Reforming WTO Rules on State-Owned Enterprises: SOEs and Financial Advantages

Wu, Yingying | March 1, 2019

State-owned enterprises (SOEs) are pervasive worldwide nowadays, particularly in the emerging countries. SOEs are currently more active in global markets than decades ago, engaging in cross-border trade and investment. Concerns, hence, have arisen, that there are negative effects on global markets associated with SOEs usually receiving various advantages, particularly, such as financial advantages. Meanwhile, SOEs often act as the givers of financial advantages. Current WTO rules are not sufficient to address the problem of SOEs as givers of financial advantages, and the problem of SOEs as recipients of financial advantages. This article tries to push the current WTO rules to their limits, and to find potential approaches to address those problems. The efforts, however, failed to some degree. Hence, the article makes recommendations to improve them by three types of proposals, i.e., trade remedies proposals, trade rules proposals, and a competition rules proposal within the framework of the WTO. In the end, the author also engages with other academic articles on SOEs, and where they support the author’s position or differ from it. Explanations are also given on how proposals made by the author are similar to or differ from what was proposed in the Trans-Pacific Partnership (TPP) and why the author’s approach is better.