Promotion of Competitiveness for ASEAN Integration (COMPETE)

Project description

Project title: Promotion of Competitiveness within the Framework of the Initiative for ASEAN Integration (COMPETE)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Countries: Cambodia, Laos, Myanmar, Viet Nam
Lead executing agency: Association of Southeast Asian Nations (ASEAN)
Overall term: 2018 to 2021

gizIMAGE-competitiveness-asean-compete

Context

Removing barriers to trade in services and setting up more effective competition regimes are two important key elements of the ASEAN Economic Community (AEC) in order to create a common and viable market. The new ASEAN Trade in Service Agreement (ATISA), was signed in April 2019. It encourages a shift from a positive list approach to a negative list approach for the negotiations of further services liberalisation. In a negative list approach, all sectors are by default open to foreign service suppliers. Member States can set exemptions in the annexes of ATISA and determine sectors or subsectors which they do not wish to fully liberalise. As Cambodia, the Lao People’s Democratic Republic (PDR), Myanmar and Viet Nam (CLMV) do not have much experience with negative list approaches, they require more work and time to build up sufficient institutional and human capacities.

A reduction of trade barriers usually contributes to greater competition. However, opening service markets may also increase the risks of market concentration and abuse of market power. To mitigate these risks, further steps for liberalising trade in services require complementary activities to strengthen national competition regimes.

The project is supporting the Initiative for ASEAN Integration (IAI). The IAI was launched by ASEAN in 2000 to support ASEAN’s newer Member States (Cambodia, Lao PDR, Myanmar and Viet Nam) in implementing ASEAN commitments and agreements for further regional integration. The beneficiaries of the project are, therefore, the approximately 185 million consumers in Cambodia, Lao People’s Democratic Republic (PDR), Myanmar and Viet Nam (CLMV) who will benefit from an improved selection of cheaper and higher-quality products and services. Furthermore, especially SMEs in CLMV will have better chances to realise their growth potential when international and national barriers to market entry are removed further.

Objective

CLMV countries apply an investment-conducive and pro-competitive implementation of ASEAN agreements in the areas of “trade in services” and “competition policy”.

Approach

At the ASEAN level, the project supports the implementation of ASEAN key strategies in the fields of competition policy and trade in services. These strategies, by definition, are used for processes of ASEAN Economic Integration and shape the institutional framework for an investment and competition-promoting regulatory practice of the ASEAN member states beyond the time frame of the project. Here the project works together with the relevant ASEAN sector bodies, namely the ASEAN Experts Group on Competition (AEGC) and the ASEAN Coordinating Committee on Services (CCS).

In parallel, the project supports the four CLMV countries in improving institutional effectiveness, hence strengthening the institutions involved in the implementation of existing laws and ASEAN agreements on trade in services and competition (especially ministries of commerce/trade and competition authorities). To ensure an effective implementation, the related ministries and agencies will get technical assistance in developing regulations, guidelines, policy reviews and other supporting documents. This includes improving inter-ministerial coordination and public-private dialogues in a more coherent and strategic approach.

A special focus of the project is on improving human resource development systems. For this purpose, suitably qualified staff are identified and trained in the responsible ministries and authorities in order to act as multipliers (trainers or mentors). In addition, the access to various learning materials (including e-tools) will be improved, including support for more in-depth national analyses and research in competition policy and trade in services.

The project's effects make a direct contribution to the implementation of the ASEAN Economic Blueprint 2025 in the CLMV countries and anchor effects beyond the duration of the project.

Further Information