By Jonathan Said
Carbbean Community (CARICOM) countries continue their economic integration journey through the Caricom Single Market and Economy (CSME).
Promulgated in the Grand Anse Declaration of 1989, the CSME seeks to deepen economic integration through advancement beyond a common market and towards a Single Market and Economy.
CARICOM member countries recognize that a central requirement of the CSME is the need to apply competition and consumer protection policies. Economic integration depends for genuine success on facilitating the free and unhindered access by regional firms into each other’s markets and efforts to address issues of tariff and non-tariff barriers are being pursued in order to hasten this process.
if a truly integrated single economy is to be realized, however, a complementary effort needs to be made to address anti-competitive behaviour and consumer protection issues in the various territories and markets since anti-competitive behaviour stifles entrepreneurship, investment, product and quality enhancement and denies consumers access to optimal choices in their purchasing pursuits.
When firms fail to label their products accurately, use predatory pricing, proffer misleading advertising pr [;ace conditionalities on product purchases that ties the consumer to use a particular third party firm instead of a firm of their choice (thus giving that third party firm monopolistic power), the vibrancyt of the market economy is stifled.
Guyana’s National Competitiveness Strategy recognizes the central role of the free market in the country’s economic development – through its ability to foster entrepreneurship, innovation, investment, higher standards, better quality, competitive prices and firms’ ability to better gauge consumer expectations of the goods and services that they acquire; hence the importance of the application of Competition Policy in each CARICOM member state. The objective of Competition Policy is to ensure that the economic benefits of a free market in a single market place are maximized, through supporting free competition – by both domestic and regional firms. Competition Policy acts as the custodian of the free market economy by supervising market structures and consumer interests and by allowing for redress only in cases of market failure.
The Revised Treaty of Chaguaramas created the Caricom Competition Commission and obliged each member state to establish a National Competition Commission. To date, only Jamaica and Barbados have established and operationalised their Commissions. Trinidad and Tobago and the Organization of Eastern Caribbean States are in the process of establishing their Commissions.
Competition Commissions are the independent vehicles through which Competition Policy is implemented. Both the government and the private sector have endorsed the need for Competition Policy and both see the institution as one of the highest priorities of the National Competitiveness Strategy. Government and the private sector sector have collaborated to realize the the Competition and Fair Trading Act in 2006 and the appointment of four
Commissions in 2007
Up until now, however, the Commission has been unable to function because its secretariat has not been established. In order to address this issue the Ministry of Tourism, Industry and Commerce is currently recruiting staff in order to establish the secretariat of the Commission.
While the Competition and Fair Trading Act provides the legislative framework for the application of the competition and consumer protection policy in Guyana and to serve as a governance mechanism for the conduct of firms in the market place, it fails to address issues such as market structures and consumer protection. While the Legislation may be amended at a later date to address the former issue government is seeking to address the latter issue through a Consumer Protection Bill, which is likely tro be enached by end of 2009.
The enactment of this piece of legislation will result in the establishment of a Consumer Protection Commission – which will function as part of the Competition Commission, and will be named the ‘Competition and Consumer Protection Commission.
The issue of protection of shareholders rights will be affressed through the introduction of Mergers and acquisition legislation while the NCS also addresses the issue of anti-dumping laws.
The Guyana Competition and Consumer Protection Commission (CCPC) will work toward the common objectives of both the Caricom Competition Commission and national competition authorities in other member countries. The Commission will function as a fair trading Commission insofar as it will provide representation in consumer affairs issues as well as competition issues. The functions of the Commission in the contexct of the Competition and Fair Trading Act, are to:
1) keep under review commercial activities with a view to ascertaining practices which may adversely affect the economic interests of consumers
2) order, at the request of any person or on its own initiative, such investigations into the conduct of business as will enable it to determine whether any enterprise is engaging in business practices on contravention of this Act
3) conduct such inquiries as it may consider necessary or desirable in connection with any matter falling within the provisions of this Act
4) advise the Minister on such matters relating to the operation of this Act as it thinks fit or as may be requested by the Minister
5) take such action as it considers necessary with respect to the abuse of a dominant position by any enterprise
6) eliminate anti-competitive agreements
7) carry out such other functions as are required to give effect to this Act
In both Jamaica and Barbados, the Competition Commissions have been successful in boosting economic competitiveness by supporting free competition in numerous markets and providing more accurate information to consumers. For example, the Jamaican Fair Trading Commission found that following a complaint that airlines where not advertising the full ticket prices. it entered discussions with airlines to ensure that advertised prices included all taxes and fees. It also helped settle allegations of overcharging by health care providers and pharmacies. The Jamaican Fair Trading Competition also reached conclusions in some cases which dispelled allegations of price fixing and collusion. For example, the Jamaican Fair Trading Commission conducted an investigation into alleged collusion by commercial banks in 2006, finding that while the structure of the commercial banking sector favoured collusion no evidence of direct communication by the banks to collude was found.
Jonathan Said is an economist in the NCS Implementation Unit.
