AEC Blueprint 2025 Analysis: Paper 8 | An Analysis of ASEAN Competition Law

by Dr. Bambang Irawan | Originally published on 16 August 2016.


Summary

ASEAN consumer protection is relatively new and the previous AEC Blueprint does not make any specific time frame on the implementation of the measures. The new Blueprint has outlined more specific strategies in promoting protection and fair treatment for ASEAN consumers, including the necessary infrastructure to implement those strategies. Member States need to work more on developing the relevant policies and laws, and harmonising them across the region, especially in the case of cross-border dispute settlements.

Foreword
The AEC Blueprint Analysis series is a publication which seeks to provide insight into the ASEAN Economic Community Blueprint (AEC) 2025. The publication will seek to do so by adopting a holistic approach in its analysis; creating context by examining past achievements, defining present challenges, and discussing future plans. The series will pay special attention to strategic measures outlined within the AEC’s new blueprint, providing insights with regards to the viability of regional economic integration under the AEC.

Competition Policy and Law (CPL)
At its core, ASEAN defines the aims of CPL as institutions and regulations which create a culture of fair competition. Fair competition is a building block of any free market and involves ensuring a level playing field for businesses, regardless of ownership or origin. (ASEAN Secretariat, 2016) CPL legislation may address explicit areas such as monopoly laws, to more general areas cross covered by other AEC initiatives such as foreign ownership laws. This report will illustrate the groundwork achieved by ASEAN and the goals that have yet to be attained in the interests of a fully integrated and functioning AEC.

A. Targets under the AEC 2015 Blueprint

AEC Blueprint 2015
As at 2007 when the AEC Blueprint 2015 was ratified, only four member states including
Singapore, Indonesia, Thailand, and Vietnam had domestic competition laws and regulatory bodies.

The 2015 Blueprint therefore called for four goals:

  1. Member states were to introduce competition policies domestically by 2015.
  2. Domestic authorities on competition policy were to be established in each ASEAN state,
    which would in turn discuss and coordinate CPL efforts.
  3. Following the two initial goals, capacity building initiatives were to be undertaken to grow
    the depth of CPL amongst member states. (Capacity building, put simply indicates a nation
    dedicating resources towards passing laws and strengthening its regulatory bodies in the
    areas of CPL)
  4. A regional guideline was also an explicit goal the original blueprint set out to achieve

ASEAN Experts Group on Competition (AEGC)
The ASEAN Economic Ministers (AEM) endorsed the establishment of the AEGC in 2007 with the
express purpose of having the body be a forum for CPL discussion and cooperation. This resulted
in the adoption of several best practices and policy guidelines enumerated on the right.

Three main areas of focus in each of the CPL documents were:

  • Institutional Building
  • Enforcement
  • Advocacy

The policy guides and plans were emphasised further in a set of region wide socialisation
workshops targeted at government officials and select private sector groups in order to raise
awareness and advocate the adoption of CPL.

ASEAN Competition Action Plan (ACAP)
The ACAP was finalised in 2014 by the ASEAN Secretariat as a CPL action plan for the 2016 –
2025 period (ASEAN Secretariat, 2016)

The ACAP enumerates 7 main focuses:

  1. Establish CPL for all remaining member states.
  2. Strengthen CPL related agencies through comprehensive technical assistance, capacity building, and the implementation of institutional mechanisms.
  3. Foster CPL awareness through platforms for regular exchange and engagement on CPL
    matters.
  4. Establish Regional Cooperation Arrangements for CPL.
  5. Harmonise CPL policies.
  6. Ensure alignment of CPL amongst intra-ASEAN FTAs and ASEAN+1 FTAs.
  7. Consider international best practices for enhancement of CPL guidelines.

B. Significant Achievements To Date

Of the four main goals set out by the AEC Blueprint 2015, the first two goals of establishing
domestic competition policies and institutions have not been met in spirit to a larger extent.

  • As of the official formation of the AEC at the end of 2015 and subsequent release of the AEC Blueprint 2025, nine of ten ASEAN member states have implemented comprehensive CPL legislation.
  • Cambodia is expected to draft and implement its dedicated CPL legislation by the end of 2016.

At face value, progress seems promising, but it should be noted that the CPL of Myanmar, the
Philippines, Laos, and Brunei have merely ratified CPL legislation, whilst the implementation of
relevant laws are still being revised and deferred.

Screen Shot 2018-01-16 at 3.43.58 PM

The third goal of the AEC Blueprint 2015, which concerns capacity building initiatives, has
been achieved to a larger extent. Over the course of the first five years of the establishment
of the AEGC, 14 capacity building activities were conducted with the participation of 700 plus
government officials from member states. (ASEAN Secretariat, 2016)

Screen Shot 2018-01-16 at 3.44.07 PM

The fourth goal of the AEC Blueprint 2015, which calls for a regional CPL guideline to be
established, was largely addressed by the three main publications released by the AEGC as
outlined above.

A key facet of competition policy would be anti-monopoly laws, which help to maintain a fair
and competitive market. The following statistics help to illustrate that in terms of perceived
effectiveness, Singapore still maintains a lead in the region.

A general positive correlation can be found between the level of development of each member
state and the perceived effectiveness of anti-monopoly policy.

Screen Shot 2018-01-16 at 3.44.16 PM

C. Current Issues and Challenges
All member states are expected to have passed their respective CPL legislation domestically by
the end of 2016. Whilst the token policies are in place, the effective adoption and deepening of
general guidelines will be key in achieving ASEAN’s goals concerning competition law.

The effectiveness of CPL legislation amongst ASEAN member states is not currently being
measured. No progress reports nor feasibility studies have been carried out.

D. Plans under the AEC 2025 Blueprint
The AEC 2025 Blueprint does not deviate from the AEGC’s seven point ACAP plan. As such, the
current status of the ACAP plan shall be examined.

E. AEC 2025 Blueprint Analysis

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F. Conclusion: Moving Forward with the AEC 2025 Plans
The main focus of the AEC 2015 Blueprint, which was the establishment of CPL institutions and
legislation, has yet to be met as of 2016. Further action will need to be taken and the AEC 2025
Blueprint’s first provision regarding establishing CPL in remaining member states recognises this fact.

The next step would be to conduct an in-depth analysis on the effectiveness of CPL in each member state to provide a basis for the AEGC on how to move forward to further promote CPL in ASEAN.

Though great strides have been made in the area of competition law, more comprehensive
measures need to be taken in defining what constitutes competition law in a binding manner.

Further cooperation and partnership with more advanced economic regions and relevant international organisations will greatly support the implementation of the ASEAN CPL.

Cross-sectoral cooperation with other sectors under the AEC and enhanced dialogue with the relevant industries could ensure that enforcement of CPL can be carried out in a more
comprehensive manner.


References
ASEAN Pacific Economic Cooperation (APEC),. (2016). Development of Competition Law in Brunei Darussalam. APEC.
Retrieved from http://www.apeccp.org.tw/doc/Workshop/w2014/14_cplg1_027.pdf
ASEAN 2025: Forging Ahead Together, The ASEAN Secretariat (2015).
ASEAN Secretariat (2008). ASEAN Economic Blueprint.
ASEAN Secretariat (2015). ASEAN Intergration Report 2015.
ASEAN Secretariat & UNCTAD. (2015). ASEAN Investment Report 2015 Infrastructure Investment and Connectivity.
ASEAN Secretariat (2015). A Blueprint for Growth ASEAN Economic Community 2015: Progress and Key Achievements.
ASEAN Secretariat (2016). AEGC ASEAN Competition Action Plan (ACAP) 2016-2025 ASEAN Competition. (n.d.). Retrieved
July 17, 2016, from http://www.asean-competition.org/about-aegc-asean-competition-action-plan-acap-2016-2025
Lee, C. & Fukunaga, Y. (2013). ASEAN Regional Cooperation on Competition Policy. ERIA.
World Economic Forum Global Competitiveness Index (2016), Competitiveness Rankings 2016. Global Competitiveness Report
2015-2016. Retrieved 17 July 2016, from http://reports.weforum.org/global-competitiveness-report-2015-2016/competitivenessrankings/


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