Kim Them Do
Notes: The following text is excerpted from my earlier research paper. Due to my busy schedule, I cannot update the latest development of the current CPTTP and RCEP. I would like to revert to the issue of ASEAN and APEC in the near future.
APEC is not an RTA in the legal sense because there is neither a treaty nor a protocol to give it legal status. Established in 1989, it serves as a forum for 21 Pacific Rim countries to cooperate on regional trade and investment, liberalization and facilitation. Its founders have no intention of following the supranational EU model of regional integration: rather they foster economic interdependence, policy dialogue and consultation with the philosophy of open regionalism.
The three main objectives pursued are promoting regional economic growth, development and cooperation; upholding an open multilateral trading system; and engendering a sense of regional economic community. Its members account for approximately 40% of the world’s population, approximately 54% of world GDP and about 44% of world trade.An annual APEC Economic Leaders’ Meeting is attended by the heads of government of all APEC members. The APEC Business Advisory Council (ABAC) was created in November 1995 with the aim of providing advice to its leaders.
APEC is criticized for being too large and diverse and for producing more rhetoric than action; most importantly, it fails to clearly define itself. APEC works at the level of the lowest common denominator in order to bring all members to a consensus. Its achievement is much less than desirable because of its lack of institutional maturity. Whether it can accomplish anything constructive in dealing with the development of APEC competition law and policy remains debatable.
In 1999 APEC Ministers endorsed the APEC Principles to Enhance Competition and Regulatory Reform and approved a guideline for future work. One of the most crucial principles is to develop effective means of cooperation between APEC economy regulatory agencies, including competition authorities, and ensure that these are adequately resourced. In doing this APEC will make efforts to “address anticompetitive behavior”, consider “timing and sequencing” when introducing competition, and focus on fostering confidence and building capacity.
In 2007, APEC leaders endorsed a Forward Work Program in five policy areas including competition policy. This work program reaffirms that “competition policy is an important means to achieving a more productive and dynamic economy”. The aims of the Forward Work Program are
- to increase awareness of the importance of competition policy to economic growth,
- to instill knowledge of the practical elements of introducing a sound competition regime, and
- to explore practical guidance on how governments can facilitate competitive markets in key infrastructure sectors.
APEC’s Competition Policy and Law Group (CPLG) is in charge of this responsibility. Some of the remarkable achievements of this Group have been organizing various workshops and seminars on competition policy for government officials. The most notable events are as seminars on The Role of Competition Policy in Structural Reform; The Creation of Competition Culture; Utilizing the APEC-OECD Integrated Checklist on Regulatory Reform; Training Course on Competition Policy; and its Competition Policy and Law Database.
Past developments in national competition law in the APEC economies are notably diverse; some basic features are as follows: among the 21 APEC member economies, 17 have introduced comprehensive competition laws and established competition authorities; Canada, USA and Japan are the leading competition law systems among these; Chile, Australia, Republic of Korea, New Zealand, Peru, Russia, Chinese Taipei and Mexico have introduced comprehensive competition laws; from 1999 to 2008 Indonesia, Thailand, Papua New Guinea, Singapore, Viet Nam and the People’s Republic of China introduced national competition laws; Malaysia, the Philippines and Hong Kong China are currently debating these issues.
The most prominent features of the substantive provisions of competition laws in the APEC economies are: prohibition of cartel/ collsion/conspiracy/ bid-rigging; prohibition of abuse of dominant position/monopolization; review of mergers and acquisitions and prior notifications of decision.
Some of the procedural provisions and guidelines focus on the following issues: processes of notification and investigation of mergers; enforcement activities; investigation procedure; the relationship between the competition authority and other governmental, regulatory or judicial bodies.
ASEAN was established in Bangkok in 1967 by Indonesia, Malaysia, the Philippines and Singapore. Brunei Darussalam joined in 1984, Vietnam in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. This bloc contains 580 million people with GDP of more than US$1.5 trillion. Its main objectives are economic growth, social progress, protection of the peace and stability in the region.
The organization holds summit meetings at which the heads of each member government meet to discuss and resolve regional issues. One of its most remarkable areas of progress in regional economic integration has been an agreement on the ASEAN Free Trade Area (AFTA). ASEAN has launched several economic cooperation schemes for implementing open regionalism, especially with the ASEAN plus Three (China, Japan and South Korea), ASEAN plus Six (China, Japan, South Korea, India, Australia and New Zealand) and ASEAN-EU (ASEM), in order to find a balance between regional integration and global liberalization. ASEAN is criticized for being too soft in its approach to human rights violations and in promoting democratization process.
Since ASEAN is committing to developing its integrated regional market, it requires a regional competition regime to enhance fair competition among firms and review its anticompetitive business practice. Faced with the spillover effects of cross-border merger activity, ASEAN countries also need to modernize their competition law to better control these.
To date national competition law has been enacted in most of the member countries, some a long time ago (Thailand in 1979, Indonesia in 1999) and others much more recently (Singapore in 2004, Vietnam in 2005). Malaysia has no comprehensive competition law but introduced a Code on Takeovers and Mergers in 1998; the Philippines deals with some competition issues in some laws, e.g. monopolies has been prohibited by constitutional law and some unfair competition conducts have been restricted by penal law. Laos has just begun with a Decree on Trade Competition; Brunei Darussalam, Myanmar and Cambodia do not yet have fully-fledged competition law.
In practice, the competition laws of these countries are designed to cure negative effects rather than to prevent the cause in that they apply more administrative than judicial regulations. Due to lack of public awareness, these regulations were mostly ex officio administrative authorities rather than filed complaints. Even Thailand and Indonesia have a systematic set of competition laws and some experience in dealing with enforcement activities and international cooperation; they need to strengthen the effectiveness of their laws. Some countries have adopted competition laws that are incompatible with international standards..
Although the ASEAN leaders are coming to recognize the significance of regional competition law, they have not had sufficient experience in the field of implementation and regional cooperation. Most importantly, a comprehensive regional system of merger control does not exist in the ASEAN area.
Because of the diversity of development stages within the bloc it is difficult to design a uniform competition regime within the ASEAN area. In these circumstances, a flexible mechanism should be gradually strengthened and technical assistance for procedural mechanisms, institution-building, human resources and discursive practice are strongly required.
To achieve this objective the ASEAN Experts Group on Competition (AEGC) was established in March 2008 to facilitate the development of regional competition policy. This body is responsible for finding a strategy that meets the various needs of member countries. It also fosters cooperation and networking among the agencies concerned. Specifically, the AEGC focuses on providing best practice for member countries. Most notably, the “ASEAN Regional Guidelines on Competition Policy” and the “Handbook on Competition Policies and Laws in ASEAN for Businesses” will be published in 2010. The AEGC has received significant technical and financial donor support, particularly from Germany through InWEnt (Capacity Building International), and German Technical Cooperation (GTZ). Other sources of technical assistance include the Asian Development Bank Institute, Australia, the EU, Japan, the OECD and the US.