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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

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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

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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

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Internal Aspects of Competition Policy:

Traditional Policies and Practices in the Control of Unfair Trade Practices:

• Consumer Protection Acts

• Standards Acts

• Regulated Industries Policy

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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

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Regulated Industries Legislation:

• price and tariff controls

• performance standards

• mixed with hotatory, rather than

substantive anti competitive compliance requirements

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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

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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

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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 ,Trinidad , Guyana , others

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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

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Main Competition Policies:

Chapter 8 Revised Treaty ;Art 177,178,179

Universal Coverage of all sectors

Control behaviour not structures

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Main Competition policies

Prohibitions Approach :

• agreements :meaning horisontal and vertical

• decisions and concerted practices,

• abuse of dominance

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Main Competition policies :

Dominance conflicts:

Prohibit abuse of dominance but;

• No interference with market structures

• Monopolies permitted : Art 35

• No merger regulation

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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

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Main Competition policies:

Certain Anti competitive agreements

prohibited :

• price fixing, market division, limitation of production etc Art 177

• but no mention of cartels specifically

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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

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Jurisdictional issues:• between national authorities; competition vs

regulated industries • between Community and national authorities • between disciplines in a CSME; dumping vs

predatory pricing

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Fundamental Principles Apply Article 171 Par. 5(4) :

• MFN • National treatment • Transparency • Due process

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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

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External Dimension of Competition Policy

Fundamentals contd :• cooperation significant for enforcement• but enforcement principally national not supra

national act • special and differential treatment addressed

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Fundamentals applied in CARICOM Bilaterals/Plurilaterals :

• Dominican Republic• Cuba • Costa Rica• ACP-EU (COTONOU)• except ( Sand D) in FTAA Negotiations on

Competition Policy

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WTO core principles represented:• especially non discrimination and

transparency• due process is constitutional requirement and

well established judicial doctrine

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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

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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