Can Small Economies benefit from a Multilateral Framework on Competition? Taimoon Stewart

Can Small Economies benefit from a Multilateral Framework on Competition? Taimoon Stewart The University of the West Indies Republic of Trinidad and Tobago tstewart@fss.uwi.tt

Questions asked • What does a Multilateral Framework on competition (MFC) offer small economies? • What do small economies need? • What are the trade offs in joining an MFC? • Under what conditions can a small economy benefit from an MFC?

What does a MFC offer small economies? • Cooperation with more mature competition commissions, providing: • Coordination of technical assistance • Voluntary cooperation with exchange of non-confidential information • Assistance to deal with international cartels?? • providing a forum for discussions and learning from others, including peer review

What do small economies need? • need cooperation and technical assistance • Are affected by international cartels • CARICOM – reliance on tourism – adversely affected by operations of international tour operators • Are more vulnerable to operations of international cartels because import dependent, e.g., Vitamin Cartel & Electrical Equipment Cartel (Jamaica)

What are the trade offs in joining an MFC? • Would be required to enact competition legislation (against cartels) • Small economies do need competition law • Empirical Evidence from CARICOM countries of: • Cartel activity and other anti-competitive agreements • Abuse of Dominant Market position • Anti-competitive mergers • Have become haven for int’l cartel activities • Cooperate in exchange of information • Human resource constraint in small economies

Circumstances under which Small Economies can benefit? • Need • To include as core principles “flexibility” and “progressivity” • Tailor cartel law to exempt import and export cartels created to achieve MES • Tailor Merger Control Regulation so as to be able to capture local firms in the non-tradable sector, but allow for MES in firms that face competition from imports and/or export • Need time to implement regime--moratorium.

How to benefit continued? • S&D treatment applied to cooperation: • Investigating international cartels, given power assymmetry • More advance level of cooperation in investigation • In demands for information • Concerns about Peer Review- what would be the implications for implementation of findings, even if voluntary

Conclusion • Yes, Small Economies can benefit from a multilateral regime • There has to be a recognition of the severe constraints faced by these economies • Must have built in concessions that would make the regime work for them • Venue has to be one that is seen to be working for all parties

The contradictions of the Caribbean • The Caribbean is in serious socio-economic crisis at present, with the withdrawal of preferential treatment, and the closure of development options • Unemployment is as high as 25-30 percent in the banana producing countries • We need to limit exploitation of the consumers through enforcement of competition law and we need to tackle international cartels • Despite these problems, the Caribbean gives us a glimpse of paradise, so beautiful are the islands

Wish you were here?

Can Small Economies benefit from a Multilateral Framework on Competition? Taimoon Stewart