CARIFORUM - EC EPA and Competition Policy in Barbados
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:
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;
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:
promote, maintain competition and economic
efficiency;
prohibit anti-competitive conduct; and
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:
The efficient functioning of the CARIFORUM
Competition Authorities (the CARICOM Competition Authority and the Dominican Republic
Competition Authority);
Assistance in drafting guidelines, manuals,
and where necessary, legislation;
The provision of independent experts; and
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.