Liberalization on Trade and Investment and Thai Competition Policy

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1 Liberalization on Trade and Investment and Thai Competition Policy Siripol Yodmuangcharoen * Good morning Mr. Chairman, Distinguished Participants, Ladies and Gentlemen First of all, I would like to introduce myself. My name is Siripol Yodmuangcharoen. I am the Director-General of Department of Internal Trade, one of the departments under the umbrella of Ministry of Commerce, Thailand. Introduction Under the free economic system, the Thai government has introduce and implemented trade and investment liberalization policy because the government believed that such policies will help to enlarge the Thai market and gain more benefits, such as more new entrepreneurs can access to the market, the use and allocation of resources will be more effective, more employment and income distribution, competitive market forces, productivity and comparative advantage. In addition, the consumer will have more choices to consume diversified goods and services at the cheaper prices. * Siripol Yodmuangcharoen, Director-General, Department of Internal Trade, Ministry of Commerce, and Secretary-General of the Office of Thai Trade Competition Commission 1

2 Trade Competition Promotion 1. Policy Frame In order to promote trade competition, the Thai government has introduced competition policy by using market mechanism as an important tool to allocate economic resources effectively. Competition law can help to support market mechanism and maintain fair competition in the market. This policy frame is accordance with the Thai constitution law article 87 which has designated the government must support free economic which relies on market mechanism. The government must supervise fair competition, anti-monopoly, avoid to issue the regulations which is not comply with economic needs and not to compete with private sector. 2. Implementation methods To promote free and fair trade system, the government has eliminated monopoly and tried to reduce controlled products as less as necessary. At present, there are 20 products under control, compare to the past there were more than 100 products were controlled. Additionally, in order to create competition atmosphere and the most flexible in the market, the government has also adjusted the measure from control measures to co-operation measures. To reduce the obstacles of trade competition, the government has deregulated the rules and regulations, such as the permission procedure, discrimination rules, etc. To introduce privatization policy in order to privatize the state enterprises. To supervise monopoly or reduce competition including unfair practices by using the Trade Competition Act

3 Thai Trade Competition Act The Thai Trade Competition Act is aimed to improve market efficiency and protect competition, not competitors. That is the Act will promote competitiveness, production, effective trading system and fair prices. As you know, there are 2 forms of competition law : structural control and conduct control. For the Thai Trade Competition Act, it is conduct control. The reason is because the size of domestic market is small and needs to be enlarged. For the benefit of trading and overall economy, the Thai Trade Competition Act should not be an obstacle to the expansion of domestic businesses. The Thai Trade Competition Act which has been enforced since April 30, 1999 has main provisions about Abuse of dominant position Merger that may result in monopoly or unfair competition Collusion that may restrict competition Unfair Trade practices 3

4 Thailand Enforcement Experience From our enforcement experiences since Four years is quite a very short period of time. We found that major obstacle for effective enforcement is big entrepreneurs are not well educated about the Thai Trade Competition Act. There are 29 cases come into the office since 1999 which 19 cases are abuse of dominant position, 1 case is merger, 6 cases are collusion and 3 cases are unfair trade practices. Cases Received in Thailand Year Compla ints Abuse of Domin Pattern of Action against Trade Merger Collusi on Unfair Trade Practices Others Tot

5 Conclusion Since competition policy is related to trade and investment policy in terms of market access, trading system, and domestic trading. This will create free and fair competition between domestic and foreign entrepreneurs. Therefore, international cooperation in competition policy and capacity building among competition authorities is important and imperative. The supportive co-operation approach is priority consideration. Thailand is appreciated to establish closer cooperation with other countries. Thank you for your attention