How to promote the benefits of competition in a time of disruption?

Đỗ Kim Thêm

Competition authorities of the advanced countries advocated for antitrust policies on the reason that people are better off. It is well-known that globalization and technological innovation are going on and are to benefit most members of society.

Therefore, developing countries could introduce policies to ensure that the gains were widely shared. In this light, its newly-established competition authorities argue that the introduction of national competition law and policy would increase overall wellbeing. Of course, faith in benefit is very strong. The stronger case for firms is to increase allocative, productive and dynamic efficiency. In any event, the prospect of enjoying consumer welfare is the strongest incentive for policy makers to go further. But benefit is a part of the problem.

Unfortunately, we are facing major obstacles to sustain high growth rate. The reasons for this are obvious: slow advanced-economy growth, abnormal post-crisis monetary and financial conditions, and disruptive impacts of technology on the competitive market. Moreover, developing countries must find new trade opportunities in the foreign market as the volume of world trade development is declining. The recent uptick in protectionism and the weakness in investment are the result of this trend. These problems are reducing potential growth of world economy for a long time. How to promote the traditional benefit of competition in the lower growth environment?

Without grasping the current slowdown we could not lead trade development, higher growth and living standards for everyone. Given this, the legal landscape of national, regional and global competition law and policy need to be accordingly changed again. In so doing, we need to reconsider its framework for benefit. The reasons for this are various:

First, the two new large regional trade agreements are the most significant factors: the Trans-Pacific Partnership (TPP) between the US and 11 Pacific Rim countries and the Transatlantic Trade and Investment Partnership (TIPP) between the EU and the US are not into practice.

Second, the recent success of the Brexit campaign tells us that the European competition law and policy is under unprecedented strain because the changes will not benefit for everyone in the European market and the British could not stand exactly to benefit to these exits.

Finally, at present, competition laws and policies didn’t keep up with the times of disruption and existing laws were inadequately enforced. Most importantly, the banking sector is no longer competitive; the vital interests of banks and firms are systematically more relevant than the usual benefits of customers and workers. With these trends, adaptation is the option needed.

We must accept the inevitability of changes to their growth models caused by grouping the trading blocks of the world economy and the EU political uncertainty in explaining the future benefits of competition. We should be getting ahead of them in investing in the capacity to support their use.

Given all of this, we need to adapt the strategies to explain the benefit of competition in discussing further a sensible framework for doing so and accounting for several key factors. Within the context of this new dynamic, a realistic approach is needed. We hope that all of this was supposed to make us better to deal with this problem.