WASHINGTON Discussions on
how to manage state-owned enterprises (SOEs) may come under
increased scrutiny in future negotiations over what could be
one of the largest trade agreements to datethe proposed
Trans-Pacific Partnership (TPP).
SOEs, or government-owned
corporations, are entities in which governments can take part
in commercial activitiesa structure some say may prevent
the corporations from acting in a commercial manner due to
potential subsidies or benefits.
While talks to nail down details
of the TPP are still underway, steel producers may be among
those feeling the effects if forced to compete against foreign
competitors with government backing, industry sources said.
"We want to ensure that where
state-owned enterprises compete with private investment ... we
keep a level playing field," Daniel Watson, deputy assistant
for North America at the U.S. Trade Representatives
Office, said during a panel discussion at the Steel
Manufacturers Associations annual members
conference in Washington. "It sounds like a simple principle,
it makes good sense, but its not the easiest thing to
encode in trade negotiations."
The TPP is a proposed trade pact
between the United States and Australia, Brunei, Canada, Chile,
Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Trade experts say that a successful TPP could ultimately mean a
future "gold standard" for trade transparency with China.
Steel interests generally
support the partnership, arguing that current U.S. trade
policies are ineffective and often allow for dumped and
subsidized goods to enter the country without consequences. But
they warn that steel-producing SOEs can have anti-competitive
Watson said an additional
challenge is that SOEs can range from being "purely commercial"
to "purely public service," depending on the country, which
creates further confusion when trying to define the term.
"Not all trading partners have
found this easy to deal with as its a complicated issue.
But the U.S. government has made it a high priority," he