1 / 11

Competition Policy Issues in Regional Cooperation Arrangements The Case of SAARC

Competition Policy Issues in Regional Cooperation Arrangements The Case of SAARC. Malathy Knight-John, Institute of Policy Studies & Ratnakar Adhikari, UNDP Asia Pacific Regional Centre. State of economies in the SAARC region.

Download Presentation

Competition Policy Issues in Regional Cooperation Arrangements The Case of SAARC

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Competition Policy Issues in Regional Cooperation ArrangementsThe Case of SAARC Malathy Knight-John, Institute of Policy Studies & Ratnakar Adhikari, UNDP Asia Pacific Regional Centre

  2. State of economies in the SAARC region • Seven countries: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. Eighth country (Afghanistan in the process of membership) • Relatively closed economies until the end of 80s (except for Sri Lanka) • Since early 1990s started policy of economic reform • Deregulation • Privatisation • Financial sector reform • External sector reform • Reduction in tariffs and QRs • Removal of regulations on foreign investment

  3. Regional trading agreements – within SAARC Framework • Preferential trading arrangement (SAPTA) entered into force in December 1995; proven a non-starter due to “positive list” approach for the liberalization of tariffs • Free trade agreement (SAFTA), to enter into force from July 2006 • Shallow integration arrangement with a commitment to fully liberalize trade in goods by 2016 • Talks on services and investment yet to begin • Lengthy sensitive lists (upto 1,335 items at six digit level) mean that protectionist tendency is widely prevalent • Trade liberalization under SAFTA unlikely to promote competition

  4. Regional trade agreements – outside SAARC Framework • Trade agreement with Thailand and Myanmar • Five countries of the region (except Maldives and Pakistan) are part of a trans-regional trade agreement called Bay of Bengal Multi Sectoral Technical and Economic Cooperation (BIMSTEC) • Shallow integration arrangements with a commitment to liberalize goods, services and investment by 2017 • Bilateral trade agreements • e.g., India-Sri Lanka; India-Nepal; Pakistan-Sri Lanka • Shallow agreements with liberalization of goods only • India and Sri Lanka moving into a relatively deeper integration arrangement through Comprehensive Economic Partnership Agreement

  5. Country-wise status of competition policy • No well defined competition policy • Competition laws – limited experience • India, Pakistan and Sri Lanka • Some experience with the implementation of competition laws • New laws are in the various stage of preparation/ implementation • Bangladesh prepared a draft but has not move far enough • Nepal made a “voluntary” commitment to enact a competition law at the time of its accession to the WTO, but missed the deadline; draft ready • Bhutan is mulling over a combination of competition and consumer protection law • Maldives is not making any plans

  6. Competition concerns within the Region • Cross cutting • Cartel • Bid-rigging • Price discrimination • Exclusive dealing • Country specific • Public monopoly transforming into private monopoly – (e.g., Sri Lanka, Nepal) • Syndicate (e.g., Nepal and India – trucks and public transportation) • Tied selling (e.g., Nepal and India – school uniform) • Predatory pricing (e.g., Nepal – airlines, newspapers)

  7. Cross border competition concerns • International/regional cartels (like infamous vitamin, heavy electrical equipment and graphite electrodes cartels) • Export cartels (which provides immunity in many jurisdictions including India and Pakistan) • Cross-border mergers and acquisitions • Spill-over effects (mainly due to huge informal trade) • Dumping (alleged dumping of battery and FMCGs) • Abuse of market power by foreign investors (e.g, Unilever in Bhutan)

  8. Regional approachesSouth Asia at crossroads – I • Regional competition policy helps… • International/regional competition abuses require regional solutions due to limited capacity to prosecute them, acting individually • Rapid learning possibility • Cooperation possible either through sharing of information or positive comity • Cost effective – pooling of resources and expertise • “Direct effect” – access to regional law to challenge domestic competition abuses (e.g., UEMOA and Andean) – as an interim solution, for example, in South Asian LDCs not having domestic laws

  9. Regional approachesSouth Asia at crossroads – II • …However, there are problems too • Shallow regional integration means that regional competition policy appear neither necessary nor feasible (like the EU) • Limited national capacity (like CARICOM, COMESA) • National laws either non-existent or evolving • Issue of sovereignty • Development dimension is a matter of concern particularly for LDCs • Critical constituency for regional competition framework non-existent

  10. The way forward – I • Feasibility study on regional competition law taking into account • Cost-benefit analysis of models ranging from “best endeavour clauses” to binding supra-national enforcement and dispute settlement mechanism • Inclusion of special and differential treatment provisions such as transition period, technical assistance, training and capacity building • Incorporation of “development dimension” – such as exemption to energy, agricultural sector and SMEs for a limited period • Focusing on cooperation and sharing of information and expertise

  11. The way forward – II • In the interim • Enactment of national competition laws • Incorporating competition provisions in bilateral trade agreements • Allowing smaller countries to have access to competition authority of a bigger neighbour (e.g., Nepal and Bhutan using Indian competition authority) • Gradual learning process • Cooperation on training and capacity building • Creating critical constituency in favour competition issues

More Related