APEC or TPP: which is more important?

Asia-Pacific Economic Cooperation (APEC) was established in 1989. The organization includes 21 countries, the majority of which are located along the Pacific Ocean coastline. Up to November 1998 Russia has completed all procedures of entering the APEC. The strategic goal of the entrance is creation of the system of free and open trade and permissive investment conditions in the Asia-Pacific Region (APR) to 2020.

The regular annual APEC summit was held in the Philippines in November 2015. Presidents and governments’ executives of the APR discussed the international trade as a declared subject along with the following issues: ways of commercial relations further development; increasing competition between China and the USA; prospects of the Trans-Pacific partnership (TPP) which is extensively promoted by the USA; Chinese idea of the Free Trade Area of the Asia-Pacific (FTAAP) etc. 

Earlier it was noted that the TPP is a local partnership with the USA playing a key role. Russia and China are not considered as members of the partnership, despite their active role in the APR economy. Moreover, the government leaders were confused with the secrecy of negotiations. There are backgrounds to believe they were held under the USA pressure as a chance to announce about the established partnership prior to the APEC summit. That is why the TPP is considered as the USA’s tool of impact in the region and confrontation with China. Additionally, it is supposed the TPP members will get new possibilities of entering the APR markets. 

At the APEC forums China has marked the following FTAAP advantages: free trade zone (FTE) serves to the integration of regional economies and prevents their undesirable fragmentation; arranged settlements create favorable conditions for achieving agreements; partnership is implemented under the terms and conditions of the World Trade Organization (WTO). For China the key point  is the inclusion of the country in the FTAAP and possibility of being its leader.   

The positive decision of the summit is confirmation of creating the common free trade zone in the APR up to 2020 by the member countries. The TPP is supposed to become an economic basis allowing the USA to pursue their interests in the region. Moreover, through implementing the new rules of international trade, reviewing the standards, new approach to the investment activities, the partnership can positively influence the non-member countries.  

Therefore, the establishment of the common FTE in Asia and Latin America, merging the USA and China, is declared at the level of presidents and executives of 21 APR governments. The APEC leaders agreed that further trade and integration processes will be implemented under the WTO rules. The leaders also released the announcement on the WTO role in the liberalization of the world trade. After all, the performance of the agreements will allow to implement the new urbanization policy, support innovations of small and medium businesses, as well as investment in human capital, regional plans of alternative energy sources development and corruption control in the member countries. All this should have positive impact on the APR development. 

Changes to the antimonopoly legislation will come into force in January 2016

Less than 4 years passed since the enactment of the so-called “third antimonopoly package”. The antimonopoly practice for the previous period showed the necessity of its future development.

By the Federal law of the Russian Federation as of October 5th, 2015 №275-FZ “On introducing amendments to the Federal Law “On Protection of Competition” and certain legislative acts of the Russian Federation” the following “forth antimonopoly package” will be put into force since January 5th, 2016.

In the Federal law as of July 26th, 2006 №135-FZ “On Protection of Competition” the changes were made in 19 articles, 3 articles were supplemented, 1 chapter and 13 new articles were initiated. The changes were made as well to Article 7 of the Federal law as of August 17th, 1995 №147- FZ “Concerning Natural Monopolies” and to Article 2 of the Federal law as July 13th, 2015 №250- FZ “On introducing amendments to the Federal law “On Protection of Competition” and certain legislative acts of the Russian Federation”. In the Code of the Administrative Offences of the Russian Federation the changes were made in the 9 articles, 1 new article was supplemented and 1 article was recognized void.

All the above-mentioned refer to scale changes in the antimonopoly legislation.

Firstly, at the moment all the cases of the unfair competition such as using of else’s trademark, advertising of “the best product in the market” not being confirmed by the researches are clearly designated. Previously it was considered as a violation as well; however it wasn’t embodied in the documents.

Secondly, the joint venture agreements between enterprises using primarily for reduction of goods and services cost were given the legal status. Formerly the companies ought to pay a penalty amounting to 15 percent of the revenue for this.

Thirdly, the Federal Antimonopoly Service (FAS) was imposed the duty of prejudicial settlement of the issues related to claims against companies. It is enshrined in the law by the term “preliminary conclusion procedure”. Entrepreneurs for their part were entitled the right of prejudicial appeal decision of the FAS territorial administrations in its central office.

The amendments on responsibility for violation of antimonopoly law by the state government bodies are very important. In the first place it refers to the fact when the officers lobby the interests of one company and restrict the access to the market of the others. At present the Federal Antimonopoly Service is eligible for caution of the state official of various levels. The ceiling value of the penal sanctions for the official is raised from 30 to 50 th RUB. Moreover, the authority was entitled the right to restrict the creation of new state or municipal enterprises in the established markets.

According to experts, the adopted amendments give a clear understanding of an unfair competition. On the one hand, the changes are aimed at reducing the administrative pressure upon business, on the other - at raising responsibility of the state authorities for the antimonopoly law compliance.