A converging competition agenda for the prosperity of Mexico and the United States

Click here to read the full article online

Through an announcement that surprised the world-wide competition community, on July 9th the United States Government published the Executive Order on Promoting Competition in the American Economy (Executive Order).

Said Executive Order recognizes the benefits of competition by indicating that sustained economic prosperity requires an open and competitive economy. It underscores that competition generates more choices for small businesses to sell their products and allows them to obtain higher profits; opens new opportunities for entrepreneurs to experiment and innovate with new ideas which improve citizens’ quality of life; and provides the general population with more and better purchase choices, by allowing access to higher-quality products and services at lower prices.

The text drew attention because the Government itself points out that the United States’ economy has concentrated over the past decades and lack of competition has weakened some markets, denying citizens the aforementioned benefits. In order to revert this situation, it recognizes the need for an integral competition policy, whereby diverse government agencies (sectoral regulators) coordinate with competition authorities. According to the Executive Order, government agencies must identify and, according to each case, modify or eliminate regulations which pose unnecessary barriers to market entry or suffocate competition.

Similarly, Mexico’s Federal Economic Competition Commission (COFECE) has noted that, to achieve competitive markets in Mexico, authorities in diverse areas of government must work together, as on many occasions a lack of competition derives not only from anticompetitive conducts by economic agents, but also from rules that favor concentration, protect incumbents’ market share and/or enable breaching the competition law. For this reason, COFECE has analyzed and diagnosed diverse markets which are relevant for the national economy, and put forth recommendations which may be implemented by sectoral regulators to eliminate obstacles to the entry of new suppliers, so Mexican families and enterprises may enjoy the benefits of competition.

In the context of the U.S.-Mexico High-Level Economic Dialogue that will take place in the following days, and which considers the achievement of sustained economic prosperity as a topic in its agenda, COFECE publishes this document highlighting some of the markets it has analyzed and that coincide with those covered by President Biden’s Executive Order. It also summarizes some of its recommendations to inject competition into the Mexican economy which, in many cases, appear to be similar to those put forth by the Executive Order.