WORLD TRADE
ORGANIZATIONWT/WGTCP/W/239
24 July 2003
(03-3974)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM MALAYSIA
The following is the final text of a statem ent received from the Permanent Mission of
Malaysia, which was circulated as an advance copy for the Working Group's meeting of 26-27 May2003.
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Let me first take this opportunity to congratulate the Secretariat for commissioning the very
useful study by Dr. Simon Evenett.  I would also like to thank my colleagues who have before me
shared some of their thoughts on the current subject matter, some of which we concur with.
Malaysia acknowledges that a competition policy seeks to ensure efficiency in the market
place.  There is growing awareness on the need to develop some kind of regulatory control on
anti-competitive conduct of firms and multinational companies as the existence of such practices have
unnecessarily burdened consumers with not only inflated prices for goods and services but have also
adversely affected the trading environment.  Concer ted efforts need to be undertaken to counter their
effects on developing countries.  The primary objective of a domestic competition policy or law is toimprove market efficiency and to enhance consumer welfare.
We would like to once again emphasise our concern on the application of the WTO core
principles on competition policy.  Para 25 of the Doha Ministerial Declaration mandated this 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 and appropriate flexibility provided to address them."  The Doha meeting thus onlysought clarification of the above mentioned and not to discuss negotiations.
If one were to agree that the proposed core principles are applicable that the Working Group
has been discussing, these principles such as transparency requirements should not impose additional
burden on developing countries.  With respect to the principle of non-discrimination, the Working
Group must debate on how it can be applicable to competition rules: specifically, the implication of
non-discrimination - i.e., most-fav oured-nation (MFN) and national treatment - principles in the
context of a cooperation agreement.
On procedural fairness, Malaysia believes that each and every 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.WT/WGTCP/W/239
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On the issue of Special and Differential treatmen t (S&D), Malaysia considers that this should
be given more emphasis and due consideration.  Exemptions including possible carve-outs, are
absolutely necessary for developing countries as they strive towards a higher level of economic
development.  The much needed policy space for attaining developmental objectives including
affirmative action programmes has to be an integral element of the structure of any agreement.Transparency considerations should be implemented in stages in pace with developmental needs as
the S&D requirements vary and often are peculiar.
The case for a multilateral discussion and consensus on hardcore cartels is stronger.  There
should be no place for hardcore cartels in any country, irrespective of its level of economic
development.  Thus, it would be more appropriate for the Working Group to concentrate its efforts on
discussing anti-competitive practices particularly those related to hardcore cartels.  Malaysiarecognises that hardcore cartels are a developed country phenomenon that have burdened developing
countries with excessive costs.  We also note that there is as yet no generally accepted definition of
what embodies a hardcore cartel.  Although the OECD  does have one, we need a clear and precise
definition of hardcore cartels.
Considering the enormous burden that these hardcore cartels have created, Malaysia is of the
view that concerted action should be undertaken to tackle such malpractices.  However, many if not
most developing countries, and even countries which have introduced competition law over the last
few years, lack both the experience and capacity to tackle anti-competitive practices.  A Working
Group such as this should debate and discuss this issue in depth.  In this context, modalities onvoluntary cooperation and its impact on developing countries must be explored.  The discussions on
hardcore cartels shall be without prejudice to the outcome as regards the ultimate form of agreement –
be it a multilateral framework or regional or bilate ral framework.  In our view, cooperation through a
multilateral framework is not necessarily the only appropriate and effective way to address hardcore
cartel practices.
It is also necessary at this juncture to build capacity in terms of effective legislation and other
means to deal with hardcore cartels through the cooperation mechanism.  Bilateral and regional
cooperation among competition authorities undertaken to address problems associated with hardcore
cartels have proven to be beneficial.  Bilateral cooperation, as we see it, would be a starting point to
voluntary cooperation 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 have had the benefit of decades and
even a century of experience in competition policy and law enforcement.  On the other hand, there are
many developing countries like Malaysia who do not have a comprehensive competition policy and
law regime.  The start up process is beset with problems and is extremely difficult to manoeuvre.Capacity constraints abound as both the government and private sectors are confronted with the
prospect of a new business environment.  The international community must continue to focus and
prioritise on providing technical assistance to developing countries.
At this point of time, we feel that negotiations on competition law-related matters are not part
of the Doha work programme.  Domestic competi tion policy/law may not be a major consideration for
developing countries.  National priorities and limited capacity may require that scarce resources are
allocated for the implementation of more important socio-economic development policies in the
country.  Alternative domestic approaches to enhan ce competition in the form of regulatory reform
are some of the measures being undertaken.
Developing countries should be given time and flexibility to implement competition policies.
As pointed out by some members, it is premature at this juncture to assume that all WTO members
would eventually adopt a competition law.  In s eeking to implement competition policy, factors suchWT/WGTCP/W/239
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as exemptions and exceptions within the domestic economy are issues which require further in-depth
discussion and research before any conclusion can be drawn.
We also need to clarify core principles and modalities for voluntary cooperation.  It is
important to ensure that deliberations in this Working Group, keep the perspective of the special
needs of developing countries.  Although ideas and suggestions have been floated, the Working
Group has yet to achieve any concrete decisions that can be said to be a consensus.  Malaysia does not
want to find itself locked into an agreement which we are not quite clear and in which the application
of specific rules and disciplines can undermine efforts to build domestic industries to face
globalization.
Malaysia at the moment is preparing a competition policy and fair trade law. We need
international assistance to help us draft the policy and law.
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