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How preferential trade agreements address market distortions from state enterprises

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Abstract

As large recipients and providers of subsidies, the activities of state enterprises (SEs) have the potential to distort trade flows given their growing role in manufacturing supply chains. Countries thus need to have adequate tools at the multilateral, plurilateral, and domestic levels to craft appropriate policy responses. This report focuses on disciplines on SEs that countries have been incorporating in the context of their preferential trade agreements (PTAs). It finds that these PTAs have the potential to go a long way in addressing the issue posed by subsidies and other forms of non-market practices to and by SEs, but the report highlights potential gaps within the disciplines. A key challenge remains their geographical coverage given that jurisdictions with larger subsidies to and by SEs have not yet concluded relevant PTAs.

Suggested Citation

  • Oecd, 2026. "How preferential trade agreements address market distortions from state enterprises," OECD Trade Policy Papers 302, OECD Publishing.
    • Handle: RePEc:oec:traaab:302-en
    DOI: 10.1787/97485a5e-en
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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