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CARIFORUM - EC EPA and Competition Policy in Barbados PDF Print

Printed in the "Business Monday" newspaper on June 15, 2009

After four years of debate and negotiations the CARIFORUM – European Community Economic Partnership Agreement (EC EPA) was officially signed by 13 of the 15 governments of the region on October 15th, 2008. This article will focus on the chapter on Competition and how it harmonises with the current goals and objectives of CARICOM Community Competition Policy and the Barbados Fair Competition Act Cap.326 C (FCA).

The EPA chapter on Competition contains certain criteria, which recognise the importance of free and undistorted competition in trade. The agreement acknowledges that anti-competitive business conduct has the potential to fundamentally distort markets and limit the benefits of trade liberalisation; hence in the EPA the following practices are deemed to be incompatible with its functioning, insofar as they affect trade between the parties:

  1. agreements and concerted practices between undertakings, which have the object or effect of preventing or substantially lessening competition in the territory of the EC Party or of the CARIFORUM States as a whole or in a substantial part thereof;
  2. abuse by one or more undertakings of market power in the territory of the EC Party or of the CARIFORUM States as a whole or in a substantial part thereof.

These practices are in harmony with the principles outlined in Chapter 8 of the Revised Treaty of Chaguaramas which established the Caribbean Community and which states that the goal of the Community Competition Policy is to ensure that the benefits expected from the establishment of the CARICOM Single Market and Economy (CSME) are not frustrated by anti-competitive business conduct. These objectives, inter alia, are to:

  1. promote, maintain competition and economic efficiency;
  2. prohibit anti-competitive conduct; and
  3. promote and protect consumer welfare and interests.

The objectives of the Fair Competition Act Cap.326C of Barbados are very much aligned to the objectives of the Revised Treaty and as such, with those of the EPA.

Addressing the issue of monopolies, the EPA alludes to public and private monopolies which may have been granted exclusive rights. It states that these may exist providing that the state (party) ensures that there is neither enacted nor maintained any measure which will distort trade in goods and services. The parties, however, are encouraged to progressively adjust state monopolies of a commercial nature in such a way that by the end of the fifth year following the entry into force of this agreement there will be no discrimination in the market under which the goods and services are sold. While this may be challenging to the small economies of CARIFORUM, it should be noted that these provisions do not bind or govern public enterprises which are subject to sectoral rules as mandated within their regulatory framework. This ensures that those articles within the EPA do not detract from the public duty so ascribed to the aforementioned entities.

Moreover, it is anticipated that there will be an increase in trade between the two regions as a result of the provisions of the EPA. As a result, the Fair Trading Commission, other member states and by extension the CARICOM Competition Commission will likely encounter additional competition-related challenges with the arrival or expansion of multinational companies and other businesses in the region.

The architects of the EPA did not neglect this critical aspect of trade liberalisation and have addressed this concern in the fourth article of the chapter (Article 128) on Competition. The article highlights the exchange of information and collaboration on enforcement as essential to ongoing development. It also indicates that the various competition authorities may exchange information if they choose to do so.

In recognising the limited amount of expertise in the area of competition in the region, the drafters of the EPA have included a sixth article (Article 130) which addresses technical cooperation. This would allow the CARIFORUM member states to build capacity in this area, and in this regard the EC has agreed to facilitate support in the following areas:

  1. The efficient functioning of the CARIFORUM Competition Authorities (the CARICOM Competition Authority and the Dominican Republic Competition Authority);
  2. Assistance in drafting guidelines, manuals, and where necessary, legislation;
  3. The provision of independent experts; and
  4. The provision of training for key personnel involved in the implementation and enforcement of competition policy.

Given this agreement the interchange of information and cross border cooperation will be molded and tested to meet both the CARIFORUM and the EC requirements.

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