WORLD TRADE
ORGANIZATIONWT/WGTCP/6
9 December 2002
(02-6787)
REPORT (2002) OF THE WORKING GROUP ON THE INTERACTION BETWEEN
TRADE AND COMPETITION POLICY TO THE GENERAL COUNCIL
TABLE OF CONTENTS      Paragraph Nos.
A. INTRODUCTION 1-3
B. PROCEDURAL INFORMATION ON THE WORKING
GROUP'S ACTIVITIES 4-8
(a) Sources and materials used in the Group's work 4
(b) Meetings held in 2002 5-6
(c) Cooperation with other intergovernmental organizations 7-8
C. CLARIFICATION OF ELEMENTS CONTAINED IN
PARAGRAPH 25 OF THE DOHA MINISTERIAL
DECLARATION 9-103
I. CORE PRINCIPLES, INCLUDING TRANSPARENCY,
NON-DISCRIMINATION AND PROCEDURAL FAIRNESS 11-46
II. PROVISIONS ON HARD CORE CARTELS 47-64
III. MODALITIES FOR VOLUNTARY COOPERATION 65-84
IV. SUPPORT FOR PROGRESSIVE REINFORCEMENT OF
COMPETITION INSTITUTIONS IN DEVELOPING COUNTRIES
THROUGH CAPACITY-BUILDING 85-102
D. TECHNICAL ASSISTANCE AND CAPACITY-BUILDING,
AS CALLED FOR BY PARAGRAPH 24 OF THE
DOHA MINISTERIAL DECLARATION 103-110
E. STOCKTAKING OF NATIONAL EXPERIENCE 111-113ANNEX 1: TEXT OF THE DOHA MINISTERIAL
DECLARATION, PARAGRAPHS 23-25
ANNEX 2: CONTRIBUTIONS PROVIDED TO THE WORKING
GROUP ON THE INTERACTION BETWEEN TRADE
AND COMPETITION POLICY IN 2002WT/WGTCP/6
Page 2
A. INTRODUCTION
1. In the year 2002, the Working Group continued its work under the Chairmanship of Professor
Frédéric Jenny (France), pursuant to the mandate provided in paragraph 25 of the Doha Ministerial
Declaration (WT/MIN(01)/DEC/1).  Paragraph 25 reads as follows:
25. In the period until the Fifth Session, further work in the
Working Group on the Interaction between Trade and CompetitionPolicy will focus on the clarification of:  core principles, including
transparency, non-discrimination and procedural fairness, and
provisions on hard core 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 appropriateflexibility provided to address them.
2. As agreed at an informal meeting of the Working Group which took place on
26 February 2002, in addition to the work mandated by paragraph 25, the Working Group had a focus,
at each of its meetings in 2002, on the matter of technical assistance and capacity-building as called
for by paragraph 24 of the Doha Ministerial Declaration.
1  Following the Working Group's practice in
previous years, at each meeting, consideration was also given to the matter of "Stocktaking of national
legislation", as an aspect of "Other business".
3. This report provides an overview of the work done by the Working Group in 2002.  It
constitutes a complement to the Working Group's previous reports on its activities in 1997
(WT/WGTCP/1), 1998 (WT/WGTCP/2), 1999 (WT/WGTCP/3), 2000 (WT/WGTCP/4) and 2001(WT/WGTCP/5).
B. PROCEDURAL INFORMATION ON THE WORKING GROUP'S ACTIVITIES
(a) Sources and materials used in the Group's work
4. As was the case from 1997 through 2001, the work of the Working Group in the year 2002
was based on written contributions by Members and on oral statements, and questions and answers byMembers during the Group's meetings.  These inputs were supplemented by information received
from observer intergovernmental organizations (see subsection (c) below) and background notes
prepared by the Secretariat.  A tabular summary of written contributions to the Group in 2002 is
attached as Annex 2.
(b) Meetings held in 2002
5. The Working Group held four formal meetings in 2002.  The dates of the meetings were:
23-24 April, 1-2 July, 26-27 September and 20 November.  The meeting of 1-2 July was scheduled to
be held back-to-back with a meeting of the UNCTAD Intergovernmental Group of Experts on
Competition Law and Policy which took place on 3-5 July 2002.
6. At the informal meeting of the Working Group which took place on 26 February 2002, it was
agreed that specific elements of paragraph 25 woul d be the subject of focused attention at particular
meetings of the Working Group in 2002, as set out below:
                                                     
1 Paragraphs 23-25 of the Doha Ministerial Declaration are reproduced in Annex 1.WT/WGTCP/6
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First meeting (23-24 April): support for progressive reinforcement of
competition institutions in developing countries
through capacity-building
Second meeting (1-2 July): provisions on hard core cartels and modalities for
voluntary cooperation
Third meeting (26-27 September): core principles, including transparency, non-
discrimination and procedural fairness
The principal purpose of the meeting held on 20 November was to review and adopt the Working
Group's Report (2002) to the General Council.  Reports on each of these meetings have been
circulated in documents WT/WGTCP/M/17, 18, 19 and 20 (to be issued).
(c) Cooperation with other intergovernmental organizations
7. The Singapore Ministerial Declaration (paragraph 20) encouraged the Working Group to
undertake its work in cooperation with UNCTAD and other appropriate intergovernmental fora, to
make the best use of available resources and to ensure that the development dimension was fully
taken into account.  In this regard, the IMF and the World Bank have continued to attend the Working
Group's meetings in an observer capacity, pursuant to the cooperation agreements concluded betweenthe WTO and these organizations.  UNCTAD and the OECD have also continued to attend the
meetings as observers, on the basis of an invitation from the Working Group.  In the course of the
Group's meetings, they have kept the Group updated on relevant activities of their organizations and
contributed to the debate.  The Working Group is highly appreciative of the valuable contributions to
its work made by observer organizations.
8. As a further aspect of cooperation, the Secretariats of UNCTAD and the WTO have
cooperated closely in the organization and presentation of a number of regional workshops on aspects
of the Doha mandate on trade and competition policy during the year.  Cooperation has also occurred
with the OECD Secretariat, in the form of participation by representatives of each Secretariat in
workshops or other events organized by the other organization.  Additional information regardingthese activities is summarized in Part D, below.  During the year, the Secretariat also participated in
an informal information meeting with representa tives of the International Competition Network,
UNCTAD and the OECD, to share information about each organizations' activities.
C. CLARIFICATION OF ELEMENTS CONTAINED IN PARAGRAPH 25 OF THE
DOHA MINISTERIAL DECLARATION
9. This section of the Report provides an overview  of the substantive work done in the Working
Group in 2002, pursuant to the mandate given in the Doha Ministerial Declaration
(WT/MIN(01)/DEC/1, paragraph 25).  By its very na ture, such an overview cannot reflect everything
that was said and capture all nuances of the discussion, such as can be found in the detailed records of
the Working Group's meetings during the year (WT/WGTCP/M/17-20) and in the written
contributions of Members (see Annex 2).
10. This section is organized in accordance with the way in which the Working Group structured
its discussion of the issues, on the basis of paragr aph 25 of the Doha Declaration.  It should be noted
that the discussion which took place on some issues cut across more than one of the subheadings used
below.  This means that, in order to have a full appreciation of the discussion that took place on some
of the issues, it may be necessary to refer to more than one subsection of this section of the report.  It
also means that some degree of repetition has been unavoidable in the preparation of the varioussubsections.WT/WGTCP/6
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I. CORE PRINCIPLES, INCLUDING TRANSPARENCY, NON-DISCRIMINATION AND
PROCEDURAL FAIRNESS
11. This matter was discussed by the Working Group at its meeting of 26-27 September 2002.
Written submissions on this item were provided by the representatives of New Zealand;  Australia ;
Korea; Thailand;  Switzerland ;  India  (two contributions);  Japan ;  the United States  (two
contributions);  and South Africa (documents WT/WGTCP/W/210, 211, 212, 213, 214, 215 and 216,
217, 218 and 219, and 220, respectively).2  In addition, the Working Group had before it a background
note by the Secretariat (document W/209) on the matter or core principles, including transparency,
non-discrimination and procedural fairness.  The note provided a synthesis of the issues raised and
points made by Members on this topic prior to the Group's meeting of 26-27 September, drawing on
the Working Group's annual reports for the previous four years and on written submissions by
Members.  A previous note by the Secretariat on the Fundamental WTO Principles of National
Treatment, Most-Favoured-Nation Treatment and Transparency (document W/114, issued on14 April 1999) was also made available for the meeting of 26-27 September.  In addition, the OECD
provided a non-paper relevant to this item (subsequently issued as document W/221).  The
representatives of Argentina;  Brazil
;  Canada ;  China ;  Chinese Taipei ;  the Czech Republic ;  Cuba ;
Egypt;  the European Community and its member States ;  Hong Kong, China ;  Indonesia ;  Kenya ;
Malaysia;  Mexico ,  Morocco ;  Nigeria  and Norway  as well as the observers from the Russian
Federation and UNCTAD  made oral statements or posed questions on this item.
12. The discussion on this item spanned a range of issues, including:  (i) the relevance of core
WTO principles for the administration of competition law and policy and the potential benefits of
incorporating them in a multilateral framework on competition law and policy;  (ii) the potential scope
and application of the core principles listed in paragraph 25 of the Doha Ministerial Declaration,namely transparency, non-discrimination, and procedural fairness; (iii) in relation to each of the
principles, possible concerns relating to incorporation of the principles in a multilateral framework on
competition policy, including with respect to their implications for national competition law
enforcement processes and for national industrial and other policies of developing countries;
(iv) additional principles that could be incorporated in a multilateral framework on competitionpolicy, specifically special and differential treatment and comprehensiveness; and (v) possible means
of mediating any conflicts between core principles on competition policy and other economic and
social policies, including the role of exceptions and exemptions from national competition law and/or
from a multilateral framework;  and other matters.
13. With regard to the importance of core WTO principles, including, though not necessarily
limited to, transparency, non-discrimination and procedural fairness, for the field of competition
policy and/or the desirability of incorporating these principles into a WTO agreement on competition
policy, the point was made that these principles were central to the credibility and effectiveness of
such policy.
3   Without these elements, a competition regime would lack credibility, authority and
respect within the community, and therefore be ineffective.  The inclusion of the principles in a WTO
agreement on competition policy would support domestic competition agencies in applying the
principles, and in resisting pressures from domestic sources, in particular from businesses and otherparts of government, which was a problem in developed and developing countries alike. Core
principles were also vital in establishing a "competition culture".
4  The point was also made that
inclusion of the referenced core principles in a WTO framework on competition policy would provide
valuable assurance for traders and investors, ther eby contributing to enhanced trade and investment
flows.5  In this way, a multilateral framework would complement the liberalization of trade in goods
                                                     
2 Hereinafter in the Report, documents issued in the series WT/WGTCP/W/… are referred to as
"W/…";  documents issued in the series WT/WGTCP/M/… are referred to as "M/…".
3 M/19, paragraphs 5, 6, 7, 10, 39, 42, 43, 49 and 82.
4 M/19, paragraphs 14 and 39.
5 M/19, paragraphs 10 and 39.WT/WGTCP/6
Page 5
and services and would enhance world economic growth and be positive for all countries, developed
and developing alike.6  The view was also expressed that the three principles referred to in paragraph
25 of the Doha Ministerial Declaration were closely inter-linked and mutually reinforcing; discarding
any of them would weaken the remaining principles  and the functioning of competition policy as a
whole.7
14. The point was made that competition policy, when it affected trade, was already subject to the
principles of non-discrimination, transparency and procedural fairness, at least to an extent, as a result
of relevant general provisions of the GATT and the GATS.8  However, given the unique
characteristics of competition policy and its inherent differences from conventional trade issues, it
was desirable to consider and make more explicit the application of the principles in this area, in a
manner that took account of the special characteristics of the field.9  The suggestion was made that a
good precedent for this approach could be found in various existing WTO agreements in which the
core principles had been adapted to the particularities of subjects such as trade in services, intellectualproperty and sanitary and phytosanitary measures.
10  The point was also made that incorporation of
the referenced principles in a WTO agreement on co mpetition policy would not, in any case, involve
the harmonization of competition law or policy.11
15. The suggestion was made that there were two basic options for the incorporation of core
WTO principles in a multilateral framework on competition policy:  (i) a narrow application ofprinciples already inherent in WTO rules, which in itself would be a relatively useful outcome; or
(ii) a wider application of the principles that w ould inform the development of competition policies
and/or laws in Member countries as well as providing a framework for the further elaboration of work
on trade and competition policy within the WTO itself.  The latter approach would bring a new and
important dimension to the development of multilateral rules not only in respect of the field ofcompetition policy and/or law but also in regard to related work in such areas as investment services,
technical barriers to trade and trade facilitation.
12
16. Delving further into the role and application of each of the principles mentioned in
paragraph 25, with regard to the principle of transparency, the point was made that this principle was
well-established in WTO agreements such as the GATT (Article X regarding publication andadministration of trade regulations), the GATS (A rticle III regarding transparency) and the TRIPS
Agreement (Article 63 regarding transparency).  It wa s, perhaps, of particular importance in regard to
"behind-the-border" measures such as competition law and policy, since it was a means to ensure that
such measures were not used as a trade-restrictive measure.  At the same time, reliance on
transparency mechanisms could help to ensure that the reach and coverage of substantive disciplinesin an agreement were not unnecessarily intrusive, thereby ensuring that an appropriate balance was
struck.  Certain aspects of transparency, including the publication of laws, regulations and guidelines
of general application, might entail administrative costs, and therefore would have implications for
capacity-building.  Nonetheless, developing transparent procedures, and having a transparent
legislative framework was a key requirement for promoting compliance with the law and for the
establishment of a credible enforcement institution.  To this extent, the objectives of both the
multilateral trading system and of credible and efficient competition law enforcement would be served
                                                     
6 M/19, paragraphs 7, 17, 39, 43 and 60.
7 M/19, paragraph 14.
8 For details regarding the scope and application of the principles of national treatment, most-favoured-
nation treatment and transparency, see The Fundamen tal WTO Principles of National Treatment, Most-
Favoured-Nation Treatment and Transparency (Note by the Secretariat, document W/114, issued on
14 April 1999).
9 M/19, paragraph 7.
10 M/19, paragraphs 7 and 13.
11 M/19, paragraph 33.
12 M/19, paragraph 4.WT/WGTCP/6
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by appropriately designed transparency obligations in a multilateral agreement on competition
policy.13
17. In the field of competition policy, a transparency commitment would apply to laws,
regulations, and guidelines of general application.  There would be an obligation upon WTO
Members to ensure the publication of such laws, regulations and guidelines in a comprehensive and
timely manner.  This might be done either in print in an official gazette, journal or the like, or possiblyon a publicly accessible website.
14  This "external" transparency obligation would apply not only to
laws, regulations and guidelines, but also to sectoral exclusions and exemptions.  Such exclusions and
exemptions could be important determining factors for firms in making business decisions.  Hence,
transparency in regard to such matters could be one of several factors which would eventually serve to
bring about an increase in FDI flows.15  A further aspect of transparency would be an obligation on
WTO Members to notify their laws, regulations and guidelines as well as sectoral exclusions and
exemptions to the WTO.16  Such notifications might usefully be made to the WTO Committee on
Competition Policy that would need to be established to administer the proposed agreement.17  The
point was also made that, in principle, transparency should permeate all aspects of a country's
competition regime, including legislation, policies, institutional structures, decision-making processes,
enforcement priorities, policy and procedural guidelines, case selection criteria, exemption criteria,
appeal processes, and details of all relevant outcomes and decisions made.18  At the same time,
transparency obligations should be defined in a way that was not overly burdensome.19  In this regard,
the question of public availability of individual competition law decisions which have binding
precedential value arises;  the suggestion was made that a way could be found to make them known to
the general public.20  The suggestion was also made that developing countries be given sufficient time
and flexibility to progressively build transparency in the administration and enforcement of thecompetition law
21, for instance through transitional measures.22  Certain elements of an eventual
transparency provision could also be identified as priority areas for technical assistance and
capacity-building activities.23
18. The view was also expressed that the protection of confidential information, including
commercial and business secrets, would be a key excep tion to an eventual transparency principle in a
multilateral framework on competition policy.24  In fact, existing WTO transparency principles
generally included an exception for confidential information, which Members typically implemented
in a manner consistent with their own laws and legal traditions.25
19. A number of questions, concerns and/or reservations were noted regarding the proposal to
incorporate the principle of transparency in a multilateral framework on competition policy.26
Regarding issues of scope and coverage, the suggestion was made that this required careful
consideration.  With regard to the possible criterion of whether an individual decision had
precedential value, at least in common law jurisdictions, this was an extremely broad class of
                                                     
13 M/19, paragraph 39.
14 M/19, paragraph 40.
15 M/19, paragraph 40.
16 For further commentary on the treatment of exceptions and exemptions and exclusions from
competition law, see M/19, paragraphs 5, 9, 13, 38, 40, 47 and 50.
17 M/19, paragraph 40.
18 M/19, paragraphs 5, 9 and 58.
19 M/19, paragraphs 23, 24, 27, 28, 29 and 54.
20 M/19, paragraph 62.
21 M/19, paragraphs 24, 39 and 61.
22 M/19, paragraph 45.
23 M/19, paragraph 39.
24 M/19, paragraph 5, 11, 12, 45, 48, 50, 51 and 58.
25 M/19, paragraph 23.
26 M/19, paragraphs 22, 23, 24, 27, 29, 53, 55 and 73.WT/WGTCP/6
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decisions because all the court and agency decisions – at least the published ones – could have
precedential effect.  Thus, according to this standard, any decision by the courts of the United States –
not only in government-initiated cases but also in privately-initiated ones - could potentially be caught
by a notification requirement.27  A requirement to publish and notify policies and decisions that were
not explicitly meant to be "competition laws", but that nonetheless de facto bore on competition might
also be burdensome.28  At a minimum, the view was expressed that 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 before Ministers decided on the modalities of negotiations.29  However, a
realistic assessment of the impact of a transparency requirement would not be possible until the Group
had a good idea of the specific substantive obligations that might be required under a possible WTO
agreement on competition.30  Regarding confidentiality, the view was expressed that maintaining the
appropriate balance in this area might be difficult given the differing legal, political and institutional
environments of Members.31
20. In response to these concerns, the view was expressed that to the extent that a Member
published individual decisions, some form of non-burdensome notification process could be found.
With the suggestions and positive engagement of Members, it would be possible to define a practical
set of transparency obligations that would be useful and yet not unduly burdensome, as indeed had
been done in other areas of the WTO.  The notion of focusing on case decisions with a precedentialeffect was only one possible solution.  The key would be that, once the overall framework for
transparency was set, the manner in which it would be satisfied would take account of the realities and
diversity of domestic legal systems.  The suggestion was made that only the existence of certain basic
procedures would be subject to dispute settlement in the WTO, and not the issue of whether the
procedures had been properly exercised in a particul ar case.  In other words, the distinction between
de jure  and de facto violations would apply to the principle of transparency as well as to that of non-
discrimination.
32  The suggestion was also made that an alternative approach was to establish a
competition law and policy database, which could provide a convenient one-stop shop for all
Members.  Reference was made, in this regard, to the example of the APEC Competition Policy and
Law Database developed by Chinese Taipei, which contained policy statements, competition laws,regulations, guidelines, case-handling procedures and decisions of all APEC members.
33  Concerning
the treatment of confidential information, the point was made that this was not defined in any of the
existing WTO Agreements; nevertheless, there were several references in the Agreements to the
protection of confidential information as provided for in national laws.  Panels had consistently
deferred to national laws that were in themselves coherent and provided for this kind of protection.34
21. With regard to the principle of non-discrimination, the point was made that it involved two
components:  most-favoured-nation treatment and national treatment.35  In the context of applying
national competition laws, the suggestion was made that MFN would not pose a great problem;  it was
hardly conceivable that an authority would accept certain anti-competitive practices of firms
originating in one country, while prohibiting those originating in other countries.36  On the other hand,
issues could arise with regard to the status of bilateral and regional cooperation arrangements in
                                                     
27 M/19, paragraph 62.
28 M/19, paragraph 28.
29 M/19, paragraphs 23 and 27.
30 M/19, paragraphs 28 and 62.
31 M/19, paragraph 23.
32 M/19, paragraph 63;  see related discussion, below.
33 M/19, paragraph 64.
34 M/19, paragraph 68.
35 M/19, paragraphs 6 and 47.
36 M/19, paragraph 13.WT/WGTCP/6
Page 8
relation to MFN treatment; these would need to be clarified.  The principle of national treatment
raised a range of issues that would need to be discussed.37
22. With regard to the scope and application of the principle of non-discrimination as it would be
embodied in a multilateral framework on competition policy, the suggestion was made by delegations
supporting development of a multilateral framework that a provision on non-discrimination should
apply only to de jure  discrimination, i.e. to discrimination embodied in laws, regulations and
guidelines of general application, and not to de facto instances of discrimination.38  This did not imply
that instances of de facto discrimination were of  no concern; however, at the current stage it was
difficult to distinguish potential instances of de facto discrimination from the application of the rule of
reason in particular market circumstances, and from reasonable exercises of prosecutorial discretion
based on objective factors.39  The point was also made that care would be taken to ensure that the
principles embodied in a multilateral framework on competition policy did not spill over to other
policy areas, such as industrial policy, although these might, in some cases, already be covered byexisting WTO disciplines.
40
23. A number of questions, concerns and/or reservations were noted regarding the proposal to
incorporate the principle of non-discrimination in a multilateral framework on competition policy.
With regard to possible implications of MFN treatment for existing cooperation arrangements at the
bilateral and regional levels, the view was expressed that it was important to preserve the necessaryscope for such arrangements.  Typically, the level and modalities of international cooperation,
voluntary assistance and informational exchange varied depending on a Member country's legal
system, competition law enforcement system and degree of experience in the area of competition
law.
41  Therefore, a non-discrimination clause in a possible WTO framework on competition policy
should not force competition authorities to provide enforcement assistance or to exchange information
with all of their counterparts on equal terms.  An explicit safeguard might be needed to make this
point clear.42  On the other hand, to the extent that cooperation was treated as voluntary and hence not
subject to binding commitments in any WTO agre ement on competition policy, there might not be a
need for an explicit exemption.43  A related view was that certain procedural steps could be foreseen
to establish positive incentives for enhancing contacts, with the aim of not excluding certain countriesa priori  from cooperation, and thus working in the spirit of MFN.  This could be done, for instance,
through a commitment to respond to requests by other WTO Members asking for case-specific
cooperation, and to explain the reasons if the request could not be taken into consideration.
44  Th e
view was also expressed that, for the sake of transparency, bilateral and regional cooperation
agreements should be notified to the WTO.45
24. The point was made that the WTO non-discrimination principles were generally applied to
"like" products and services; however, competition analysis and enforcement was case-specific, and
no two situations were or would be wholly analogous or comparable.  Thus, in practice it was difficult
to determine whether de facto discrimination existed with respect to antitrust enforcement actions,
given the individual focus of such actions.  Even if the application of WTO national treatment and
MFN principles was limited to de jure discrimination, as the proponents had now proposed, questions
remained.  For example, how should sectoral exem ptions to competition rules be treated?  Most
countries, if not all, exempted certain sectors from the application of antitrust rules or regulated them
through sectoral legislation instead of, or in addition to, antitrust rules.  In the GATT, Article XX
                                                     
37 M/19, paragraphs 14 and 53.
38 M/19, paragraphs 8, 36 and 44.
39 M/19, paragraphs 7, 36, 44 and 65.
40 M/19, paragraph 36.
41 M/19, paragraph 11.
42 M/19, paragraph 6.
43 M/19, paragraphs 37 and 44.
44 M/19, paragraph 13.
45 M/19, paragraph 15.WT/WGTCP/6
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exceptions regarding, for example, the protection of public morals or human health, and law
enforcement, would be available for such exemptions and exceptions.  However, should a prospective
WTO competition chapter address these;  and, if so, were there particular factors in the competition
context that should be addressed, for example, the state of liberalization of the national economy, or
whether or not there was effective national regulatory oversight with respect to exceptions? 46
25. With regard to possible implications for developing countries, the view was expressed that it
was sometimes necessary, for the sake of development, to accept some anti-competitive practices
(such as discrimination against a foreign firm) or mergers in order to achieve long term gains.  For
these reasons, developing countries should be exempted from the application of the principle of
national treatment in any multilateral agreement on competition policy47 or should, at a minimum,
benefit from appropriate flexibility.48  Flexibility was needed, among other reasons, because the
economies of most developing countries were dominated by small and medium-sized enterprises
whose impact on the market was insignificant.  Th e question here was how small firms in developing
countries could remain competitively viable so that they were not wiped out by the current trends of
mergers and acquisitions by multinationals which tended to create monopolies and anti-competitive
practices, when applying the principle of non-disc rimination.  The principle of non-discrimination had
the potential of being abused if not properly addressed; therefore, it should be implemented, if at all,
on a case-by-case basis so that it would not be applied in those cases where it conflicted withcountries' development objectives.
49  Because of globalization, local firms were already confronted
with intense foreign competition.  Industries in developing countries should be given a sufficient time-
frame to build up capacity to meet international competition.50
26. The view was also expressed that the reasons commonly cited as to why national treatment
was an important aspect of non-discrimination in the context of trade policy were not necessarilyapplicable in the case of competition policy.  First, national treatment was intended to ensure that
concessions made by Members in respect of trade barriers at the border were not nullified by within-
the-border discrimination between imported and domestically-produced goods.  Mergers and vertical
restraints often had anti-competitive effects both on domestic and foreign producers.  However, it was
difficult to see how they unfairly blocked market access to imports, which was the concern of thenational treatment principle.  Second, national treatment was designed to support trade liberalization,
which was desirable because, on the whole, it was believed to be beneficial to the participating
countries.  Competition policy, however, was by definition concerned with imperfect competition,
where the presumption in favour of free trade was much less clear cut.  Competition policy in respect
of mergers and cartels could have different welfare effects on different countries, depending on wherethe 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 and restrictive business practices with cross-border effects, and might have
little to gain from the application of the natio nal treatment principle in the competition law of
developed countries.  A third justification for the national treatment principle in trade agreements was
that even in cases where a country could gain unilaterally from departing from free trade, the gains
turned into losses if other countries act the same  way.  However, it had not been established that
departures from an international competition polic y norm could be mutually destructive in the same
way.  These distinctions between the national treatment principle as it applied to trade in goods and its
potential applicability to competition policy cautioned against the appropriateness of carrying it over
to the field of competition policy.  Furthermore, much of the discussion so far in the Working Group
had been based on the idea of promoting static allocative efficiency as the sole objective of amultilateral agreement.  In developing countries, where both private and public resources for research
                                                     
46 M/19, paragraph 22.
47 M/19, paragraph 26.
48 M/19, paragraphs 29, 58 and 61.
49 M/19, paragraph 29.
50 M/19, paragraphs 25 and 53.WT/WGTCP/6
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and development (R&D) were limited, the promotion of investment might require a stable degree of
economic concentration.  Increasing exposure to international trade consequent on trade liberalization
could be relied upon to keep a check on market power and limit static resource misallocation.  In any
case, many developing country Members had little experience or expertise in regard to competition
policy.  This meant that competition law principles  drawn from countries with much more experience,
apart from possibly being intrinsically inappropriate for developing countries, would impose greatercompliance costs.  Developing countries also did not yet have the kind of well-developed safety nets
that existed in industrial countries to provide for those displaced by import competition.  There was
thus a greater need to cushion the impact of such competition through suitable industrial restructuring
measures which would also enable developing countries to embrace greater trade liberalization.  In
this sense, a discriminatory competition policy could be a concomitant to a non-discriminatory trade
policy.  In the context of meeting the needs of developing countries, it was more appropriate to adopt
the concept of non-discrimination in terms of the need to treat different countries with differentcapacities in a differential manner, and of the need and responsibility to provide assistance, positive
measures and affirmative action to local firms and institutions in developing countries to ensure their
viability and development so that they could become increasingly efficient and competitive.
51
27. The view was also expressed that the approach that had thus far been taken to defining non-
discrimination and other core principles that might be included in a multilateral framework oncompetition policy had been fundamentally flawed in  that the focus had been on domestic rather than
on cross-border trade.  For example, non-discrimination had been used interchangeably with "national
treatment", which referred to equal treatment between foreign and domestic firms operating within a
domestic market.  This was a view that would serve the interest of those with significant overseas
investment that would like to ensure access to the host countries' markets.  Most developing countries,however, were importers and exporters, rather than investors.  Thus, priority in the application of the
core principles should be focused in the first place on cross-border trade.  A competition law should
not discriminate between export and non-export firm s.  In other words, if bid-rigging and price or
quantity-fixing agreements were prohibited in the national competition law, export cartels should be
subject to the same provisions.  The use of export cartels as a strategic trade policy to extract "rents"from foreign countries was unacceptable.  If the Doha Ministerial Declaration was truly a
development agenda, then unfair cross-border trade, not unfair domestic trade, should be given
priority.
52
28. In response, the view was expressed that not all forms of different or differential treatment
were in and of themselves discriminatory;  indeed, there could be plenty of reasons why a governmentmight wish to treat different economic operators in a different manner.  The point that was being
made by delegations supporting incorporation of the principle of non-discrimination in a multilateral
framework on competition policy was simply that, as a matter of principle, the reason for the
differential treatment could not and should not be nationality.  Confidence was expressed that the
majority of Members shared this view, and indeed it followed from the founding principles of the
WTO.  It might also be the case that some of the economic operators that a government was treating
in a certain manner were all foreigners.  For instance, as had been pointed out by some developingcountries, the economic structure of a country might not be sufficiently diversified or developed, and
in certain areas firms with certain characteristics could all be foreign.  Probably this would not, in
itself, constitute discrimination; however, the underlying reasons for the different treatment had to be
based on objective policy factors.  With regard to an argument that had been made that some
Members might be in a position to ensure de facto non-discrimination but not de jure  discrimination,
this was understood to mean that Members might not know in advance when they needed to apply
differential treatment.   However, a priori exclusions and exemption were not the only tools to permit
this.  There were also public interest clauses and several other policy tools that Members with a
                                                     
51 M/19, paragraph 17.
52 M/19, paragraph 12.WT/WGTCP/6
Page 11
competition authority could adopt.  Under the proposed rule, these tools would be acceptable provided
that they were administered in a transparent manner.53
29. With regard to the argument that WTO rules should focus on cross-border rather than
domestic trade, the view was expressed that such a distinction was untenable in practice.  Any anti-
competitive behaviour that involved cross-border trade or investment necessarily involved domestic
economic factors;  the only cases where this was not so were situations where there were no imports,exports or foreign direct investment with respect to a given area or product, and trade was purely
domestic.  If a country decided not to apply competition law to that particular situation, the WTO
probably would not have anything to say about that because it was a purely national choice.
However, the majority of situations would have  a cross-border dimension of one kind or another.
54  In
response to this argument, the point was made that the discussions thus far in the Working Group had
seemed to concentrate mainly on situations of anti-competitive practices involving investment,
meaning commercial presence.  This required fo cusing on the nationality of companies that were
already operating within the home country or the host country.  However, there were many unfair
practices related to cross-border movement of goods in terms of exports and imports, in particular in
cartels, and thus a greater focus on cross-border movements of goods would be desirable.55
30. With regard to the principle of procedural fairness, the view was expressed that a common
feature of all effective competition policy regimes was that they included guarantees that the rights ofparties facing adverse decisions and sanctions would be recognized and respected.  Such guarantees
could vary both in content and in form, because they reflected the tools of the legal system and the
traditions that had generated the competition regime.  Four broad categories of guarantees were
relevant.  First, there should be guarantees relating to access to the system.  For example, this could
involve the right of firms to have notice that a fo rmal investigation by the competition authority was
pending against them, and what the authority's objections to their conduct were.  A second basic
guarantee related to the defence of the firms invo lved.  Firms should have the opportunity and the
time to make their views known to the authority in writing or by participating in hearings, by
submitting evidentiary proof or documents, and by having an opportunity to introduce testimony from
witnesses who might corroborate thei r views on the facts.  These types of guarantees would typically
include some right of access to the authority's file .  A third guarantee was the right of firms involved
in competition proceedings to have decisions affecting them reviewed by an independent judicial
body.  Finally, the protection of confidential information, including business secrets, should also be
guaranteed.  These basic guarantees did not need to be harmonized across regimes, but should be
described in a future agreement with some clarity.
56  Another view was that four broad concepts could
be identified that were likely to promote fairness, namely:  (i) the right of access and rights to petition
a competition authority;  (ii) the right of a firm su bject to an investigation to know the basis for an
antitrust authority's objection before the authority took action, and the right of that firm to respond;
(iii) the right to appeal an agency's decision;  and (iv) timeliness.57
31. A number of questions, concerns and/or reservations were noted regarding the proposal to
incorporate the principle of procedural fairness in a multilateral framework on competition policy.
The point was made that, currently, there was no broad consensus on the meaning of proceduralfairness in the context of competition law enforcement.  This was partly because notions of
fundamental fairness differed between legal system s, and were also influe nced by the political and
legal cultures in which relevant agencies operated.
58  As well, a number of specific questions were
posed regarding how the principle of procedural fairness would work in practice, including the
                                                     
53 M/19, paragraph 66.
54 M/19, paragraph 67.
55 M/19, paragraph 67.
56 M/19, paragraph 41.
57 M/19, paragraph 18.
58 M/19, paragraph 18.WT/WGTCP/6
Page 12
following questions:  who should have rights of access to the system?  Would everyone have equal
access rights, or could more extensive rights be conferred on certain classes of parties, such as
customers of the firms who were the subject of investigation?  Should the competition authority be
required to accord procedural rights to third parties that might, for example, be harmed by a merger
transaction but not in a traditional antitrust sense?  Would the agencies of Members whose legal
systems allowed for broad rights of private action to pursue competition law claims directly throughthe use of the courts be required to provide as much  formal access to the agency as those that did not?
Would all Members be required to have private rights of action?  Concerning the right to respond,
what form should such a practice take?  Would objections need to be notified formally and in writing
or could this be done on a more informal basis?  As to appeal rights and the role of the judiciary, what
types of decisions ought to be reviewable?
32. With regard to the implications of the principle of procedural fairness for developing
countries, the concern was expressed that proposals on procedural fairness could require a Member toset up and maintain a judicial framework for handling appeal cases.  Similarly, requirements for
comprehensive notification of competition laws and related information to both the public and the
WTO might require a lot of resources.  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
before Ministers decided on the modalities of negotiations.
59  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 had to be developed for
competition policy.60  In any case, it was important to address this issue, if at all, in ways that took
account of the diversity of Members' legal cultures and the established practices of national judicial
systems and competition authorities, where the latter existed.61
33. In response to these concerns, the view was expressed that all competition systems – no
matter how different they were – respected certain basic criteria of fairness.  Furthermore, experience
in other areas of the WTO had shown that procedural fairness could be addressed in ways that were
simple and practical, and yet took account of the evident diversity in Members' legal cultures and
systems.  To take the example of judicial review, there were a number of provisions in the WTOagreements stipulating an obligation to provid e for judicial review without any interference
whatsoever on how judicial reviews were organized in  a given country, or the scope of such judicial
reviews.  In practice, these provisions had not created problems of the type which had been alluded to,
and had been useful in terms of reassuring traders and investors that the national systems of countries
with which they often had, at best, limited familiarity, respected certain basic norms.
62
34. Pursuing a specific aspect of the debate, the view was expressed that even the more basic
procedural fairness rules that might be envisioned in a multilateral agreement could raise problems for
national enforcement processes.  For instance, one of  the basic rules would involve the right to receive
a notice of an investigation.  There would be no problem if the required notice was supposed to be
addressed to the party being investigated, but the situation was different if there was to be widespread
notification, for example, to the WTO and/or its Members.  Certain Members' practice was not to
disclose publicly the existence of an investigation when it had not been determined that the target ofan investigation had done anything wrong, out of respect for the rights of the person being
investigated.
63  In response, the point was accepted that there was a need for a clear distinction
between notification of investigations to the parties, and notification to the WTO.  Nevertheless, one
of the essential elements of procedural fairness was that the target of an investigation be so notified.
To show compliance with a procedural fairness oblig ation in the WTO, Members should simply be in
                                                     
59 M/19, paragraphs 27 and 28.
60 M/19, paragraph 54.
61 M/19, paragraphs 15, 28 and 63.
62 M/19, paragraphs 41, 42 and 68.
63 M/19, paragraph 69.WT/WGTCP/6
Page 13
a position to demonstrate that they had made provision for targets of an investigation to be notified in
an appropriate manner.64  The suggestion was also made that any eventual multilateral framework on
competition policy should be non-binding.  In this context, the question of obligations relating to
procedural fairness would not arise.65
35. With regard to additional principles that might be incorporated in a multilateral framework on
competition policy, the suggestion was made that the principle of special and differential treatment(S&D) was a key such principle.
66  Possible dimensions of this principle included increasing trade
opportunities for developing countries, safeguarding their developmental interests, flexibility in any
commitments for developing countries and LDCs, and transitional periods.67  The view was expressed
that development provisions should be established that had a clear linkage to trade dimensions, so that
they were closely related to the mandate of the WTO.68  Further, special and differential treatment
implied that time should be granted to developing countries to implement a competition regime and
any related commitments;  the amount of time should depend on the country's level of development.69
In addition, developing countries should be given a time-frame to build transparency and due process
in the administration and enforcement of the competition law.70  The view was also expressed that
developing countries should be allowed to exempt national and international export cartels, since most
developing countries' exporters or importers were mainly small scale and might need to bind together
to counter the bargaining power of larger buyers or sellers from industrialized countries.  As regardsmergers and acquisitions, special and differential treatment should be provided for developing
countries so as to enable their economies and their enterprises to achieve a critical mass, which could
enable them to compete on an equal footing with enterprises of the same size on international
markets.
71
36. The point was made that giving content to the principle of special and differential treatment
might facilitate reaching agreement on the appropriate meaning and scope of procedural fairness and
the other proposed core principles.72  The view was also expressed that special and differential
treatment should not necessarily be limited to developing countries.  Rather, flexibility could be
extended to all countries that had no competition law,73 regardless of their stage of economic
development.74  Consideration needed to be given as to how special and differential treatment related
to progressivity, flexibility, capacity-building and regional institutions.75  The view was also
expressed that the need for special and differential treatment in this area went further than the simple
element of progressivity.  The focus of work on core principles should be on promoting the
developmental needs and the interest of all countries, particularly the developing ones.76
Nevertheless, the point was made that if exemptions and exclusions became part and parcel of the
                                                     
64 M/19, paragraph 69.
65 M/19, paragraph 26.
66 M/19, paragraphs 12, 15, 29, 32, 50, 52, 53, 55, 56, 61, 71.
67 At the Working Group's meeting in April, the observer from the OECD drew the attention of the
Group to various possible types of special and differential treatment like GATS-type approach, exceptions,
exemptions and exclusions, plurilateral approach, transi tional periods and technical assistance, etc. (see M/17,
paragraph 41).
68 M/19, paragraph 53.
69 M/19, paragraph 61.
70 M/19, paragraph 12.
71 M/19, paragraph 50.
72 M/19, paragraph 32.
73 M/19, paragraph 55.
74 M/19, paragraph 15.
75 M/19, paragraph 34.
76 M/19, paragraph 55.WT/WGTCP/6
Page 14
general framework of the agreement, there would be less of a need for special and differential
treatment at least on this ground.77
37. The suggestion was also made that consideration be given to the following additional
principles:  (i) the obligations of foreign firms to the host country;  (ii) the obligation of home
governments to ensure that foreign firms met their obligations;  (iii) measures to be taken by domestic
firms and governments in a possible multilateral framework;  (iv) enabling local firms, especiallysmall firms, to remain competitive and to grow ;  (v) impediments to competition by government
actions, for example anti-dumping actions;  (vi) impediments to competition by intellectual property
rights' protection, global monopolies and oligopolies, and their effect on local firms;  and (vii) large
mergers and acquisitions by transnational companies, and their effects on developing countries.  The
proposed exercise would enable the Working Group to identify appropriate technical assistance and
S&D measures that could assist developing countries.
78  The point was also made that past discussions
in the Working Group had not addressed the concerns of Members having no comprehensivecompetition law or authority.  A suggestion was made that the Secretariat should carry out further
study on how the various core principles could be applied in those economies without a general
competition law.
79
38. The suggestion was made that the principle of  comprehensiveness merited inclusion in the
proposed multilateral framework.  The principles of transparency, non-discrimination and proceduralfairness, which were derived largely from current WTO disciplines, provided necessary but not
sufficient conditions for an adequate competition policy.  In particular, those principles did not
adequately deal with the issue of exemptions and exceptions.  An additional principle, namely
comprehensiveness, which was one of the principles used in APEC to enhance competition and
regulatory reforms, was needed to achieve this.  Recognizing that all countries would needexemptions and exceptions in their competition policy and law, under a principle of
comprehensiveness these exemptions and exceptions would be subject to periodic re-examination
within the context of an overall framework or commitment to competition principles.
80
Comprehensiveness was not a core WTO principle, but a core principle of competition policy.  Itsinclusion in the proposed framework would help to avoid a situation whereby the value of the
agreement was undermined by an excessive proliferation of exemptions.
81
39. Returning to the subject of the possible implications of incorporating non-discrimination and
other core WTO principles in a WTO agreement on competition policy for national industrial and
other economic and social policies, the view was expressed that much of the debate turned on this.
Developing countries needed the flexibility to reso rt to a range of developmental tools, including
those that normally fell under the rubric of "industrial policy".  In any case, the resolution of conflicts
between competition and development policies should be left to each Member, subject to the
transparency consideration.  What should be avoided was an overly prescriptive or intrusive
approach.82
40. In response, delegations supporting development of a multilateral framework suggested that,
at least to an extent, the view that competition policy was at odds with developmental objectives was
mistaken.  This was not in any way to diminish the importance of developmental objectives -certainly, it was understandable that development was the utmost priority of economic policy in
developing countries - but only to suggest that br oad application of competition policy principles
across national economies could be consistent with or even serve to advance those objectives.
                                                     
77 M/19, paragraph 71.
78 M/19, paragraph 73.
79 M/19, paragraph 27.
80 M/19, paragraph 4.
81 M/19, paragraph 72.
82 M/19, paragraph 75.WT/WGTCP/6
Page 15
Experience had shown that competition in markets led to greater economic efficiency, thereby
contributing to sustainable development in the long term and guaranteeing the interests of all market
players, including small and medium-sized enterprises as well as consumers.  Certainly, it was not in
the interest of developing countries to subject them selves to arrangements such as international cartels
– which could only be combated through the effective application of competition laws.  For these
reasons, an approach based on the sweeping exclus ion of whole sectors of the national economy from
the scope of competition principles might well damage the objectives that it was intended to
promote.83
41. Notwithstanding the foregoing, the proponents al so affirmed their belief that the proposed
multilateral framework could and should preserve adequate "policy space" for developing countries to
pursue the economic and social policies they deemed necessary for their own development.  It was
perfectly legitimate for a government to decide that there were policy goals that overrode the need to
protect competition.  Among other possible tools, the preservation of appropriate policy space mightbe addressed through:  (i) clear delineation of the scope of the proposed core principles regarding
competition policy, with the intent of ensuring that they did not spill over into related policy fields;
(ii) appropriate exemptions or exceptions from national competition law and/or the proposed
multilateral framework; and/or (iii) the principle of special and differential treatment, discussed
below.
84
42. With regard to the relevance of exceptions an d/or exemptions from national competition laws
and/or from a multilateral framework as a tool for managing any conflicts with national industrial
policies, the view was expressed that given the diversity in stages and patterns of economic
development among Members, sufficient flexibility had to be incorporated in any possible framework
to make it workable among all WTO Members.85  A multilateral framework on competition had to
provide for the possibility of appropriate exemptions or exclusions in two respects.  First, many
Members – including LDCs and other developing countries, but also some industrialized countries –
wished to provide greater flexibility for small and medium-sized enterprises than for other firms under
their competition laws.  The proposed framework should permit this kind of flexibility.  Second, as
mentioned above, national interests might be safeguarded simply by providing for exclusion ofsensitive economic sectors altogether from the substantive provisions of a multilateral framework, or
from some of the core principles.
86  Provisions for exemptions and exceptions would provide greater
flexibility for WTO Members to achieve other national objectives such as industrial and economic
development.87  Exceptions and exemptions must, however, be subject to appropriate transparency
procedures, in order that firms trading with a Member or investing in a Member's economy would
know where they stood.88  The suggestion was also made that the ability to implement exemptions
should not be phased out over time, or be subject to periodic review.89
43. The view was expressed that the experience of some Members confirmed that national
competition policies consistent with the principle of non-discrimination could co-exist with national
industrial polices and other economic or social policies designed to address particular problems or
advance particular interests.  Reference was made, in this regard, to the case of Australia, which
maintained a non-discriminatory approach to the administration of its competition law.  At the sametime, there were other government policies in Australia that co-existed with competition policy and
had allowed the Government to meet other priorities and goals, e.g. foreign ownership restrictions on
Australian media.  Furthermore, while Australia's competition regime was non-discriminatory,
                                                     
83 M/19, paragraphs 76 and 83.
84 M/19, paragraph 77.
85 M/19, paragraphs 9, 27, 28, 29 and 49.
86 M/19, paragraph 47.
87 M/19, paragraph 78.
88 M/19, paragraph 78.
89 M/19, paragraph 78.WT/WGTCP/6
Page 16
provision was made for exemptions from the law through legislative means, provided that the
exemptions met a public interest test, and through an administrative "authorization" process
conducted by the competition authority, which was also based on a public interest test.  These
considerations made clear that adopting a national  competition law consistent with WTO principles of
non-discrimination and transparency would not nega te Members' ability to implement appropriate
national industrial policies, consistent with existing WTO disciplines.90
44. In a similar way, the point was made that the Constitution of the South Africa set high
standards with respect to the application of the principles of transparency, non-discrimination and
procedural fairness.  All administrative actions, including actions taken by the competition authorities,
had to adhere to them.  For instance, there was a clear institutional separation between the functions of
investigation and adjudication, and high standards with respect to the provision and publishing of the
reasons for any decision made, including decisions that were favourable to merging parties.  Although
the South African decision-making body in competition cases, the Competition Tribunal, was anadministrative tribunal, and a body of laypersons, rather than of judges, effectively it had the status of
a high court, and had to adhere to all the principles and procedures characteristically adhered to by
institutions of that nature.  Notwithstanding this, the South African Competition Act contained
provisions designed to advance and promote the interests of small and medium-sized enterprises and
those of black-owned enterprises, in the words of the Competition Act, "to extend and promotecontrol of those historically disadvantaged".  These two objectives were not only incorporated in the
broad objectives of the Act, but were taken into consideration in applications for exemptions under
the legislation and constituted specific criteria to be considered in the evaluation of mergers.  These
aspects of the legislation had passed constitutional muster because the Constitution of the Republic of
South Africa provided that in order to promote equality, legislative and other means could be taken toprotect or advance persons previously disadvantaged by discrimination.  Thus, the guarantees of non-
discrimination and procedural fairness embodied in the Constitution and the existence of a
Competition Act respecting those guarantees had not prevented the Government of South Africa from
pursuing industrial and social policies even though the application of such policies required the
selective promotion of particular interest groups.
91
45. The suggestion was made that, as a possible way forward on this issue, a WTO agreement on
competition policy could embody only general provisions with regard to the core principles, while
also offering more detailed interpretations or po ssible approaches for the application of the core
principles in the form of non-binding guidelines or a menu of options.  This would foster common
understanding of the core principles among Members, while also taking into consideration thediversified approaches of competition law enforcement adopted by each Member.
92  The view was
also expressed that, although non-binding arrangem ents could indeed be part of a possible way
forward, a purely non-binding framew ork would not be sufficient.93
46. The view was expressed that the principles referred to in paragraph 25 of the Doha Ministerial
Declaration were the basis of the multilateral trading system and were known by all countries.  To
bring them over to competition legislation would not be difficult if Members engaged themselves
positively in the exercise.  No competition law was opposed to these principles; on the contrary,competition policy and the WTO principles were mutually supportive.  Furthermore, the proposed
principles would give more credibility to competition agencies.  Delegations should therefore adopt a
more positive stance in this area, starting with an analysis of how the principles were reflected in their
own legislation.  In this way, common approaches and positions could be readily identified.
94
                                                     
90 M/19, paragraph 6.
91 M/19, paragraph 31.
92 M/19, paragraph 80.
93 M/19, paragraph 80.
94 M/19, paragraph 82.WT/WGTCP/6
Page 17
II. PROVISIONS ON HARD CORE CARTELS
47. This item was discussed by the Working Group at its meeting of 1-2  July 2002.  Written
submissions on this item were provided by the representatives of Australia, Canada , the European
Community and its member States, Korea , Mexico , Switzerland , Thailand  and the United States
(documents W/198, 201, 193, 200, 196, 194, 203 and 205, respectively).  In addition, the Working
Group had before it a background note by the Secretariat (document W/191) on the matter of
provisions on hard core cartels.  The note provided a synthesis of the issues raised and points made by
Members on this topic in previous meetings of the Working Group, drawing principally on the
Group's annual reports for the past four years and on written submissions by Members.  UNCTAD
and the OECD also provided written materials relevant to this item (subsequently issued, with the
assent of the Working Group, as document W/197 and document W/207, respectively).  In addition,
the representatives of Argentina;  Brazil ;  Cuba ;  Guatemala ;  Hong Kong, China ;  India ;  Indonesia ;
Japan;  Malaysia ;  New Zealand ;  Pakistan ;  Romania ;  South Africa  and Venezuela  as well as the
observer from the Russian Federation made oral statements or posed questions on this matter.
48. The discussion on this item spanned a range of issues, including:  (i) the harm caused by
hard core cartels, with particular reference to their effects on developing countries;  (ii) the measures
needed to address hard core cartels, at both the national and international levels;  (iii) the relevance of
existing international instruments, including those of UNCTAD and the OECD;  (iv) questions,
concerns and reservations regarding proposals for action at the multilateral level;  and (v) definitional
and other issues.
49. With regard to the harm caused by hard core cartels, the view was expressed that these
arrangements undermined the potential benefits of trade liberalization and imposed heavy costs on the
welfare and development prospects of poor countries.95  Evidence before the Working Group,
including a recent World Bank background study, showed clearly that international hard core cartels
had a substantial detrimental impact on developing countries and that this impact was more extensive
than had previously been thought.96  The study had found that imports affected by the cartels
described in that study had comprised approximately 6.7 per cent of all developing countries' imports
in 1997, or a total of US$81.1 billion in goods and services.  Moreover, the mark-up attributable to thecartels had been as high as 45 to 50 per cent in several cases, implying that the impact on the cost of
developing countries' imports was immense.  Th ese estimates were based only on the known cartels,
described in the study, whose existence had been disclosed by competition authorities in the United
States and Europe;  therefore, the actual figures could be much higher.
97  To cite one relevant
example, the graphite electrodes cartel, which had lasted at least seven years and had coveredproducts worth a total of about €2.5 billion, had fixed prices at about 50 per cent above the
competitive market price, implying illegal gains for the cartel members of about €1.2 billion within
the European Community alone.
98  Hard core cartels also had an impact on suppliers99 and on market
access.100  A recent OECD survey had addressed more than one hundred cases investigated in OECD
member countries and about 20 non-member countries between 1996 and 2000.101  The magnitude of
welfare losses that had been caused by the cartels described in the OECD survey was many billions of
dollars annually.  Most of the reported cases were domestic cartels, though international cartels hadreceived a great deal of attention because of their size and visibility.  Purely domestic cartels probably
                                                     
95 M/18, paragraphs 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 47.
96 Margaret Levenstein and Valerie Suslow, Priv ate International Cartels and Their Effect on
Developing Countries (Background Paper for the World Bank's World Development Report 2001,9 January 2001) (available on the Internet at http://www-unix.oit.umass.edu/~maggiel/WDR2001.pdf).Referred to henceforth as "World Bank background study").
97 M/18, paragraphs 9 and 39.
98 M/18, paragraph 5.
99 M/18, paragraph 6.
100 M/18, paragraphs 10 and 43.
101 Fighting Hard-Core Cartels – Harm, Effective Sanctions and Leniency Programme , OECD, 2002.WT/WGTCP/6
Page 18
did even more harm than the big global ones.  These cartels were more common in some sectors,
including construction, construction materials, sales to government institutions, bulk food, electrical
equipment, as well as the services sector, particularly local transport, professional services and health
care.102
50. The view was expressed that international cartels were largely a developed country
phenomenon, in that low-income countries and LDCs were home to none of the notoriousinternational cartels that had been discussed in the Working Group.  Nonetheless, it was clear that
such cartels had inflicted heavy losses on countries in various parts of the world as had been
documented in the submissions of various delegations.
103  The point was also made that cartels tended
to operate in countries with weak or non-existent enforcement of competition laws.  In the past, only
cartels affecting developed economies, in particular those of the United States and the European
Community, had been systematically exposed and prosecuted.  While the breaking up of cartels in
these jurisdictions might, in some cases, impair their operations in developing economies as well,other cartels operating exclusively in developing countries might never be discovered or prosecuted.
The international steel cartel was an example of a cartel that had been known to be in existence for
over a decade and was undoubtedly harmful to developing countries but had never been prosecuted.
104
Another view was that the magnitude of the harm caused by cartels remained far from clear.  Many
calculations at this stage seemed to consist of rather crude estimates.105
51. With regard to the measures needed to address hard core cartels, the view was expressed that,
at the national level, what was called for was the adoption and vigorous enforcement of well-crafted
national competition laws.106 In this regard, the experiences of several WTO Members that had
successfully investigated and prosecuted cartels, including both developed and developing countries,
were referred to in the Working Group.107  The point was made that so-called leniency programmes,
which typically offered immunity to the first member of a cartel that came forward to the authorities
to provide information on the other members, were a potentially powerful enforcement tool.108
52. The point was also made that the international scope of many cartels was at odds with a focus
only on purely domestic arrangements:  rather, there was a clear need for international action in this
area.109   It was difficult for a single competition authority to effectively address the impact of cartels
that operated across multiple economies, particularly where the competition regime had only recently
been established or the domestic authority had few resources.  Therefore, countries needed to
cooperate in prosecuting those infringements considered to be most harmful.110  Cooperation had been
undertaken bilaterally in a number of cases, with proven benefits.111  However, the negotiation and
implementation of such agreements was time-consuming112, and international cartels or other
practices often affected countries other than those covered by particular bilateral agreements.
Moreover, countries with more advanced competition regimes might have limited incentive to
cooperate with countries whose enforcement of competition law was considered to be inadequate.113
Finally, many countries were excluded from the benefits of such agreements.114  For these reasons, the
                                                     
102 M/18, paragraph 48.
103 M/18, paragraph 33.
104 M/18, paragraph 9.
105 M/18, paragraph 37.
106 M/18, paragraphs 5, 6, 14, 24 and 31.
107 M/18, paragraphs 5, 6, 14, 30 and 31.
108 M/18, paragraphs 27 and 29.
109 M/18, paragraph 22.
110 M/18, paragraphs 8, 9, 11, 17, 19, 22, 25, 26, 27, 28, 29, 32 and 33.
111 M/18, paragraphs 8, 9 and 11.
112 M/18, paragraph 8.
113 M/18, paragraph 9.
114 M/18, paragraph 8.WT/WGTCP/6
Page 19
suggestion was made that the incorporation of provisions on hard core cartels in a multilateral
framework on competition policy should be considered.115
53. With regard to the possible contents of provisions of a multilateral framework on competition
policy relating to hard core cartels, the suggestion was made that two main elements were required:
(i) a ban on such cartels;  and (ii) measures to promote the exchange of information between WTO
Members in relation to such cartels.  More spec ifically, a WTO agreement should incorporate a clear
statement that hard core cartels were prohibited.  There should be a clear definition of such cartels; a
mechanism allowing countries to grant exclusions from the definition for domestic policy purposes,
while ensuring appropriate transparency regarding such exclusions;  and guidance should be provided
regarding the deterrence of cartel activity through appropriate penalties.  The exact contours of a
definition of hard core cartels could only be determined through negotiations.  In regard to penalties,
while these were inherently a matter for domestic law and were closely linked to the domestic legal
system, a WTO Competition Policy Committee could provide guidance to countries wanting tointroduce penalties in terms of identifying what had proved effective in various jurisdictions.
116  The
suggestion was also made that a transitional period was necessary for developing countries that had
not yet established competition laws to adopt such disciplines.  During the transitional period,
technical assistance and capacity-building relating to the adoption of legislation, as well as the
enforcement process, should be provided.117  The view was also expressed that any international
initiative in this area should not focus unduly on domestic as opposed to international arrangements.
Importance was attached to the implementation of cooperation mechanisms focused specifically on
the issue of hard core cartels.118
54. The relevance of existing international instruments was discussed.  With regard to the United
Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of RestrictiveBusiness Practices (the "Set"),
119 the Set had, as its primary objective, to ensure that restrictive
business practices did not impede or negate the realization of benefits flowing from trade
liberalization, particularly those affecting the trade and development of developing countries.  It had
universal applicability to all enterprises and all coun tries, as well as being applicable to transactions
involving goods and services.  As described in the Set, enterprises should refrain from horizontalarrangements such as price-fixing agreements, including export and import agreements;  collusive
tendering;  market or customer allocation arrangements;  allocation of sales and production quotas;
collective action to enforce arrangements, e.g. by concerted refusal to deal;  concerted refusal of
supplies to potential importers;  and collective denial of access to an arrangement, or association that
was crucial to competition.
120  With regard to the OECD Recommendation on Hardcore Cartels,121
essentially, the Recommendation provided that OECD member countries should ensure that their
competition laws effectively halt and deter hard core cartels, in particular by providing for (i)
effective sanctions, of a kind and level adequate to deter firms and individuals from engaging in cartel
practices; and (ii) adequate enforcement power s and institutions including powers to obtain
documents and information.  The Recommendation also committed OECD members to cooperate
with each other in enforcing their laws against cartels and set out a number of principles to govern
such cooperation.  The OECD Competition Committee was charged, among other tasks, withreviewing Members' experience in implem enting the Recommendation.  Non-OECD member
                                                     
115 M/18, paragraphs 8, 9, 10, 11, 16, 17, 29 and 32.
116 M/18, paragraph 17.
117 M/18, paragraph 19.
118 M/18, paragraph 22;  see related discussion in Part C(III), below.
119 United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of
Restrictive Business Practices (Geneva:  1980).
120 M/18, paragraph 33.
121 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/6
Page 20
countries were invited to associate themselves with the Recommendation.  Accordingly, both the Set
and the OECD Recommendation underlined the bread th of international concern on this issue.122
55. A number of questions, concerns and reservations were raised by delegations regarding the
foregoing proposals and observations.  The view was expressed that there was no generally accepted
definition of hard core cartels.  The OECD Recommendation focused on enterprise practices, and not
on governmental measures having an impact on trade which were already covered under existingWTO Agreements
123;  it was acknowledged that the utility of the term "hard core cartels" was limited
in the sense that countries had differing definitions, prohibitions, and exemptions relating to cartel
agreements.124  The definition of hard core cartels was meant to exclude arrangements that could be
defended on efficiency-enhancement grounds; in this context, the question was asked whether a
distinction between a hard core and a non-hard core cartel could actually be made operational, and
whether there was any scope for an efficiency defence of hard core arrangements?  If  scope existed
for an efficiency defence, what would be its extent?  In this regard, differences existed in theapproaches adopted by some Members.
125  The point was also made that the definition of hard core
cartels had been the subject of considerable debate and discussion when negotiating the 1998 OECD
Recommendation and the view was expressed that a similar debate should take place within the
Working Group before negotiations took place.  In particular, would a definition of hard core cartels
be limited to price-fixing, bid-rigging, market allo cation, and output restrictions, as was the case with
respect to the OECD Recommendation?  Alternatively, should the OECD Recommendation constitute
only a "starting-point", and would the Group consid er supplementing the OECD definition by further
elements or practices?  Another issue to be addressed related to exemptions from cartel prohibitions.
Virtually every country had such exemptions, either  in connection with industry-specific regulations,
or because a choice had been made not to apply competition law to certain conduct or sectors.126
56. The question was raised as to whether the definition of hard core cartels would include a per
se or rule-of-reason approach.  The point was made that one Member's national legislation had
adopted a per se  approach in regard to price-fixing and bid-rigging, while the treatment of quantity
fixing and market allocation activities was based on a rule of reason.  If a rule-of-reason approach was
preferred, the question of wide-ranging prosecutoria l discretion would have to be discussed.  A rule-
of-reason approach could justify certain activities on an efficiency-related basis, if the domestic law
was based on the size of the domestic market, whereas in the international context, output restrictions
and market allocation were unlikely to be justifiable.127 Another Member state had used the rule-of-
reason approach for more than 15 years to evaluate the acceptability of cartel activities.  Although
efficiency had been the key criterion for application of the rule of reason, this was a flexible conceptand depended on individual circumstances.  Therefore there were several controversies regarding the
use of the rule of reason and efficiency.  As a result, the competition law provisions that used the rule
of reason had been repealed and a " per se  illegal" approach adopted instead.
128
57. A related issue involved export cartels, and ways of dealing with cartels that might not be
formally exempted, but that were either not covered by a country's cartel  laws, or were sanctioned by
a government.129  In particular, the question was posed as to whether export cartels could be justified
by efficiency considerations?130  In response, the point was made that export cartels, despite their
pejorative name, included a variety of possible arrangements the competitive effects of which were
uncertain.  For example, the origin of export cartels  in the United States had simply been to facilitate
                                                     
122 M/18, paragraphs 18, 19, 20, 21, 22, 25, 32, 34 and 46.
123 M/18, paragraphs 33 and 39.
124 M/18, paragraph 33.
125 M/18, paragraph 37.
126 M/18, paragraph 18.
127 M/18, paragraph 22.
128 M/18, paragraph 23.
129 M/18, paragraph 18.
130 M/18, paragraphs 34 and 37.WT/WGTCP/6
Page 21
the ability of firms that might not otherwise have had the ability to engage in export activity to do so.
In these cases, such arrangements clearly had pro-competitive effects.  Care was therefore required in
discussing arrangements characterized as export cartels which did not, in fact, necessarily have the
same effects as hard core cartels.131
58. The view was expressed that intergovernmental or state-to-state arrangements would not
likely be covered by a WTO agreement on competition policy, which would be aimed at anti-competitive practices of enterprises.  In support of this, it was worth noting that, 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.
132
59. The view was expressed that hard core cartel provisions should not entail an undesirable
degree of harmonization of competition laws and institutions, nor should they entail undesirable costs
in terms of limiting countries' options in the area of industrial policy in the development stage.Exemptions concerning cartels involving small and medium-sized enterprises and export and import
cartels, as well as cartels in specific industry sectors should be considered.  On the other hand,
exemptions, as a specific instrument of flexibil ity, should be narrowly defined in their sectoral
coverage and should be transparent
133 and of a temporary nature, with the objective of being
ultimately phased out.  Besides, exemptions or sectoral exclusions were not always an effective orefficient tool for a country to strengthen the competitiveness of domestic industries.  The point was
made, for example, that, in a Member country, industries with strong international competitiveness
such as automobiles and semi-conductor sectors had achieved their competitiveness through
experiencing intense competition in the domestic market, rather than being granted sweeping
exclusions from competition law.
134
60. Questions were posed as to whether the WTO was the appropriate venue for international
action on hard core cartels.  A number of bilateral and regional arrangements already addressed
problems relating to international hard core cartels.  Moreover, the International Competition Network
(ICN) was a fast-evolving forum in which national competition authorities could address competition
issues;  some considered it to be a promising forum for cooperation and the promotion of bestpractices.  Imposing a WTO obligation on all Members to introduce laws to prohibit hard core cartels
was not appropriate since some 50 or more Members of the WTO still did not have a competition law.
Even among those developing country Members that had competition laws, it remained uncertain
whether all of them fulfilled the standards set ou t in the OECD Recommendation in terms of having
effective sanctions and enforcement procedures and institutions.  Developing country Membersneeded technical assistance and encouragement rather than a burdensome obligation backed up by
WTO dispute settlement machinery.  If the Dispute Settlement Mechanism did not apply to a
multilateral framework on competition policy, what would be left would be no more than some best-
endeavour commitments, technical cooperation and perhaps a peer review mechanism.  In that light, it
might be preferable for such a framework to be developed by a specialized forum such as the ICN
instead of the WTO.
135  The point was also made that the ICN was a new body which, at least for the
present, was focusing on issues other than cartels.136
61. The view was also expressed that, for many developing country Members, to introduce a
competition law and to put into place related enforcement institutions would be costly and
burdensome. An assessment of the costs and benefits of competition law and enforcement should be
                                                     
131 M/18, paragraph 44.
132 M/18, paragraph 46.
133 M/18, paragraphs 21 and 32.
134 M/18, paragraph 32.
135 M/18, paragraph 36.
136 M/18, paragraph 41.WT/WGTCP/6
Page 22
carried out. 137 Despite the explicit invitation in the OE CD Recommendation for non-Members of the
OECD to associate themselves with the Recommendation, few non-Members had availed themselves
of this opportunity.  It might be useful to inquire why this was the case.  If the issue was institutional
in nature, it would be interesting to ask whether the WTO would have any institutional advantage over
the OECD and other bodies in addressing hard core cartels.138  With regard to the scope of substantive
rules, a doubt was expressed on the likelihood that a prohibition on hard core cartels at the nationallevel could stand effectively without a corresponding prohibition of mergers to monopoly.
139  T h e
view was also expressed that the reason that the Doha Ministerial Declaration had referred
specifically to hard core cartels, in addition to th eir pernicious effects, was the consensus that existed
among competition officials that such activities ought to be prosecuted and banned.  Once
consideration extended beyond hard core cartels into areas such as mergers, vertical restraints, even
dominance, there was a lack of consensus even among competition authorities, and it was not clear
that the WTO would be an appropriate place to attempt to provide guidance on these matters.140
62. The view was expressed that certain issues needed to be addressed to ensure that a
multilateral framework on competition policy was in the interest of developing countries.  First, how
would any potential definition, particularly a restrictive one, influence domestic provisions in a
competition law that attempted to address public policy issues?  Flexibility was also important.
Another issue that warranted consideration related to the approach that courts had taken in somecountries when dealing with prosecutions of cartel activities.  Would a definition of a cartel in a
multilateral framework be of any relevance if courts tended to use a rule-of-reason approach in
analysing cartels or similar conduct?
141
63. With regard to additional elements relating to hard core cartels, the view was expressed that
the Group should discuss possible additional features of any commitment that Member countriesmight undertake beyond the commitment to adopt a law.  In particular, would WTO hard core cartel
provisions include reference to penalties and, if so, what would be the content of the provisions in that
regard?  What would the situation be if a Member were to enact a law but did not enforce it?  How
could an agreement be crafted that provided the necessary discretion for enforcement authorities not
to bring an action where supporting evidence was lacking or where an action would be against theinterest of justice?  The OECD's experience in negotiating the Recommendation on Hardcore Cartels
provided invaluable lessons for the work of the Wo rking Group in regard to these matters.  Given the
nature of the WTO, reaching a consensus on the treatment of hard core cartels might be even more
challenging than it had been in the OECD.
142
64. In response, the point was acknowledged that further consideration would have to be given to
issues such as definitions, exemptions and other dimensions of provisions on hard core cartels in a
multilateral framework on competition policy.143  The point was also made that the problem of
hard core cartels was a global phenomenon and not the exclusive preserve of developed countries.
Such arrangements were widely recognized as the most harmful type of anti-competitive practice.  In
addition to the direct, negative impact of cartels on consumer welfare and user industries, they often
impacted adversely on market access.  For example, the allocation of national markets among cartel
members had an adverse impact on market access opportunities that Members would be expected to
                                                     
137 M/18, paragraph 37.
138 M/18, paragraph 44.
139 M/18, paragraph 41.
140 M/18, paragraph 44.
141 M/18, paragraph 38.
142 M/18, paragraph 18.
143 M/18, paragraph 42.WT/WGTCP/6
Page 23
realize as a consequence of the work done by the WTO and GATT before it.  Given this, the
importance of the issue of cartels for the WTO was self-evident.144
III. MODALITIES FOR VOLUNTARY COOPERATION
65. This item was also discussed by the Working Group at its meeting of 1-2 July 2002.  The
representatives of the European Community and its member States, Japan , Australia , Korea , Canada ,
the United States and Thailand  introduced written contributions relevant to this item (documents
W/193, 195, 199, 200, 202, 204 and 205, respectively).  In addition, as had been requested by theWorking Group at its informal meeting on 26 February, the Working Group had before it a
background note by the Secretariat (document W/192) on modalities for voluntary cooperation.  The
note provided a synthesis of the issues raised and points made by Members on this topic in previous
meetings of the Working Group, drawing principally on the Group's annual reports for the past four
years and on written submissions by Members.  UNCTAD and the OECD also provided written
materials relevant to this item (subsequently issued as document W/197 and document W/208,respectively).  The representatives of Colombia;  Cuba
;  Egypt ;  Hong Kong, China ;  India ;
Indonesia;  Malaysia ;  Norway ;  Singapore ;  South Africa ;  Switzerland ;  Tanzania  and Zambia  made
oral statements or posed questions on this item.
66. The discussion  on this item spanned  a wide range of issues, including:  (i) the need for
international cooperation to address anti-competitive practices of enterprises in a globalizingeconomic environment;  (ii) possible modalities for voluntary cooperation which could be
incorporated in a multilateral framework on competition policy;  (iii) questions, concerns and
reservations regarding the proposed modalities;  (iv) alternative approaches to cooperation of a more
binding nature;  (v) practical aspects of cooperation in the field of competition law and policy that
bore on the proposed modalities;  (vi) linkages to other elements of the paragraph 25 of the DohaDeclaration and more general institutional questions.
67. With regard to the need for cooperation, the view was expressed that  with the globalization of
business activities, anti-competitive business practices increasingly occurred across a number of
countries or in some cases even globally.  Under such circumstances, it was difficult for a single
government to correctly assess the effects of these practices and effectively prevent or remedythem.
145  With adequate and timely access to information, which was often located abroad, countries
could increase their efficiency in detecting and investigating cross-border anti-competitive practices,
and in market analysis.146  Further, cooperation allowed countries with less enforcement experience to
receive information on how other countries had dealt with particular situations.147  Last but not least,
varied national competition rules created potential trade and investment distortions and increased thecosts and uncertainties for governments and companies.
148  In such circumstances, cooperation could
expedite, for instance, merger review procedures, and lower the costs of merger transactions.149
68. With regard to possible modalities for voluntary cooperation that could be incorporated in a
multilateral framework on competition policy, one approach that was suggested was that two principal
types of cooperation could be foreseen in the framew ork of the WTO:  firstly, the general exchange of
experiences, views, etc. among competition authorities and their officials;  and secondly, the more
specific forms of cooperation that would take place between competition authorities in regard toindividual cases.  A WTO Committee on Competition Policy would play a key role in regard to the
first category of cooperative activities.  Activities of this nature could include exchanges of
                                                     
144 M/18, paragraph 43.
145 M/18, paragraphs 50, 53, 54, 56, 57, 70, 74 and 81.
146 M/18, paragraphs 57, 60, 61 and 70.
147 M/18, paragraphs 67, 72 and 76.
148 M/18, paragraph 57.
149 M/18, paragraph 57.WT/WGTCP/6
Page 24
information on national competition laws, practices and developments.  Another activity which could
be usefully undertaken would be exchanges of experiences and discussions on specific competition
policy issues that had an impact on international trade.  A third activity that could be undertaken in a
WTO Committee on Competition Policy would be  voluntary peer reviews of WTO Members'
competition laws, policies and perhaps even their enforcement record.  A fourth activity would be
joint analysis and discussions on global competition issues which affected international trade andglobal economy.  With regard to the second category of cooperation, namely case-specific
cooperation, two distinct types of activities were foreseen.  The first would be the exchange of
information and evidence relating to particular ca ses, while the second would comprise consultations
and exchanges of views on cases which affected the important trade interests of other WTO Members.
The proposed modalities for case-specific cooperation would not be limited merely to the
investigation of hard core cartels;  rather, they could be invoked in cases involving the full range of
anti-competitive practices, including abuse of dominant position, vertical restraints and otherpractices.  Notwithstanding this, the proposed modali ties would be voluntary or non-binding in nature
in that countries ultimately could not be required to cooperate if, for whatever reason, they were not
prepared to or were not in a position to do so.
150
69. The point was made that the tools for voluntary cooperation that, according to this proposal,
would be included in a multilateral framework were practical instruments which had come fromexperience with cooperation at the bilateral level.  A first essential tool was notification, whereby one
country would inform another of certain cases which affected the other country's important interests.
Second, there was the exchange of information other than notifications to facilitate enforcement
activities on either side.  A third tool involved th e provision of mutual assistance in the enforcement
process.  Finally, the proposed agreement would provide for:  (i) traditional or negative comity,meaning that one country would take into consid eration the important interests of other affected
countries when taking a decision on a case;  and (ii) positive comity, which would involve a country
taking enforcement action upon a request from another country which suffered from anti-competitive
practices originating in the territory of the requested country.  All these tools were already found in
the bilateral agreements to which some Members were party;  regrettably, however, for the most part,developing countries were excluded from the benefit of such agreements.
151  The view was also
expressed that a multilateral agreement on competition policy would provide a flexible framework for
cooperation in the WTO, which would be a long-term and incremental process and could include a
variety of activities, e.g. related to developing institutional capacity, sharing information among
competition authorities, and administering the agreement.  Given the level of development ofcompetition institutions in many WTO Member coun tries, it was likely that information exchange
would have mainly educative purposes, at least initially.  Information of this type could include
national legislation, reports of competition authorities, guidelines and other enforcement policies,
speeches, presentations and any bilateral cooperation agreements that had been concluded.  All these
would be useful to the participating Members and would contribute to the capacity-building
process.
152  A number of related approaches were also suggested.153
70. An alternative view was that the initial commitment on cooperation in a multilateral
framework on competition policy should be binding.   According to this view, a purely voluntary
framework would be ineffective because more advanced competition authorities, with greater
information and capabilities, would have little incentive to provide information or assistance to less
advanced authorities that were not in a position to offer reciprocal benefits.  The initial commitment in
the proposed binding framework would be focused purely on fighting international cartels and wouldconsist of the following elements:  firstly, there would be mandatory notification by authorities that
were currently investigating and prosecuting inte rnational cartels to promptly alert competent
                                                     
150 M/18, paragraph 51.
151 M/18, paragraph 52.
152 M/18, paragraph 53.
153 M/18, paragraphs 51, 52, 54, 55, 61, 63, 67, 68, 69, 72 and 74.WT/WGTCP/6
Page 25
authorities in other countries where these cartels could be operating.  The notification should include
at least the background and the preliminary analysis of the particular case.  Authorities should also be
kept up to date on a regular basis with regard to progress in the investigation.  The second element
would be a mandatory consultation.  This would require governments that were investigating an
alleged cartel to engage in discussions with other Member countries whose interests could be affected.
The third element would be assistance in the enfo rcement process, whereby competition authorities
would be required to provide analytical assistance and share experience and suggestions concerning
enforcement techniques.  Requests for information ga thering should also be facilitated.  Due to the
overwhelming disparities in financial and technical resources between competition authorities in
developed and developing countries, special and differential (S&D) treatment for developing
Members would be necessary.  As one such element, competition authorities in developing countries
could be financially compensated for delivering requested services and be allowed to cooperate to the
extent possible, subject to technical and financial constraints.154
71. With regard to questions, concerns and reservations regarding the proposed cooperation
modalities, the suggestion was made that it was important, firstly, to clarify the precise tools that
would be included in a possible multilateral fram ework.  Another term the Working Group needed to
clarify was the word "voluntary".  Previous disc ussions in the Group had noted that cooperation, as
conceived by most countries active in this area, was an inherently voluntary activity;  consequently, itwould be futile to try to coerce it.  Nonetheless,  the Group needed to consider whether there would be
any obligation on the part of the requested jurisdiction to, for example, "give sympathetic
consideration" to a cooperation request; whether a requested jurisdiction that for one reason or another
was not in a position to cooperate might have to provide reasons or justification for not doing so;
whether there would be any obligation for consultations that could arise in that context, etc.  Animportant related question was the extent of discretion a requested jurisdiction would have, e.g. in the
area of notification, if it was looking into a sensitive activity such as a cartel and it did not see fit to
engage in extensive notification for fear of comp romising the investigation.  Still another issue
concerned the scope of any obligation relating to cooperation, for example whether it would apply
only to conduct encompassed by substantive disciplines that the Working Group would agree to orwould go beyond these.  For example, if a substa ntive discipline was adopted only with respect to
hard core cartels, would cooperation extend only to such cartels or also to other aspects of competition
enforcement?
155
72. The concern was expressed that developing countries did not feel that they had derived
sufficient benefits from the multilateral trading system156;  without the assurance of concrete benefits
from cooperation, they would have less interest in the promotion of competition law and policy at the
multilateral level.157  In particular, the view was expressed that the cooperative arrangements currently
in place were insufficient to protect developing countries from international cartels because countries
with more advanced competition regimes had weak incentives to cooperate with countries whose
enforcement of competition law was considered inadequate.158  Accordingly, efforts to promote
cooperation in the WTO should be built around practical examples, which showed how cooperation
could bring benefits to the participating countries.159  The view was also expressed that cooperation
was a catalyst that had brought about closer relations and a cooperative spirit among the staff of the
participating agencies160;  and had laid the ground for closer cooperation.  Therefore, when developing
countries and countries with weak enforcement regimes had more systematic access to information
concerning, for example, the operations of international cartels, they would begin to see the benefits
                                                     
154 M/18, paragraph 54.
155 M/18, paragraph 55.
156 M/18, paragraph 60.
157 M/18, paragraph 70.
158 M/18, paragraph 76.
159 M/18, paragraph 72.
160 M/18, paragraph 55.WT/WGTCP/6
Page 26
that could be achieved from engaging in other forms of cooperation at the multilateral level.161
Another concern was that, for many small countries with small companies, strategic alliances for
importation were important to achieve economies of scale;  yet these could be considered as harmful
practices or import cartels.162  The view was also expressed that case-specific cooperation could more
appropriately be tackled in bilateral and regional as opposed to multilateral arrangements; if at all, the
multilateral framework should be limited to more general types of cooperation.163
73. With regard to the proposal to implement binding commitments on cooperation in the
framework of the WTO, the view was expressed that making "voluntary cooperation" obligatory
would create a "voluntary obligation", which did not make sense.164  A binding obligation to
cooperate could create resource problems for developing and developed countries alike.165  Further,
the view was expressed that mandatory cooperation would indirectly force all countries to have a
competition authority;  however, taking into consideration differences in levels of development, it was
important for each individual country to evaluate whether and at what stage a competition policy or
competition authority was justified.166  The best incentive for cooperation was not a legally binding
text;  it was the mutual interest of enforcement agencies to assist each other where this was reasonably
possible.167 Cooperation was a two-way process;  if one of the two authorities had nothing to
contribute, it would be difficult to envisage how an  obligation to cooperate would actually work;  and
if both authorities had something to contribute it would be difficult to envisage how an obligation tocooperate would add value to the exercise.
168  The point was also made that it was important that
competition authorities be in a position to decline requests for cooperation, for instance, when an
agency did not see it appropriate to engage in extensive notification for fear of compromising a cartel
investigation.169
74. In response, the view was expressed that a voluntary framework might work in countries with
comparable levels of development;  however, the sa me result could not be expected in a multilateral
environment that was made up of the most advanced nations and the less developed ones, where the
expected benefits from cooperation were not mutual.170  Best-endeavour clauses appeared to serve
little purpose for developing countries171, in particular because giving the requested party the ability to
refuse requests would not guarantee any kind of response172;  thus, voluntary cooperative
arrangements would be insufficient to protect developing countries from international cartels.173
Further, while the sharing of information by developed countries could not be enforced by developingcountries in voluntary cooperation arrangements, given the power asymmetry between developed and
developing countries, voluntary cooperation by de veloping countries' competition authorities would in
practice become mandatory.
174  The view was also expressed that there was no reason why the WTO
should duplicate the voluntary mechanisms that were available in bilateral and regional cooperation
regimes.175
                                                     
161 M/18, paragraph 70.
162 M/18, paragraph 62.
163 M/18, paragraph 50.
164 M/18, paragraph 68.
165 M/18, paragraphs 66, 67, 71 and 72.
166 M/18, paragraph 62.
167 M/18, paragraph 74.
168 M/18, paragraph 67.
169 M/18, paragraph 55.
170 M/18, paragraphs 70 and 54.
171 M/18, paragraph 63.
172 M/18, paragraph 70.
173 M/18, paragraph 76.
174 M/18, paragraph 63.
175 M/18, paragraph 70.WT/WGTCP/6
Page 27
75. Reflecting further on the question of bindin g vs. non-binding cooperation, reference was
made to the actual experience with cooperation of some developed and developing country Members.
The view was expressed that formal cooperation agreements had brought about closer relations and a
cooperative spirit;176 however, to a large extent cooperation re mained an informal process.  Informal
cooperation, including discussions on investigations, exchanges of non-confidential information and
the sharing of relevant information, had been valuable and productive on many occasions.177  It was
largely a matter of making phone calls, exchanging e-mails and meeting colleagues in relevant fora.178
The suggestion was made that it was unclear whether making such activities binding would yield any
real advantage.179  The development of cooperation in the Nordic region was mentioned as an
example of a gradual evolution of cooperation from informal to more formal methods.180
76. As to the types of information that would be shared in the course of case-specific cooperation,
the view was expressed that information that was confidential would not be required to be shared;
however, Members would remain free to share such information to the extent this was consistent withtheir national legislation and enforcement practices.
181  In particular, countries that wished to
cooperate would have to meet minimum requirements in terms of the quality of their procedures and
handling of confidential information.182  Given the time necessary to establish appropriate frameworks
to protect confidential information, the view wa s expressed that the exchange of confidential
information was possible only in the longer term,183 and that initially, the exchange of non-
confidential information was a more achievable target, which would still yield useful outcomes.184
Further, the view was expressed that the exchange of confidential information should not form part of
a multilateral arrangement,185 as bilateral arrangements were more appropriate for that purpose.186
Concerns relating to the leakage of confidential information, which among other things couldjeopardize the effectiveness of cartel investigations,
187 were also cited.188  At the same time, the view
was expressed that it was important to avoid an over-extensive concept of confidentiality that would
make everything that was in an investigation file  impossible to exchange.  While business secrets
should not be exchanged without the express consent of the parties concerned, information consisting
mostly of work products of the authorities might be exchanged in appropriate cases.  Moreover, in
appropriate cases, if authorities had a strong mutual interest, there should be the possibility ofcoordinating investigations in order to maximize the chances of having successful outcomes.
189
Another view was that Members should explore the possibility of sharing confidential information,
because only this would guarantee concrete benefits to developing countries.190  As to the coverage of
the proposed provisions on hard core cartels, the view was expressed that domestic rules on collusive
practices should be subject to the particular development needs of the individual country, whereasinternational cartels were not subject to a development dimension and thus would not merit
exemptions, exclusions or development-related defences.
191
                                                     
176 M/18, paragraph 55.
177 M/18, paragraph 57.
178 M/18, paragraph 72.
179 M/18, paragraph 72.
180 M/18, paragraph 58.
181 M/18, paragraphs 52, 53 and 70.
182 M/18, paragraph 54.
183 M/18, paragraphs 57 and 54.
184 M/18, paragraphs 57 and 70.
185 M/18, paragraphs 67, 70 and 81.
186 M/18, paragraph 67.
187 M/18, paragraph 69.
188 M/18, paragraph 54.
189 M/18, paragraph 74.
190 M/18, paragraphs 54 and 70.
191 M/18, paragraphs 79 and 80.WT/WGTCP/6
Page 28
77. With regard to the proposal to establish a WTO Committee on Competition Policy, the view
was expressed that the Working Group on Trade and Competition Policy Issues established under
Chapter 15 of the NAFTA Agreement provided an illustration of how such a WTO Committee could
work.192  Such a body could facilitate general exchange of views and experiences193;  support the
exchange of information on domestic competition laws, domestic practices and developments194;
provide an opportunity to exchange experience and hold discussions on specific competition policyissues having an impact on international trade
195;  serve as a forum for voluntary peer reviews on
Members' competition laws and policies196, and perhaps even their enforcement record197;  coordinate
and monitor technical assistance198;  and develop a long-term vision of enhanced cooperation199, in
particular by discussing issues relating to procedural and substantive convergence.200  The view was
also expressed that while the establishment of such a WTO Committee merited discussion, it should
be borne in mind that other multilateral vehicles already existed.201
78. With regard to the prerequisites of cooperation in the WTO, the view was expressed that a
national enforcement structure was indispensable for meaningful cooperation.202  A Member without
any kind of domestic enforcement capacity could not be involved in case-specific cooperation,
because it would have no competition law, no cases and no ability to engage in cooperation.203
Further, it was unrealistic to expect a country to prosecute firms for conduct affecting another countrywithout a competition law and authority.
204  The view was also expressed that cooperation was
possible even if the participating countries had different systems of competition law, and even if a
particular country did not have a comprehensive competition law or did not incorporate all the WTO
principles in its national legislation.205  In any case, it was neither reasonable nor fair to force the
introduction of national competition laws and policies.206  Cooperation should be voluntary and
sufficiently flexible to allow each individual country to evaluate whether and at what stage acompetition policy or authority was justified.
207  A multilateral framework on competition policy
without an obligation to adopt a domestic competition law would still be a useful source of assistance
for countries in the process of developing and/or implementing a law, and would facilitate cooperation
among countries with established competition regimes.208
79. Views were expressed regarding possible alternatives to requiring the adoption of fully-
fledged competition laws and the establishment of competition authorities at the domestic level.  For
instance, since cooperation agreements were normally government-to-government instruments, in
theory, cooperation could be provided by an agency or Ministry other than the competition
authority.209 Alternatively, instead of each Member of the WTO having a competition law and a
competition authority, regional authorities and legal instruments, such as COMESA,210 could fulfil the
                                                     
192 M/18, paragraph 53.
193 M/18, paragraphs 51 and 67.
194 M/18, paragraph 52.
195 M/18, paragraphs 51 and 53.
196 M/18, paragraph 53.
197 M/18, paragraph 51.
198 M/18, paragraph 53.
199 M/18, paragraph 53.
200 M/18, paragraph 53.
201 M/18, paragraph 68.
202 M/18, paragraphs 59 and 72.
203 M/18, paragraph 67.
204 M/18, paragraph 72.
205 M/18, paragraph 66.
206 M/18, paragraph 50.
207 M/18, paragraphs 62 and 66.
208 M/18, paragraphs 81 and 82.
209 M/18, paragraph 82.
210 M/18, paragraph 60.WT/WGTCP/6
Page 29
requirements of a multilateral framework.211  In any case, the suggestion that all WTO Members ought
to have a competition law did not imply that such laws had to cover all types of anti-competitive
behaviour;  the only practice that would have to be addressed in some way was hard core cartels212 –
preferably both domestic and international cartels.213  It was not strictly necessary to have an
administrative body called a competition authority, but only an identified and sufficiently equipped
enforcement capacity of some kind.214
80. The view was also expressed that technical assistance was not only an element, but also a
prerequisite of successful cooperation, in particular  as regards cooperation between a country with a
competition authority and another country without such an authority.  In particular, technical
assistance for developing countries without competition authorities and laws could allow them to
evaluate the implications of enhanced cooperation, for example as regards the types of information
that could be exchanged.215  Capacity-building was indispensabl e for such countries to choose the
legal system that suited them best, which allowed them to effectively fight hard core cartels, as well asto engage in competition advocacy.
216
81. With regard to the relationship between bilateral, regional and multilateral cooperation
arrangements, the view was expressed that none of these arrangements should be exclusive, and that
in fact they were complementary.217  Bilateral and regional arrangements could serve as a starting-
point for a multilateral framework.218  Further, any multilateral framework would benefit from
supplementary bilateral and regional cooperation arrangements219, in particular when regional
arrangements, such as COMESA, served as a substitute for domestic competition regimes.220  While
general cooperation, discussion and joint analysis could be usefully carried out at the multilateral,
regional and bilateral levels221, a view was expressed that bilateral and regional arrangements were
more amenable to detailed commitments regardin g case-specific cooperation than a more gradually
developing multilateral framework.222  The view was also expressed that existing bilateral and
regional arrangements were limited to developed countries;  thus, without a multilateral arrangement,
developing countries would remain excluded from the benefits of cooperation.223
82. As to the suitability of the WTO as a foru m for dealing with cooperation on competition
issues at the multilateral level, the view was expressed that the wide membership of theorganization,
224 and its expertise in trade issues225 qualified it to deal with anti-competitive practices
that undermined trade and development.226  The view was also expressed that the heterogeneous
membership of the WTO could interfere with the workability of a multilateral framework227, in
particular, a mandatory approach backed by a dispute settlement mechanism might not take into
account the different approaches taken by WTO Members in the field of competition policy.228  In any
                                                     
211 M/18, paragraph 67.
212 M/18, paragraph 74.
213 M/18, paragraph 80.
214 M/18, paragraph 67.
215 M/18, paragraph 65.
216 M/18, paragraph 73.
217 M/18, paragraphs 51, 53, 50 and 61.
218 M/18, paragraph 52.
219 M/18, paragraphs 59 and 68.
220 M/18, paragraph 60.
221 M/18, paragraph 67.
222 M/18, paragraphs 50, 67 and 68.
223 M/18, paragraph 52.
224 M/18, paragraph 50.
225 M/18, paragraph 50.
226 M/18, paragraphs 50 and 70.
227 M/18, paragraphs 62 and 63.
228 M/18, paragraph 63.WT/WGTCP/6
Page 30
case, the view was expressed that cooperation in the WTO was a long-term incremental process229,
and only in the light of more experience could Members consider a step-by-step230 development of
multilateral cooperation.231
83. The view was expressed that an asymmetry of powers and interests existed between
developed and developing countries;  this called into question the prospects for cooperation on
competition policy in the framework of the WTO and, at a minimum, necessitated appropriatesafeguards.
232  In response, the view was expressed that the existence of such asymmetries was not
only a "North-South" issue;  asymmetries also existed among developed countries and among
developing countries as well.233  The point was also made that international cartels typically were
harmful to all economies in which they operated;  consequently, there was a clear symmetry of
interests between developing and developed countries in addressing them.234
84. The view was expressed that positive linkages existed between the proposed modalities for
voluntary cooperation in the framework of the WT O and other elements of paragraph 25 of the Doha
Declaration.  A key such linkage related to tech nical assistance and capacity-building, both as a
prerequisite of voluntary cooperation and as an inherent element and benefit of cooperation.  In
particular, capacity-building was a form of cooperation between established authorities and countries
that were in the process of establishing such an authority.235  Certain general, not case-specific forms
of cooperation, in particular in the WTO Committee on Competition Policy, could effectively promotecapacity-building.
236  Linkages to the core principles of transparency and non-discrimination were
also discussed.237
IV. SUPPORT FOR PROGRESSIVE REINFORCEMENT OF COMPETITION
INSTITUTIONS IN DEVELOPING COUNTRIES THROUGH CAPACITY-BUILDING
85. This item was discussed by the Working Group at its meetings of 23-24 April 2002.  Written
submissions on this item were provided by the representatives of Australia, Canada , Egypt , the
European Community and its member States, Japan , Korea , Romania , Thailand  and the United States
(documents W/190, 183, 187, 184, 186, 189, 181/Rev.1, 188 and 185, respectively).  In addition, the
Working Group had before it a background note by the Secretariat (document W/182) on the matter of
support for progressive reinforcement of competition institutions in developing countries through
capacity-building.  The representatives of the Czech Republic;  Costa Rica ;  Ecuador ;  Guatemala ;
Honduras;  Hong Kong, China ;  India ;  Jamaica ;  Jordan ;  Malaysia ;  Morocco ;  Norway ;  Pakistan ;
the Philippines;  South Africa ;  Switzerland  and Trinidad and Tobago  made oral statements or posed
questions on this item.  The observer from the OECD provided an update on relevant activities of that
organization.
86. The discussion on this item spanned a wide range of issues, including the following:  (i) the
distinction between support for progressive reinforcement of competition agencies in developing
countries through capacity-building as referred to in  paragraph 25 of the Doha Ministerial Declaration
and technical assistance and capacity-building as called for in paragraph 24 of the Declaration;  (ii)
the capacity-building needs and the challenges and difficulties encountered in implementing
competition policy in developing and transition countries;  (iii) characteristics and limitations of
existing capacity-building programmes;  (iv) the nature, design and delivery of future programmes;
                                                     
229 M/18, paragraphs 53 and 66.
230 M/18, paragraph 50.
231 M/18, paragraphs 64 and 52.
232 M/18, paragraphs 63 and 75.
233 M/18, paragraph 71.
234 M/18, paragraph 80.
235 M/18, paragraphs 67 and 71.
236 M/18, paragraph 67.
237 M/18, paragraphs 55, 66, 74 and 82.WT/WGTCP/6
Page 31
(v) the relationship between capacity-building and other elements of a possible framework on
competition policy.
87. With regard to the distinction to be drawn between the element of support for progressive
reinforcement of competition agencies in developing countries through capacity-building as referred
to in paragraph 25 of the Doha Ministerial Declaration and that of technical assistance and
capacity-building as called for in paragraph 24 of  the Declaration, the Chairman suggested that in
respect of the former item (i.e., capacity-building as referred to in paragraph 25), the Working Group's
task was to reflect on and clarify the issues asso ciated with reinforcing the role of competition
agencies and building a competition culture in developing countries, something which had already
been under consideration in the Working Group for the past couple of years.  The latter item, on the
other hand, was concerned with activities to be undertaken particularly in period leading up to the
Fifth Ministerial Conference for the purpose of assisting developing and least-developed countries to
"better evaluate the implications of closer multilateral cooperation for their development policies andobjectives", as well as to contribute to human and institutional development.  Accordingly, matters
such as specific needs for seminars or other forms of assistance needed in the short to medium term
might more appropriately be taken up in the Group's discussions pertaining to capacity-building as
called for under paragraph 24 of the Doha Ministerial Declaration.  He stressed that this was only a
personal interpretation.
238
88. With regard to the capacity-building needs of  developing and transition countries and the
challenges and difficulties encountered in implemen ting competition policy in such countries, the
view was expressed that building trust in mark et forces and promoting understanding of the
contribution of competition policy to sustainable economic development were major challenges.
However, when countries with successful experience s in competition law joined these efforts, the
prospects for success were much greater.  The same held true for designing a framework of
competition policy that was suitable for each country's specific economic situation.  Technical
assistance was only one of various interrelated forms of international cooperation that were
contemplated in the Doha Declaration.  Furthermore, it was important to note that programmes were
more efficient if they were based on effective partnerships between the donor and the beneficiary.There was a growing need for access to information, transfer of competition policy know-how,
competition advocacy, etc., which could only be met through increased cooperation including in the
WTO.
239  The suggestion was made that this tendency was confirmed by a survey conducted by the
OECD in 2001.240
89. A number of more specific needs and challenges were identified.  First, with respect to the
drafting of legislation, many countries, particularly developing and least-developed countries, lacked
qualified personnel that had the skills and experience necessary to enable them to draft national
competition legislation.241  Secondly, in relation to the establishment of a competition authority
responsible for the implementation and enforcement of national competition legislation, problems
encountered included a scarcity of resources, diff iculty in developing and maintaining the necessary
expertise, and the lack of the necessary infrastructure, including financial and physical
infrastructure.242  Thirdly, for some countries, the costs associated with the implementation and
enforcement of a domestic competition law were considered to outweigh the benefits.243  Fourthly,
many developing countries faced an absence of competition advocacy and a competition culture.244  In
order to address such difficulties, the scope of the required technical assistance could range from
                                                     
238 M/17, paragraph 3.
239 M/17, paragraph 5.
240 M/17, paragraph 40.  For discussion of related elements of the OECD survey, see below.
241 M/17, paragraphs 6, 7, 12.
242 M/17, paragraphs 6, 7, 10, 12.
243 M/17, paragraph 7.
244 M/17, paragraphs 7, 8, 10.WT/WGTCP/6
Page 32
assistance with the drafting of a competition law and the establishment of competent authorities and
training of their staff through to the implementation and enforcement of such law.  Developing
countries should have access to capacity-building activities that would result in a skilled pool of staff
who were able to draft national competition legislation.  Technical advice, training, assistance and
cooperation from international organizations and countries that had mature, experienced competition
authorities were useful resources.  In particular, assistance could take the form of exchange of nationalcompetition legislation and assistance with respect to the identification of major elements that should
be included in the legislation, including administrative, criminal and civil actions and penalties;
identification of the administrative and judicial forums of legal actions; and procedures for
information exchange.  Means should be explored to ensure that the benefits of implementing a
national competition law were higher than the costs associated with such implementation.  This would
require educating the relevant stakeholders about the benefits and drawbacks of a national competition
law.
245  Two principles should be considered in the course of providing support for the progressive
reinforcement of competition institutions in developing countries through capacity-building:  first,
flexibility in the sense that a "one size fits all approach" is not appropriate since each country should
be free to choose how to apply a competition regime in a way that reflects its economic situation and
development objectives;  second, progressivity in the sense of allowing developing countries to
undertake a phased approach to the discussion, introduction and implementation of competitionlegislation.
246  Truly meaningful assistance had also to be long term and focused on building in-house
knowledge.247
90. Regarding the necessity of strengthening competition institutions, the view was expressed that
efforts should be developed in three directions:  first, it was necessary to continually advocate and
emphasize the positive contribution of competition policy and law to economic development sincethis relationship was not yet well understood in many countries.  Secondly, it was necessary to
reinforce the capacity of agencies in a country or region to train the staff of competition authorities on
a continuous basis.  It was also necessary to involve professional training institutions in the field of
law and economics that were based in the region or country in question.  Such institutions would not
only be able to provide training on a regular and continuous basis but would also assist in building anintellectual climate that was supportive of competition policy;  would bring students into contact with
competition law and economics, many of whom mi ght eventually consider employment with the
competition authority;  and would provide institutional capacity for research and expert testimony.
Thirdly, it was necessary to reinforce linkages between competition authorities.  The most effective
learning took place as a result of contact between practitioners from different competitionjurisdictions.  For example, in relation to long-term secondment programmes, apart from the obvious
benefits of having an experienced antitrust official on site, it ensured that the "capacity builder"
developed an understanding of the country which he or she was assisting and that a long-standing
connection developed between competition authorities in the respective countries which, in turn,
meant that assistance could continue to be sought long after the capacity builder had returned to his or
her home country.
248  The existing technical assistance model according to which foreign experts were
sent to a country or region for short seminars was criticized.  The view was expressed that suchseminars were often too brief and, frequently, the expert was not sufficiently familiar with the legal
and economic system and the policy priorities of the country or region in question.
249
                                                     
245 M/17, paragraphs 7, 8.
246 M/17, paragraphs 7, 13, 30.
247 M/17, paragraphs 8, 9.
248 M/17, paragraph 10.
249 M/17, paragraph 10.WT/WGTCP/6
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91. With regard to the specific needs of different countries, the national experiences of several
Members were discussed.250  These illustrated obstacles relating to human resources251 and the
necessity to foster a culture of competition among market actors as well as other groups involved with
the application of the law.252  The view was expressed that promoting a culture of competition did not
necessarily require the adoption of a multilateral framework on competition policy in the WTO253;  on
the other hand, the view was also expressed that such a framework could be helpful in this regard.254
92. With regard to existing capacity-building programmes, various Members provided detailed
descriptions of their technical assistance activities255, including Members which had been transformed
over the years from recipients to providers of technical assistance.256 Recognizing that "one size does
not fit all", technical assistance programmes had been adapted to the different legal, economic and
political environments that existed in different countries.257
93. Reference was made to the above-mentioned OECD survey, which provided information on:
(i) technical assistance provided by OECD members to non-members in 1999-2000;  and(ii) delegations' views regarding the most effective means of delivering such assistance.  The
following key points had emerged from the survey:  (i) more countries and organizations were
becoming involved in the area of capacity-building;  (ii) this raised important coordination and
funding considerations;  (iii) challenges in the area of funding required a multifaceted strategy,
pursuant to which providers reinforced each others' efforts at every opportunity and increased effortsto raise awareness of competition policy.  The strategy needed to seize every opportunity to draw
attention to the linkages between competition and areas such as the development of SMEs,
infrastructure industries, deregulation, privatization, trade policy, education, health, intellectual
property, etc.;  (iv) increased coordination could enhance the overall efficiency of technical assistance
delivery and reduce duplication through greater communication and cooperation.  In this regard, theoutreach unit of the OECD was looking forward to actively exploring various options for enhanced
cooperation with the Working Group as well as with UNCTAD, the World Bank and individual
enforcement agencies;  (v) the optimum form of technical assistance and capacity-building was a
function of a number of factors including the stage of development of the recipient country both
generally and in the specific area of competition policy.  The survey had found that, at the earlystages, before a competition law had been enacted or even before there was recognition of the need
for a broad competition policy, high-profile conferences and short-term visits could be helpful.  In
contrast, at the stage of drafting a competition law or regulation and establishing an agency,
longer-term advisors as well as short-term study visits were useful.  For those countries at a more
advanced stage of developing a competition policy that were, for example, experiencing difficultieswith enforcement due to a lack of expertise or lack of a competition culture, high-profile conferences,
peer reviews and workshops were particularly valuable.  The benefits to recipient countries appeared
to be directly linked to the duration of technical assistance.  However, the survey found that few
providers of technical assistance had the resources to engage in long-term assistance given that it was
particularly costly.
258
94. With regard to the nature, design and delivery of future programmes, the view was expressed
that:  (i) the different approaches and steps undertaken by each country for the common purpose ofpromoting competition policy should be respected; (ii) the provision of adequate technical assistance
programmes and tools, especially those reflecting the needs of developing countries, was of utmost
                                                     
250 M/17, paragraphs 6, 11, 12.
251 M/17, paragraph 6.
252 M/17, paragraphs 11, 14.
253 M/17, paragraph 14.
254 M/17, paragraph 39.
255 M/17, paragraphs 18, 19, 21 22, 23, 24.
256 M/17, paragraphs 20, 24.
257 M/17, paragraph 20.
258 M/17, paragraph 40.WT/WGTCP/6
Page 34
importance;  (iii) in implementing technical assistance and capacity-building, it was desirable to share
common principles and approaches for cooperation.259
95. The view was expressed that assistance in the investigatory process could take a wide variety
of forms:  (i) scholarships for academic/professio nal training;  (ii) internships at competition
authorities to gain experience;  (iii) visits by staff from experienced agencies to guide and assist,
particularly in procedural matters in the early years of newly established competition agencies;(iv) resource persons and financial assistance for training workshops targeted at specific groups, such
as lawyers, economists and judges;  (v) assistance with the organization of workshops for producer
and consumer groups;  and (vi) guidance in the development of an information database in new
competition agencies.  Given the problem of high st aff turnover in many developing countries, a more
sustainable approach to training was needed.  It would also be helpful to establish an institution that
would be staffed by competition experts from mature regimes.  Such experts could be adjunct to the
institution, lecturing on specific topics from time to time.  Such an institution could organizecompressed module courses on a revolving basis, targeting discrete audiences such as the legal
fraternity, economists and trade experts, government officials, and others.  The suggestion was also
made that colleges and universities in developing countries introduce courses in competition law and
policy with assistance from experts from countries with more mature competition regimes.  In this
way, the capacity to provide training internally would be developed.
260
96. Reference was made to the duration of relevant programmes.  Due to confidentiality concerns,
interns could normally only be hosted for a period of a couple of weeks.  However, placing advisors
in new antitrust agencies for a period of more than six weeks was the most effective way to achieve
the goals of technical assistance.  Such assistance was particularly effective when the advisors were
experienced economists or attorneys from established antitrust authorities.  Over time, such advisorsbecame familiar with a country's antitrust law, its institutions, markets and the unique challenges that
were faced by that particular antitrust authority.  Further, over the course of time, long-term resident
advisors were more effective because they were able  to earn the respect, trust and confidence of the
new antitrust authority.  However, in some countries, budgetary limitations or the desires of the host
country were such that the use of long-term advisors has not been possible.  While not as effective aslong-term assistance, short-term assistance could be effective in a few key areas.  In particular, short-
term advisors could be effective during the legislative drafting stage and the institutional design stage
of an antitrust authority.  Further, short-term missions conducted by lawyers and economists on
interactive investigative skill seminars and workshops had also been effective particularly when they
involved sending an expert from a certain industry to a newly established antitrust authority when acase had arisen in the same industry.  In general, conferences had not been as effective as the long-
term or short-term assistance that had been offered, particularly where they used a lecture format that
focused on broad theory as opposed to real-world application and the lecturers tended not to be
familiar with the recipient country's legal system.  One-stop shop programmes that lasted several days
were normally ineffective since they presented major concepts or ideas that were not easily practised
in different environments.  However, there were a few situations where conferences were considered
to be particularly effective, including case analysis seminars such as those offered by the OECD inVienna, where members of agencies were present and analysed actual cases that they were dealing
with and received feedback as well as conferences at the national level during the pre-legislative stage
of a country at which local and foreign experts discussed the pros and cons of antitrust legislation or
the particular details of proposed legislation.
261
                                                     
259 M/17, paragraph 17.
260 M/17, paragraph 15.
261 M/17, paragraph 21.WT/WGTCP/6
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97. In the course of the above statements and related discussion, the view was expressed that:
(i) a "one size fits all" approach to the design and delivery of technical assistance and
capacity-building was not appropriate.  Rather, technical assistance worked best when tailored to the
particular needs and environments of the recipient country and, further, no single competition model
was suitable for all circumstances.  Furthermore, it was important that capacity-building be viewed as
a long-term process262;  (ii) systematic assessment of needs was critical to effective capacity-building
activities.263
98. The qualifications of technical assistance providers were important.  Enforcement experience
was critical and often not possessed by private sector technical assistance providers.  Outreach
experience or, at least, some familiarity with and experience in dealing with the unique requirements
of emerging and developing economies was important.  The need for practical assistance in law
enforcement, particularly regarding investigative tech niques, analytical skills, case handling, etc., was
also emphasized.264
99. A number of questions were posed by developing countries to the proponents of a multilateral
framework on competition policy regarding proposals for an enhanced commitment to technical
cooperation and capacity-building in the WTO:  (i ) how exactly would the institutional capacity of
developing countries be strengthened?  (ii) woul d such capacity-building be limited to competition
policy as related to trade or would it also cover competition policy per se ?  Where would the line be
drawn between the two?  (iii) woul d the resources which would be made available for different forms
of assistance be adequate, timely and for a sufficient period of time so as to enable countries at
different stages of development to gain adequate experience and create adequate capacity?  (iv) would
such resources be quantified?  (v) how exactly  would the needs and development objectives of
developing and least-developed country participants  be taken into account, so as to avoid a donor-
driven process?  (vi) would such a process includ e creation of an organization that would coordinate
capacity-building and technical assistance provided to developing countries on a regular basis but at
the same time maintain an "arms length" relationship with donors?  (vii) what forms of technical
assistance and capacity-building would be provid ed which would enable developing countries to
develop the tools and expertise and to find means of obtaining the necessary resources to:  (a) knowwhich information to obtain relating to restrictiv e business practices including hard core cartels and
abuses of dominance or mergers originating from abroad and affecting their markets;  (b) adopt
procedures to obtain such information;  (c) interpret and evaluate such information;  (d) prove that
such practices or mergers were anti-competitive in the face of the legal and economic expertise that
would be at the disposal of the firms involved;  (e) benefit from voluntary international cooperation,
e.g. by obtaining investigatory assistance from a foreign competition authority regarding information
available to them or which could be obtained by them or by obtaining judicial assistance; and (f) learn
how to respond appropriately to requests for vo luntary cooperation from other countries or to
extraterritorial enforcement of the competition laws of other countries?  Developing countries had
little knowledge of what a multilateral framework on competition policy would entail.  Therefore, it
was perhaps too early to state comprehensively what their technical assistance needs would be.  An
iterative exercise of training in various aspects was unavoidable.  As technical knowledge improved,the need for understanding more issues would co rrespondingly increase and it would be necessary to
provide for such additional training.
265
100. The observation was made that many tools existed to build capacity and that overlapping aims
were sometimes involved.  Capacity-building focu sed on developing and building the ability of a
competition authority to enforce competition law a nd policy in its jurisdiction.  This raised the
question of how a competition culture could be built in the administration as a whole - in the
                                                     
262 M/17, paragraph 26.
263 M/17, paragraph 27.
264 M/17, paragraph 40.
265 M/17, paragraph 31.WT/WGTCP/6
Page 36
judiciary, in the business community and in the public in general - because competition law and
policy could not be enforced where the community as a whole did not have a sense of what
competition rules were and what competitive behaviour was.  This more long-term aspect of
capacity-building was not something that would end or diminish with the end of the work of the
Working Group or with the negotiation and implementation of a multilateral agreement.  Further, it
was not something that in and of itself was linked to  multilateral rules.  In that context, cooperation
between competition authorities was essential if Members were to help developing countries establish
competition authorities and build them up.  In this respect, one of the main purposes of technical
assistance  was to ensure that developing country authorities were in a position to benefit from
international cooperation.266
101. With regard the ways in which capacity-build ing related to other elements of a possible
framework on competition policy, the view was expressed that international cooperation had a useful
role to play in addressing competition policy implications posed by globalization of markets.However, given the diversity in scope and emphases of competition policy and implementation
instruments across WTO Members, the scope and modalities of cooperation had to be carefully
considered.  Full account had to be taken of the needs of developing and least-developed country
participants and appropriate flexibility had to be provided to address them, as had been mandated in
paragraph 25 of the Doha Ministerial Declaration.  This included the possibility of not having acompetition law. Assistance was needed to help developing and least-developed countries better
evaluate the implications of closer multilateral cooperation for their development policies and
objectives.
267  The various technical cooperation programmes that has been outlined by Members,
particularly those designed to enhance capacity and technical cooperation over the long term, only
partly met the mandate contained in paragraph 25.  Paragraph 25 made it clear that the WTO andother international organizations should be invo lved in technical cooperation and capacity-building.
In this respect, the design and implementation of competition legislation, the design and establishment
of the agency in charge of implementing the law and the development of a competition environment
should be given priority, particularly in countries that did not have significant experience in the area.
These elements should be part of a coherent technical assistance programme that surveyed the needsof recipients, that took into account the various needs of developing countries, and that established
modalities to avoid duplication.  An element that was important in respect of both paragraphs 24
and 25 of the Ministerial Declaration was the assessment of the impact of technical cooperation.  Such
an exercise should be conducted at all levels, including the multilateral level, and therefore should be
included as an element of the modalities of cooperation and capacity-building.  Such an element wasessential since it allowed recognition of the special needs of developing countries and the fact that a
"one size fits all" approach was not appropriate.
268  The view was expressed that a distinction had
rightly been drawn between technical assistance and capacity-building aimed at enhancing the ability
of developing countries to better evaluate the implications of multilateral cooperation in this area and
support for progressive reinforcement of competition institutions in developing countries through
capacity-building.  From the perspective of develo ping countries, there was an inter-linkage between
the two objectives sought to be achieved through technical assistance and capacity-building. Thenature and quantum of obligations undertaken by Members for capacity-building in developing
countries, which was aimed at reinforcing competition institutions so that they were better able to
apply their national laws and to take advantage of  international cooperation in anti-competitive cases
with international dimensions, would have an important bearing on evaluation of the implications of
closer multilateral cooperation for their development policies and objectives.
269
                                                     
266 M/17, paragraph 33.
267 M/17, paragraph 29.
268 M/17, paragraph 30.
269 M/17, paragraph 31.WT/WGTCP/6
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102. The view was also expressed that carrying out effective technical assistance and
capacity-building programmes required a certain degree of common understanding about the core
principles and technical assistance and capacity-building programmes facilitated clarification of the
core principles through exchanges of experiences and mutual understanding among the participants.
In other words, capacity-building and clarification of the core principles were mutually supportive and
should be promoted together.270
D. TECHNICAL ASSISTANCE AND CAPACITY-BUILDING, AS CALLED FOR BY
PARAGRAPH 24 OF THE DOHA MINISTERIAL DECLARATION
103. Paragraph 24 of the Doha Ministerial Declaration states that Ministers recognize the needs of
developing and least-developed countries for enhanced support for technical assistance and
capacity-building in this area, including policy an alysis and development so that they may better
evaluate the implications of closer multilateral cooperation for their development policies andobjectives, and human and institutional development.  To this end, it calls for work to be undertaken
in cooperation with other relevant intergovernmental organizations, including UNCTAD, and through
appropriate regional and bilateral channels, to provide strengthened and adequately resourced
assistance to respond to these needs.  In this regard , in the course of each of its meetings in 2002, the
Working Group heard reports on activities undertaken pursuant to the mandate given in paragraph 24,whether by the WTO Secretariat, other intergovernmental organizations and/or by Members acting
through bilateral and regional channels.
104. In the course of the year, the following Me mbers informed the Working Group of specific
activities relevant to paragraph 24 that had taken place or would take place at their initiative or with
their cooperation:  Australia
271, the European Community and its member States272, New Zealand273,
Uruguay274, Japan275, Korea276, Guatemala277, China278 and Argentina279.  In addition, detailed updates
on relevant activities were provided by UNCTAD and the OECD at each meeting of the Working
Group.280
105. With regard to technical assistance activities undertaken by the WTO Secretariat, an
important aspect of these activities throughout the year concerned cooperation with otherinter-governmental organizations, especially UNCT AD.  At its meeting of 23-24 April, the Working
Group was informed of an inter-agency meeting that had taken place at the WTO on 25 January 2002
and that had been attended by representatives of UNCTAD, the OECD and the World Bank in
addition to the WTO Secretariat.  The purpose of the meeting was to exchange information on each
organization's planned activities and to encourage a high degree of cooperation between theparticipating organizations in the delivery of technical assistance in this area, particularly in the form
of regional workshops, where feasible and cons istent with each organization's priorities.
281
                                                     
270 M/17, paragraph 36.
271 M/17, paragraph 46.
272 M/17, paragraph 49.
273 M/17, paragraph 54.
274 M/19, paragraph 92.
275 M/19, paragraph 93.
276 M/19, paragraph 94.
277 M/19, paragraph 96.
278 M/19, paragraph 97.
279 M/19, paragraph 98.
280 See M/17, paragraph 60;  M/18, paragraphs 93 and 94;  and M/19, paragraph 100.
281 M/17, paragraph 58.WT/WGTCP/6
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106. With regard to cooperation undertaken specifically with UNCTAD, the Group was informed
that, in the first part of 2002, with the participation of the WTO, UNCTAD had organized a first series
of regional workshops covering aspects of the Doha mandate on trade and competition policy that had
taken place in Panama City, for the countries of Latin America;  in Tunis, for African countries;  in
Hong Kong, China, for Asian countries;  and in Odessa, for the countries of Central and Eastern
Europe.  Subsequently, a second series of workshops was being organized by the WTO, with theparticipation of UNCTAD.  To date, this had included regional workshops organized by the WTO
Secretariat in Guatemala City
282, for the countries of Central America;  in Libreville, for the countries
of French-speaking Africa283;  and in Port-Louis, Mauritius, for the countries of English-speaking
Africa.  In addition, UNCTAD had participated in a national workshop that had been organized by the
WTO Secretariat in China.
107. Apart from its role in the organization of regional and national workshops focusing
specifically on the Doha mandate on trade and competition policy, the Secretariat had participated inthe following additional workshops and seminars during the year:  an UNCTAD seminar in Abu
Dhabi, for countries of the Middle East region;  an UNCTAD seminar in Lusaka, for the countries of
southern Africa;  and a major conference organized by the Fair Trade Commission of Korea in
cooperation with UNCTAD and the OECD, in Seoul.  In addition, during the year, the Secretariat had
presented modules on trade and competition policy in the following WTO seminars and coursesdealing with diverse aspects of the Doha Development Agenda:  (i) a national seminar for Nigeria on
various trade topics;  (ii) an OAS-WTO-Georgetown University course for Latin American trade
officials, in Washington, D.C.;  (iii) an ECA-WTO regional workshop on various issues, held in
Addis Ababa;  (iv) two special sessions of the WTO Trade Policy course that were held for officials
of French-speaking and English-speaking African countries, in Casablanca and Nairobi, respectively;(v) a short course for senior trade policy officials organized by the WTO in cooperation with the Joint
Vienna Institute, in Vienna;  and (vi) several regular sessions of the regular WTO Trade Policy
Course, in Geneva.
108. In the course of the discussion on this item, a number of observations and suggestions were
made by Members concerning capacity-building programmes.  Among many other comments
284, the
suggestion was made that technical assistance and capacity-building that responded to the various
specific needs of developing country Members would assist not only in building up and strengthening
legal systems in the competition area, but would also facilitate deliberations in the Working Group.
To maximize the usefulness of such activities, the suggestion was made that they focus on the
following areas in advance of any discussion of  the possibility of reaching consensus on the
modalities for negotiations on a multilateral framework on competition policy within the WTO:
(i) assessment of the status quo in developing country Members with regard to the development of
competition policies and the formulation and implementation of competition laws;  (ii) helping
developing country Members to develop relevant legal systems and a competition culture by
providing training to national competition authorities and other related government agencies as well
as the private sector and academic institutions;  (iii) analysis of the interrelationship between market
development and competition policies in developing country Members;  (iv) analysis of theimplications of a possible multilateral framework agreement within the WTO on trade and
development for developing country Members with and without a mature domestic legal framework
on competition policy and the market economy;  and (v) information and experience sharing among
Members in competition policy.
285  The importance of understanding how competition policy fitted
within the broader framework of establishing  good systems of economic governance and how it
linked with other economic policies such as trade, economic regulation and consumer protection was
                                                     
282 The workshop in Guatemala City was organized in cooperation with the Inter-American
Development Bank/INTAL.
283 Representatives of the Secretariats of both UNCTAD and the OECD participated in this event.
284 M/17, paragraph 52.
285 M/17, paragraph 52.WT/WGTCP/6
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also stressed, particularly in light of the challenges posed by globalization and the increasing
incidence of cross-border anti-competitive conduct.286  The point was also emphasized that it would
be desirable for the various organizations involved in providing technical assistance in this area to
cooperate as far as possible and to reach a common understanding regarding their respective roles and
areas of responsibility.287  A number of more specific needs were also identified by Members.288
109. As a further aspect of technical assistance and capacity-building, during the course of the year
the Secretariat was asked to undertake, with the assistance of a consultant, a study of certain elements
relevant to the costs and benefits for developing countries of adopting a multilateral framework on
competition policy in the WTO.  The terms of reference for the study, which were agreed to at the
Working Group's meeting on 1-2 July, were as follows:
"Study of issues relating to a multilateral framework on
competition policy
The study would aim to summarize available information that might
facilitate an assessment of the costs and benefits of proposals that had
been put forward for development of a multilateral framework on
competition policy.  It would be based on existing literature and
public sources, including studies and other documentation preparedby or for UNCTAD, the OECD and the World Bank, and would
address the following three main elements:
(a) Examination of issues concerning the relationship between
competition policy as it relates to trade and industrial policy,including:
- any trade-offs and complementarities that may arise between
the application of competition policy and the attainment of
dynamic efficiency gains in developing countries;
- historical experience regarding the relationship between
competition and industrial policy;
- the implications of possible provisions relating to non-
discrimination, transparency, procedural fairness and
hard core cartels for national industrial/economic policy
options, and national experience in this regard;
(b) Examination of issues and compilation of available empirical
data relevant to the resource implications of adopting and
effectively implementing a multilateral framework oncompetition policy, including provisions relating to hard core
cartels, transparency, procedural fairness and responding to
requests for voluntary cooperation.
(c) The impact of competition law and policy in tackling anti-
competitive practices of firms in a developing country
setting."
                                                     
286 M/17, paragraph 46.
287 M/17, paragraph 55.
288 See M/17, paragraphs 48, 50, 51 and 53;  M/18, paragraphs 87, 88, 89 and 91;  and M/19,
paragraphs 97 and 99.WT/WGTCP/6
Page 40
The study was to be based on existing literature and public sources, including documentation prepared
by other intergovernmental organizations.289
110. Subsequently, the Working Group was informed that the Secretariat had contracted the
services of an expert consultant, Dr. Simon Evenet t, who was the Director of Economic Research at
the World Trade Institute in Bern, to prepare the requested study.  Work had already commenced, and
it was hoped that the study would be available towards the end of the year.290
E. STOCKTAKING OF NATIONAL EXPERIENCE
111. Written submissions relevant to this item were introduced by Korea and Argentina
(documents W/189 and 206, respectively).
112. With regard to the relationship between competition policy and development as well as the
implications of financial crises, the point was made that that Korea had experienced a foreign
exchange crisis in 1997.  Many businesses had closed down during this period and many workers lost
their jobs.  A view had prevailed within the business sector that to ameliorate the effects of the
economic crisis, it was necessary to relax competition law to protect Korean companies from
international competitors.  However, with the recommendation of the IMF and the IBRD, Korea had
enforced its competition law more intensively on the grounds that one of the reasons for the Korean
economic crisis had been the fact that market mechanisms had not worked effectively.  The Korea
Fair Trade Commission (KFTC) had played a major role in restructuring the Korean economy into a
market economy.  It had ensured that, in the process of privatization, competition principles were
applied.  As a result, currently, the Korean economy was in a significantly better state than prior to the1997 economic crisis.  On this basis, Korea's experience during and subsequent to the crisis had
highlighted the need for and importance of competition policy as an underpinning of and
counterbalance to industrial policy, and as a bulwark of a vigorous market economy.
291
113. Also on the subject of the role of competition policy in times of financial or economic crisis,
the view was expressed that the recent experience of Argentina had shown the importance of suchpolicy in good times and in bad.  In times of economic difficulty, the temptation was great for
governments to intervene directly in markets or to fix prices.  Indeed, reliance on the market system
itself was sometimes called into question.  In Argentina, extensive privatization and deregulation,
particularly in the early 1990s, often carried out without due attention having been given to the need
for competition and other public disciplines, had led to a concentration of the economy with manyundesired results.  Competition safeguards had been introduced late and with many shortcomings.  In
many sectors, concentration had facilitated cartelization.  As a result, after the original boom resulting
from deregulation and privatization, between 1997 and 2000 the economy did not grow and
productivity was negative.  This experience showed what happened when insufficient attention was
paid to the introduction of competitive disciplines in a time of economic restructuring.  The
suggestion was made that, to restore economic stab ility, Argentina could not avoid a microeconomic
revolution in both the public as well as the private sectors.  Strengthening the efficient operation ofmarkets and promoting the adoption of new technologies were the key to future success.  An overall
lesson from the country's experience was that macroeconomic balance was a necessary but not a
sufficient condition for prosperity.  Efficiency at the microeconomic level, through the application of
sound marketplace framework legislation and institutions including in the area of competition policy,
was also required.
                                                     
289 M/18, paragraphs 95-98.
290 M/19, paragraph 91.
291 M/17, paragraph 62.WT/WGTCP/6
Page 41
ANNEX 1
TEXT OF THE DOHA MINISTERIAL DECLARATION (WT/MIN(01)/DEC/1),
PARAGRAPHS 23-25
(Adopted 14 November 2001)
INTERACTION BETWEEN TRADE AND COMPETITION POLICY
23. Recognizing the case for a multilateral framework to enhance the contribution of competition
policy to international trade and development, and the need for enhanced technical assistance and
capacity-building in this area as referred to in paragraph 24, we agree that negotiations will take place
after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit
consensus, at that Session on modalities of negotiations.
24. We recognize the needs of developing and least-developed countries for enhanced support for
technical assistance and capacity-building in this area, including policy analysis and development so
that they may better evaluate the implications of closer multilateral  cooperation for their development
policies and objectives, and human and institutional development.  To this end, we shall work in
cooperation with other relevant intergovernmental organizations, including UNCTAD, and through
appropriate regional and bilateral channels, to provide strengthened and adequately resourcedassistance to respond to these needs.
25. In the period until the Fifth Session, further work in the Working Group on the Interaction
between Trade and Competition Policy will focus on the clarification of:  core principles, including
transparency, non-discrimination and procedural fairness, and provisions on hard core 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.WT/WGTCP/6
Page 42
ANNEX 2
CONTRIBUTIONS PROVIDED TO THE WORKING GROUP ON THE INTERACTION
BETWEEN TRADE AND COMPETITION POLICY IN 2002
Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/181 and Rev.1 Romania M/17, para. 4-5 Core principl es, including transparency, non-discrimination and
procedural fairness
W/182 Secretariat M/17, para. 4 Core principles, including transparency, non-discrimination and
procedural fairness
W/183 Canada M/17, paras. 4 & 19 Core principles, including transparency, non-discrimination and
procedural fairness
W/184 EC and member States M/17, paras. 4 & 18 Core prin ciples, including transparency, non-discrimination and
procedural fairness
W/185 United States M/17, paras. 4 & 21 Core principl es, including transparency, non-discrimination and
procedural fairness
W/186 Japan M/17, paras. 4, 16 & 17 Core principles , including transparency, non-discrimination and
procedural fairness
W/187 Egypt M/17, paras. 4, 7 & 48 Core principles , including transparency, non-discrimination and
procedural fairness;  Provisions on hard core cartels
W/188 Thailand M/17, paras. 4 & 6 Provisions on hard core cartels
W/189 Republic of Korea M/17, paras. 4, 20, 47 & 62 Core pr inciples, including transparency, non-discrimination and
procedural fairness;  Provisions on hard core cartels;  Modalities
for voluntary cooperation
W/190 Australia M/17, paras. 44 & 46 Core principl es, including transparency, non-discrimination and
procedural fairness;  Provisions on hard core cartels
W/191 Secretariat M/18, para. 3 Provisions on hard core cartels
W/192 Secretariat M/18, para. 49 Modalities for voluntary cooperation
W/193 EC and member States M/18, paras. 3- 5, 51-52 Provisions on hard core cartels
W/194 Switzerland M/18, paras. 3 & 8 Provisions on hard core cartelsWT/WGTCP/6
Page 43Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/195 Japan M/18, paras. 49-50 Modalities for voluntary cooperation
W/196 Mexico M/18, paras. 3 & 29 Provisions on hard core cartels
W/197 UNCTAD M/18, paras. 3, 46-47, 49 & 81 Provisions on hard core cartels
W/198 Australia M/18, paras. 3 & 11 Provisions on hard core cartels
W/199 Australia M/18, paras. 49 & 57 Modalities for voluntary cooperation
W/200 Republic of Korea M/18, paras. 3, 7 & 56 Provisions on hard core cartels
W/201 Canada M/18, paras. 3, 10 & 24-25 Provisions on hard core cartels
W/202 Canada M/18, paras. 49 & 53 Modalities for voluntary cooperation
W/203 United States M/18, paras. 3 & 6 Provisions on hard core cartels
W/204 United States M/18, paras. 49 & 55 Modalities for voluntary cooperation
W/205 Thailand M/18, paras. 3, 9 & 70 Modalities for voluntary cooperation
W/206 Argentina M/18, para. 99 Stocktaking of national experience
W/207 OECD M/18, paras. 3 & 48 Modalities for voluntary cooperation
W/208 OECD M/18, paras. 49 & 82 Provisions on hard core cartels
W/209 Secretariat M/19, para. 3 Core principles, including transparency, non-discrimination and
procedural fairness
W/210 New Zealand M/19, paras. 3 & 4 Core principles , including transparency, non-discrimination and
procedural fairness
W/211 Australia M/19, paras. 3 & 5-6 Core principles , including transparency, non-discrimination and
procedural fairness
W/212 Republic of Korea M/19, paras. 3 & 7-11 Core prin ciples, including transparency, non-discrimination and
procedural fairness
W/213 and Rev.1 Thailand M/19, paras. 3 & 12 Core prin ciples, including transparency, non-discrimination and
procedural fairness
W/214 Switzerland M/19, paras. 3 & 13-14 Core principl es, including transparency, non-discrimination and
procedural fairness
W/215 India M/19, paras. 3 & 16-17 Core principles , including transparency, non-discrimination and
procedural fairness
W/216 India M/19, paras. 3 & 16-17 Core principles , including transparency, non-discrimination and
procedural fairnessWT/WGTCP/6
Page 44 Symbol
(WT/WGTCP/W/-)Member/other source Where introduced
(Reference in Minutes)Topic
W/217 Japan M/19, paras. 3 & 15 Core principles, including transparency, non-discrimination and
procedural fairness
W/218 United States M/19, paras. 3 & 22-23 Core principl es, including transparency, non-discrimination and
procedural fairness
W/219 United States M/19, paras. 3 & 18-21 Core principl es, including transparency, non-discrimination and
procedural fairness
W/220 South Africa M/19, paras, 3 & 30-32 Core principl es, including transparency, non-discrimination and
procedural fairness
W/221 OECD M/19, paras. 3 & 58 Core principles, including transparency, non-discrimination and
procedural fairness
W/222 EC and member States M/20 (to be issued) Core prin ciples, including transparency, non-discrimination and
procedural fairness
__________