Country

Overall project value

Proportion carried out by legal entity (%)

No of staff provided

Name of client

Origin of funding

Dates (start/end)

CSME Member States

EUR 65,000

100

1

CARICOM Secretariat/CSME Unit

EDF

04/2010 – 09/2010

Detailed description of project

Type of services provided

Thirteen CARICOM Member States are currently in the process of establishing the CSME. This process entails, among other things, the integration of national goods, services and factor markets through intra-regional liberalization and regulatory harmonization and, as a result, the creation of a single, seamless market space within the Community. The Revised Treaty of Chaguaramas, adopted in 2002, establishes the legal basis for the CSME. A key addition to the Revised Treaty was the introduction of regional and economy wide competition policy and rules. However, the treaty does not make specific reference to the treatment of mergers and takeovers or on the alteration of market structures leading to market dominance within the CSME. The non-inclusion of merger control provisions is significant given the fact that mergers and acquisition play a very important role in the creation and development of competitive markets.

The objective of this project is to provide CARICOM’s Council of Trade and Economic Development (COTED) and the CARICOM Competition Commission with recommendations for the treatment of mergers and acquisitions within the CSME. In order to do this, our analysis includes four perspectives: political, legal, institutional and economic.

  • The main purpose of the economic analysis is to assess the economic and social impact which the concentration of markets through mergers and acquisitions may have in the CSME, both at the national and common market level.
    • Inventory of national, regional and international mergers and acquisitions since 2001;
    • Perceived impact on competition and competitors: market power, market concentration, employment, prices in affected sectors;
    • Reasons and justifications for mergers and acquisition;
    • Role of government in the transaction, views and reactions of competitors.
  • With regard to the political dimension, the key issue is to define core principles which will allow striking the balance between industrial policy objectives and the Revised Treaty's objective to foster competition in the internal market.
  • The analysis of legal issues includes an analysis of the provisions in the Revised Treaty and of Member State regulations. Furthermore, the analysis of CARICOM documents will be complemented by a review of the treatment of mergers and acquisitions in other regional integration and trade treaties, including the EU and SADC, and the proposals for establishment of rules for competition currently being discussed in the WTO Doha Round.
  • The institutional angle is covered by assessing the current capacities of the (few) existing competition authorities in the CSME and drawing lessons from institutional frameworks established in other countries.

The expected output of the project is that a policy for the treatment of mergers and acquisitions within the CSME is developed which articulates:

  • the scope, critical elements and related issues for a common CSME regime on mergers and acquisitions;
  • modalities for implementation of the common CSME policy on mergers and acquisitions; and
  • the rules and disciplines to be observed by Member States for treating with mergers and acquisitions in the CSM
Development of a regional competition policy and legal framework for the treatment of mergers and acquisitions.

Study on the effect of mergers and acquisition on competition in CSME and recommendations for regional policy based on:
  • Desk research (Revised Treaty, competition laws and policies of member states, available research studies);
  • Questionnaire based data collection from CSME Members;
  • Field visits and consultations of CSME Member States.
  • Validation workshop