Economic Committee Chair Update to the Competition Policy and Deregulation Group

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2008/SOM3/CPDG/009

Agenda Item: 7

Economic Committee Chair Update to the Competition Policy and Deregulation Group

Purpose: Information

Submitted by: EC Chair

Economic Committee Chair Update to the Competition Policy and Deregulation Group

Lima, Peru, August 13-14, 2008

Summary

This paper updates the Competition Policy and Deregulation Group (CPDG) on the outcomes of the Structural Reform Ministerial Meeting (SRMM), the Economic Committee’s (EC) structural reform work programme for 2008, and coordination between the EC and the CPDG.

The Structural Reform Ministerial Meeting (SRMM) was held 3-5 August 2008 in Melbourne, Australia. The SRMM was the first APEC ministerial meeting wholly dedicated to structural reform, reflecting the growing importance placed on structural reform by APEC economies in improving the investment climate in the region; promoting regional economic integration; and underpinning sustainable growth.

The Ministerial Meeting provided an opportunity for Ministers who have undertaken major structural reforms in their respective economies to engage in open dialogue about their experiences of structural reform. Ministers discussed the political challenges of structural reform and how regulatory reform frameworks facilitate structural reform. The SRMM concluded with Ministers reaffirming their commitment to the APEC structural reform agenda in the Joint Ministerial Statement (JMS) and encouraged APEC bodies to work together to further structural reform initiatives. The deliverables from the SRMM were:

·  Endorsement of the Good Practice Guide on Regulatory Reform;

·  APEC Policy Support Unit to undertake necessary research on key elements of the LAISR agenda;

·  Practical support to member economies to successfully undertake structural reform; and

·  Voluntary reviews or self reviews of member economies’ institutional frameworks that support structural reform.

The Economic Committee has continued to implement the LAISR Forward Work Programme in 2008. Some highlights are included below. A more comprehensive record of the outcomes of EC initiatives is included in the body of this report.

·  The APEC Economic Policy Report on Competition Policy will be presented to APEC Leaders in November 2008. The report will serve as a useful reference to Leaders, Ministers, and various committees on the role of competition policy in promoting structural reform. Using individual APEC economy reports on competition policy, the report will identifying the economy-specific and crosscutting regional challenges and priorities to help formulate the focus of future competition policy work.

·  The Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Infrastructure Facilities will be held on 15-16 August. The seminar will allow economies to exchange experiences and identify good practices on regulatory and competition policy issues related to transport infrastructure in APEC Economies. The seminar will focus on regulation of ports, airports, roads, and rail and aims to develop concrete methods to achieve further improvement on regulatory issues in transport infrastructure, including capacity and institution building activities.

·  The Roundtable Discussion on Regulatory Reform, held on 25 February encouraged economies to share experiences of the attributes of a robust regulatory reform framework and raise awareness and encourage policy makers to test their own regulatory structures and review processes.

Forward Work Programme to Implement LAISR

On 5-6 September 2007, APEC Ministers endorsed a detailed and ambitious multi-year work programme for the EC to implement the Leaders’ Agenda to Implement Structural Reform (LAISR). This work programme is organised under the five LAISR themes of regulatory reform, competition policy, corporate governance, public sector management and strengthening economic and legal infrastructure, and will guide the activities of the EC through until 2010. The EC has, and will be undertaking a number of initiatives in 2008 to progress its multi-year work programme, including:

Regulatory Reform

·  The Good Practice Guide on Regulatory Reform is aimed at providing economies with useful tips and practical experiences on good practice for regulatory reform, including regulation making, review and enforcement. The Guide was welcomed by Ministers at the SRMM in August.

·  The Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Infrastructure Facilities will be held on 15-16 August. The seminar will allow economies to exchange experiences and identify good practices on regulatory and competition policy issues related to transport infrastructure in APEC Economies. The seminar will focus on regulation of ports, airports, roads, and rail and aims to develop concrete methods to achieve further improvement on regulatory issues in transport infrastructure, including capacity and institution building activities.

·  The Consultancy Study by the World Bank on Measuring the Ease of Doing Business in APEC being undertaken 2008-2009 will look at the impact of regulatory reform on a range of macro-level economic indicators such as economic growth, inward foreign direct investment and job creation, as well as the impact of regulatory burden on firm level indicators like job creation and investment. The study will include case studies of reform and also identify priorities for regulatory reform for APEC economies.

Competition Policy

·  The APEC Economic Policy Report on Competition Policy will be presented to APEC Leaders in November 2008. The report will serve as a useful reference to Leaders, Ministers, and various committees on the role of competition policy in promoting structural reform. Using individual APEC economy reports on competition policy, the report will identify the economy-specific and crosscutting regional challenges and priorities to help formulate the focus of future competition policy work.

Public Sector Governance

·  A roundtable discussion on How ResultsBased Management can be used to Balance Accountability and Innovation in the Public Sector held on 26February heard from government practitioners and business on how an economy can effectively use results-based budgeting to help achieve a balance between accountability and innovation in the public sector.

·  A Bibliography of Resources on Public Sector Governance has been prepared to increased knowledge on best practices and practical measures to strengthen public sector governance. The bibliography identifies work done to date on public sector governance within APEC and by other international organisations, and was tabled at EC 1 in February 2008. A copy is available on the APEC EC Collaboration Site.

Corporate Governance

·  A Roundtable Discussion on Corporate Governance Challenges and Priorities scheduled for 19 August 2008 will explore corporate governance challenges and priorities, including transparency and disclosure, shareholder rights and participation, and board responsibilities. The seminar aims to affirm or endorse the “OECD Principles of Corporate Governance” and develop a plan for implementation of the principles in an Asia-Pacific context.

·  A Workshop on Corporate Governance Reform will be held on 17 August 2008 to discuss the importance of corporate governance, examine tools to help pursue reform processes, and discuss international corporate governance principles. The workshop will involve experts from the World Bank/IMF/OECD, ABAC, relevant think tanks in the APEC region, and officials from member economies, with each group sharing its perspectives on keys to effective implementation of corporate governance reforms.

Strengthening Economic and Legal Infrastructure

·  A Consultancy Study on Cross-Border Mergers and Acquisitions being undertaken in 2007-2009 aims to estimate the impact of mergers and acquisitions on greenfield FDI, external trade and economic growth in the APEC economies. The study will look at the implications of M&As for trade and investment policies and market and industry regulations.

EC and CPDG Coordination

The change to the formal reporting lines of the CPDG from the Committee on Trade and Investment (CTI) to the EC at the beginning of 2008 reflects the increasingly interconnected and complementary nature of the work being undertaken by the EC and the CPDG. It is anticipated that the change of reporting lines will assist the EC’s Competition Policy Friends of the Chair (FotC) Group and the CPDG to further coordinate their activities, and to ensure that APEC’s structural reform agenda is progressed in a consistent and coherent way.

The CPDG and EC activities are complementary, with the CPDG having a clear practitioner focus and a focus on capacity building work, and the EC taking a higherlevel economy wide view of competition policy. The CPDG Convenor and the Coordinator of the EC FotC Group on Competition Policy are consulting regularly on their respective work programmes, and opportunities for joint work, such as the upcoming joint EC-CPDG Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Infrastructure Facilities being held on 15-16 August.

Economic Committee Chair Succession

New Zealand’s term as Chair of the EC will be completed in 2008. Nominations for the 2009-10 EC Chair closed in late June, with Japan putting forward a candidate. It is anticipated that the 2009-10 Chair will be agreed at EC2 2008, and presented to SOM3 for endorsement.