COMPETITION POLICY IN THE TRANS PACIFIC PARTNERSHIP AND THE IMPLICATIONS FOR IMPROVING COMPETITION LAW AND POLICY OF VIETNAM

Impact of the TPP Competition Policy and issues raised in reforming competition policy, law and its enforcement in Vietnam .... Professors and lecturers from FTU as well as World Trade I

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

-o0o -

DISSERTATION

COMPETITION POLICY IN THE TRANS-PACIFIC PARTNERSHIP AND THE IMPLICATIONS FOR IMPROVING COMPETITION LAW AND POLICY

OF VIETNAM

Major: International Trade Policy and Law

Full Name: Ngo Hoang Quynh Anh SUPERVISOR: Prof Dr Tang Van Nghia

Ha Noi - 2017

DECLARATION

I hereby declare that this master thesis is the scientific research of my own which made on the basis of theoretical studies, field surveys and under the direction and supervision of Prof Dr Tang Van Nghia The research contents and results of this thesis is completely honest These data and documents for the analysis, review and evaluation were collected from various sources which are fully listed in the reference list

I am fully responsible for the content of this master thesis as well as this declaration

Hanoi, 4 December 2016

Author

Ngo Hoang Quynh Anh

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

LIST OF ABBREVIATIONS ii

LIST OF TABLES iii

LIST OF FIGURES iii

CHAPTER 1: INTRODUCTION 1

1.1 Research Rationale 1

1.2 Literature Review 2

1.3 Research objectives 5

1.4 Research questions 5

1.5 Scope of research 5

1.6 Research methodology 5

1.7 Thesis outline 6

CHAPTER 2: THE PRINCIPLE OF COMPETITION, COMPETITION LAW AND POLICY 7

2.1 The concept of Competition 7

2.2 Fundamentals of Competition Policy 8

2.2.1 Competition Law and Competition Policy 8

2.2.2 Generalization of Competition Policy 9

2.2.3 Main objectives of Competition Policy 10

2.2.4 Benefits of Competition Policy 12

2.2.5 Contents of Competition Policy 13

2.3 International Competition Law and Policy 14

2.3.1 Similarities between competition law regimes around the world 15 2.3.2 Differences between competition law regimes around the world 19 2.3.3 The involvement of international bodies and organizations in the field of competition law and policy 22

CHAPTER 3: COMPETITION POLICY IN THE TRANS-PACIFIC PARTNERSHIP (TPP) 28

3.1 Introduction to TPP 28

3.1.1 Overview of TPP 28

3.1.2 Timeline of TPP negotiations 29

3.1.3 Outline of TPP 30

3.2 Potential macroeconomic implications of the TPP 34

3.2.1 Member countries impacts 34

3.2.2 Non-member countries impacts 37

3.3 Competition policy in the TPP 39

3.3.1 Overview of competition policy in the TPP 39

3.3.2 Contents of competition policy in the TPP 40

CHAPTER 4: POTENTIAL IMPACTS OF COMPETITION POLICY OF THE TPP TO VIETNAM 48

4.1 Vietnam‟s membership of the TPP 48

4.1.1 Position of Vietnam in the TPP 48

4.1.2 Vietnam‟s Commitments on Competition Policy under the TPP 48 4.2 Competition Policy in Vietnam 49

4.2.1 Overview of Vietnam Competition Legislation 49

4.2.2 Sources of Competition Law in Vietnam 51

4.2.3 Coverage of Vietnam Competition Law 53

4.2.4 Enforcement of Competition Policy in recent years 58

4.2.5 Support activities of law enforcement of Competition Policy in recent years 61

4.3 Impact of the TPP Competition Policy and issues raised in reforming competition policy, law and its enforcement in Vietnam 62

4.3.1 About reforming competition law and policy in Vietnam 62

4.3.2 About reforming competition law and policy enforcement in Vietnam 64

CHAPTER 5: IMPLICATIONS FOR REFORMING COMPETITION LAW AND POLICY IN VIETNAM IN ACCORDANCE WITH THE COMMITMENTS IN THE TPP 68

5.1 Improving provisions in Competition Law in accordance with regulations of TPP 68

5.1.1 General provisions 68

5.1.2 Provisions on competition law enforcement 71

5.1.3 Provisions on the model of competition authority 72

5.2 Introducing the competitive neutrality to the competition law and policy 73

5.2.1 Creating a level playing field for enterprises 74

5.2.2 Limiting abuse of market power of SOEs 75

5.2.3 Enhancing competitive capacity of enterprises 75

5.3 Raising awareness of competition law and policy 75

5.3.1 Enhancing knowledge of competition law and policy 75

5.3.2 Improving dissemination of competition law and policy through means of communication 76

5.4 Improving the skilled human resources in the field of competition law and policy 77

5.4.1 As regards human resources of competition authorities 77

5.4.2 Education and training of competition law and policy at graduate and undergraduate level 77

5.5 Setting a fair, transparent and accountable competition environment 78 5.6 Improving Competition Law Enforcement and authorities 79

5.6.1 Solutions for improving the effectiveness of competition law enforcement 79

5.6.2 Solutions for improving law enforcement capacity of concerning authorities 80

5.7 Protecting consumers‟ rights 81

5.8 Promoting cooperation and technical cooperation in competition policy 83

5.9 Raising corporate awareness and corporate compliance of competition law and policy 84

CHAPTER 6: CONCLUSION 86

REFERENCES iv

ACKNOWLEDGEMENT

During the completion of this master thesis, I received the guidance and valuable help from the lecturers, siblings and friends With great respect and deep gratitude, I would like to express sincere thanks to:

Prof Dr Tang Van Nghia, Dean of Faculty of Graduate Studies of the Foreign Trade University (FTU) who wholeheartedly helped, supported and encouraged me from the initial to the final level of this dissertation He provided me with comprehensive guide from choosing the topic, outlining the thesis and editing this research

Professors and lecturers from FTU as well as World Trade Institute in the Master of International Trade Policy and Law Intake Three, who not only spread profound knowledge and information in the fields of economy and law but generated strong motivation for me while I was taking this course as well

Last but not least, I would like to express my sincere thanks to my family, my colleagues and my friends, who have always by my side encouraging, supporting, contributing valuable ideas and giving me favourable conditions for me to complete this scientific research

LIST OF ABBREVIATIONS

ASEAN Association of Southeast Asian Nations

FDI Foreign Direct Investment

FTA Free Trade Agreement

GDP Gross Domestic Product

ICN International Competition Network

JICA Japan International Cooperation Agency

NAFTA North American Free Trade Agreement

OECD Organization for Economic Cooperation and Development

SME Small and Medium – Sized Enterprises

SOE State – Owned Enterprises

TPP Trans – Pacific Partnership

TRIPS Trade – Related Aspects of Intellectual Property Rights

UNCTAD United Nations Conference on Trade and Development

U.S United States of America

VCA Vietnam Competition Authority

VCC Vietnam Competition Council

WTO World Trade Organization

Figure 2.1: Four elements of competition policy must be

considered to promote a market oriented economy 9 Figure 3.1: Change in GDP of TPP Members by 2030 35

Figure 3.2: Change in GDP of TPP Non-Members by 2030 37

Figure 3.3: Change in exports of TPP Non-Members by 2030 38

Figure 3.4: Impact of TPP on sectorial output by 2030 39

CHAPTER 1: INTRODUCTION

1.1 Research Rationale

Negotiating Pacific Partnership (TPP) has been developed from Pacific Strategic Economic Partnership Agreement (or P4) – a Free Trade Agreement which was signed on 03 June 2005 and became effective from 28 May 2006 between

Trans-04 countries including Singapore, Chile, New Zealand and Brunei In September

2008, US announced its decision to take part in the P4‟s expansion Two months later, Australia, Peru and Vietnam expressed their concerns in TPP negotiation which brings about the increase in the number of members of P4 to 8 nations in 2010 From then on, TPP members have experienced 19 official negotiations, 5 ministerial negotiations and finished negotiating in October 2015 with 12 country members including Canada, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Australia, US, Japan and Vietnam The main target of TPP is to eliminate tariff and barriers to goods and service in importation and exportation among members

On 04 February 2016, in Auckland city, New Zealand, Minister of Trade and Economics of 12 country members of TPP together signed on TPP Agreement, marking the official completion of TPP negotiations This Agreement consists of 30 chapters and regulates not only traditional issues like goods, service, investment but also relatively new matters such as state-owned companies, E-commerce and competition policy As for competition policy, TPP spends a whole chapter controlling this matter with detail and practical regulations It synchronizes anti-trust law of member countries and elevates them to provide the most useful environment for competition to develop in the whole organization

With the socialist-oriented market economy, competition environment in Vietnam should bring about the best conditions for enterprises to grow, for consumers to benefit and for social welfare to gain In almost developed countries in the world, competition policy serves as an instrument to “encourage industrial efficiency, the optimal allocation of resources, technical progress and the flexibility

to adjust to a changing environment” (Massimo Motta, 2004, p.15) Nonetheless, competition policy in Vietnam remains various obstacles Accessing to the WTO and

especially in the TPP not only marks a crucial effort of Vietnam in integration to international law but brings out numerous benefits to Vietnam‟s economy as well

In compliance with TPP regulations in the fields of competition policy, legal framework on competition law and policy of Vietnam should gradually be modified

and improved From the above reasons, the topic “Competition policy in the Trans -

Pacific Partnership and the implications for improving competition law and policy of Vietnam” is chosen This thesis shall give information about general theory of

competition policy and deepens its analysis of competition policy in the TPP After that, based on the current status of competition policy in Vietnam, the thesis shall give several implications for Vietnam‟s competition policy

In November 2016, the U.S President-elect Donald J Trump has issued a video outlining his policy plans for his first 100 days in office in which announced his intent to U.S withdraw from the Trans-Pacific Partnership “from day one” This is a really serious challenge for other members of the TPP However, in the framework

of this dissertation, competition policy in the TPP and implications for Vietnam shall

be analyzed in the condition that TPP is fully ratified by all its member countries

1.2 Literature Review

While a significant amount of researches have been conducted in the fields of competition law and policy, there are not many researches focusing on competition policy in the TPP The main reason is that TPP only finalized its negotiations at the beginning of this year Thus most of the researches on competition policy in the TPP done before that time were prediction However, researches on international competition law and policy as well as competition policy in Vietnam are really huge collection This section shall make a general assessment on several typical and prominent researches

First of all, Competition Policy: Theory and Practice (Motta, 2004) is a book

dealing with both theory and practice of competition policy This is really a have textbook in economics of lecturers, students, economists and lawyers It draws

must-on the literature of industrial organizatimust-ons, and must-on original analyses, to explain the likely effects that firms‟ practices have on welfare and formulate policy

recommendations, which are of practical use for antitrust authorities The interaction between theory and practice is one of the main features of the book, which contains numerous references to competition policy cases (mostly from the EU and the US) and a few fully developed case studies

International and Comparative Competition Law (Dabbah, 2010), from an

international and comparative perspective, covers the role of different international organizations active in the area, the significance of multinational enterprises and, in particular, the differences between US and EU systems Taking examples from regions such as Africa, the Middle East and Asia, Dabbah looks at the law and policy

in developing countries and at a regional level, the internationalization of competition law and the doctrines of extraterritoriality, bilateral cooperation and multilateral cooperation, as well as the relationship between competition and trade policy

David J Gerber, through Global Competition: Law, Markets and Globalization,

examines competition law on the global level and reveals it is often complex and little-understood dynamics It focuses on the interactions between national and international legal regimes (WTO, Europe and the US) that are central to these dynamics and a key to understanding them According to the book, national experiences will continue to shape the dynamics of transnational cooperation and coordination relating to the global economy, just as they are shaped by those efforts and by the global economy itself With three parts namely: sovereignty as the framework for global competition; domestic experience and global competition law; competition law as a transnational project, the book provides up-to-date analyses of practical competition law and policy in the global economy

Besides these above mentioned books focusing on competition policy, there have been a number of papers specialized in international competition policy and that of

Vietnam Competition Law Enforcement of Vietnam and Necessity of a Transparent

Regional Competition Policy by Phan Cong Thanh in December 2015 is one of those

papers The paper discusses the enforcement of Vietnam‟s competition law and argues for the need for a regional competition policy for ASEAN and the East Asia

area which enhances an individual country‟s competition policy and prevents conflicts of interest among countries To conclude, it suggests several recommendations for Vietnam governments and competition authorities to adopt for

a competition policy

More detail, Brief Review Report of Vietnam Competition Legislation in 2012 by

Vietnam Competition Authority is a more specialized research in this field After raising and analyzing issues emerging from enforcing competition law of Vietnam, it gives recommendations to rebuild a set of provisions in the Competition Law of Vietnam in conformity with the context of Vietnamese economy, common practice and customs of doing business

International competition law and policy is also a topic of great concern of researchers In E15 Expert Group on Competition Policy and the Trade System, Robert D Anderson and Anna Caroline Muller issues the think piece namely

Competition Law/Policy and the Multilateral Trading System: A Possible Agenda for the Future in September 2015 This paper has been produced under the E15 Initiative

which is implemented jointly by the International Centre for Trade and Sustainable Development (ICTSD) and the World Economic Forum The paper reviews the past work of WTO Working Group on the interaction between trade and competition policy, competition policy in WTO Agreements, the treatment of competition policy

in recent regional trade agreements and ongoing negotiations The final purpose of the paper is to give a possible agenda for future work on competition policy in the WTO

In its publication namely Global Economic Prospects on January 2016, the World

Bank Group raised a topical issue: Potential Macroeconomic Implications of the

Trans-Pacific Partnership This analysis, as its name, discussed the features of new

generation free trade agreements and TPP, and then specially traced out potential macroeconomic implications for member and non-member countries of TPP According to this paper, TPP will reduce tariffs and restrictiveness of non-tariff measures as well as harmonize a range of regulations to encourage the integration of

supply chains and cross-border investment Competition policy is also a field influenced by TPP a lot

1.3 Research objectives

The research aims to clarify the issue of international competition policy in general and competition policy in framework of TPP in particular The research also aims at giving recommendations for reforming competition law and policy in Vietnam in accordance with commitments in the TPP

1.4 Research questions

The objectives of the research are derived from the research questions as follows:

 What are the characteristics of international competition law and policy?

 What are the contents of competition policy in the TPP?

 How does competition policy in the TPP influence economy of member countries?

 How has competition policy in Vietnam been implemented?

 How can Vietnam‟s competition law and policy be improved towards commitments in the TPP?

1.5 Scope of research

Regarding the content of the dissertation, it focuses on the real situation of competition policy enforcement of Vietnam and competition policy in the TPP The scope of this thesis is as follows:

As for geographical scope, the research is intended to conduct a depth practical view concerning impacts of competition policy in the TPP to several member countries Then, the research deepens its study by a case of Vietnam

As for time scope, the research focuses its analysis and synthesis on the period of TPP negotiations and finalization (mainly from 2005 to 2016) and also makes some prediction of potential impacts of TPP‟s competition policy in the future

1.6 Research methodology

During the research process of this thesis, the author has combined different research methods as follows:

- Theoretical research methods:

The thesis will collect legal documents, economic information through historical research method and then classify and systematize them Moreover, the thesis also analyze and synthesize all data and documents

- Practical research methods:

The thesis will observe the real situation of enforcement of competition law and policy all over the world and base on particular experiences from several countries, giving recommendations for Vietnam by professional solution method

1.7 Thesis outline

Chapter 1: Introduction

Chapter 2: The principle of Competition, Competition Policy and International Competition Law

Chapter 3: Competition policy in the Trans-Pacific Partnership (TPP)

Chapter 4: Impacts of competition policy in the TPP to Vietnam

Chapter 5: Implications for reforming Competition Law and Policy in Vietnam in accordance with the commitments in the TPP

Chapter 6: Conclusion

CHAPTER 2: THE PRINCIPLE OF COMPETITION, COMPETITION LAW AND POLICY

2.1 The concept of Competition

Competition is a very broad concept which appears in almost every area of social life, from everyday life activities to more specific field like economics, politics, and culture and so on Therefore, there are varied different views of competition According to the English language dictionary, competition is an event

or a contest in which people fight for superiority or supremacy According to

Competition Law by Richard Whish and David Bailey, competition means a struggle

or contention to superiority; and in the fields of commercial, competition means a striving for the custom and business of people in the market place (Richard Whish and David Bailey, 2009, p.3) The UK Office of Fair Trading and Competition Commission defined competition as a process of rivalry between firms seeking to

win customers‟ business over time by offering them a better deal (Merger

Assessment Guidelines, UK Office of Fair Trading and Competition Commission

2010) In economic sciences, researchers seem not to be satisfied by any concept of competition Because, competition is an economic phenomenon that only exists in the market economy, in all fields and all periods of business process and for all business subjects participating on the market As a result, competition concept is viewed under the purpose and research approach of business researchers Although being regarded and considered under different views and there is a number of definition of competition, in economy, the concept of competition is based on the characteristic that a rivalry or struggle to win the supremacy or predominance of the subject compared to another one

At the heart of the concept of competition stands the freedom to compete This

means that market operators must have the freedom to compete for a process of competition In practical terms, this means that a free-market economy must exist:competition is the flywheel of a free economy (Maher M Dabbah, 2010, p.20-21)

Competition continuously evolves and is a highly dynamic process, which is conditioned by wider developments and circumstances both within and outside the marketplace One of the most remarkable ways in which competition has evolved

over the years has been in its becoming a „global‟ concept This has been facilitated

by the „adoption‟ of the concept by important international organizations, including the Organization for Economic Cooperation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), the World Bank, the International Monetary Fund (IMF) and to a large extent the World Trade Organization (WTO), as well as by the process of market globalization and the process of trade liberalization, which has been sweeping through different countries around the world (Maher M Dabbah, 2010, p 21)

2.2 Fundamentals of Competition Policy

2.2.1 Competition Law and Competition Policy

Being one of the core policies for economic development, competition policy contributes to formulate competition legislation of each country Competition policy orientates contents of competition law and together with competition law, creating legal environment on competition Final target of competition policy is economic growth and consumer welfare through their rights to choose which suitable on the market they want

In particular, the concept of competition policy is considerably wider than that of competition law According to Maher M Dabbah in International and Comparative Competition Law, “competition law is a body of legal rules and standards which aim

at protecting the process of competition: dealing with market imperfections and restoring desirable competitive conditions in the market” Competition policy is concerned with the formulation of a competition law and its enforcement In particular, competition law is an element of competition policy:

Figure 2.1: Four elements of competition policy must be considered to

promote a market oriented economy

Source: Frederic Jenny, Competition law and competition policy: lessons from

developing and transition economies, 17 April 2007

2.2.2 Generalization of Competition Policy

Competition policy can be defined as a governmental policy that promotes or maintains the level of competition in the market, in conformity with political, socio-economy target of the government Competition policy also includes governmental measures that directly affect the enterprises and the structure of industry and market Basically, competition policy consists of two elements (ASEAN Regional Guidelines

on Competition Policy 2010, 2.1.1):

The first, competition policy comprises of a set of policies that promote competition in local and national markets such as introducing an enhanced trade policy, eliminating restrictive practices and reducing unnecessary governmental interventions

The second, competition policy is expressed through issuing and enforcing competition law aimed at preventing anti-competitive business practices, abuse of market power and anti-competitive mergers It generally focuses on controlling restrictive trade practices and anti-competitive mergers, or unfair trade practices

In an economy, having an effective competition policy shall help the government maintain a fair and equal competition environment and promote enterprises‟

Competition law liberalization Trade

competition capability which goes together with the common benefit of the society The ability and opportunity of accessing the market as well as competition capability

of enterprises indicate the essence and contents of that country‟s competition policy Competition policy should be established based on theories of modern economics in the framework of an international economic integration with government‟s active role That is why competition policy fulfills trade policy, promotes trade liberalization and contributes to eliminate trade restrictiveness and trade barriers on global market

Competition policy, on the basis of market economy, is still sustained and enforced differently between economies and countries In full market economy, free competition policy and encouraging competition policy are operated in the most suitable way with the economy Meanwhile, in transition economies, competition policy is kept together with market entry barriers in several fields directly managed

by the government Basically, opening market, maintaining equal and fair competition regime for all subjects, preventing restrictive competition are core issues

of planning and implementing competition policy of each economy

2.2.3 Main objectives of Competition Policy

A number of objectives have inspired competition policy In this research, objectives of competition policy are summarized in four main things as follow:

2.2.3.1 Establishment of economic competitiveness regime

Competition policy introduces a “level-playing field” for all market players that will help markets to be competitive Competition policy not only is the basis of legal framework for competition activities in one economy but also establish competition law and policy enforcement institutions This, in turn, heightens enterprises‟ awareness of competition law compliance, protects rights and benefits of consumers and fosters their sense of self-protection against risks of the drawbacks of competition Therefore, competition in the market is always kept in control and in line with the whole benefit of the society

2.2.3.2 Economic efficiency

Economic efficiency refers to the effective use and allocation of the economy‟s resources Firms are often put under pressure on producing at the lowest possible cost so as to have a competitive advantage This will benefit the consumers In the event of no market entry barriers, even when a monopoly, firms are subject to quote

a competitive price (relatively low price) for product and service, because if they set

a high price, potential competition subjects shall have chances to access the market (Tang Van Nghia, 2013, p 55) This is also a motivation for firms to undertake research and development to meet diversified customer needs As a result, competition has a tendency to bring about enhanced efficiency in both static and dynamic sense

In economic theory, when other things being equal, an increase of the price at which goods are sold reduces consumer surplus and increases producer surplus It turns out that in general, as the price increases, the increase in profits made by the firms does not compensate for the reduction in the consumer surplus Hence, total surplus (economic welfare) is lowest when the market prices equal the monopoly

price (Massimo Motta, Competition Policy: Theory and Practice, 2004, p.18) When

following a competition policy, there is hardly existence of monopoly price in the market for all fields of the whole economy That is why one of objectives of competition policy is to help the economy gain total surplus If economic welfare increases, there is more likelihood that new products should be introduced, in turn, innovations would be made and consequently the quality levels of goods and services would be improved

2.2.3.3 Economic growth and development

Economic growth which is defined as the rise in the value of goods and services produced by an economy This is a key indicator of economic development Economic development is a broader term including employment growth, literacy, mortality rates and other measures of quality of life Competition policy may lead to economic growth and sustainable development through improvements in economic efficiency and the decline in wastage in the production of goods and services The

market is, as a result, able to more rapidly reallocate resources, improve productivity and achieve a higher level of economic growth Finally, sustained economic growth tends to bring about enhanced quality of life and better economic development (ASEAN Regional Guidelines on Competition Policy 2010, 2.2.1.2)

In addition, in Competition Policy: Theory and Practice (2004), Massimo

Motta analyzed and proved other objectives of competition policy related to economic growth and development through theoretical model such as: promoting market integration, economic freedom, fighting inflation and fairness and equity

2.2.3.4 Consumer welfare

Competition Policy benefit consumers in terms of better choice, better quality and lower prices Consumer welfare protection may be required so as to equalize a perceived imbalance between the market power of consumers and producers which may derive from market failures such as information asymmetries, the lack of bargaining position towards producers and high transaction costs Competition policy may serve as a complement to consumer protection policies to address such market failures (ASEAN Regional Guidelines on Competition Policy 2010, 2.2.1.3)

2.2.4 Benefits of Competition Policy

As mentioned above, competition policy introduces a “level-playing field” for all market players The introduction of a competition law will provide the market with a set of “rules of the game” that protects the competition process itself, rather than competitors in the market

In addition, competition policy is also beneficial to developing countries Due

to worldwide deregulation, privatization and liberalization of markets, developing countries need a competition policy, in order to monitor and control the growing role

of the private sector in the economy so as to ensure that public monopolies are not simply replaced by private monopolies

Besides contributing to trade and investment policies, competition policy can accommodate other policy objectives (both economic and social) such as the integration of national markets and promotion of regional integration, the promotion

or protection of small businesses, the promotion of technological advancement, of product and process innovation, of industrial diversification, environment protection, fighting inflation, job creation, equal treatment of workers according to race and gender

In particular, competition policy may have a positive impact on employment policies, reducing redundant employment (which often results from inefficiencies generated by large incumbents and from the fact that more dynamic enterprises are prevented from entering the market) and favouring jobs creation by new efficient competitors

Competition policy complements trade policy, industrial policy and regulatory reform Competition policy targets business conduct that limits market access and which reduces actual and potential competition, while trade and industrial policies encourage adjustment to the trade and industrial structures in order to promote productivity-based growth and regulatory reform eliminates domestic regulation that restricts entry and exit in the markets Effective competition policy can also increase investor confidence and prevent the benefits of trade from being lost through anti- competitive practices In this way, competition policy can be an important factor in enhancing the attractiveness of an economy to foreign direct investment, and in maximizing the benefits of foreign investment

2.2.5 Contents of Competition Policy

For the purpose of ensuring the presence of competition relationships and economic development, governmental competition policy is often established in line with economic conditions and often comprises of contents as follows (Tang Van Nghia, 2013, p.57):

- Competition policy illustrates vividly the objectives of regulating competition relationships of the whole economy The condition of this regulation objective

is that economic system should be built based on suitable political-legal regime Competition policy shall explicitly show the free rights of entry or exit from the market, the right of reforming the forms of business organization and the right of free competition of business subjects

- Competition policy, on one hand, shall maintain the fair and equal competition environment; on the other hand, shall oppose to anti-competitive business practices due to abuse of market power, monopoly or anti-competitive mergers from any subjects within or out of its nations

- Having full of measures to ensure an effective implementation of competition law and policy Enforcement institutions of Competition Law shall have favourable capacity and authorization in its specialization Meanwhile, subjects on the market shall be self-conscious and shall have appropriate actions with regulations of competition law and policy

- Having proper, capable and competent institutions to enforce competition law

in practice in order for all subjects on the market to strictly obey competition law Therefore, there should have an independent and competent competition regulatory body to solve competition issues Competition policy makes sure

of cooperation mechanism of enforcement competition law bodies and supervises activities of them

- Assuring the firms‟ right of unlimited access and non-discrimination in all markets In case there is existence of market entry barriers, competition is restrained and market power is abused

In the market economy, decisions of firms have a considerable influence on the common economy operation In order for the market to self-operate as its normal rule

as well as self-control through competition without any interventions, private autonomy shall be ensured by the government by law This also includes institutional monitoring enforcement of competition law in preventing anti-competitive practices

on the market As competition law is the essential factor in regulating the market economy, competition law demonstrates competition policy Competition law is not only expression of competition policy, but legal instruments for competition policy enforcement That is why competition law and policy should adopt objective and consistent regulations for firms and other business subjects

2.3 International Competition Law and Policy

It is obvious that competition law and policy are highly international Because many nations, from developed to developing ones, have adopted similar forms of

competition law Additionally, competition law enforcement has become increasingly global through extraterritorial assertion of jurisdiction and bilateral cooperation International competition law and policy has two considerable functions: first, it proves the rights and obligations of all entities in the global market and second, it contributes to establish conduct norms for global market to not only those engaging in but are affected by them as well There are various ways to access and analyze international competition law and policy by virtue of the diversification

of it, however, in the framework of this thesis, international competition law and policy is examined in three modern aspects: similarities and differences between competition law regimes around the world and the involvement of international bodies and organizations in the field of competition law and policy

2.3.1 Similarities between competition law regimes around the world

Although each country adopts a distinct competition law and policy, most of the world‟s competition law regimes share varying common characteristics and features These include the prohibitions on collusion (cartel), prohibition on abuse dominance or monopolization and regulating mergers

2.3.1.1 Prohibition on collusion (cartel)

In terms of competition, collusion refers to agreements between two or more parties in order to restraint open competition In business practices, firms often agree together and cooperate so as to achieve highest business efficiency on the market However, for the purpose of profit or business advantage, firms frequently find ways

to restraint the ability to participate in the market of business rivals or potential competitors Agreement in restraint of competition shall be demonstrated by mutual agreements, decisions or activities among firms in order to cause disadvantages to others or exert harmful effect to competition reality There are two types of agreement in restraint of competition (cartel) namely vertical cartel and horizontal cartel As horizontal cartel is cooperation between two or more actual or potential competitors at the same level of business, it often includes agreements related to price, market sharing, preventing other entities from participating on the market…

On the other hand, as vertical cartel is cooperation between companies operating at

different levels of the production or distribution chain, it often comprises of price fixing, exclusive distribution by territory Although the two kinds of cartel do harm

to competition on the market, vertical cartel seems to bring about less negative effect

on the market than horizontal cartel

It is essential for a competition law and policy to include a prohibition on collusion between firms, particularly cartels aiming at market sharing, price fixing, limiting production, collusive tendering and other important aspects of the firms‟ competitive interaction Not only competition law regimes of countries on the world have regulations for cartels but regulations of business organizations as well For example, according to Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) stated that: “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

i directly or indirectly fix purchase or selling prices or any other trading conditions;

ii limit or control production, markets, technical development, or investment; iii share markets or sources of supply;

iv apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

v make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts”

These prohibitions are to ensure the open competition environment for business subjects as well as to protect interests of enterprises not participating in the agreements and to protect consumer benefit

2.3.1.2 Prohibition on abuse of dominance or monopolization

Abuse of a dominant position occurs when a dominant firm in a market, or a dominant group of firms, engages in conduct that is intended to eliminate or discipline a competitor or to deter future entry by new competitors, with the result that competition is prevented or lessened substantially Abusing a dominant or monopoly position on the market is also a form of anticompetitive behaviour which

is generally addressed by international competition law and policy The prohibition

on abuse of dominance assumes massive significance in practices and is considered

to be complementary to the prohibition on collusion For instance, Article 14 of Vietnam Competition Law 2004 stated that: “Any enterprise or group of enterprises

in a dominant market position shall be prohibited from carrying out the following practices:

i Selling goods or providing services below total prime cost of the goods aimed at excluding competitors;

ii Fixing an unreasonable selling or purchasing price or fixing a minimum re-selling price goods or services, thereby causing loss to customers; iii Restraining production or distribution of goods or services, limiting the market, or impeding technical or technological development, thereby causing loss to customers;

iv Applying different commercial conditions to the same transactions aimed at creating inequality in competition;

v Imposing conditions on other enterprises signing contracts for the purchase and sale of goods and services or forcing other enterprises to agree to obligations which are not related in a direct way to the subject matter of the contract;

vi Preventing market participation by new competitors”

Similarly, Article 102 of the Treaty on the Functioning of the European Union (TFEU) indicated that “Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States

Such abuse may, in particular, consist in:

i directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

ii limiting production, markets or technical development to the prejudice

2.3.1.3 Regulating mergers and concentration

In most competition law regimes around the world, there is a mechanism for merger regulation aiming at controlling problematic merger operations, which may lead to competition problems A merger is the purchase acquisition or pooling together of the interest of two firms with the aim of creating a single entity Mergers are addressed under international competition law and policy for the purpose of controlling concentration in the right procedures and level If not, business concentration will be the cause of dominant position on the market or even more threatening, monopoly There are four types of merger including vertical mergers, horizontal mergers, conglomerate mergers and joint venture situation In the fight against anti-competitive behaviour such as collusion and abuse of dominance,

existing regulations are applied ex-post 1 in the investigation and prosecution of such

observed behaviour whereas merger regulations are applied exante 2 meaning that potential or expected effects of mergers are evaluated before the any merger is approved

Regulating concentration is government‟s activities in the fields of controlling, creating impact on subjects engaging in business concentration or being about to engage in business concentration based on competition law and policy in order to

guarantee concentration activities in good condition and not do harm to the market Therefore, competition law regimes of countries in the world need to and shall consist of merger regulations

All of the above-mentioned similarities concern the substance and scope of competition rules However, similarities between competition law regimes around the world also exist in relation to approaches of enforcement, procedural aspects and general policy views followed when applying the rules Most competition law regimes around the world have come to develop common methods in their analysis

of different competition issues Achieving these similarities deserves specific emphasis because it has been facilitated by bilateral cooperation between different competition authorities and the helpful role played by some international organizations in this field

In an era of globalization and with so many competition law regimes worldwide, similarities between these regimes are particularly welcome and can be extremely useful They should - where relevant and possible - be fostered in order to avoid unnecessary situations and conflicting decisions between different competition authorities in cases of concurrent jurisdiction in which the competition rules of more than one regime apply (Dabbah, 2010, p.13-14)

2.3.2 Differences between competition law regimes around the world

The above important similarities must be looked at alongside the many differences These differences are particularly worth noting because realizing their existence and understanding them is extremely vital to assessing two important things On the one hand, this would help identify possible gaps in those regimes as well as key strengths, which could possibly be consulted when seeking to build or

strengthen other regimes On the other hand, identifying these differences helps

recognize the challenges facing any attempt to arrive at common grounds in the field

of competition law and policy

Below are the four differences between competition law regimes around the world (Dabbah, 2010, p 14-19):

2.3.2.1 Viewing competition and understanding competition law

Perhaps the first difference that should be mentioned is the lack of consensus with respect to the meaning of „competition‟ It is not clear that the scope of this particular concept is identical in different competition law regimes and whether the treatment of different types of anticompetitive situations in these regimes is on an

equal footing This particular difference is especially important given the difference

between the competition laws understanding prevailing in different regimes In some regimes, a mature understanding of competition law exists among the different communities - of enforcing authorities, practitioners and academics (and to a large extent the business community) - and the experience within these regimes with competition and competition law is very impressive

2.2.2.2 The title of the law

Another difference to note is that how competition laws are referred to in different parts of the world Obviously in many competition law regimes, the laws

are referred to competition law In some competition law regimes, however, the laws

are referred to as law against restrictive business or trade practices In other regimes the laws are called the laws against unfair competition, and there is a third, but not final, category of countries where the law is called the competition and fair trading law or competition and trade regulation

For present purposes, however, it is worth observing that the laws in different competition law regimes do not necessarily have to be consistently called

“competition law” Moreover, in some cases the difference in reference to the relevant law(s) may be merely cosmetic more than anything else without any material implication or consequence An example here is found in the case of those jurisdictions where the law is referred to as “competition law” and those in which the law is referred to as the law on the “protection of competition and the prohibition

of monopolistic practices”

2.3.2.3 Enforcement

A third and in practice highly imperative difference concern, the competition law tradition and the degree of seriousness with which competition law is enforced in different regimes In certain regimes, a weak competition law tradition exists and enforcement is either non-existent or limited whereas in other regimes building a strong competition and competition law cultureand having effective enforcement are extremely important goals, which are taken very seriously The issues of enforcement assume huge importance in practice in light of the adverse consequences a lack of competition law tradition and effective enforcement could trigger, but also because these issues have a direct link to the issue of

“independence” of competition authorities and the separation of competition ment and decision-making from politics The competition authorities in certain regimes do not enjoy sufficient independence and in practice their decision-making powers and enforcement actions are subject to the approval or actions of the government or a minister The lack of sufficient independence can enhance the political influence in a given competition law regime and possibly the „politicization‟

enforce-of enforcement and actions taken within the regimes as a whole

2.3.2.4 Institutional approaches

Finally, it would be important to refer to a significant difference namely the

„right‟ institutional approach which should be adopted To be more specific,

institutional approaches here relates to how the competition rules should be applied

and who should enforce them In some regimes, an administrative body has competence in conducting investigations and reaching binding decisions, with of course the possibility being included to seek judicial review or appeal against these decisions In other regimes, the power to reach final decisions in relation to competition investigations is in the hands of judges who hear actions brought by the competition authority or the government or private parties against a firm or group of firms alleged to have committed a competition breach Finally, there are regimes which include a specialist tribunal experiencing the power to conduct review of or hear appeal actions from decisions adopted by the competition authorities and other

public bodies having the power to enforce competition law

2.3.3 The involvement of international bodies and organizations in the field of

competition law and policy

2.3.3.1 The World Trade Organization (WTO)

The WTO is a unique international organization and rule-making body with a mechanism for dispute resolution In January 1995 the WTO came to succeed the General Agreement on Tariffs and Trade (GATT), which was concluded in October

1947 by 23 countries Today the WTO has a very wide membership background including 153 countries

The WTO‟s engagement in the field of competition law began in 1996, one

year following its creation when the Working Group on the Interaction between

Trade and Competition - what is widely known as the Singapore Group - was

established The purpose of the Group is to research on the relationship between competition policy and trade policy and explore the possibilities for introducing some forms of competition law framework or agenda within the WTO In its work initially the Group focused on the core principles of interface among these important policies: transparency; non-discrimination; procedural fairness; voluntary cooperation; capacity building; and limitations on hardcore cartels

It is true that the WTO is a trade body, but competition law is not totally absent from the scope of its work Under the GATT several cases had arisen where countries claimed that other countries supported or fostered anti-competitive

behaviour As for WTO rules and principles in competition, it is obvious that Most

Favored-Nation (MFN) supports the operation of impartial competition law regimes

at national level Furthermore, competition law concepts also appear in several WTO

agreements including: the Basic Telecommunications Agreement and specially the

Telecommunications Reference Paper on Regulatory Principles of the Negotiating Group on Basic Telecommunications; the General Agreement on Trade in Services;

the General Agreement on Tariffs and Trade, the Agreement on Trade-Related

Investment Measures; The Trade-Related Aspects of Intellectual Property Rights; The Agreement on Government Procurement; the Agreement on Technical Barriers

to Trade; and the Accounting Disciplines Agreements (Maher M Dabbah, 2010,

p.126)

2.3.3.2 The Organization for Economic Cooperation and Development (OECD)

The OECD was in 1961 which brings together 34 countries who are among the world‟ most developed nations The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems They work with governments to understand what drives economic, social and environmental change They measure productivity and global flows of trade and investment They analyze and compare data to predict future trends They set international standards on a wide range of things, from agriculture and tax to the safety of chemicals. The OECD is not a competition body, but rather an international organization involved in „economic cooperation and development‟ with a strong competition law branch

The OECD‟s role and the types of activities in the fields of competition law have changed over time For instance, traditionally, Competition Committee meetings have been an opportunity for senior competition officials from OECD members to meet and discuss issues of substantive law and areas of potential cooperation However, now the focus is more on cooperation between competition authorities of OECD members and a number of OECD measures have been adopted

to address this issue and to bring it to the forefront of Competition Committee‟s business (Dabbah, 2010, p.135)

In recent years, the OECD created important competition fora within the

Competition Committee, markedly the Global Forum Competition (GFC) and Latin

American Competition Forum (LACF) Both of them are noteworthy for how the

OECD has expanded its „reach‟ to include competition authorities from around the world at different levels of development On the one hand, the GFC is mandated to contribute to the global development of competition law in various ways It is intended to be a forum in which OECD‟s members‟ experiences and best practices can be effectively disseminated; non-members‟ conditions, views and experiences can be divulged; the different approaches between developed and less developed

competition law regimes can be addressed; larger networks of government officials with similar understanding can be improved On the other hand, the LACF, as the name suggests, emphases on Latin America At each annual forum senior officials from countries in the region together with international experts discuss issues of competition policy that are interesting to them (Dabbah, 2010, p.137)

The OECD has produced many significant studies and produced a number of Guidelines, Best Practices, Guiding Principles and Recommendations over the years which had a direct positive influence in the field of competition law and policy Among these, the following are important:

- Guidelines for fighting bid rigging in public procurement (2009);

- Recommendation on competition assessment (2009);

- Recommendation of the Council concerning merger review (2005);

- Best Practices for the formal exchange of information between competition authorities in hardcore cartel investigations (2005);

- Guiding principles for regulatory quality and performance (2005);

- Recommendation of the Council concerning structural separation in regulated industries (2001);

- Recommendation of the Council concerning effective action against hardcore cartels (1998)

Among the different OECD regulations mentioned above, it is worth noting the

Best Practices for formal exchange of information between competition authorities in hardcore cartel investigations (Best Practices) which were adopted in November

2005 and have received relative attention in the competition law community The

Best Practices recognize the importance OECD places on the need to fight hardcore

cartels and build an effective anti-cartel enforcement through a „network‟ between different competition authorities within which exchange of information may occur

The Best Practices deal with safeguards for the formal exchange of information

including highlighting what should be done for this purpose They also discuss and cover the issue of legal professional privilege, which can be extremely important when conducting investigations in cartel cases, in addition to paving the way towards

ensuring transparency in the process of exchange of information The Best Practices

in many ways build on previous OECD recommendations in the field, including the

1998 Recommendations on fighting hardcore cartels (Dabbah, 2010, p.138-139)

2.3.3.3 United Nations Conference on Trade and Development (UNCTAD)

UNCTAD was formed in 1964 and today has 173 member countries UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively It also helps equip them to deal with the potential drawbacks

of greater economic integration To do this, UNCTAD provides analysis, building, and technical assistance for member countries to use trade, investment, finance, and technology as vehicles for inclusive and sustainable development UNCTAD has three main functions: it acts as a forum for intergovernmental deliberations aimed at consensus-building among its member countries; it undertakes research, policy analysis and data collection for the purpose of debates; and it provides tailored technical assistance to developing countries

consensus-There is Intergovernmental Group of Experts on Competition Law and Policy

in the UNCTAD‟s structure The Intergovernmental Group meets to discuss ways of improving worldwide cooperation on competition policy „implementation‟ and

enhancing convergence through dialogue based on the UN Set of Principles and

Rules for the Control of Restrictive Business Practices 3 Every five years since the adoption of the Set, a Review Conference is held at which the heads of competition authorities and senior officials from developed and developing countries meet Review Conferences have been field in 1985, 1990, 1995, and 2000 and more recently in 2005 These Review Conferences offer a valuable opportunity for competition authorities from around the world to foster bilateral and regional cooperation between them, share experience (particularly in relation to best practices), discuss capacity building and technical assistance programs and to examine ways in which these authorities can strengthen their enforcement mechanisms and efforts Other achievements within the Conference worth noting

include revision to the UNCTAD Model Law on Competition and arranging ad hoc

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peer review exercises It was adopted so as to provide countries with a source of reference when drafting or amending domestic competition laws It is related to the Set and can be said to be based on different elements within the Set The Model Law has been amended and updated since its adoption, most notably at the 4th Review Conference 2005 as noted above when the Model Law was expanded to include the area of merger control (Dabbah, 2010, p.145-147)

In addition, UNCTAD occasionally held training activities for especially developing countries with a large number of them focusing on competition law and

policy Take Contribution of Competition Policies to the achievement of the

Millennium Development Goals (MDGs) for example It highlights the emphasis that

UNCTAD places on the need to formulate and enforce competition and consumer protection laws in a „pro-poor‟ manner that is through ensuring an efficient allocation

of resources in developing countries Recently, UNCTAD has several training program conferences in collaboration with local competition authorities and other institutions of the relevant countries

2.3.3.4 The International Competition Network (ICN)

The International Competition Network (ICN) was launched in October 2001 as the only international body devoted exclusively to competition law enforcement and its members represent national and multinational competition authorities The ICN provides competition authorities with a specialized yet informal venue for maintaining regular contacts and addressing practical competition concerns This allows for a dynamic dialogue that serves to build consensus and convergence towards sound competition policy principles across the global antitrust community Annual conferences and workshops provide opportunities to discuss working group projects and their implications for enforcement The ICN does not exercise any rule-making function Where the ICN reaches consensus on recommendations, or "best practices", arising from the projects, individual competition authorities decide whether and how to implement the recommendations, through unilateral, bilateral or multilateral arrangements, as appropriate Currently the ICN‟s membership includes

112 competition authorities; a membership base that is bound to widen in the years to

come with new competition law regimes becoming established and new competition authorities inaugurated and admitted to the Network

Initially, the focus of the ICN work was placed on specific topics in jurisdictional merger control and competition advocacy; anti-cartel enforcement and abuse of dominance In particular, in relation to cartels the ICN has been looking the conduct and value of investigations by competition authorities in uncovering and punishing cartels For priority, the ICN has been keen to assist competition authorities in improving their operational and practical skills in order to construct effective anti-cartel enforcement regimes A number of ICN „workshops‟ have been organized during which the topic of fighting cartels was discussed and a manual on anti-cartel enforcement techniques has been produced in addition to a „template‟ on anti-cartel enforcement More recently attention has also shifted to abuse of dominance monopolization (Dabbah, 2010, p.153)

multi-CHAPTER 3: COMPETITION POLICY IN THE TRANS-PACIFIC PARTNERSHIP (TPP)

3.1 Introduction to TPP

3.1.1 Overview of TPP

The Trans-Pacific Partnership Agreement took five years and 19 rounds of negotiations before it was concluded on Oct 5, 2015 Its twelve countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, USA and Vietnam They account for 24,9 per cent of the world area and 11,1 per cent of the world population According to the United State Trade Representative, once effective, TPP will become a free trade area with 800 million people, representing 40 per cent of the world economy, 39 per cent of the world GDP; 19,3 per cent of the world export and 21,1 per cent of the world import

The major objective of TPP is freer trade by reducing tariffs and easing the restrictiveness of non-tariff measures, improving markets access among member countries On-tariff measures cover a wide range of measures that can be obstacle to trade, including but not limited import licensing requirements, discriminatory standards, rules for valuation of goods at customs, pre-shipment inspection, investment measures, and rules of origin and local sourcing for government procurement TPP can enhance the shared benefits of trade by eliminating barriers to expanded international commerce and deepening economic cooperation between partners

It also aims at facilitating supply chain integration by encouraging greater regional coherence in standards and regulations among its member countries

Additionally, another target of TPP is setting common ground for labor and environmental standards and intellectual property protections

In addition, the TPP would strengthen ties between Asia and the Americas, establishing a new pattern for the conduct of international trade and investment, and potentially leading to an all-inclusive free trade area in the Asia-Pacific It could bring about considerable benefit, greater than those expected from the World Trade Organization‟s

a full member on 13 November 2010) At that time, Trans-Pacific Strategic Economic Partnership Agreement was renamed as Trans-Pacific Partnership Agreement (TPP)

- In 2009: In March, the first negotiation was arranged for the new pact that included four more countries which bring the total number of TPP to eight However, the negotiations were postponed due to the inauguration of President Barack Obama In December, United State Trade Representative announced President Obama‟s decision of US continuing the TPP Only from that time did TPP negotiations officially begin

- In 2010: The first round took place in Melbourne, Australia in March where parties exchanged views and agreed to gather information as well as discuss the participation of more countries The second round of negotiations took place in San Francisco, California, in June whereby parties discussed the agreement architecture, the relationship between the TPP and the existing free trade agreements (FTAs) In October, the third round of negotiations took place in Brunei, whereby Malaysia joined as the ninth member of TPP The fourth round of negotiations was held in Auckland, New Zealand, in December with the focus on creating the text for individual TPP chapters

- In 2011: TPP started its fifth round of negotiations in February in Santiago, Chile Between March and December, another five rounds of negotiations took place respectively in Singapore, Vietnam, Chicago, Peru and Malaysia

- In 2012: Texas hosted the 12th round of negotiations in May In the same year, the 13th, 14th and 15th round of negotiations took place in California, Virginia, and New Zealand respectively During the 15th round, Mexico and Canada entered the negotiations

- In 2013: The 18th round of TPP negotiations took place in Malaysia Japan formally joined the TPP negotiations on July 23 the same year The 19th and final round of negotiations took place in Brunei Thereafter, TPP leaders, ministers as well as chief negotiators held various meetings to finalize the agreement over a period of two years

- In 2015: On October 4th, TPP ministers announced that they had concluded TPP negotiations and a full text of the agreement, was made public soon after

On November 18, the leaders of 12 countries sealed the TPP free trade initiative in the Philippines on the sidelines of a two-day summit of the Asia-Pacific Economic Cooperation

- In 2016: On 04 February 2016, in Auckland city, New Zealand, Minister of Trade and Economics of 12 country members of TPP together signed on TPP Agreement, consisting 30 chapters marking the official completion of TPP negotiations Member countries are given two years to ratify the agreement before it comes into force in 2018

3.1.3 Outline of TPP

3.1.3.1 Key features

TPP is a 21st-century trade agreement setting a new standard for international trade and incorporating next-generation issues that will boost the competitiveness of member countries in the global economy The United State Trade Representative identified five defining features as follows4:

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https://ustr.gov/about-us/policy-offices/press-office/press Comprehensive market access

As analyzed in Part 3.1.1 of this research, the main purpose of TPP is to eliminate tariffs and other barriers to goods and services trade and investment This, in turn, helps create far-reaching market access to all member countries

- Regional approach to commitments

The TPP facilitates the development of production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets Supply chains involve the close coordination of production decisions among different locations They depend on rapid and reliable ways for shipping goods, making investments, and transferring information Attracting supply chains to an economy requires good physical connectivity through ports, roads and telecommunications, along with policies that facilitate trade in intermediate products and services, as well as foreign investment (World Bank Group, Global Economic Prospects, Topical issue: Potential Macroeconomic Implications of the Trans-Pacific Partnership, USA, 2016) Thanks to TPP, supply chain integration fosters the share of foreign value added in TPP member countries‟ exports

As for labour and environment, the TPP seeks to incorporate International Labor Organization (ILO) obligations, requiring domestic laws to be consistent with international standards, and provides enforcement Environmental standards introduced in the agreement address illegal wildlife trafficking, logging and fishing They also include provisions on conservation, biodiversity, protecting the ozone layer and environmental goods and services (World Bank Group, Global Economic Prospects, Topical issue: Potential Macroeconomic Implications of the Trans-Pacific Partnership, USA, 2016)

In terms of intellectual property rights, TPP goes somewhat beyond the WTO‟s TRIPS agreement It requires penalties for the unlawful commercial exploitation of copyrighted work, and prescribes measures to reduce the illegal online distribution of copyrighted material and strengthen copyright terms

(World Bank Group, Global Economic Prospects, Topical issue: Potential Macroeconomic Implications of the Trans-Pacific Partnership, USA, 2016)

- Addressing new trade challenges

The TPP promotes innovation, productivity, and competitiveness by addressing new issues, including the development of the digital economy, green technologies and the role of state-owned enterprises in the global economy

- Inclusive trade

The TPP includes commitments to help small and medium sized businesses take advantage of its opportunities, and bring their unique challenges

to the attention of the TPP governments It also includes specific commitments

on development and trade capacity building, to ensure that all members take full advantage of its benefits

- Platform for regional integration

The TPP is intended as a platform for regional economic integration and designed to include additional economies across the Asia-Pacific region

of state-owned enterprises in international trade and investment, the ability of small businesses to take advantage of trade agreements, and other topics

TPP unites a diverse group of countries by geography, language and history, size, and levels of development All TPP countries recognize that diversity is a unique asset, but also one which requires close cooperation, capacity-building for the

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