INTRODUCTION
1. The Meeting for 2002 of the Competition Policy and Deregulation Group (CTI) was held in Merida, Mexico, 17-18 May 2002. Mr. Margarita Trillo from Peru chaired the meeting. Representatives from Australia; Brunei Darussalam; Canada; Chile; the People's Republic of China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Peru; Singapore; Chinese Taipei; Thailand and United States of America participated in the Meeting. The APEC Secretariat was also present.
ADOPTION OF THE AGENDA
2. The Group adopted the annotated agenda as drafted.
CHAIR'S OPENING REMARKS
3. The CPDG Chair extended a warm welcome to all delegates. The Chair thanked Mexico for the warm hospitality and excellent arrangements made for the CPDG meeting.
CHANGE OF CPD CONVENOR
4. The Chair informed the Meeting explained the group of the process that was followed since the beginning of the year to receive the nomination of potential candidates as new Convenor. The Chair reported that based on her consultations with member economies, the only economy that expressed interest was Mexico.
5. The Chair called on next Convenor, Mrs. Rebeca Escobar from Mexico, who thanked the meeting for the support and confidence received. It was agreed that the new Convenor should take over afterwards this meeting. All the relevant reports to CTI III should be coordinated and prepared by Mrs. Escobar.
6. The Chair mentioned that it would be important for the group to have a Co-chair. The Chair also pointed out that an Asian representative would be suitable since Mr. Escobar and herself hails from America.
ISSUES RELATED TO INSTRUCTIONS FROM LEADERS, MINISTERS AND SOM
7. Implementation of the Shanghai Accord
8. Contribution to the Doha Development Agenda
The group agreed to follow the work to be done by the WTO Working Group on the Interaction between Trade and Competition Policy. According to the Doha Development Agenda, this work will focus on core principles and provisions for hardcore cartels, as well as support for progressive reinforcement of competition institutions in developing countries through capacity building.
REPORT ON PROJECTS RELATED TO COMPETITION OR DEREGULATION
9. Peru reported on the progress in the implementation of the APEC-OECD Co-operative Initiative on Regulatory Reform, 2000-2002 which included activities undertaken during the Second Workshop held in Merida, Mexico on 24-25 April. The Second Workshop examined the design and practical operation of Regulatory Impact Analysis as a tool for sustaining regulatory reform and the integration of market openness into regulatory systems as a component of regulatory reform. The third Workshop will take place in Korea in October.
10. Mexico reported on the preparation for the first component of the Training Program to promote Economic Competition in APEC economies. The first will be held in Mexico City on May 30-31 and will be related to Energy Sector. Other three components related to Telecommunications, Transportation and Finance Sector will take place over this year and the first part of 2003. It was explained that the Mexican Government, undertook the responsibility of shaping the legal and regulatory framework of regulated sectors, in order to encourage competition and innovation, is organizing a Training Program to Promote Economic Competition in Regulated Sectors. The purpose of this Program is to help local economies grow by improving the regulatory and legal climate for competition in key infrastructure sectors and to suit APEC's objectives. The objective is to train a cadre of regulators, officials and legislators on the principles of competition policy and the interrelationship between competition policy and sectoral regulation.
11. Japan briefed the meeting on the preparation for the first year of the project "APEC Training Program on Competition Policy" submitted jointly by the CPD and SELI. Japan also informed CPDG that the project overseers would circulate more information on proposed training program for members (e.g, agenda, structure of the program, participation). The main objective of this Program is to implement "APEC Principles to Enhance Competition and Regulatory Reform". To achieve this objective, the Training Program "provides technical co-operation and assistance, and builds capacity especially in developing economies by better utilizing the accumulated APEC knowledge and expertise on competition policy and regulatory reform", mainly focusing on competition policy.
12. Chinese Taipei reported on the progress on the Law Database. After the last report to CPDG, the Database has not only been updated by most old member economies on a regular basis, but also been enhanced by the efforts from new member economies. Chinese Taipei announced that at current stage, the competition database covering whole APEC geographic areas available for public access has been completed. It was also mentioned that the completion of this database demonstrates the close cooperative relationship that exits among member economies for the accomplishment of the first section of collection actions in the Osaka Action Agenda. The private sector, including academic organizations and business enterprises, will also be able to retrieve useful information from the database for improving trade and investment. With the establishment phase of the database completed, the main task now is its maintenance. Chinese Taipei asked for coordination on the side of APEC Secretariat for the maintenance of the data base.
PRESENTATION OF PROJECTS FOR CPD APPROVAL
13. Mexico made a presentation on APEC OECD Cooperative Initiative on Regulatory Reform: Second Phase. This project is the continuation of the initiative as started two years ago. Chile made some comments on the budget as presented by Mexico and offered his assistance to revise the figures. CPDG endorsed the project.
14. Japan reported on APEC Training Program on Competition Policy for 2003. For the 2003 program, two training courses are planed to be held. Such training programs will be based on the outcomes of the 2002 program. CPDG endorsed the project
15. As a way of reference for CTI, CPDG ranked both projects as follows:
(1) APEC Training Program on Competition Policy (Japan, Thailand, Vietnam)
(2) APEC OECD Cooperative Initiative on Regulatory Reform: Second Phase (Mexico)
RESEARCH, ANALYSIS AND OTHER ACTIVITIES AS DEVELOPED BY MEMBER ECONOMIES
16. United States made a presentation on the paper "U.S. Perspective on the International Competition Network (ICN)". Specifically. It was mentioned that the ICN was launched by antitrust officials from 14 economies last October to provide a new framework for interaction and cooperation among government officials, private firms and non-governmental organizations in the antitrust area. Just 7 months after its inception, approximately 60 jurisdictions on six continents have already joined the network. These economies represent 70 percent of the world's GDP. It was also mentioned that APEC via CPDG, as other international organizations, provide fine venues, with their own focus for debating competition policy issues among many economies. The United States pointed out that the ICN should seek to build on what international organizations have done and are doing, and not to duplicate it. The dialogue in these organizations will provide valuable input to ICN projects and hopefully some of the ICN's work will enrich related discussions in other fora as well.
17. United States made a presentation on joint FTC-DOJ public hearings on "Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy". It was mentioned that the primary goal of these hearings is educational - to develop a better understanding of how to manage issues arising at the intersection of competition and intellectual property law and policy. The hearings, which began on February 6, 2002, focus primarily on the implications of competition law (known as antitrust law in the United States) and patent law for innovation and other aspects of consumer welfare. The relationship of competition and intellectual property law and policy presents pressing public policy concerns given the growth in economic significance of the knowledge-based economy over the past few decades and the increasing number of Federal Trade Commission (FTC) and Department of Justice (DOJ) enforcement matters requiring the application of U.S. antitrust law to conduct relating to intellectual property. A public report that incorporates the results of the hearings will be prepared after the conclusion of hearings. United States highly commended to CPDG the public materials that are available on the agencies' websites.
18. Mexico made a presentation on "The Role of Competition Policy in Economic Development". Mexico explained that the easiest way to understand how competition policy fosters economic development in a dynamic context is by analysing its impact on four elements considered when making investment decisions: income, costs, profitability and risk. Competition policy facilitates market access by new competitors thereby enabling the generation of productive infrastructure and incomes. It does so by tackling predatory and other anticompetitive practices that an agent endowed with market power may carry out or the barriers that a monopoly may impose on market access or an authority may impose in order to protect incumbent firms. As to costs, competition policy also fosters investments by promoting lower prices for inputs and capital goods. Regarding profitability, there are two elements to consider. On one hand, competition in the financial sector is necessary for domestic investors to have access to sufficient financial resources at competitive interest rates. On the other hand, profitability grows when incomes increase and investment costs fall. Finally, Competition policy reduces investment risks by facilitating decision-making. It makes the game's rules transparent for investors and it is part of "good governance", that provides legal certainty regarding the observance of investor's property rights and that economic institutions are designed to support free market access. The Mexican experience in competition law enforcement demonstrates that competition is a powerful tool for the promotion of economic development. Mexico has undoubtedly taken steps forward in fostering an efficient and effective competition policy, but this policy needs to be strengthened in order to achieve the level of development Mexican people seek and deserve.
FINAL REMARKS
19. The Chair concluded the meeting by thanking all participants for their active involvement and cooperation. She expressed appreciation to all CPDG members for the friendship and goodwill she enjoyed during her 3 years of CPDG work.