1887

OECD Trade Policy Papers

This series is designed to make available to a wider readership selected trade policy studies prepared for use within the OECD.

NB. No. 1 to No. 139 were released under the previous series title OECD Trade Policy Working Papers.

English

Bringing together international trade and investment perspectives on state enterprises

State enterprises (SEs) have been increasingly competing with private firms in international markets, in terms of both cross-border trade and FDI. Given both the potentially positive contribution internationally trading and investing SEs can make, as well as the concerns raised about their competitive behaviour, there is an interest in elaborating policy approaches that minimise any potentially distortionary effects and at the same time restrain protectionist policies that may be directed at SEs. The growing interdependency between trade and FDI, the increased contestability and complexity of markets and the varied nature of state intervention in the economy today mean that policy approaches need to consistently cover issues which transcend the traditional boundaries between trade, investment and competition. This paper investigates how international trade and investment perspectives on SEs are being brought together in international trade and investment agreements and how they could be integrated further. It does so by examining both the ability of existing provisions to ensure a level playing field between private firms and SEs and the disparity in approaches to regulating international activities of SEs between international trade and investment treaties. The paper first reviews the work documenting international activities of SEs and the associated concerns, highlighting the example of the steel sector. Next, it discusses some of the non-binding approaches that can be used to level the playing field, before reviewing relevant provisions in multilateral and preferential trade and investment agreements and identifying potential gaps. The concluding section summarises the results and identifies key issues for policy consideration.

English

Keywords: state-owned enterprises, investment agreements, SOEs, regulation, trade agreements, state enterprises
JEL: F5: International Economics / International Relations, National Security, and International Political Economy; F23: International Economics / International Factor Movements and International Business / Multinational Firms; International Business; F13: International Economics / Trade / Trade Policy; International Trade Organizations; F6: International Economics / Economic Impacts of Globalization; H4: Public Economics / Publicly Provided Goods; H1: Public Economics / Structure and Scope of Government; F21: International Economics / International Factor Movements and International Business / International Investment; Long-term Capital Movements; G34: Financial Economics / Corporate Finance and Governance / Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance; K2: Law and Economics / Regulation and Business Law; L44: Industrial Organization / Antitrust Issues and Policies / Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations; K33: Law and Economics / Other Substantive Areas of Law / International Law; L5: Industrial Organization / Regulation and Industrial Policy; H2: Public Economics / Taxation, Subsidies, and Revenue; H8: Public Economics / Miscellaneous Issues; F15: International Economics / Trade / Economic Integration; G38: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: Government Policy and Regulation; F02: International Economics / General / International Economic Order and Integration; L3: Industrial Organization / Nonprofit Organizations and Public Enterprise
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