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Regional Harmonization of Competition Law and Policy: An ASEAN Approach

Published online by Cambridge University Press:  03 July 2012

Huong Ly LUU
Huong Ly LUU*
Affiliation:
National University of Singapore, Singapore
*
emilyluu82@yahoo.com
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Abstract

The ASEAN Economic Ministers unveiled the ASEAN Regional Guidelines on Competition Policy on 24 August 2010. This is a non-binding document covering all key issues relating to competition law and policy. This article provides a comparative study of the regional harmonization of competition law and policy among the EU, NAFTA, MERCOSUR, CAN, and ASEAN, with a focus on ASEAN. In contrast to the “hard law” approach of the EU, NAFTA, MERCOSUR, and CAN, ASEAN has opted for a “soft law” approach because it is constrained by (1) the traditional “ASEAN Way”; (2) the diversity in economic conditions and competition regimes among its members; and (3) the lack of a supranational body to enforce common competition rules, or, at least, a mechanism for dispute resolution. The author concludes that this modest step which ASEAN has taken in the regional harmonization of competition law and policy is appropriate for the time being.

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Articles
Information
Asian Journal of International Law , Volume 2 , Issue 2 , July 2012 , pp. 291 - 321
Copyright
Copyright © Asian Journal of International Law 2012

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Footnotes

*

PhD Candidate, Faculty of Law, National University of Singapore (NUS); Associate Professor, Hanoi Law University, Vietnam. I would like to express sincere thanks to my supervisor, Robert Ian McEwin, Simon Chesterman, Andrew Simester, and the research students at the NUS Faculty of Law, as well as participants of the Third Biennial Asian Society of Law Conference (Beijing, 27−28 August 2011) for their precious comments. I also wish to thank the Faculty of Law (NUS) for funding me for this conference. All mistakes remain mine.

References

1. ASEAN was established in Bangkok on 8 August 1967 by the five original Member States: Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984; Vietnam on 28 July 1995; Laos and Myanmar on 23 July 1997; and Cambodia on 30 April 1999. ASEAN regional economic integration is a multi-sectoral process involving trade, investment, financial, industrial, and development issues. To reach the goal of a more liberal and competitive region, ASEAN has signed the ASEAN Trade in Goods Agreement, 26 February 2009, online: ASEAN 〈www.aseansec.org/22223.pdf〉 [AFTA]; ASEAN Comprehensive Investment Agreement, 26 February 2009, online: ASEAN 〈www.aseansec.org〉 [AIA]; ASEAN Framework Agreement on Services, 15 December 1995, online: ASEAN 〈www.aseansec.org/6628.htm〉; and ASEAN Framework Agreement on Intellectual Property Cooperation, 15 December 1995, online: ASEAN 〈www.aseansec.org/6414.htm〉. ASEAN's comprehensive efforts at developing greater economic co-operation in the fields of trade, investment, finance, industry, intellectual property, etc. have been termed “AFTA plus”, because they supplement the trade-related initiatives under the AFTA and similar regional agreements.

2. The Charter of the Association of Southeast Asian Nations, which conferred legal personality upon ASEAN, was signed on 20 November 2007 at the 13th ASEAN Summit in Singapore, online: ASEAN 〈www.aseansec.org/publications/ASEAN-Charter.pdf〉 [ASEAN Charter]. The Charter repeats some of the purposes and objectives enshrined in the ASEAN Vision 2020 (Association of Southeast Asian Nations, “ASEAN Vision 2020” (15 December 1997), online: ASEAN 〈www.aseansec.org/1814.htm〉). Yet what is different is that the Charter has turned those political promises and commitments into legal obligations, thus making it obligatory for the ASEAN Member States to fulfil them. See Keyuan, ZOU, China-ASEAN Relations and International Law (Oxford: Chandos Publishing, 2009)CrossRefGoogle Scholar at 6.

3. Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015” (13 January 2007), online: ASEAN 〈www.aseansec.org/19260.htm〉.

4. “ASEAN Economic Community Blueprint” (20 November 2007), online: ASEAN 〈www.asean.org/21083.pdf〉, para.8 [AEC Blueprint].

5. Ibid., para. 5 states: “In establishing the AEC, ASEAN shall act in accordance to the principles of an open, outward-looking, inclusive, and market-driven economy consistent with multilateral rules as well as adherence to rules-based systems for effective compliance and implementation of economic commitments.” On ASEAN progression towards rules-based frameworks governing Member States’ economic relations, see DAVIDSON, Paul J., ASEAN: The Evolving Legal Framework for Economic Cooperation (Singapore: Times Academic Press, 2002) at 158−162Google Scholar.

6. “ASEAN Regional Guidelines on Competition Policy” (August 2010), online: ASEAN 〈www.aseansec.org/publications/ASEANRegionalGudelinesonCompetitionPolicy.pdf〉 [ASEAN Regional Guidelines on Competition Policy].

7. North American Free Trade Agreement, 17 December 1992, online: NAFTA 〈www.nafta-sec-alena.org/en/view.aspx?x=343〉 [NAFTA].

8. Also known as “anti-trust law”; the terms “competition” and “anti-trust” are used interchangeably in this article.

9. GOODE, Walter, Dictionary of Trade Policy Terms (New York: Cambridge University Press, 2007) at 93CrossRefGoogle Scholar. The competition laws of most countries deal with four main groups of behaviour by firms: (a) horizontal agreements; (b) vertical agreements; (c) abuse of market power by monopolies and large firms; and (d) control of mergers and acquisitions to ensure that they do not impair overall competitive conditions in the market.

10. Ibid., at 94.

11. A key distinction between competition policy and competition law is that competition policy disciplines constrain both private and government actions, whereas competition law traditionally pertains only to the behaviour of private entities, with the exception of some transitional competition jurisdictions, e.g. Eastern European countries, China, and Vietnam, where certain actions of the state authorities that may restrain competition are well within the purview of competition law.

12. Eleanor M. FOX, “International Antitrust: Against Minimum Rules; For Cosmopolitan Principles” (1998) 43 Antitrust Bulletin 5 at 5.

13. Daniel K. TARULLO, “Competition Policy for Global Markets” (1999) 2 Journal of International Economic Law 445 at 447.

14. Peter J. LLOYD, “Multilateral Rules for International Competition Law?” (1998) 21 World Economy 1129.

15. Ibid., at 1132.

16. Tarullo, supra note 13 at 447.

17. First, there are practical problems; since important documents and witnesses are located abroad, a fair examination of the charges may be impossible without the co-operation of the foreign government enforcement agency. Second, there is the possibility that extra-territorial enforcement may affect the principle of comity. See Robert PITOFSKY, “Competition Policy in a Global Economy-Today and Tomorrow” (1999) 2 Journal of International Economic Law 403 at 408.

18. The first bilateral positive comity agreement in the world was signed between the EU and the USA in 1991. See Agreement Between the Government of the United States of America and the Commission of the European Communities Regarding the Application of Their Competition Laws, 23 September 1991, online: EUR-Lex 〈http://eur-lex.europa.eu〉.

19. Pitofsky, supra note 17 at 408−9.

20. Tarullo, supra note 13 at 447.

21. A. Neil CAMPBELL and J. William ROWLEY, “The Internationalization of Unilateral Conduct Laws-Conflict, Comity, Cooperation and/or Convergence” (2008) 75 Antitrust Law Journal 267 at 267.

22. The Boeing-MDD merger involved two US-based firms whose combined sales in the EU were big enough for the EU Commission to claim the right of scrutiny (something the US authorities did not contest). In the course of the Boeing affair, EU officials expressed concern that the benefits of the merger to the US, including the benefits to the US economy, exceeded the consumer costs to the US. They suggested that if the US authorities had taken into account the anti-competitive costs worldwide, this would have tilted the balance in favour of prohibiting the merger. For a more detailed analysis of the case, see Eleanor M. FOX, “Antitrust Regulation Across National Borders: The United States of Boeing Versus the European Union of Airbus”, Brookings Institution, Article, Winter 1998, online: 〈www.brookings.edu/articles/1998/winter-businessfox.aspx〉.

23. Bernard HOEKMAN and Peter HOLMES, “Competition Policy, Developing Countries and the WTO” (1999) 22 World Economy 875 at 881. It should, however, be borne in mind that the Boeing/McDonnell Douglas disagreements should be treated as an exception rather than the rule since, as explained by Pitofsky, “[e]specially with respect to the Europeans, our disagreements are vastly outnumbered by the instances in which there is cooperation, coordination and agreement about the essential elements of a review of competitive behavior”. See Pitofsky, supra note 17 at 407.

24. UNCTAD, “World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy” (1 August 1997), online: UNCTAD 〈http://unctad.org/en/docs/wir1997_en.pdf〉, at Chapter 5.

25. JANOW, Merit E., “The Work of the International Competition Policy Advisory Committee to the Attorney General and the Assistant Attorney General for Antitrust” (1999) 2 Journal of International Economic Law 441 at 443CrossRefGoogle Scholar.

26. Tarullo, supra note 13 at 449.

27. Daniel D. SOKOL, “Order Without (Enforceable) Law: Why Countries Enter into Non-Enforceable Competition Policy Chapters in Free Trade Agreements” (2008) 83 Chicago-Kent Law Review 231 at 276.

28. OECD, “Trade and Competition Policies: Options for a Greater Coherence” (Paris: OECD Publishing, 2001).

29. Ibid.

30. Clifford A. JONES and Mitsuo MATSUSHITA, “Preface” in Clifford A. JONES and Mitsuo MATSUSHITA, eds., Competition Policy in the Global Trading System (The Hague: Kluwer Law International, 2002)Google Scholar, 2 at 2.

31. Bernard HOEKMAN, “Competition Policy and Preferential Trade Agreements”, Economic Development Institute of the World Bank, Working Paper, 1 January 1998.

32. Japan-Measures Affecting Consumer Photographic Film and Paper, WTO Panel Report, 31 March 1998, WT/DS44/R [Kodak-Fuji].

33. These are arrangements under which a producer gives sole rights to a wholesaler or retailer in an area, and/or imposes the condition that anyone handling their goods (or services) must not act for any other firm.

34. The WTO dispute panel agreed to treat all the “measures” attacked by the US, which included decisions of the Japan Fair Trade Commission regarding the absence of anti-competitive practices by Fuji, as possible grounds for a complaint, as these “measures” could have affected trade. However, on examining the facts, it concluded that there was no impairment of US market access rights and it also did not find that Japanese distribution structures excluded foreigners as a result of “public policy”, even on a wide interpretation of this term. The Panel concluded that:

single-brand wholesale distribution is the common market structure—indeed the norm—in most major national film markets, including the US market. While the United States responds that the US market structure was the result of private and not governmental actions, it is unclear why the same economic forces acting in the United States would not also exist in Japan.

See Kodak-Fuji, supra note 32 at 421.

35. Bernard M. HOEKMAN and Petros C. MAVROIDIS, “Competition, Competition Policy and the GATT” (1994) 17 World Economy at 121−50.

36. For example, Hoekman and Mavroidis argue that:

[t]he obvious solution to the problem of antidumping, one that has been suggested at regular intervals by economists and trade lawyers for over 20 years, is to make antidumping enforcement more consistent with competition law enforcement. That is, the focus of attention should become the effect of dumping on competition in the importing country's market, rather than its impact on the competitors that happen to be located in that market.

See Bernard M. HOEKMAN and Petros C. MAVROIDIS, “Antitrust-based Remedies and Dumping in International Trade”, World Bank, Policy Research Working Paper, 31 August 1994 at 26.

37. See e.g. Aditya BHATTACHARJEA, “The Case for a Multilateral Agreement on Competition Policy: A Developing Country Perspective” (2006) 9 Journal of International Economic Law 293 at 300; Margaret LEVENSTEIN and Valerie Y. SUSLOW, “Contemporary International Cartels and Developing Countries: Economic Effects and Implications for Competition Policy” (2004) 71 Antitrust Law Journal 801 at 816−18, 822; Einer ELHAUGE, “Why Above-Cost Price Cuts to Drive Out Entrants Are Not Predatory-and the Implications for Defining Costs and Market Power” (2003) 112 Yale Law Journal 681 at 684; Bernard M. MAVROIDIS and Petros C. MAVROIDIS, “Dumping, Antidumping and Antitrust” (1996) 30 Journal of World Trade 27 at 28−30.

38. Treaty Establishing the European Economic Community, 25 March 1957, online: EC 〈http://ec.europa.eu/economy_finance/emu_history/documents/treaties/rometreaty2.pdf〉 [EEC Treaty].

39. Australia-New Zealand Closer Economic Relations Trade Agreement, 28 March 1983, online: ADFAT 〈www.dfat.gov.au/fta/anzcerta/downloads/anzcerta1.pdf〉 [ANZCERTA].

40. See André Filipe Zago de AZEVEDO, “MERCOSUR: Ambitious Policies, Poor Practices” (2004) 24 Brazilian Journal of Political Economy 584.

41. The EEC subsequently became the European Union (EU) after the Maastricht Treaty, and the EEC/EU rules have been extended to the new members of the regional trading arrangement and the European Economic Area, and the states in central and eastern Europe and the southern Mediterranean, which are associated with the EU.

42. EEC Treaty, supra note 38, arts. 85−92.

43. ANZCERTA, supra note 39.

44. NAFTA, supra note 7.

45. Andean Subregional Integration Agreement, 26 May 1969, online: Andean Community General Secretariat 〈www.comunidadandina.org/ingles/normativa/ande_trie1.htm〉 [Cartagena Agreement].

46. Treaty Establishing a Common Market Between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, 26 March 1991 (entered into force 29 November 1991), online: OAS 〈www.sice.oas.org/trade/mrcsr/mrcsrtoc.asp〉 [Treaty of Asunción].

47. Ken HEYDON, “Regulatory Provisions in Regional Trade Agreements: ‘Singapore’ Issues”, World Trade Organization, Paper presented at the WTO Seminar on Regionalism and the WTO, Geneva, 26 April 2002 at 69.

48. The EU has its origins in the common market established by the European Coal and Steel (ECSC) Treaty in 1952, which expired on 23 July 2002 (Treaty Establishing the European Coal and Steel Community, 18 April 1941 (entered into force 24 July 1952)), online: EUR-Lex 〈http://europa.eu〉 [ECSC Treaty]. The consequences of this expiry are explained in section 2 of European Commission, “Communication from the Commission Concerning Certain Aspects of the Treatment of Competition Cases Resulting from the Expiry of the ECSC Treaty” (26 June 2002), online: EUR-Lex 〈http://eur-lex.europa.eu〉. The term European Union (EU) is used, for the purposes of this article, interchangeably with the European Community (EC).

49. Treaty on European Union, 7 February 1992 (entered into force 1 November 1993), online: EUR-Lex 〈http://eur-lex.europa.eu/en/treaties/dat/11992M/htm/11992M.html〉.

50. Karen J. ALTER, “The European Union's Legal System and Domestic Policy: Spillover or Backlash?” (2000) 54 International Organization 489 at 489. The advanced level of legalization in Europe is in part a consequence of the institutional design of the EU. Member States set out to create a supranational political entity, giving the EU Council the power to pass legislation that is directly applicable in the national realm and creating a supranational Commission to oversee implementation of the EU treaties, monitor compliance with EU law, and raise infringement suits against states. They also created the ECJ, authorizing it to hear disputes between states and the EU's governing institutions; to hear infringement suits against Member States raised by the Commission; to review challenges to EU laws and Commission decisions; and to review and, if necessary, invalidate EU rules. States gave the ECJ these powers believing that the Court would help them keep the other supranational bodies of the EU in check.

51. Indeed, competition policy was seen as integral to this objective, as noted in an early policy memorandum:

[a] genuine single market cannot be brought about except through free competition. If the market were to remain subject to the arbitrary decisions of the cartels, or to the restrictive practices of monopolies, then the benefits of the single market would soon be offset by the effects of price-fixing and production quotas.

See High Authority, European Coal and Steel Community, Memorandum on the Anti-Trust Policy of the High Authority 1 (1954) (Translation by the High Authority), cited in Clifford A. JONES, “Competition Dimensions of NAFTA and the European Union: Semi-Common Competition Policy, Uncommon Rules, and No Common Institutions”, Jean Monnet Chair of the University of Miami, Jean Monnet/Robert Schuman Paper Series, October 2006, at 5, online: 〈http://www6.miami.edu/eucenter/JonesFinal.pdf〉. The original competition rules of arts. 65 and 66 of the ECSC Treaty, supra note 48, migrated into what are now arts. 81 and 82 of the Treaty Establishing the European Community, 25 March 1957, online: EUR-Lex 〈http://eur-lex.europa.eu〉 [EC Treaty].

52. Jones, supra note 51.

53. EEC Treaty, supra note 38.

54. See Alter, supra note 50.

55. Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the European Community, 13 December 2007, online: EUR-Lex 〈http://eur-lex.europa.eu〉 [Lisbon Treaty].

56. Treaty on the Functioning of the European Union, 25 March 1957, online: EUR-Lex 〈http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0047:0200:en:PDF〉 [TFEU].

57. Ibid., art. 3.

58. Philip Lowe, former Director-General for Competition, also confirmed that “[w]e are starting to see some convergence both on substance and on procedure—numerous Member States aligning their national procedural rules (and to some extent their provisions on sanctions) on the Community model—but important difference remain”. See Philip LOWE, “Foreword” in Ioannis KOKKORIS, ed., Competition Cases from the European Union (London: Sweet & Maxwell, 2010)Google Scholar, at 1. For example, the core of the regulation of anti-competitive behaviour in UK domestic law is closely modelled upon EC law. Chapters I and II of the UK Competition Act 1998 [UK Competition Act 1998] are almost identical to arts. 101 and 102 of the Lisbon Treaty, supra note 55. Further, the UK courts and agencies are instructed to apply these provisions in a way that achieves consistency with EC law (UK Competition Act 1998, c. 41, s. 60). Section 60 of the UK Competition Act 1998 ensures that questions arising under UK competition law are dealt with in a manner which is consistent with the treatment of corresponding questions arising in EC law. Yet, there is still divergence from EC law. In merger control, UK competition law differs from the Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of Concentrations between Undertakings (the EC Merger Regulation/ECMR) insofar as notification is voluntary and the concept of a concentration includes the acquisition of material influence, which is regarded as weaker than that required to establish control for the purposes of EC law. Another important divergence from EC law is that UK law includes provisions on criminal sanctions for cartel behaviour (UK Enterprise Act 2002, c. 40, s. 188), whereas EC law has no equivalent provision.

59. Jones, supra note 51 at 5−6, notes:

In the EC it has often been said that the “first principle” of competition law is single market integration and the elimination of private practices which interfere with integration”, and “[w]hile more recent documents have placed more emphasis on maintenance of competitive markets as the first objective of EC competition policy and seemingly demoted the single market objective to second place, there is no doubt that both are important.

60. EC Treaty, supra note 51.

61. Eco Swiss China Time Ltd v. Benetton International NV, Judgment of the Court, 1 June 1999, Case C-126/97, [2000] 5 C.M.L.R. 816 at para. 36 (emphasis added).

62. KOKKORIS, Ioannis and OLIVARES-CAMINAL, Rodrigo, Antitrust Law Amidst Financial Crises (New York: Cambridge University Press, 2010)CrossRefGoogle Scholar at 19. In negotiations on the Lisbon Treaty (supra note 55), the then French President Nicolas Sarkozy succeeded in removing the words “free and undistorted competition” from the treaties. However, the requirement is maintained in an annex and it is unclear whether this will have any practical effect on EU policy.

63. In fact, this is an aspect that has gained increasing importance in recent years as the EC Commission is encouraging a more decentralized application of EC competition law. See Heydon, supra note 47 at 10.

64. TFEU, supra note 56, arts. 101 and 102.

65. Lowe, supra note 58 at 1. Regardless of the method of initiation of a case, the Commission starts by conducting an initial assessment, where its investigative powers will be utilized. This initial phase allows for better and more efficient case handling. The Commission will consider whether the case at hand merits further investigations and whether it is better allocated to a national competition authority. Cases which are unlikely to result in an infringement decision or where the impact on competition is insignificant may be discontinued at this stage. Following the initial assessment of the matter, the Commission may decide to either open proceedings or close the case, or issue a statement of objection with a view to adopt a prohibiting decision or accept commitments.

66. Council Regulation (EC) No. 1/2003 of 16 December 2002 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, 16 December 2002, online: EUR-Lex 〈http://eur-lex.europa.eut〉 [EC Regulation No. 1/2003], Chapter V.

67. Kokkoris, supra note 58 at 4.

68. TFEU, supra note 56, art. 267.

69. EC Regulation No. 1/2003, supra note 66.

70. Ibid., art. 3.

71. EC Treaty, supra note 51, arts. 81 and 82 (i.e. TFEU, supra note 56, arts. 101 and 102).

72. Jones, supra note 51.

73. NAFTA, supra note 7.

74. NAFTA confines its anti-trust and competition provisions to the five articles of Chapter 15 (ibid., Chapter 15).

75. Indeed, the American Bar Association Task Force has noted that:

First, competition policy and trade policy go hand in hand in providing fundamental economic underpinnings of market economies, notwithstanding significant derogations from these policies. Just as free trade measures lift government barriers to trade, competition law enforcement can eliminate private barriers to trade. Second, as trade becomes freer, private and national incentives to block trade and protect traditional markets may become stronger; a competition policy to prevent rebuilding barriers by anticompetitive restraints becomes more imperative.

See American Bar Association, “Report of the Task Force of the ABA Section of Antitrust Law on the Competition Dimension of NAFTA” (20 June 1994), online: American Antitrust Institute 〈www.antitrustinstitute.org/files/430b.pdf〉, at 1.

76. NAFTA, supra note 7, art. 1501(1) states:

Each Party shall adopt or maintain measures to proscribe anticompetitive business conduct and take appropriate action with respect thereto, recognizing that such measures will enhance the fulfillment of the objectives of this Agreement. To this end the Parties shall consult from time to time about the effectiveness of measures undertaken by each Party.

77. The only exception is that NAFTA specifies is found in ibid., art. 1502(3)(4):

State-designated monopolies may not use its monopoly position to engage … in anticompetitive practices in a non-monopolized market in its territory that adversely affect an investment of an investor of another Party, including through the discriminatory provision of the monopoly good or service, cross subsidization or predatory conduct.

78. Heydon, supra note 47 at 10.

79. NAFTA, supra note 7, art. 1501 recognizes the importance of anti-trust co-operation and co-ordination, and commits the parties to co-operate in issues of anti-trust enforcement policy. Section 1504 of NAFTA established a Working Group on trade and competition (which is now defunct) to consider further the development of competition rules, and, in particular, the relationships between competition and trade. See NAFTA, supra note 7, art. 1504. This Working Group had several meetings, but these never resulted in any changes to the competition rules or policies of any of the parties, or of NAFTA itself. The focus of the Working Group's activities has been limited to the application and possible trade effects of competition law enforcement (in conformity to its mandate and the thrust of NAFTA art. 1501), and on the strengthening of bilateral co-operation between the anti-trust authorities of members.

80. For example, in 1995, Canada and the US concluded an agreement that provides for the exchange of information and co-operation/consultation on the basis of negative and positive comity. See Agreement Between the Government of the United States of America and the Government of Canada Regarding the Application of Their Competition and Deceptive Marketing Practices Laws, August 1995, online: Federal Trade Commission 〈www.ftc.gov/bc/international/docs/agree_canada.pdf〉.

81. NAFTA, supra note 7, art. 1501(3) provides: “No Party may have recourse to dispute settlement under this Agreement for any matter arising under this Article.”

82. Mexico-Measures Affecting Telecommunications Services, WTO Panel Report of 2 April 2004, WT/DS204/R. In this case, the US complained that Mexico was not treating US telecom companies fairly in their efforts to provide international call services from the US into Mexico by conducting or allowing discriminatory and anti-competitive conduct in certain telecommunications markets. In particular, Mexico had delegated the negotiations for the pricing of such services for all Mexican suppliers to the national monopoly carrier Teléfonos de México (Telmex), which prevented US carriers from negotiating more competitive rates with other Mexican carriers, and had failed to prevent Telmex from engaging in other discriminatory and anti-competitive conduct. The US could not resolve this dispute under NAFTA since NAFTA dispute resolution procedures excluded the competition rules from its jurisdiction. Thus, the US took its complaint to the World Trade Organization (WTO), claiming Mexico violated the terms of its commitments under the General Agreement on Trade in Services, 15 April 1994 (entered into force 1 January 1995), online: WTO 〈www.wto.org/english/docs_e/legal_e/26-gats.pdf〉 [GATS]. A Dispute Resolution Body Panel was requested in 2000 and convened in 2002. In 2004, the Panel upheld the US claim, finding that Mexico had failed to honour its GATS commitments in several respects, including its failure to prevent the Telmex monopoly from engaging in anti-competitive practices.

83. Jones, supra note 51.

84. EC Treaty, supra note 51.

85. Jones, supra note 51.

86. Treaty of Asunción, supra note 46. The treaty provides for the creation of a common market among the four participants to be known as the Southern Common Market. The treaty established the goals to be accomplished in creating the common market, eventually allowing for the free movement of goods, capital, labour, and services between the four countries. Contingent protection in intra-bloc trade would be eliminated and all MERCOSUR members would follow a common external policy towards non-member countries.

87. Protocol of Ouro Preto, 17 December 1994, online: OAS 〈www.sice.oas.org〉.

88. Other MERCOSUR institutions are the Joint Parliamentary Committee (16 members from each national parliament, and, thus, a joint parliament in embryonic form), the Economic and Social Consultative Forum (similar to the EU's Economic and Social Committee), and the Administrative Secretariat of MERCOSUR (like the General-Secretariat of the EU Council of Ministers).

89. André Filipe Zago de AZEVEDO, “MERCOSUR Agreement on Competition Policy-How Effective Has It Been and How to Promote Further Cooperation?”, Competition Policy Foundations for Trade Reform, Regulatory Reform and Sustainable Development, Work Package No. 4, Deliverable 23, 12 September 2005, online: 〈www.cpftr.org/cpftr/deliverables/Deliverable23.pdf〉.

90. See Malcolm ROWAT, Michele LUBRANO, and Rafael PORRATA Jr., “Competition Policy and MERCOSUR”, World Bank, Technical Paper No. 385, 30 September 1997.

91. Protocol for the Defense of Competition, 17 December 1996, online: OAS 〈www.sice.oas.org/Trade/MRCSRS/Decisions/DEC1896p.asp〉 [Fortaleza Protocol].

92. Agreement for the Regulation of the Protocol of Competition Policy, 5 December 2002, online: OAS 〈www.sice.oas.org/Trade/MRCSR/agcompop.asp〉 [MERCOSUR Regulation].

93. See World Trade Organization, “Report on Trade and Investment Policy Review: Uruguay”, WT/TPR/S/163, 12 April 2006, online: WTO〈www.wto.org/english/tratop_e/tpr_e/s163-3_e.doc〉, at 78.

94. See José Tavares de ARAUJO Jr. and Luis TINEO, “The Harmonization of Competition Policies Among MERCOSUR Countries” (1998) 43 Antitrust Bulletin 45.

95. TFEU, supra note 56.

96. José Tavares de ARAUJO Jr., “Competition Policy and the EU-MERCOSUR Trade Negotiations”, Working Group on EU-MERCOSUR Trade Negotiations, Working Paper, 12−13 May 2000, online: 〈www.seae.fazenda.gov.br/central_documentos/textos_artigos/2001-1/4-competition〉.

97. Art. 6 outlines seventeen anti-competitive practices that should be avoided in intra-regional trade, including price-fixing; restraints, reductions, or destructions of input or output; market division; restriction of market access; bid-rigging; exclusionary practices; tying arrangements; refusal to deal; resale price maintenance; market division; predatory practices; price discrimination; exclusive dealings; and abuse of dominant position. See Fortaleza Protocol, supra note 91, art. 6.

98. Ibid., art. 6.

99. Ibid., art. 8.

100. Araujo, supra note 96.

101. Azevedo, supra note 89.

102. Araujo and Tineo, supra note 94 at 59.

103. Ibid., at 60. See also Gesner OLIVEIRA, “Aspects of Competition Policy in MERCOSUR” (2000) 11 Bolletin Latinoamericano De Competencia 37 at 41:

Today, the strengthening of market competition, transparency and stable rules are particularly relevant in stimulating global investors. Efficient and independent competition authorities are crucial in this new context. The Fortaleza Protocol in its present form fails to achieve such institutional development.

104. Cartagena Agreement, supra note 45.

105. See online: Andean Community General Secretariat 〈www.comunidadandina.org/ingles/competition.htm〉 [CAN Website].

106. Andean Community Commission Decision 608 on “Rules for the Protection and Promotion of Competition in the Andean Community”, 29 March 2005, online: Andean Community General Secretariat 〈www.comunidadandina.org/ingles/treaties.htm〉.

107. CAN Website, supra note 105.

108. Hoekman and Holmes, supra note 23 at 888 (emphasis added): “Harmonization of substantive law is … not desirable, and not enforceable in any event without a supra-national body.”

109. Pitofsky, supra note 17 at 410, has explained that:

[t]he present state of antitrust law with respect to monopoly power, mergers, vertical distribution practices and the whole range of competition issues varies too much country to country to expect a wide range of countries to find common ground. And of course mandatory dispute resolution, even if desirable, is virtually impossible if the countries cannot agree on the rule of law that will resolve the dispute.

110. Oliveira, supra note 103.

111. Sokol, supra note 27 at 256 (emphasis added).

112. Ibid., at 272 (emphasis added).

113. THANADSILLAPAKUL, Lawan, “The Harmonization of ASEAN Competition Laws and Policy from an Economic Integration Perspective” (2004) 3 Uniform Law Review 749 at 770Google Scholar.

114. For example, see ARIFF, Mohamed, “Chapter 8: Competition Policy for ASEAN” in Competition Policy in ASEAN: Thematic Studies (Chiba: IDE-JETRO, 2008)Google Scholar, online: ERIA 〈www.eria.org/research/images/pdf/PDF%20No.1-2/No.1-2-part2-8.pdf〉, 135 at 143:

Although it would be impractical for ASEAN countries to have a uniform set of competition policies and laws at this juncture, the study lends support to the call for some convergence of competition laws … as ASEAN economies integrate with one another through intra-regional trade and investment. In the absence of a convergence of competition policies, there is the danger of the legitimacy of the competition law in one country being challenged under the existing laws in other countries.

115. Charlie SACEDA, “ASEAN Sets Tone for More Serious Cooperation” Dateline Philippines (24 August 2010).

116. See the Association of Southeast Asian Nations, “Joint Media Statement of the Thirty-Ninth ASEAN Economic Ministers (AEM) Meeting”, Makati City, Philippines, 24 August 2007, online: ASEAN 〈www.asean.org/20853.htm〉 on the establishment of ASEAN Experts Group on Competition (AEGC).

117. AEGC serves as a forum for discussing and co-ordinating regional co-operation in competition policy, with the goal of promoting a healthy competitive environment in ASEAN. Implementation of the tasks and activities relating to competition policy, as targeted for delivery under the AEC Blueprint, will be overseen by the AEGC. Other areas of focus of the AEGC during the next three to five years will be the implementation of a wide range of demand-driven capacity-building activities.

118. ASEAN Regional Guidelines on Competition Policy, supra note 6.

119. See the ASEAN, “Handbook on Competition Policy and Law in ASEAN for Business” (24 August 2010), online: ASEAN 〈www.aseansec.org/25532.htm〉.

120. ASEAN Regional Guidelines on Competition Policy, supra note 6 at i.

121. Ibid.

122. Abbott and Snidal have made the distinction between “hard” law and “soft” law. “Hard” law is an international institutional response based on binding commitments to create domestic compliance, whereas, “soft” law refers to commitments that are not formally binding. See Kenneth W. ABBOTT and Duncan SNIDAL, “Hard and Soft Law in International Governance” (2000) 54 International Organization 421 at 421.

123. ASEAN Regional Guidelines on Competition Policy, supra note 6 at i.

124. Ibid., art. 2.2.4.

125. The EC Treaty, supra note 51, arts. 81 and 82: “The following [anti-competitive practices] shall be prohibited as incompatible with the common market in so far as they may affect trade between Member States.” See also NAFTA, supra note 7, art. 1501.1: “adopt or maintain measures to proscribe anticompetitive business conduct and take appropriate action with respect thereto, recognizing that such measures will enhance the fulfilment of the objectives of this Agreement.”

126. ASEAN Regional Guidelines on Competition Policy, supra note 6, art. 10.1.1.

127. Ibid., art. 2.2.

128. Ibid., art. 2.2.2.

129. Ibid., art. 5.1.1.

130. Ibid., art. 3.2.

131. Ibid., art. 3.3.

132. Ibid., art. 3.4.

133. Ibid., art. 3.1.4.

134. Ibid., art. 3.1.2.

135. Ibid., art. 3.5.4.

136. Ibid., art. 3.5.1.

137. Ibid., art. 4.4.1.

138. Ibid., art. 3.5.5.

139. Ibid., art. 4.1.3.

140. Ibid., art. 4.3.3.

141. Ibid., art. 4.3.3−4.

142. Ibid., art. 3.1.3.

143. Ibid., art. 6.4.

144. Ibid., Chapter 7.

145. Ibid., art. 7.1.4.

146. Ibid., art. 8.3.

147. Ibid., art. 10.3.1.

148. Ibid., art. 10.3.3.

149. Ibid., art. 10.3.4.

150. Ibid., art. 10.3.5.

151. Ibid.

152. DAVIDSON, Paul J., “The ASEAN Way and the Role of Law in ASEAN Economic Cooperation” (2004) 8 Singapore Year Book of International Law 165 at 166Google Scholar.

153. ASEAN Charter, supra note 2, art. 2(2).

154. ONG Keng Yong, “ASEAN and the 3 L's: Leaders, Laymen and Lawyers” (March 2005), online: ASEAN 〈www.aseansec.org/17356.htm〉. See also Zou, supra note 2 at 4: “one of the hidden purposes of the establishment of ASEAN was to contain the spread of communism to Southeast Asia mainly from China and Vietnam in the 1960s.”

155. Estrella D. SOLIDUM, “The Role of Certain Sectors in Shaping and Articulating the ASEAN Way” in Ram Prakash ANAND and Purificacion Valera QUISUMBING, eds., ASEAN Identity, Development and Culture (Quezon City: University of the Philippines Law Center & East-West Center Culture Learning Institute, 1981)Google Scholar, 130 at 138.

156. Ibid., at 130. In fact, as observed by Kahler, this low level of legalization is an attribute of not only ASEAN but also of the larger Asia-Pacific region. See Miles KAHLER, “Legalization as Strategy: The Asia-Pacific Case” (2000) 54 International Organization 549 at 549.

157. See e.g. Davidson, supra note 152 at 166:

with economic expansion in the region and closer economic cooperation among the members of ASEAN, it is arguable that they too have developed the need for more of a rules-based system to regulate their economic activity inter se. This development has been driven not only by integration, but also by ASEAN's desire to be seen as an attractive location for foreign investment.

158. EWING-CHOW, Michael, “Culture Club or Chameleon: Should ASEAN Adopt Legalization for Economic Integration?” (2004) 8 Singapore Year Book of International Law 225 at 237Google Scholar.

159. ASEAN, “Reforms and Integration in East Asia Could Strengthen Regional Stability” (14 August 1999), online: ASEAN 〈www.aseansec.org/golek.html〉.

160. See Kokkoris and Olivares-Caminal, supra note 62.

161. Davidson, supra note 152 at 176.

162. ASEAN Charter, supra note 2. Simon S.C. TAY, “The ASEAN Charter: Between National Sovereignty and the Region's Constitutional Moment” (2008) 12 Singapore Yearbook of International Law 151 at 169:

The measures taken by the Charter may not go as far as some critics would like. But on the whole, the Charter helps ASEAN move from an almost purely political relationship towards relationships in which there are legitimate expectations that arise from repeated interactions, shared principles and purposes, and norms, as well as stronger regional processes and institutions that will foster compliance by the member countries to their promises and obligations.

163. AEC Blueprint, supra note 4 at para. 5 (emphasis added).

164. Abbott and Snidal, supra note 122.

165. Diane P. WOOD, “The Impossible Dream: Real International Antitrust” (1992) University of Chicago Legal Forum 277 at 307.

166. Ibid., at 304−5:

The factor that separates the competition purists from the others is the question whether competition is a national goal for its own sake or on the other hand, whether it is simply part of a more general industrial policy regime. The scope of competition policy is, finally, a political decision, and no country actually practices the purest version.

167. Ibid., at 280.

168. The three options are: (1) the co-ordinated or sovereignty model (under which governments can rely on the co-ordinated application of national competition laws based on positive comity agreements); (2) the harmonized law model (under which countries can harmonize their national competition laws following international guidelines); and (3) the supranationality model (under which governments sign an agreement on international competition laws). See Thanadsillapakul, supra note 113.

169. Ibid., at 779.

170. Ibid., at 780.

171. See DAMTOFF, Russell W. and FLANAGAN, Ronan, “The Rise of Transnational Networks: The Development of International Networks in Antitrust” (2009) 43 International Law 137 at 148Google Scholar. See also Campbell and Rowley, supra note 21.

172. EVANS, David S., “Why Different Jurisdictions Do Not (and Should Not) Adopt the Same Antitrust Rules” (2009) 10 Chicago Journal of International Law 161 at 163−85Google Scholar:

[c]onvergence should not be seen as a desirable end in itself … Since most economic commerce is local, the heterogeneity in local circumstances would result in heterogeneity in the antitrust rules. The heterogeneity of antitrust rules—in other words, divergence—is probably optimal.

173. GERADIN, Damien, “The Perils of Antitrust Proliferation: The Globalization of Antitrust and the Risks of Overregulation of Competitive Behavior” (2009) 10 Chicago Journal of International Law 189 at 208Google Scholar: “Global antitrust regime is an approach that is neither politically feasible nor necessarily desirable.” See also Wood, supra note 165 at 279:

[t]he apparent paradox of on the one hand, countries around the globe have enacted antitrust laws both to symbolize their commitment to the competitive process and to prevent the abusive practices which may tempt powerful firms and on the other hand, efforts to obtain an international consensus on competition law principles have thus far met with only the most modest success, to the point that the search for either harmonization of national competition law rules or the establishment of any kind of supranational procedural or substantive regime seems to be an impossible dream.

See also Evans, supra note 172 at 161, arguing that divergence is the norm for anti-trust rules, the quest for convergence is quixotic, and the disdain when another jurisdiction has a different rule than one's own is uncalled for.

174. NIELS, Gunnar and KATE, Adriaan Ten, “Introduction: Antitrust in the U.S. and the EU Converging or Diverging Paths?” (2004) 49 Antitrust Bulletin 1 at 12−15CrossRefGoogle Scholar: “the lack of substantive convergence in some areas of antitrust across jurisdictions (particularly but not exclusively in the area of monopolization) may suggest high costs for a binding commitment.”

175. HEYER, Ken, “A World of Uncertainty: Economics and the Globalization of Antitrust” (2005) 72 Antitrust Law Journal 375 at 379Google Scholar.

176. Tarullo, supra note 13 at 451.

177. MELAMED, A. Douglas, “International Cooperation in Competition Law and Policy: What Can be Achieved at the Bilateral, Regional and Multilateral Levels” (1999) 2 Journal of International Economic Law 423 at 433CrossRefGoogle Scholar.

178. For more analysis of each ASEAN member's national competition law, see McEWIN, Robert Ian and ANANDARAJAH, Kalaeds., ASEAN Competition Law (Singapore: LexisNexis, 2011)Google Scholar.

179. Vertical agreements are agreements between parties at different levels of the production or distribution chain.

180. Excessive pricing refers to charging too high a price to the detriment of customers or consumers.

181. Wood, supra note 165 at 305. See also Evans, supra note 172 at 173: “So long as the legal regimes differ, we would not expect full convergence in competition rules.”

182. Hoekman, supra note 31.

183. In fact, when the EEC Treaty, supra note 38, was signed and when the Council Regulation (EEC) No 4064/89 of 21 December 1989 on the Control of Concentrations between Undertakings, online: EUR-Lex 〈http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31989R4064:EN:HTML〉, was implemented, not all members of the bloc had national rules on competition law. Yet, after only a few years, the EU members were capable of harmonizing the Community rules and internalizing them into their national legal system (e.g. Portugal and Spain). During the nineties, a series of institutional changes were made by them in order to ensure consistency between domestic rules and Community standards in the areas of regulatory mechanisms and anti-trust law. See Araujo, supra note 96.

184. See Niels and Kate, supra note 174 at 12−15:

While the U.S. approach is more minimalist in its interventions, i.e. its default presumption is that the market works effectively, the EU approach takes a broader view of the meaning of efficiency and anticompetitive harm and requires greater justification for firms to undertake exclusionary conduct.

185. Fox, supra note 12 at 7.

186. See also Wood, supra note 165 at 312: “An effective agreement must have credible institutional support. The machinery for dispute resolution, for advisory opinions, and for monitoring compliance, will play a critical role in the success of the arrangement.”

187. Geradin, supra note 173 at 202.

188. Ibid., at 199.

189. ASEAN Charter, supra note 2, arts. 2(2) and 3.

190. Ewing-Chow, supra note 158 at 229.

191. ASEAN Charter, supra note 2, arts. 7, 12, and 20. Yet, the ASEAN Secretary-General and the ASEAN Secretariat have been given greater responsibility to monitor compliance and facilitate the implementation of the ASEAN Economic Community. See ASEAN Charter, supra note 2, art. 11.

192. Ewing-Chow, supra note 158 at 227:

The creation of a single market within ASEAN is very unlikely because a custom union has to create a common external tariff policy. Singapore has an almost zero tariff policy (except for a few products), which means that Singapore's tariff will have to go up or that other ASEAN members’ [tariffs] will have to go down significantly to implement a common external tariff policy.

193. Tay, supra note 162 at 170.

194. “The ASEAN Way and the Rule of Law” (3 September 2001), online: ASEAN 〈www.aseansec.org/newdata/asean_way.htm〉.

195. Kahler, supra note 156 at 550.

196. ASEAN Regional Guidelines on Competition Policy, supra note 6.

197. Sokol explained that “[c]ompetition policy chapters in PTAs serve to strengthen domestic antitrust systems by creating an international lever to push reforms and commitments that domestic interest groups otherwise might resist”. See Sokol, supra note 27 at 234. In a speech opening a recent workshop on the ASEAN Regional Guidelines on Competition Policy, the Minister of Energy at the Prime Minister's Office of Brunei Darussalam, Yang Berhormat Pehin, also highlighted the importance of competition in fostering dynamic economic productivity and efficiency, and emphasized that “[t]he success of implementing competition policy and law towards achieving such objectives would require concerted efforts from all stakeholders, including the Government and from the private business community”. See Association of Southeast Asian Nations, “Promoting Fair Competition in ASEAN-Series of Socialisation Workshops on Competition Opens in Brunei”, online: ASEAN 〈www.aseansec.org/25363.htm〉.