./.WORLD TRADE
ORGANIZATIONWT/GC/W/298
6 August 1999
(99-3334)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Trade and Competition
Communication from Korea
The following communication, dated 29 July 1999, has been received from the Permanent
Mission of Korea.
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Background
1. As was discussed at the Working Group on the Interaction between Trade and Competition
Policy, anti-competitive practices by private firms can create a barrier to the market access of foreign
firms. With the globalization of the world economy, cases where anti-competitive behaviour of a
company in one country harms the interests of other countries are multiplying. By effectively
regulating cross-border anti-competitive activities, co mpetition policy can contribute to achieving the
objectives of the WTO, including the promotion of international trade. Bilateral or regional
cooperation helps to some degree, but both have limitations in terms of overall effectiveness. Issues
arising out of the interaction between trade and competition policy can be more effectively addressedby enhancing multilateral cooperation in addition to bilateral and regional efforts. Given the impact of
anti-competitive government measures on international trade, competition-oriented reforms of some
provisions of the existing WTO Agreements may also be helpful to the better working of the
international trade system.
2. Korea is of the view that it is time to begin negotiations on a multilateral framework on
competition policy. A multilateral framework may provide a level playing field securing legal
stability, predictability and transparency in the world trade and foreign investment, thereby helping
enterprises to reduce transaction costs. Lower transaction costs, in turn, contribute to enhancing global
economic welfare by expanding international trade and investment.
Proposal
Objectives
3. Negotiations should aim at establishing a basic framework of binding principles and rules on
competition policy and promoting cooperation among WTO Members in relation to competitioncases. The WTO framework on competition policy (“the Framework”) should address concerns of
WTO Members to achieve a balance between competition policy and other economic and social
policy objectives and contribute to their economic development by enhancing competition in their
domestic markets.WT/GC/W/298
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Key elements
Core principles and rules
4. The Framework should develop core principles and rules on competition policy. WTO
principles of non-discrimination and transparency could function as a cornerstone for other principles
and rules of the Framework. The application of the principles and rules should be confined to areas
where international trade and/or foreign investment are affected; they should not be applied to
business practices that have domestic effects only.
5. Korea’s general views about the core principles and rules to be incorporated into the
Framework are described in its submissi on to the Working Group (WT/WGTCP/W/133).
International cooperation
6. As shown in the areas of international cartels or mergers and acquisitions that involve more
than one country, there is a growing need to enha nce international cooperation for better enforcement
of competition law and policy. International cooperation is particularly important to effectively
regulate anti-competitive practices by multinational firms as well as to reduce possible conflictsbetween countries over extraterritorial enforcement and fact-finding.
7. The Framework should therefore include modalities for international cooperation. Prior
notification of competition law enforcement that may incur costs for other WTO Members,
coordination among the concerned WTO Members in cases where more than two jurisdictions are
engaged in anti-trust investigation, and exchanges of non-confidential information are candidates tobe considered as such cooperation modalities. Positi ve comity could also be incorporated into the
Framework to impose greater discipline on cross-border anti-competitive practices.
Development dimension
8. Competition policy is generally recognized as a useful policy tool for development. Indeed,
many developing countries have introduced or reinforced their competition laws as a key component
of domestic reforms designed for their better in tegration into the world economy. Therefore, the
development dimension should be an integral part of the Framework.
9. A number of incentives could help WTO Members engage in negotiations on a multilateral
framework on competition policy. They include grace periods differentiated according to the level of
each Member’s economic development, exemptions of certain obligations, waivers, reservations and
technical assistance. Given the limited capacity of many developing countries, special emphasisshould be placed on technical assistance with a focus on their domestic capacity-building.
Dispute settlement procedures
10. The Framework should include a dispute settlement mechanism that reflects the specificities
of competition law.
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