Trade and competition (laws): Interrelations from a Southern African perspective

Abstract

As a result of the processes of globalisation and of technological revolution, markets now transcend countries’ physical borders. Increasingly interconnected, borderless and digitalised global markets, thus, tend to develop mass markets, increase the integration of enterprises and so produce goods and provide services that are readily accessible for consumers. Easy access improves knowledge transfer and raises economic efficiencies and expectations. However, there are also downsides. The ever-diminishing distinction between goods and services in these markets poses a threat to the diversity of goods and services and, consequently, to small market players at both country and company level. Thus, the rise of anti-competitive cross-border economic activities such as collusion, international mergers and filling dominant positions gives reason to pause and revisit the relationship between competition and trade from the perspective of African countries, where national markets are generally small and where small and medium-sized enterprises (SMEs) represent the majority of market players. While economic analysis of trade on its own often assumes static models, attention to competition and especially to the interface between trade and competition and between its laws and policies reveals possibilities of enhancing the focus on the diversification and development of productive capabilities that are crucial for the economic development of the small-scale national market players, and inclusive growth, within most African states. In this chapter we present such a perspective to economic policymaking in part by distinguishing between trade and competition at the level of economic activity (section 2) and trade and competition laws (section 3) when discussing their interrelations. We illustrate the latter by evaluating whether and to what extent the behaviour of cross-border economic operators is currently disciplined, with a specific focus on South Africa, one of Africa’s largest economies. South Africa has a well-articulated policy architecture for trade and competition; is a party to both major southern African regional agreements, the Southern African Customs Union (SACU) and the Southern African Development Community (SADC); and is involved in recent initiatives directed at African integration. We then conclude the chapter (section 4).