Trans-Pacific Competition Law implications – the impact of the TPP

Published On 12/03/2013 | By Charles Noonan | Enforcement, Reform

While the Trans-Pacific Partnership (TPP) Agreement has received little attention from the Australian media of late, the formulation of this multilateral agreement may have significant implications for Australian competition law.

If you are wondering what the TPP is, it essentially builds on a 2006 agreement between NZ, Singapore, Chile and Brunei (P4) that aimed to facilitate trade amongst P4 partners through tariff elimination and the promotion of cooperation on customs procedures, intellectual property and competition policy.  After the Obama administration announced that it would join the P4 in September 2008, the governments of Australia, Canada, Malaysia, Mexico, Peru, the USA and Vietnam were quick to follow suit.  The 16th round of TPP negotiations will take place in Singapore this week with a view to finalising negotiations by the end of 2013.

On 12 November 2011, the leaders of the nine TPP countries announced a broad outline of the proposed agreement, which covered:

  1. Comprehensive market access, such as eliminating tariffs and other trade and investment barriers between TPP countries;
  2. The facilitation of trade and the development of supply chains amongst TPP members;
  3. ‘Cross-cutting’ trade issues, such as ensuring regulatory coherence between TPP countries and ensuring the facilitation of competition;
  4. Addressing trade challenges that have emerged from new technologies; and
  5. Provisions which enable TPP members to update the agreement to address new trade issues as they arise.

TPP Competition Policy

The framework of the agreement indicates that TPP partners will formulate a competition policy to ‘promote a competitive business environment, protect consumers and ensure a level playing field for TPP companies’.  This will be achieved through regulatory coherence between TPP countries, reducing regulatory and other barriers to foreign markets and promoting co-operation between national regulatory bodies.

While the substantive details of the TPP competition policy are yet to be finalised, reports from recent TPP negotiations indicate that significant progress has been made on the TPP competition chapter, including:

  • The minimisation of regulatory and other non-tariff barriers to foreign markets;
  • The increase of competitiveness and business facilitation, including ‘focusing holistically on ensuring that we are developing the production and supply chains that will enhance our competitiveness and maintain jobs in our markets’; and
  • Increased participation of small and medium-sized enterprises in regional trade.

Similar to Australia’s existing Free Trade Agreement with the United States, the TPP is likely to include a requirement that TPP partners inform each other of competition law issues in each other’s jurisdictions and co-operate in the enforcement of competition laws through the exchange of information between national regulators.

So what does this all mean for Australia?

At this stage it does not appear that substantive changes to Australian competition law are likely to result from the TPP.   However, the TPP may see greater co-operation between the ACCC and other TPP regulators, such as the US Department of Justice, in investigating and prosecuting anti-competitive conduct, particularly international cartels.  There are already a range of other bilateral and multilateral free-trade agreements in force or currently being negotiated (including existing bilateral agreements between Australia and TPP partners Chile, Singapore, US and NZ) that provide for this kind of cooperation.  As the 16th round of negotiations commence in Singapore this week, further implications of this agreement should become apparent in the coming weeks.

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About The Author

is a law graduate in King & Wood Mallesons' Melbourne office.

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