RESTRICTED
WORLD TRADE WT/WGTCP/W/9
19June1997
ORGANIZATION(97-2512)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM EGYPT
Thefollowing communication hasbeenreceived from thePermanent Mission oftheArab
Republic ofEgypt withtherequest thatitbecirculated toMembers.
_______________
Thisisapreliminary attempt toprovide theWorking Group withtheEgyptian perception of
therelevant studies forthisverycomplex issue.
1. Itisworth noting thatwiththeincreased trend inglobalization andthechanging trading
environment, global firms operating under freetrade aredetermining thecriteria andsetting thenew
conditions forcompetitiveness andcompetition inthemarkets, where expanded intrafirm trade is
becomingthenorm.Thewaycompetitionpolicywaslookedatinthepast,delinkingitfrominternational
trade, might havebeensensible then. Competition policy cannolonger beconfined tothenational
framework. Today, wearedealing withanewphenomenon whose consequences varyamong countries
withdifferent levels ofdevelopment. Thebenefits ofthisnewenvironment, particularly fordeveloping
countries isnottobetaken forgranted. Toleveltheplaying fieldontheglobal level, developed and
developing countries should cooperate toestablish anenabling framework thatshould allow tomake
thebestuseofthebenefits accruing fromfreetrade andfreerinvestment. Thus, theincreasing need
tolookatthelinkages between trade andcompetition ononehand andinvestment andcompetition
ontheother handfrom theglobal perspective.
2. TheWorking Group should address the"Trade andCompetition Issue" inacomprehensive
manner without prejudice totheresults ofthework ortheissues tobeeventually identified thatwould
merit further consideration. Though weareparticularly interested intheinternational dimensions of
competition policy, theWorking Group should notshyaway fromstudying, asweareintheeducative
process, theinterface oftrade andcompetition involving anti-dumping andsafeguard measures.
3. Inorder toincrease ourknowledge onthissubject-matter, wepropose thattheWorking Group
embark onaricheducational work programme, thatwould entail national submissions andstudies by
theWTO Secretariat, incooperation, where appropriate, withotherrelevant international organizations,
particularly UNCTAD, asmandated bytheSingapore Ministerial Conference, withaviewtoensuring
thatthedevelopment dimension istaken fullyintoaccount.
4. Theeducational work programme could comprise initially three major studies, asfollows:
(a) Aconceptual study oftheelements ofaneffective competition policy:
(i) towhat extent cannational competition lawseffectively dealwithRBPs by
TNCsattheinternationallevel,inparticularinthecaseofdevelopingcountries?
How tocontrol international mergers thatcreate monopolies ordominant
positions inthenational market?
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(ii) international cooperation toenable countries todealeffectively with the
competition issues involved byforeign firms abroad andaffecting theirlocal
markets;
(iii) theneedfor,andpossible scope ofamultilateral framework.
(b) Tostudy indepth thedevelopment dimension ofcompetition policy, drawing inter
aliaontherelevant principles oftheRBPSet:
(i) howtoensure anoptimal transition forfirms previously protected from
competition tobeabletocompete successfully asmarkets areopened tothe
freeforces ofcompetition?
(ii) empirical experiences might bestudied tocompare shock versus gradualistic
approaches;
(iii) towhatextent would exemptions fromcompetition rulesbeapplicable tofirms
ofdeveloping countries (SMEs, transitional safeguards, specific sectors, ...)?
(iv) theinterrelationship between investment andcompetition policy?
(c) Astudy oftherelevant provisions oftheUruguay Round agreements related to
competition, withafactual background oftheprovisions -where possible -indicating
thevarious positions andthereasoning behind:
(i) towhatextent doestheWTO trading system cover competition issues andis
compatible withbasic competition principles?
(ii) howhavethecompetition aspects beendealtwithintheWTO agreements?
(iii) howcould theWTO system bemade more compatible withcompetition
principles?
5. Although wearewellaware ofthecomplexities anddiversified views regarding thedefinition
ofcompetition andtheneed toreach aconsensual definition, webelieve thatitwould be
counter-productive toaimatsuchanobjective intheinitial phase ofourwork.
6. Thework should draw upon theRBPs Setwhose basic objective istoensure thatRBPs do
notimpede ornegate therealization ofbenefits thatshould arisefrom theliberalization oftariff and
non-tariff barriers affecting world trade, particularly those affecting thetrade anddevelopment of
developing countries. Itisimportant todraw upon thecomprehensive nature oftheRBPs Set,which
applies toallenterprises, including transnational corporations, whether private orstate-owned and
particularly itsimportance inattempting toincorporate thedevelopment dimensions. TheSettherefore
seems tobearelevant starting point forourwork.