An analysis of the new trade regime for state-owned enterprises under the Trans-Pacific Partnership Agreement

This paper analyses the new discipline on state-owned enterprises contained in the recently concluded Trans Pacific Partnership Agreement, and evaluates various factors that influenced the shaping of its specific rules. The new discipline consolidates and strengthens related provisions in current trade regimes, reflects various aspects of trade disputes between China and the US, and adopts, as its general underlying rationale, the principle of competitive neutrality. The new discipline contains elements that may challenge the multilateral trade regime, and may serve as a role model in regulating state-owned enterprises, including subsidies in services trade in other on-going trade negotiations. The new regime makes us think hard about fundamental issues regarding enforcement of competition policy against state-owned enterprises, treatment of non-market economies, and how to deal with effects of subsidies in international trade, bringing competition issues back on the trade agenda.