Deliverables and pledges under Ethiopian Trade Competition Law: the need for private sector empowerment and enablement

Author:Elias N. Stebek
Position:Elias N. Stebek (LL.B, LL.M, PhD), Associate Professor, St. Mary's University, School of Graduate Studies. I thank the anonymous reviewers for their comments. Email: <elstebek@gmail.com> , <eliasnr@smuc.edu.et>
Pages:32-63
SUMMARY

This article examines whether Ethiopia’s Trade Competition and Consumer Protection Proclamation enacted in 2014 can deliver its pledges toward ensuring fair trade practices. Trade competition envisages viable competitors in the context equal opportunities in operation and access to factors of production of goods and services. It is under such setting that the production and distribution of goods... (see full summary)

 
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Deliverables and Pledges under Ethiopian
Trade Competition Law:
The Need for Private Sector Empowerment and Enablement
Elias N. Stebek
Abstract
This article examines whether Ethiopia’s Trade Competition and Consumer
Protection Proclamation enacted in 2014 can deliver its pledges toward
ensuring fair trade practices. Trade competition envisages viable competitors in
the context equal opportunities in operation and access to factors of production
of goods and services. It is under such setting that the production and
distribution of goods and services can match the level of consumer demand and
choice (in kind, quantity, quality and price) envisaged in the law. On the
contrary, private economic actors cannot be protected from unfair business
practices in the context of pressures from non-private sector economic
hegemony and politically affiliated oligopolistic entities. It is argued that a
broad-based private sector and its enablement including the need to address
gaps in Ethiopia’s land laws, an enhanced autonomy of the Trade Competition
and Consumer Protection Authority (TCCPA) in the context of good
governance (which includes rule of law and independent judiciary),
representation of stakeholders in the Authority, and the empowerment of civil
society organizations are crucial to deliver the pledges embodied in Ethiopia’s
competition law.
Key terms
Trade competition, consumer welfare, private sector empowerment, land
policy, oligopolistic pressures, Ethiopia
DOI http://dx.doi.org/10.4314/mlr.v11i1.2
This article is licensed under a Creative Commons Attribution-NonCommercial-
NoDerivs (CC BY-NC-ND)
______________
Introduction
There have been specific laws on trade practices in Ethiopia since the Trade
Practices Decree of 19631 and the Trade Practices Proclamation of 19652 which
Elias N. Stebek (LL.B, LL.M, PhD), Associate Professor, St. Mary’s University, School of
Graduate Studies. I thank the anonymous reviewers for their comments.
Email: <elstebek@gmail.com> , <eliasnr@smuc.edu.et>
1 Trade Practices Decree No 50/1963.
2 Trade Practices Proclamation No. 228/1965.
Deliverables and Pledges under Ethio pian Trade Competition Law33
regulated trade competition with some peripheral reference to consumer
protection. After the hibernation of these laws due to a centrally planned
economy influenced by Marxist policies from 1975 to 1991, a proclamation was
enacted in 20033 to regulate trade practices, followed by another proclamation
on trade competition and consumer protection in 2010.4 The current Trade
Competition and Consumer Protection Proclamation No. 813/20135 (which was
enacted in March 2014),6 substitutes the earlier proclamations. These specific
laws substantiate the provisions in the Civil Code of 1960 and the Commercial
Code of 1960, special legislation on mandatory safety standards, Ethiopia’s
criminal law and other laws that embody provisions relevant to trade
competition and consumer protection.
The unified approach of Proclamation No. 813/2013 (TCCPP) has enabled it
to regulate trade competition and consumer protection. This article focuses on
trade competition and examines whether the Proclamation effectively delivers its
pledges toward ensuring fair trade practices. Section 1 addresses the nexus
between trade competition and consumer welfare. Section 2 states the
prohibitions (that are embodied in the Trade Competition and Consumer
Protection Proclamation) against anti-competitive (restrictive) business practices.
Administrative enforcement of trade practices and the gaps thereof are
highlighted in Section 3.
Section 4 presents an overview of comparative experience in state
intervention toward private sector empowerment in contrast to predatory state
interventions that adversely affect economic performance. Sections 5 to 8
examine the impediments against and the way forward in the implementation of
the pledges toward fair trade practices that are embodied in the Trade
Competition and Consumer Protection Proclamation. Even though the
competition regime under Proclamation No. 813/2013 is fairly specific and
detailed, these sections discuss the challenges in fair competition under settings
of excessive non-private sector hegemony, oligopolistic vested interest and
problems in land tenure security. The discussion in these sections thus shows the
need for the empowerment and enablement of the private sector.
3 Trade Practice Proclamation No. 329/2003.
4 The Trade Competition and Consumer Protection Proclamation No. 685/2010.
5 The Trade Competition and Consumer Protection Proclamation No. 813/2013.
6 The English version of the Proclamation is unduly designated as Proclamation No.
813/2013 (due to an apparently typographical error in printing on the Proclamation), while
it should have been referred to as Proclamation No. 813/2014 because it was enacted on
March 21, 2014 (Megabit 12, 2006 Ethiopian Calendar).
34 MIZAN LAW REVIEW, Vol. 11, No.1 September 2017
1. The Trade Competition and Consumer Welfare Nexus
Laws on trade competition envisage certain core elements of a market economy,
i.e., “a market equipped with mechanisms allowing competition between
businesses, and the resulting strive for technological progress”,7 market share,
productivity and competitiveness. In centrally planned economies, where the
means of production are state-owned, the economic position of public
enterprises is “institutionalized by the socialist economic order itself” and the
protection of competition “did not make sense”.8
In Hungary, for instance, “competition law fell into a state of hibernation
between 1948 and the 1960s” because “the earlier competition acts were not
officially abolished” under the socialist government “but in practice they were
regarded as ineffective”.9 Citing Kornai,10 Ceres states that the shortage
economy that existed in Hungary during the period, “created a safe market for
the seller and the producer”, and they were as a result “neither interested in nor
motivated by quality investment, product innovation, or delivery times”.11
An economic system need not necessarily be socialist or centrally planned
for competition law to be dormant because other factors, as well, affect the level
of application of competition law. Based on South Korea’s experience, Choi
states that until 1980, “most competition laws appear[ed] to be dormant” owing
to “the absence of a competition law culture and inexperience with
enforcement”.12 Moreover, Choi notes that “competition policy will tend to lose
out in cases of serious conflict with other policy objectives, such as when the
government intervenes in private activities” thereby impeding “the development
of competition law enforcement” and making it “difficult to establish a
competition law culture”.13
South Korea’s competition law regime, “used to be similar to that of other
developing countries before its comprehensive competition law, the Monopoly
Regulation and Fair Trade Act (MRFTA), was first introduced in 1980”.14 Even
7 Magdalena Tulibacka (2009), Product Liability Law in Transition: A Central European
Perspective, Ashgate, p. 4.
8 Katalin Cseres (2004), “The Hungarian Cocktail of Competition Law and Consumer
Protection: Should It Be Dissolved?” Journal of Consumer Policy, 27: p. 46.
9 Ibid.
10 Kornai, J. (2000). The Hungarian reform process: Visions, hopes and reality. In: J. Kornai,
Evolution of the Hungarian economy 1848–1998, Volume II, Paying the bill for the
Goulash communism, pp. 7–119. New York: Columbia University Press, pp. 59, 71.
11 Cseres (2004), supra note 8, p. 46.
12 Yo Sop Choi (2014), “The Rule of Law in a Market Economy: Globalisation of
Competition Law in Korea”, European Business Organization Law Review 15: p. 420.
13 Id. p. 435.
14 Ibid.

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