Competition Law to hasten FTA talks

Between PH and EU

The European Union (EU) said that formal negotiations for the proposed bilateral free trade deal with the Philippines may now proceed with the enactment of the Philippine Competition Act stressing that competition is an important pillar for a successful Free Trade Agreement (FTA) negotiation.

This was stressed by EU Competition Policy expert Tiina Pitakanen in a speech before the EU Competition Policy Breakfast Dialogue organized by the European Chamber of Commerce of the Philippines at the New World Hotel in Makati as President Aquino. The EU competition policy expert cited the Philippines for having passed this important piece of legislation, which took 25 years to pass in Congress.

“Our view is this is a big achievement because this was one of issues that we wanted the Philippines to achieve before we can start with the negotiation. So we think we are now there and we can finalize our discussion on this part of the FTA,” Pitakanen said.

President Aquino has signed the Philippine Competition Act only in July this year. Under the law, the government is given 190 days to come up with the Implementing rules and regulations of the law after which the Philippine Competition Commission shall also be established.

The government is still preparing for the implementation of this law which is expected to level the playing field for all enterprises in the country whether it is small or big.

“We will not go into bilateral FTA negotiations without the competition charter,” Pitakanen stressed, who has been engaged with the EU Competition Cluster that handles negotiations on competition policies in every FTA negotiation.

Normally, the EU has a list of anticompetitive practices and laws. The EU Competition cluster looks at anticompetitive mergers and agreements provisions, provisions on due process, and the implementation of the competition law so that it should be applied to all enterprises in a transparent manner. The cluster also tackles the provisions of the competition law, provisions on state-owned enterprise, and subsidy provisions.

These provisions can be found in the EU FTA agreements with Korea and Singapore, Pitakanen said. She, however, said these EU rules on competition should not prejudice the outcome of the FTA negotiations.

Pitakanen stressed the importation of competition chapter in any FTA deal with other countries because this will ensure market access and rules to establish the environment for fair trade practices.

Once the competition chapter is agreed in the planned FTA, Pitakanen said “both parties signal to the world that competition is good, it is important and is one of pillars of the FTA to promote market access and make investment really possible.”

The Philippines and the EU have expressed willingness to forge bilateral FTA but both parties have not yet moved into the formal negotiation stage with the Philippines still entangled in the so-called “scoping” exercise stage.

Pitakanen, an EU expert on competition policy, cited the Philippine government for having come up with the new law with a provision for review after five years.

EU is interested on the antitrust infringements, how rules are applied that there is no discrimination and the establishment of a Competition Commission.