TPP’s State-owned enterprises (SOE) rules take on a new and growing challenge in international trade and investment. While fully respecting the important role SOEs play in the United States and elsewhere, TPP ensures that foreign governments will not use these enterprises to gain unfair advantages over private American businesses and their workers. These ground-breaking provisions will create worldwide precedents that can help ensure fair competition in the global economy of the future.

HOW TPP ENSURES FAIR COMPETITION WITH SOEs

TPP helps ensure fair competition by making SOEs operate on commercial grounds, increasing transparency, and requiring regulatory fairness. This is the first trade agreement to include this scope of rules on SOEs. TPP requires TPP countries to:

• Ensure that SOEs make commercial purchases and sales on the basis of commercial considerations, except when doing so would be inconsistent with any mandate requiring an SOE to provide public services (for example, as the U.S. Postal Service does).
• Ensure that SOEs that receive subsidies do not have an advantage or undercut U.S. private firms. If they do, we will for the first time in a U.S. trade agreement, have the ability to initiate dispute settlement and impose trade sanctions.
• Regulate SOEs and private companies in an impartial manner, without providing preferential treatment to local SOEs.
• Ensure transparency by publishing complete lists of national SOEs and, upon request, sharing information about government ownership, control, and non-commercial assistance to SOEs.
• Ensure that national courts have full jurisdiction over foreign SOEs located within their territory, so that they cannot avoid national laws through claims of sovereign immunity.
• Make all SOE provisions fully enforceable through state-to-state dispute settlement.