Competition
Law, Part 2
Therefore,
ASEAN regional competition laws and policies play a multifunctional role,
i.e. to encourage the free flow of trade and investment, to monitor the
behaviour of firms, and to evaluate the economic role or potential dominance
of extra-ASEAN TNCs in the region. A single ASEAN competition law, rather
than separate competition laws in each ASEAN country, would ensure that
competition is evaluated on a regional basis, thus maintaining the principle
of open regionalism in ASEAN. I will discuss this topic below.
Unlike
the assumptions of neo-liberalism (Picciotto, 1998: 738)(5),
competition law and policy accepts the important role of states and good
governance institutions in regulating firms’ behaviour. This perspective
is also more compatible with the new approach of positive integration
ideology (Picciotto, 1998: 739)(6). Moreover,
competition law generally takes a pro-consumer policy perspective that
takes into account the public good and social welfare. This ensures that
the advantages of liberalisation within ASEAN resulting from economic
integration would directly contribute to the general public wealth through
consumers.
Section
1.2 surveys existing ASEAN laws relating to unfair competition and considers
how they function and whether they are effectively enforced. Section 1.3
focuses on the rationale for a regional ASEAN competition law. The rationale
for implementing regional competition law and policies is that the removal
of internal barriers should not be allowed to result in companies creating
territorial exclusivity through cartels or the abuse of dominant position.
Control of restrictive business practices in the process of liberalisation
is a key element in the new approach to positive integration (Picciotto,
1998: 735-8). This approach is unlike neo-liberalism, which tends to assure
that the free market needs no control, regulation or restriction, either
by government or public bodies.
1.1
Competition Law as a Reinforcement Function of ASEAN Investment Regime
and Regulations
1.1.1
Why does ASEAN require Competition Law?
Firstly,
since ASEAN aims to strengthen economic integration in the region, it
needs laws and institutions to support the implementation and elaboration
of trade and investment liberalisation within the ASEAN market. The interaction
between government, consumers, and producers results in the concern that
a rules-based system needs to be strengthened. How the competitive process
actually works and to what extent the government should regulate the relationships
between producers and consumers is significant. In this sense, competition
law is essential as an instrument to regulate fair competition because,
as I mentioned earlier, it is compatible with liberalisation since it
is basically neutral and non-discriminatory.
Secondly,
in an emerging ASEAN free market economy, monopolies and restrictive business
practices are viewed as undesirable because they are likely to distort
prices and the efficient allocation of resources. Therefore, contestability
has to be realised, so that free entry and the competitive pressure of
new competitors will function and balance market power and structure in
the ASEAN market. The goal of market contestability and undistorted competition
is to create an ultimate public benefit for the consumers, to enable great
varieties of product ranges at the minimum price that fundamentally strengthens
consolidation of social wealth and of general consumers.
Part
3
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(5)
Neo-liberalism regards regulation as an unnecessary burden; as Picciotto
stated, the perspective of neo-liberal ideologues toward economic integration
is that "…international integration means the creation of open markets,
which requires only strong provision for the protection of property rights,
the maintenance of public order, and not much else". See Picciotto,
1998: 738.
(6)
Picciotto argues that the current phase of restructuring of the global
political economy needs the creation of positive linkages across regulatory
regimes, to facilitate a shift from negative to positive integration.
This can also be applicable to economic integration at a regional level.
See Picciotto, |