FTAAP Capacity Building Workshop on Competition Chapter in FTAs/EPAs under the 3rd REI CBNI Port Moresby, Papua New Guinea | 11 August 2018 APEC Committee on Trade and Investment October 2018 APEC Project: CTI 03/2018T Produced by APEC Division Economic Affairs Bureau Ministry of Foreign Affairs (MOFA) 2-2-1 Kasumigaseki, Chiyoda Ku, Tokyo 100-8919, Japan Tel: (81 3) 5501 8340 Fax: (81 3) 5501 8342 For Asia-Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: [email protected] Website: www.apec.org © 2018 APEC Secretariat APEC#218-CT-04.10 CONTENTS Page I Overview 2 II Background 4 III Discussion 6 1. Opening Remarks 6 2. Introduction 7 3. Workshop’s Sessions 8 1) Session 1 8 2) Session 2-1 21 3) Session 2-2 42 4) Session 3 50 IV Conclusions 56 V Next Steps 58 VI Appendix 1 : Agenda Appendix 2 : Presentation Document (Mr Willett) Appendix 3 : Presentation Document (Mr Hayashi) Appendix 4 : Presentation Document (Mr Chen) Appendix 5 : Presentation Document (Mr Masuda) Appendix 6 : Presentation Document (Mr Kumaran) Appendix 7 : Presentation Document (Mr Teo) Appendix 8 : Presentation Document (Mr Arai) Appendix 9 : Presentation Document (Mr Karakov) 1 FTAAP Capacity Building Workshop on Competition Chapter in FTAs/EPAs under the 3rd REI CBNI 11 August 2018, International Convention Centre Port Moresby, Papua New Guinea Project Final Report I Overview On 11 August 2018, the FTAAP Capacity Building Workshop on Competition Chapter in FTAs/EPAs under the 3rd REI CBNI (CTI 03/2018T), initiated by Japan and co-sponsored by Australia, Canada, Chinese Taipei, Korea, Papua New Guinea, Philippines, Thailand and Viet Nam took place. This workshop was conducted as one of the activities under the Action Plan Framework for Regional Economic Integration (REI) Capacity Building Needs Initiative (CBNI) initiated by Korea since 2010, and was aimed at in-depth capacity building for negotiators and policymakers on competition area through sharing the best practices and experiences of negotiations. Thereby, the workshop attempted to equip FTAs/EPAs negotiators to enhance their knowledge on competition policies, leading to a desirable competition chapter in future FTAs/EPAs. The workshop also served as a basis for APEC economies to cooperate further in the promotion of competition, economic efficiency, consumer welfare and the curtailment of anti-competitive practices. This workshop was participated by 51 attendees from 17 member economies including 11 speakers, from Australia, China, Japan, Malaysia, New Zealand, Singapore and academia (Nagoya University and Shumei University in Japan). The details of speakers are as follows; - Mr Justin Allen, APEC Committee on Trade and Investment (CTI) Chair (Senior Policy Officer, Ministry of Foreign Affairs and Trade, New Zealand) (Opening Remarks) - Mr Hiroshi Kudo, Negotiator for Economic Partnership Agreements, Ministry of Foreign Affairs, Japan (Moderator) - Mr Edward C Willett, Associate Commissioner, Papua New Guinea Independent Consumer & Competition Commission (Former Commissioner, Australian Competition and Consumer Commission) - Mr Shuya Hayashi, Professor, Graduate School of Law, Nagoya University, Japan - Mr Chen Kening, Deputy Director, Anti-monopoly Bureau of State Administration for Market Regulation, China 2 - Mr Tatsuro Masuda, Deputy Director, International Affairs Division, Fair Trade Commission, Japan - Mr Hideyuki Shimozu, Senior Planning Officer, International Affairs Division, Fair Trade Commission, Japan - Mr Arunan Kumaran, Senior Principal Assistant Director, Ministry of Domestic Trade, Cooperatives and Consumerism, Malaysia - Mr Wee Guan Teo, Director, International & Strategic Planning Division, Competition Commission, Singapore - Mr Koki Arai, Professor, Faculty of Comprehensive Management, Shumei University, Japan - Mr Grigory Karakov, Deputy Head of the Department, Department for Control over Foreign Investments, Federal Anti-monopoly Service, Russia This workshop comprised of three sessions. Session 1 ‘Update the Current Situation surrounding the Competition Policy and the Chapter on Competition in FTAs/EPAs’, Session 2-1 ‘Exchange the Information of Essential Elements on Competition Chapter in FTAs/EPAs’, Session 2-2 ‘Explore Desirable Elements of a Competition Chapter in FTAs/EPAs’ and Session 3 ‘Discuss the Relation between Investment and Competition Policy including Chapters on FTAs/EPAs’. We 1) examined the current status of a competition chapter in FTAs/EPAs to promote better understanding regarding the benefits of the establishment of the chapter on competition in FTAs/EPAs through the review of recent studies and practices in Session 1, 2) explored the essential elements of competition chapter in FTAs/EPAs considered to be indispensable through exchanging the information and knowledge from the negotiators’ experience in Session 2-1, and then 3) explored the desirable elements of a competition chapter which could be accepted by many participants, which may serve as guidelines for future FTAs/EPAs negotiations in Session 2-2. Also since now the examination of impact on and implications of the investment aspects of the Next Generation Trade and Investment Issues (NGeTIs) is implemented in Investment Expert Group (IEG), in order to support this work, we 4) discussed the relation between investment and competition policy, specifically, how competition policy affects investment activities in Session 3. Through this workshop, the following 3 points were highlighted. 1) Through the update of the current situation surrounding the competition policy and the chapter on competition in FTAs/EPAs, we shared the view that international cooperation and harmonization in the field of competition law is crucial. 2) We explored and managed to share the views on the desirable and optional elements of a competition chapter which may serve as guidelines for future FTAs/EPAs negotiations. In the end, we shared the views that 1) Objectives, 2) Basic Principles including i) Addressing Anti-competitive Activities, ii) Non-discrimination, iii) Transparency and iv) Procedural Fairness as well as 3) Technical Cooperation 3 are desirable elements of a competition chapter in FTAs/EPAs, whereas 1) Private Rights of Action, 2) Notification, 3) Cooperation in Enforcement Activities, 4) Coordination of Enforcement Activities, 5) Confidentiality of Information, 6) Consultation/Regular Meeting between Competition Authority, 7) Dispute Settlement, 8) State Owned Enterprises (SOEs), 9) State Aids & Subsidies, 10) Consumer Protection as well as 11) Review Mechanism are optional elements of a competition chapter in FTAs/EPAs. We also shared the views that ‘no one size fits all’ approach is important and these elements apply in accordance with the counterparty’s status. 3) Regarding the relation between competition policy and investment, we shared the view that there seems to be little relation between competition agreement and foreign direct investment; however, the role of competition policy has increased in the NGeTIs, specifically in how competition policy affects investment activities. II Background This project was designed to put into action APEC Ministers’ instructions to build capacity to strengthen and deepen the regional economic integration, and to facilitate the realization of a Free Trade Area of the Asia Pacific (FTAAP) (APEC 2011 Ministerial Meeting statement). Accordingly, Korea as a leading economy of the REI CBNI initiative and other interested APEC member economies have made efforts in developing a detailed work plan to implement APEC Leaders’ instructions. The results of the REI CBNI survey conducted by Korea and APEC member economies’ inputs have highlighted the needs of building and enhancing preparation capacities in this field. From 2012, under 1st REI CBNI by the leadership of Korea, several economies conducted the series of Capacity Building Workshop or Seminar with the variety of themes in 13 times, namely, FTA Utilization (Japan), Rules of Origin (ROO) (Korea), Environment (Viet Nam), Sanitary and Phytosanitary Measures (SPS) (Viet Nam), FTA Implementation (Korea), E-commerce (China), Labor (United States), Dispute Settlement (Korea), Government Procurement (Viet Nam), Safeguard (Indonesia), Presentation of Negotiation (New Zealand), Intellectual Property Right (IPR) (Viet Nam), and Service and Investment(United States). In their 2013 Declaration, APEC Leaders insisted that ‘APEC has an important role to play in coordinating information sharing, transparency, and capacity building...’ and ‘agreed to ...increase the capacity of APEC economies to engage in substantive negotiations.’ Furthermore, APEC Ministers ‘encouraged officials to advance the REI CBNI Action Plan Framework as a key delivery mechanism for the technical assistance needed to one day make the FTAAP a reality.’ APEC Economic Leaders agreed to continue the capacity building activities in pursuit of the eventual realization of the FTAAP under the Action Plan Framework of the 2nd REI CBNI (as appeared in Annex A of APEC Economic Leaders’ Declaration on The Beijing Roadmap for APEC’s Contribution to the Realization of the FTAAP in November 2014). They encouraged economies ‘to design and conduct capacity 4 building programs for specific sectors as lead economies.’ REI CBNI also conforms to the instructions of APEC Ministers. At the APEC Ministerial Meeting of 2014, APEC Ministers welcomed the progress achieved under the Action Plan Framework on