Study on Unfair Trade Practices in select ASEAN countries

Hanoi, 11 March 2011

Background• The prevalence of UTPs and their significance towards

business growth & consumer welfare• ASEAN context:• 8 out of 10 have laws & regulations dealing with UTPs in

some forms• All 5 countries covered under this project have laws &

provisions prohibiting and dealing with UTPs in different forms

• The AEGC & Blueprint towards an ASEAN Economic Community by 2015

• The knowledge gap==> Calling for research, advocacy & capacity building

activities to raise the ante of UTPs in the region

The Research Questions

1. What constitute UTPs in the ASEAN context?2. Costs vs. benefits of regulating UTPs in a transition/developing

economy3. The special development context for promulgating

laws/regulations on UTPs in transition/ developing economies – the local factors

4. Separation of UTPs from RBPs and/or consumer protection issues in the law books

5. Separate regulatory body for UTPs or hybrid model6. Whether it is possible and how to estimate the harms inflicted by

UTPs on consumers, SMEs, general welfare and growthWhether it is possible and how to account for the benefits that may accrued from regulating UTPs in the context of transition/ developing economies

7. Extra-territorial aspects of UTPs in ASEAN scope for cross-border enforcement or regional cooperation on UTPs

ObjectivesThe overall objective of this proposed project is to generate and promote substantive discussions/dialogues in the Association of Southeast Asian Nations (ASEAN) on issues related to unfair trade practices (UTPs). This is expected to lead and contribute to the improvement of the relevant legal and institutional frameworks in ASEAN countries that seek to sustain a fair business environment therein and ensure equitable market outcomes in the long run.

Specific objectives Highlighting to policy-makers and advocacy groups the relevance of

designing appropriate regulatory frameworks to deal with UTPs in select ASEAN countries, by bringing to the fore the prevalence and nature of various UTPs in these markets as well as showcasing their possible harms to competition, business growth and consumers’ welfare;

Promoting public support for the development of such regulatory frameworks by understanding the perceptions and expectations of relevant stakeholder groups (consumers and small enterprises) and infusing these perceptions and expectations into the national discourse within select ASEAN countries on UTPs;

Facilitating common understanding and networking between relevant stakeholder groups (policymakers, the research community and academia, consumers and the business) in select ASEAN countries and region-wide for creating consensus and momentum from the bottom-up for ASEAN-wide discussions on UTPs; and

Deepening the discussion and building capacity amongst members of the ASEAN Experts’ Group on Competition (AEGC) on issues related to UTPs as a starting point for ASEAN-level discussions on UTPs.

Activities

• Country-level research: empirical research, perception surveys & case studies

• Establishment & development of project website & discussion forum

• Policy dialogues with the AEGC

Expected Outputs

• Country reports (published in electronic format)

• Policy briefs• Synthesis report (published in electronic

format)• Policy briefs for the synthesis report• Website & discussion forum• Meeting proceedings

Expected Outcomes Emergence of a resource pool of knowledge for all relevant stakeholder groups

within and outside ASEAN to draw from on UTPs in the region Increased capacity of researchers in the region to undertake research in this

specialised area Increased appreciation by policy-makers and advocacy groups of the prevalence of

and harms caused by UTPs Increased awareness of stakeholder groups, especially the consumers, and the small

business for self protection and contributions to effective law compliance processes Featuring of the perceptions of various stakeholder groups on UTPs in the national

policy discussion Emergence of an informal network of people and institutions which have interests on

the issues to exchange views and knowledge in the ASEAN region Development of common understanding/consensus within and amongst ASEAN

countries on the issues of UTPs Initiation and substantive developments of discussions within and amongst ASEAN

countries on UTPs, the appropriate legal and institutional frameworks to deal with them, as well as possibility of policy coordination and enforcement cooperation

Empirical research

• To answer the research questions• Individualizing the research according to

specific country contexts– The legal & institutional framework dealing with

UTPs– Market behaviours: Sourced from case law

available with the competition or consumer protection authorities ;or information collected from the media and various stakeholders

Perception surveys• Serving many causes at the same time: collecting information,

advocacy, networking, etc• Selective sample – including those who are most informed • Gvt officials – competition & consumer protection authorities• Activists from notable consumer organisations in the country as

representatives of consumers• Chambers of commerce & industry as representatives of the business• A select number of SME proprietors

• The proposed size for each country?• Direct interview method while maintaining confidentiality• Questionnaire designs: based on the framework of the research

questions• General policy issues – theoretical aspects• Hypothetical situations (UTPs) – practical aspects

Case studies• For analysis of the benefits brought about (since UTPs have

been dealt with properly by the laws), as well as the harms inflicted by those specific UTPs. The benefits and/or the harms might be calculated/estimated based on, though not restricted to, the following parameters:• Lost profits claimed by other firms• Differences in consumer spending (real and projected) as a result

of the UTP, compared against household statistics and total industry revenue

• Revenue loss due to the exit/bankruptcy of SMEs, or due to SMEs not entering the market

• Damages other than financial damages claimed by consumers• Value of contracts lost due to the exercise of UTP• Other quantifiable factors

Implementation arrangements• CUTS: • Project management• Coordination• Research in Vietnam• Technical assistance to partners for specific activities

• Country partners:• One lead researcher – country research• Coordination & reporting (every six months)

• Economist/Project Advisor• Project Steering Committee

Tentative schedule of project activities