Is It Possible to Use State-Owned Enterprises to Promote Industrial and Technological Development Under Article 17.4 of the CPTPP?

Abstract

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) establishes, in its Chapter 17, the most extensive ‘behind the border’ regulation of stateowned enterprises (SOEs) among the bilateral and multilateral treaties. Prima facie, its rationality can be explained by the original purpose of the United States (former drafter of the Trans-Pacific Partnership Agreement (TPP)) to discipline the state capitalism policies employed by some Asian signatories. Considering this context, this article examines the meaning of the key normative concepts contained in Article 17.4 of the treaty (i.e., ‘commercial activities’, ‘non-discrimination’ and especially ‘commercial considerations’) and discusses to what extent such concepts recognize or restrict the freedom of the Parties to create and manage SOEs committed to promote national industrial and technological development, using as benchmark for this assessment Article XVII of the GATT and the interpretations made by the WTO adjudicators. It concludes that the wording of Article 17.4 is compatible both with an interpretation that allows the existence of such types of entities and with an interpretation that does not. State-owned enterprises, non-discrimination, commercial considerations, differential treatment, industrial development, competition, trade, mission