 2002 in Sao Paulo, in which the WTO Secretariat had participated.
                                                     
11 OECD, Hardcore Cartels:  Recent Progress and Challenges Ahead (Paris:  2003).WT/WGTCP/M/22
Page 47
V. OTHER BUSINESS, INCLUDING STOCKTAKING OF NATIONAL EXPERIENCE
AND LEGISLATION
A. STOCKTAKING OF NATIONAL EXPERIENCE
132. The Chairman recalled that, at the Working Group's meeting of 20-21 February, the
Secretariat had been asked (WT/WGTCP/M/21, paragraph 136) to prepare an updated version of the
document entitled "Overview of Members National Competition Legislation"
(WT/WGTCP/W/128/Rev.2, dated 4 July 2001).  The Secretariat had commenced work on the update
and would be getting in touch with some Members to confirm specific details of their national
legislation where this was unclear.  The document would be issued subsequent to the meeting.  To
facilitate this work, delegations that had not already done so were invited to submit their national
legislation to the Secretariat.
133. The representative of Australia said that his country had recently conducted a review of the
competition provisions of Australia's Trade Practices Act 1974, the overarching competition law in
Australia.  The review, which had been commissioned by the Prime Minister 18 months previously,
had addressed a number of broad questions about the applicability and appropriateness of the Act,
including its implications for the ability of Austra lian companies to compete globally, in the light of
developments such as the impact of globalisation.  Attention had been given to the various interests
that were affected by the competition provisions including the large business sector, the small
business sector and consumers.  The review had been conducted independently by a former Justice of
the High Court of Australia and had benefited from a large number of submissions and representations
from interested groups.   The final report based on the review had emphasized that competition
provisions exist to protect the competitive process rather than protecting individual competitors.  Thebenefits of a comprehensive approach to competition law had also been stressed.  Competition law
was and should be treated as separate and distinct from industrial policy or industrial targeted
legislation.  Overall, the report had concluded that the competition law of Australia had served
Australians well.   In particular, it had sustained a competitive environment which had benefited
consumers in terms of services available and prices, and had achieved an appropriate balance betweenthe prohibition of anti-competitive conduct and the encouragement of competition.  The majority of
the specific recommendations in the report had been concerned with the fine tuning of aspects of the
legislation rather than with any fundamental changes of orientation.
12
134. The representative of Morocco said that the competition law of his county (law n° 06/99)
illustrated specific kinds of flexibility that were relevant to the implementation of competition policy
in developing countries and had achieved three fundamental objectives:  (i) setting up an environment
favourable for investment by facilitating access to all sectors and markets.  This was achieved bydoing away with public and private obstacles to market entry and by promoting the development of
small and medium-sized enterprises; (ii) improving the performance and competitiveness of
enterprises operating in Morocco with a view to  encouraging them to compete on equal terms with
foreign competitors on foreign markets.  This permitted enterprises to develop "critical mass" with a
view to realizing economies of scale.  Nonetheless, it remained important to monitor concentrations of
operations and tendencies to monopolisation which could result in abuse of dominance and therefore
affect free and fair competition; (iii) protecting consumers against excessive prices, resulting from
cartels and market sharing.  These objectives might appear to be contradictory but, in fact, were not.
By definition, prices were determined by the interplay of the forces of demand and supply.  What was
essential was that these forces worked in a legal, transparent and fair way.  In fact, in view of thediversity of economic agents and the complexity of behaviours, the operation of market mechanisms
was often affected by doubtful practices.  The model of pure and perfect competition remained a
vision of the mind and an ideal to be achieved.  In order to take account of all the objectives that had
                                                     
12 Details are available on the Internet at
http://www.treasurer.gov.au/tsr/content/pressreleases/2003/021.asp.WT/WGTCP/M/22
Page 48
been mentioned (efficiency, performance, compet itivity, promotion of SMEs, consumer welfare), it
was necessary to have a competition law aiming at perfect competition and to have a competition
policy that would be in line with each economy.  This approach led the domestic authorities to draw
up a list of priorities:  (i) to address price fixing and market sharing by applying competition law; (ii)
to open monopolies to competition by doing away with market access barriers and abuse ofdominance; (iii) to address economic concentrations.  Promoting competitive market forces while
carrying out an industrial policy resulting in sectorial privileges and protection presented a true
dilemma.  The debate was closed by the adoption of a merger law with high thresholds of market
control (40 %).  The legislation also contained a series of exemptions to the prohibition of cartels and
abuse of dominance where these were necessary based on the concept of economic progress and
efficiency gains.  In these ways, an appropriate balance had been struck between preventing anti-
competitive practices and providing appropriate scope for necessary industrial restructuring.  Moroccolooked forward to sharing its experience with other countries that were in the process of preparing or
introducing national competition laws.
B. 
REQUESTS FOR OBSERVER STATUS FROM INTERNATIONAL INTERGOVERNMENTAL
ORGANIZATIONS
135. The Working Group agreed to revert to requests made by SELA, the Organisation of the
Islamic Conference, the South Centre and the United Nations Economic Commission for Latin
America and the Caribbean (ECLAC) at its next m eeting, having regard to any developments on
related matters in the framework of the General Council.
C. PREPARATION OF THE WORKING GROUP 'S REPORT TO THE GENERAL COUNCIL FOR 2003
136. With regard to the preparation of the Working Group's Report to the General Council for
2003, the Group decided that the Report would be in the style of the Reports prepared in 1998 through
2002 – i.e., it would provide a substantive overview of the work done by the Group during the year,
but without reaching conclusions or recommendations.  Approval of the Report would be by written
procedure, with the possibility of the Chairman convening a short meeting if the need arose.
__________