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PRINCIPLES OF COMPETITION POLICY

PRINCIPLES OF COMPETITION POLICY. Implications at the National and Regional level. LESSONS TO BE LEARNT FROM A YOUNG COMPETITION AGENCY Experience of the Barbados Fair Trading Commission. What is competition policy. Broad Definition :

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PRINCIPLES OF COMPETITION POLICY

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  1. PRINCIPLES OF COMPETITION POLICY Implications at the National and Regional level LESSONS TO BE LEARNT FROM A YOUNG COMPETITION AGENCY Experience of the Barbados Fair Trading Commission

  2. What is competition policy • Broad Definition: The full array of government policy measures that influence competition in domestic markets (e.g. Consumer protection, weights and measures, standards, investment policies, sector regulation etc) • Narrow definition: The design, effective implementation and enforcement of competition law

  3. community competition policy • The GOAL Ensure that the benefits expected from the implementation of the CSME are not frustrated by anticompetitive business conduct

  4. community competition policy • The OBJECTIVES • the promotion and maintenance of competition and enhancement of economic efficiency in production, trade and commerce; • prohibition of anti-competitive business conduct which prevents, restricts or distorts competition, or which constitutes the abuse of a dominant position in the market • promotion of consumer welfare and the protection of consumer interests

  5. Anti-Competitive Business Conduct – What is it • Agreements between enterprises to, or abuses of dominance, that have the affect of restricting or preventing competition

  6. Anti-Competitive Conduct that is Prohibited • Examples of this include: • Price fixing • Limit production • Market sharing • Apply unequal conditions to equivalent transactions • Rig Bids

  7. Abuse of Dominance Definition • An enterprise abuses a dominant when it impedes the maintenance or development of effective competition because of its position in the market

  8. Abuse of dominance • Examples include: • Denial of Access to essential facilities • Predatory Pricing • Price Discrimination • Exclusive Dealing • Price Squeezing

  9. implementation is a shared obligation • The COMMUNITY • norms and institutional arrangements • information systems

  10. implementation is a shared obligation • The MEMBER STATES • legislative measures • dissemination of information • institutional arrangements and administrative procedures • institutional arrangements and administrative procedures

  11. implementation is a shared obligation • The Process • Revised Treaty sets framework • Member States agree on Model law • Enactment of domestic legislation

  12. Status of implementation • Jamaica and Barbados • Guyana and Trinidad and Tobago • Suriname • OECS • Belize

  13. Benefits of competition policy • It encourages innovation, cost and production efficiency and enhance consumer satisfaction through inter-firm rivalry • Competition law’s role is enhanced as a complement to trade and investment policies

  14. Influence of regional and International trade regimes • The CSME • The WTO/GATTs • The Economic Partnership Agreement signed with Europe

  15. Vital aspect of trade and industrial policy • Competition policy has been a neglected aspect of member states trade and economic development policy framework • There has been a tendency to liberate sectors in response to commitments made under various trade arrangements • There has been no strategic thinking as to how firms will compete in these liberated markets

  16. Critical issues in liberalised markets • What monitoring mechanism are there to ensure fair play among companies • Role to be played by regulatory bodies with respect to – regulating operation aspects of sector and fair competition • How will new entrants compete

  17. Major Challenges faced by member states of caricom • Difficulty in building national and regional firms that can compete effectively • Business culture based on family relationships and networks • Lack of human, financial and institutional capacity to implement trade agreements • Sustaining economic and social development in liberalised trading environment

  18. National/regional Competitiveness • Broad Definition from OECD: The degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long term

  19. Viable solutions for caricom member states • IMPLEMENTATION OF THE CSME IN ALL ITS DIMENSIONS - Building sectoral linkages by facilitating networks that meet business and social needs - Learning from experiences of other member states • Encouraging entrepreneurship and new industry development • Creating appropriate regulatory, legal and institutional frameworks to support the above

  20. Experience to date • Member states have not fully implemented Chapter 8 of the Revised Treaty • Competition culture is only gradually being established in those member states that have operational fair competition agencies • Degree of competitiveness of firms still low except for sectors such as banking, insurance • Need to ensure that industrial policy includes and respects the role played by competition policy in economic and social development

  21. Way forward • Continuing to develop competitiveness of national/regional business firms • Review of the legislative framework for competition and consumer policy in the region • Building a Competition and Consumer Culture

  22. THANKYOU BARRY HEADLEY Specialist, Competition Policy CARICOM SECRETRIAT CSME UNIT Workshop on Competition Law and Policy In Caricom And Launch of Guyana Competition Commission Georgetown, Guyana 12th August 2009

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