State-owned enterprises as actors in international trade

SOEs are growing actors in international trade and global value chains. This chapter explores the extent to which the international trading system, under the rules of the WTO and other international agreements, are equipped to cover market distortions caused by financial and regulatory support granted to (and by) SOEs. The chapter points out that trade rules are ownership neutral, but it remains debated whether a specific set of rules are need to cover SOEs. The chapter explores regulatory frameworks and practices at the domestic level which can safeguard a level playing field. It covers existing binding international agreements and treaty practice, and explores potential gaps in their coverage. It points to the need for sounder incentives for states and SOEs to abide by market and transparency principles, including the consideration of rules on subsidies granted to SOEs as a priority for further deliberations in the international trade context.