From Effect to Behaviour: Regulating State-Owned Enterprises as Competitors in Trade Agreements

In recent years, the attempt to curb state-owned enterprises (SOEs) has resulted in dedicated rules in trade agreements. This paper reveals significant paradigm shifts in cross-border SOE regulation by exploring the emerging SOE rules and contrasting them with SOE disciplines in World Trade Organization (WTO) agreements. First, the emerging SOE rules shift the emphasis from regulating trade measures to the competitive behaviour of SOEs. More importantly, the emerging SOE rules are characterized by excessive focus on behaviour analysis and a per se approach. Under a per se approach, a violation of the emerging SOE rules could be established regardless of whether the behaviour of an SOE caused a harmful trade or competition effect. Finally, in light of SOE reform in China, the article contends that the emerging SOE rules' behaviour analysis deviate cross-border SOE regulation from its primary goal of levelling the playing field.