6 - Emerging Approaches to Regulating State-Owned Enterprises

Summary

Chapter 6 provides a critical evaluation of the new rules on SOEs developed in international trade and investment agreements, with the CPTPP as the leading example. Despite its reputation as a ’twenty-first century high-standard trade agreement’, we argue that the SOE rules in the CPTPP do not add much to the existing rules in the WTO and are less rigorous than China’s WTO-plus obligations discussed in Chapter 5. This chapter then examines some major post-CPTPP trade and investment agreements with significant rules on SOEs, including the EU–Japan FTA, the EU–Vietnam FTA, the United States–Mexico–Canada Agreement (USMCA) and the CAI. As one of China’s latest international agreements, the CAI is also the first treaty where China agreed to SOE rules outside the WTO. Again, the main substantive obligation here – the one on commercial considerations – simply repeats the existing obligation in China’s WTO accession package. While all of the FTAs discussed in this chapter should be praised for setting new and higher standards of transparency, they do not resolve the longstanding problem of enforcement – the most challenging issue under the WTO’s transparency regime.