Last week the
annual ASEAN Competition Workshop was held in Singapore. Attendees focused on achieving the ASEAN
Economic Community (AEC) Blueprint goal of having a uniform national competition
(antitrust) law and policy in each of the ASEAN member states by 2015. So far, only five member states – Indonesia,
Malaysia, Singapore, Thailand and Vietnam – have done so, with the other member
states currently in the legislative process of adopting such laws.
That only half of ASEAN
currently has met the AEC Blueprint goal with one year to go is not
surprising. Of the remaining five
countries, one (Philippines) has a mish-mash of laws affected by its American
legal legacies, one is a small market (Brunei) that probably did not see the
need for a competition law, and three (Cambodia, Laos and Myanmar) are
less-developed countries.
It is also not surprising
when one views competition policy from a political economy point of view. The exercise of disproportionate market
power, whether through cartel behavior, predatory pricing, or other unfair
trade practices, results in windfall economic gains for a small group of
companies at the expense of a much larger number of consumers. Because the consumers have more difficulty
organizing themselves to counter would-be market abusers, the government acts
on their behalf through state agencies or authorizing private legal actions
against unfair competition. Hence ASEAN
members, like most countries, have created independent authorities to deal with
competition issues (there is little appetite in ASEAN for American-style
private antitrust litigation).
Yet the relative slowness in
adopting such regimes is precisely because of this political economy
dynamic. Competition policy is a vital
part of establishing a single market in the AEC. However, the
priority of ASEAN leaders has been to focus on the establishing the single
production base first, with a true single market to be established later,
beyond 2015 (despite the continuing rhetoric equating the two goals). This reflects the greater political
difficulty in ASEAN to implement either strong regional institutions (like the
EU) and/or robust treaty obligations and dispute resolution (like NAFTA) that
are necessary to have effective market regulation, including, inter alia, competition law and policy.
As a result, competition
issues, like most other market-related issues like consumer protection, are
pursued in ASEAN on a stop-start, inconsistent basis, and implemented in a
patchy way in the ASEAN member states; it will remain that way until ASEAN
leaders realize that an effective single market will require reform of the
ASEAN institutions. The AEC, in its ultimate form, will need an ASEAN mechanism
that deals with a single AEC market, rather than 10 separate member state
markets.
