Benefits and challenges of regional competition agreements – UMAÑA – November 2018 OECD GFC
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This document discusses challenges with regional competition agreements in Latin America and the Caribbean. It notes that regional institutions are poor, underfunded, and have sclerotic normative frameworks. Only CAN and CARICOM have regional enforcement capabilities. CAN has made some progress with decisions and cases but tensions remain. CARICOM has rules but no enforcement actions after 10 years. MERCOSUR and CACM have agreed to establish competition authorities but have not done so after many years. The document proposes overhauling frameworks, regional merger review, cross-border leniency agreements, and focusing on actual cases to help move integration efforts forward in the region.
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Benefits and challenges of regional competition agreements – UMAÑA – November 2018 OECD GFC
- 1. THE CASE OF LATIN AMERICA AND THE CARIBBEAN Dr. Mario A Umana REGIONAL COMPETITION AGREEMENTS:
- 3. ECONOMIC (DES) INTEGRATION IN LAC
- 4. CHALLENGES • Poor/dated regional institutions • Small/fragile/underbudgeted agencies • Sclerotic normative framework • Only CAN and CARICOM have regional enforcement • No cases • Tensions: National vs supranational Competition vs Trade authorities
- 5. CAN: working progress • Decision 608 of the commission • 34 years in the making • Small Competition and Trade Remedies Unit under SGCA • Pre-judicial rulings by the TJCA • Baby diapers cartel. Tensions on leniency applications Case 78-IP-2018 • Abuse of dominance. Bolivian Beer. Application of Decision 608 as national law. • Transmilenio. Bid rigging. SGCA denies jurisdiction based on absence of cross- border effects.
- 6. CARICOM: no enforcement • Rules 173 and 174 of Rev Chaguaramas Treaty • Small competition agency: 6 commissioners, 5 staff, no Executive Director, Sr Legal Counsel nor Registrar • 10 years: no cases 1 case before adjudication panel 1 case under investigation
- 7. MERCOSUR: LIGHT • Protocol of Fortaleza 1996. Updated by Decision 43/2010 and Annex: Agreement for the defense of Competition. • 22 years : no cross border cases • Intergovernmental body • CT5 responsible for applying the regional regulation Consultations Coordination Technical Cooperation Notification of actions Confidentiality
- 8. CACM: A tale of unfulfilled commitments • No regional competition agreement in place Despite: • Mandate from foundational treaty (1961) • Agreement to establish Customs Union (2012) • Association Agreement with EU • Tensions between RECAC and COMIECO
- 9. Some ideas to move forward • Overhaul the frameworks • Regional merger review • Leniency in cross border cartels • Apply CAN’s art 49 approach to CARICOM members that still lack national competition laws. • Attention to political economy • Smarter advocacy for resources • Focus on cases
- 10. Are we pushing the wrong way? Pacific Alliance • 5th economy of the world in 2020 • More advanced integration platform in the Americas • 4 current members are leaders in LAC Competition Policy New generation of MOUs • Cooperation for cartel investigations/leniency • Consultation on Regional mergers