Preventing Prospective Trade Issues in ASEAN by Instigating International Cooperation on Competition Policies and Law

Abstract

The formulation of the ASEAN Economic Community (AEC) will transform its member states into countries with a free flow of goods, services, capital, and skilled labor. On one hand, the establishment of the AEC marks a new era of economic prosperity. On the other hand, the advent of the AEC accompanies with a variety of prospective trade issues, which could adversely affect economic integrity among all members, such as international price fixing cartel, illegitimate mergers which likely to create monopolistic condition in a certain market, and potentially abuse of market dominance, price fixing cartels. Against this backdrop, transnational corporations potentially pose a serious threat to a free and fair competition following the removal of internal trade barriers through employing or abusing their position to squeeze competitors out of the market. Conversely, the same transnational corporations are likely to secretly collude with domestic entities to fix the price of products or limit production. Furthermore, due to political, cultural and legal perspectives regarding cross-border business transactions vary among member countries. Competition Policies and Law (CPL) can serve as a touchstone to help ASEAN’s members comply with the agreement on a neutral and non-discriminatory basis. The efficient implementation of CPL ensures that the playing field is equal for all competitors in the market. Additionally, as States Owned Enterprises (SOEs) in each member country will eventually privatize within in a few years, competition law also need to play an important role to ensure fair play between these former monopolies and foreign competitors. As cross-border transactions by international business corporations frequently affect multiple jurisdictions, enhancing CPL will serve as the optimal institutional vehicle to deal with anti-competitive behavior in cross-border business transactions. This paper contains three topics as following: 1) why do we need competition law for ASEAN Economic Community? ; 2) Case studies on cross-border trade issues: lessons from Europe Union; 3) enhancing competition policies and law as prophylactic measure for ASEAN and Thailand