Applying Competition Policy to Optimize International Trade Rules

32 Pages Posted: 8 Mar 2017  

Hyo-young Lee

Center for International Commerce and Finance, Seoul National University

Date Written: February 27, 2017

Abstract

This paper delves into the relationship between trade and competition, which has long been a subject largely untouched since the issue had been dropped from the multilateral trade agenda in 2003. The need to incorporate elements of competition policy into international trade rules has long been discussed in the context of making the international trade regime more effective. The issue has gained more attention as state-owned enterprises (SOEs) began to emerge as new influential players in the international market, competing with private enterprises on an unequal footing. A growing number of bilateral trade agreements have included chapters on competition policy, albeit with rules that do not have sufficient binding force for disciplining the business practices of state-owned enterprises. The recently concluded Trans-Pacific Partnership (TPP), however, has introduced innovative rules for disciplining the competitive practices of SOEs by integrating the existing WTO disciplines on subsidies with competition rules. In this article, "competitive neutrality", the fundamental principle underlying the SOE disciplines, is used as a framework of analysis for understanding the new disciplines and obligations in the SOE rules. Several legal issues and challenges are identified that are relevant for applying the new rules in the real world, and implications are derived for future rule-making involving other new trade issues.

Keywords: Competition policy, State-owned enterprises, Subsidies, WTO, TPP

JEL Classification: K33, L32, L41

Suggested Citation

Lee, Hyo-young, Applying Competition Policy to Optimize International Trade Rules (February 27, 2017). KIEP Research Paper, Staff Papers 17-01. Available at SSRN: https://ssrn.com/abstract=2929110

Hyo-young Lee (Contact Author)

Center for International Commerce and Finance, Seoul National University ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

Paper statistics

Downloads
54
Rank
316,874
Abstract Views
292