COMPETITION POLICY IN BILATERAL AND PLURILATERAL AGREEMENTS: Involvement of the Member States of the Caribbean Community. Presented by Ivor Carryl to ; The Regional Seminar for Latin America and the Caribbean on the Post Doha Competition Issues : Sao Paulo Brazil 23-25 April 2003 1 Introduction : • Caribbean competition policy and law a recent development • Infancy: of law, institutions and enforcement • Changing from : traditional consumer protection to market conduct/restrictive practices • Establish at outset nexus between competition and development and trade 2 Introduction contd: • Competition and development built into external dimension of CARICOM foreign economic policy and agreements with non members • Possible multilateral framework would benefit and be challenged by bilateral and plurilateral agreements • TWO ASPECTS :Internal Agreement (CSME) and External Agreements 3 Internal Aspects of Competition Policy: Traditional Policies and Practices in the Control of Unfair Trade Practices: • Consumer Protection Acts • Standards Acts • Regulated Industries Policy 4 Consumer Protection Type Policies • • • • • false and misleading bait advertising misuse and misrepresentation of standards product /service quality and safety not really concerned with market conduct or anti-trust 5 Regulated Industries Legislation: • price and tariff controls • performance standards • mixed with hotatory, rather than substantive anti competitive compliance requirements 6 Regulated Industries Legislation contd; • problem of state either establishing ,maintaining or participant in monoplies regulated • weak or little commitment to enforcement • recent departures especially in telecommunications sector regulation 7 Contemporary Developments in Competition Policy and Law: • Small market 15 million consumers spread over 15 countries • propensity to monoplise ,dominate, collude: cement,beer,areated beverage,bus transport, poultry 8 Contemporary Developments in Competition Policy and Law: • From Common Market to Single Market and Economy: • Article 30 of Common Market Annex ;Treaty of 1973 • Movement towards National Law, 1993 onwards: Jamaica, St Vincent, Barbados 9 ,Trinidad , Guyana , others Chapter 8: Revised Treaty 2001 Main Competition Policies ; Objective - Art.169 • ensure benefits of CSME not frustrated by anti-competitive business conduct • link competition and trade and development 10 Main Competition Policies: Chapter 8 Revised Treaty ;Art 177,178,179 Universal Coverage of all sectors Control behaviour not structures 11 Main Competition policies Prohibitions Approach : • agreements :meaning horisontal and vertical • decisions and concerted practices, • abuse of dominance 12 Main Competition policies : Dominance conflicts: Prohibit abuse of dominance but; • No interference with market structures • Monopolies permitted : Art 35 • No merger regulation 13 Main Competition policies: Exclusions Art 168 and Chapter 7: • combinations or activities of employees • collective bargaining • certain activities of professional associations • public undertakings in LDC’S 14 Main Competition policies: Certain Anti competitive agreements prohibited : • price fixing, market division, limitation of production etc Art 177 • but no mention of cartels specifically 15 Exemptions: • monopolies :established in public interest • de minimis ; anti competitive but effect on market negligible • COTED ‘s Power to exempt any sector from Article 177,178 16 Jurisdictional issues: • between national authorities; competition vs regulated industries • between Community and national authorities • between disciplines in a CSME; dumping vs predatory pricing 17 Fundamental Principles Apply Article 171 Par. 5(4) : • MFN • National treatment • Transparency • Due process 18 External Dimension of Competition Policy Fundamentals: Experience shows that to exploit benefits of trade liberalisation (a) investment (b) need opportunity to sell inside the border ie CP • ensure that market access not undermined by anticompetitive conduct • recognise link between competition and trade and development • recognition of need for capacity building 19 External Dimension of Competition Policy Fundamentals contd : • cooperation significant for enforcement • but enforcement principally national not supra national act • special and differential treatment addressed 20 Fundamentals applied in CARICOM Bilaterals/Plurilaterals : • Dominican Republic • Cuba • Costa Rica • ACP-EU (COTONOU) • except ( Sand D) in FTAA Negotiations on Competition Policy 21 WTO core principles represented: • especially non discrimination and transparency • due process is constitutional requirement and well established judicial doctrine 22 MULTILATERAL FRAMEWORK ON COMPETITION: Possibilities increasing for eventual sucessful negotiations : Bilaterals and plurilaterals contributing ; • by bringing experience on scope of policy , institutional arrangements and cooperation that work • to convergance of agreement on basic principles • to convergence of agreement on certain areas of policy e.g agreements on hard core vertical and horisontal activities to be disciplined • to deepening universal recognition of link between competition ,trade and development through scope of agreements • by strengthened cross-border institutional networks and procedures 23 MULTILATERAL FRAMEWORK ON COMPETITION: Bilaterals plurilaterals could pose challenges ; • • • • • Resistance to dilution of value of concessions Size and vulnerabilities Special and Differential treatment Dispute settlement Sovereignty and jurisdictional issues 24