State-Owned Enterprises (SOEs) play an important role in today's global economy. In the wake of

Interdisciplinary Programmes

Academic year 2021 - 2022

State-Owned Enterprises: Trade, Competition, and Investment-Related Issues

MINT186 - Spring - 6 ECTS Monday 16:15 – 18:00, S8

State-Owned Enterprises (SOEs) play an important role in today's global economy. In the wake of

COVID-19, countries across the globe are rethinking their industrial policy as well as the state's appropriate role in a globalized but increasingly geopolitical world economy. SOEs pose a number of challenges across the fields of trade, competition and

investment/finance. This course will critically assess these challenges from an economic perspective as well as from the perspective of selected legal regimes at both the domestic and international level, with a particular focus on Chinese SOEs. Our discussion of SOEs will illustrate the complexity of regulating globalization and maintaining economic relations between countries that exhibit durable differences in how they organize their economy. The course aims to engage in genuine multi-disciplinary analysis (law and economics) as well as to provide an integrated

discussion of policy issues across the often siloed subject matter fields of trade, competition and investment/finance. The course will, indeed, be co- taught by a law professor (with special expertise in international trade and investment law) and an economics professor (with special expertise in competition enforcement and policy).

PROFESSORS

Damien Neven

damien.neven@graduateinstitute.ch

Joost Pauwelyn

Joost.pauwelyn@graduateinstitute.ch Office hours: Monday 14:00-16:00

ASSISTANT

Readings

Readings are assigned for each session. The following could serve as background readings. A more extensive reading list, assorted by session topic, is available on Moodle. These additional readings can be used to prepare class presentations and papers.

Davis, Bob, and Lingling Wei. 2020. Superpower Showdown, HarperCollins Publishers: New York City, New York.

Lardy, Nicholas R. 2019. The State Strikes Back: The End of Economic Reform in China? Washington, DC: Peterson Institute for International Economics.

Mavroidis, Petros C., and André Sapir. 2021, China and the WTO: Why Multilateralism Matters, Princeton University Press: Princeton, New Jersey.

OECD, 2015, Roundtable on competition neutrality, Issues paper by the Secretariat

OECD, 2016, State-Owned Enterprises as Global Competitors: A Challenge or an Opportunity?, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264262096-en

Evaluation

The overall grade for each student will be determined as follows:

(1) Two short research/reaction papers of maximum 2’000 words each, including footnotes, building on the themes and readings of any of the session 3 to 13. Knowing that the course has three substantive parts (trade, investment, competition), the two papers must address two different parts. Papers should describe and critically assess a specific case study (other than cases/stories/legal instruments already discussed in detail in class) focusing on a particular SOE and how that SOE got entangled in a trade/investment/competition issue relevant to this course (case studies must not necessarily be legal disputes; they could also be stories drawn from press clippings or other sources and not have reached the level of a legal dispute; case studies can also address a particular legal instrument, proposed or in place, national or international, and discuss that instrument in the context of an actual or hypothetical application to a particular SOE). Papers should not only describe the facts but make an argument, ideally one argument that is focused and goes deeper, rather than various arguments that remain superficial.

Papers will be assessed based on compliance with the requirements above as well as with reference to the clarity of the argument made, how it is structured, and whether it is substantively backed-up and convincingly presented, without factual or legal inaccuracies.

Originality of the topic and case study will also be taken into account. The two papers count toward 50% of the student’s final grade. The first paper must be submitted by April 24; the second paper by June 8.

(2) As of session 3, for each session, one or a small group of students will be tasked to make an oral presentation (15 min. maximum) of a concrete case study (this could be a particular dispute or country-specific event, story or initiative) that can be used to demonstrate the basic topic, questions and challenges assigned for the specific session. This presentation should be based on the readings assigned for the particular session. Each student must pick a session for their oral presentation during the first week of classes, subject to available slots, on a first- come-first-served basis A student’s oral presentation should be in a part where the student

will not write a paper.

Each student team must meet with the Professor leading the particular session, at the latest one week before the presentation, to discuss the topic and content of the presentation. The student presentation will be preceded by a brief introduction by the Professor. After the student presentation, a structured, class-wide discussion will follow.

The oral (team) presentation made by students counts toward 25% of the student’s final grade.

(3) Class attendance and participation is expected and will be included in the evaluation, counting for 25% of the student’s final grade. All students can be called upon during class.

However, for each individual session as of session 3 a different group or “panel” of students will be pre-assigned. The group of students “on panel” needs to be particularly well prepared and ready to engage, both with the readings of that session and the student presentation made. Each student will be “on panel” at least twice, for a session in two different clusters, to be chosen by each student during the first week of classes, subject to available slots, on a first-come-first-served basis. Students cannot be "on panel" for a session where they will make their oral team presentation or intend to write one of their two research/reaction papers on.

Syllabus

1. Introduction (Feb 21)

Goals & Methods of the Course, Evaluation

What is an SOE? Why/Where are SOEs created? What benefits & challenges do they represent?

SOEs in the broader context of subsidies. Are SOEs part of the state under international law?

Readings:

Max Büge, Matias Egeland, Przemyslaw Kowalski & Monika Sztajerowska, State-owned enterprises in the global economy: Reason for concern?, Vox, 2 May 2013, https://voxeu.org/article/state-

owned-enterprises-global-economy-reason-concern

OECD (2016), see above, read p. 11-15, p. 18-47, https://read.oecd-ilibrary.org/finance-and- investment/state-owned-enterprises-as-global-competitors_9789264262096-en#page1

World Bank, SOEs: Understanding their market effects and the need for competitive neutrality, 2020, https://thedocs.worldbank.org/en/doc/739371594131714315-

0130022020/original/15444WBSOEWEB.pdf

Evenett S. and J. Fritz, 2021, Subsidies and Market Access. New Data and Findings from the Global Trade Alert, 21 October 2021,https://voxeu.org/article/subsidies-and-market-access-new- data-and-findings-global-trade-alert

ILC, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, 2001, read p. 38 (Chapter II, paras. (1) & (2)), p. 39 (paras. (6) & (8)), p. 40 (Art. 4, para. (1), p. 42- 43 (Art. 5, paras. (1)-(3), (5)-(7), p. 47-48 (Art. 8, paras. (1)-(5), (6)-(7), p. 52-53 (Art. 11, (1), (2) &

(6)), https://legal.un.org/ilc/texts/instruments/english/commentaries/9_6_2001.pdf

2. Chinese SOEs (Feb 28)

History, structure and current state-of-play of Chinese SOEs and their international impact Guest Presentations by Fabiana Fong & Mun How Mong

Readings:

Fan, G. and Hope, N.C., 2013. The role of state-owned enterprises in the Chinese economy. US China 2022 Economic Relations in the Next 10 years, pp.1-16. [please read the whole paper]

Wang, J., 2014. The political logic of corporate governance in China’s state-owned enterprises, Cornell International Law Journal, 47. [please read p.644-669]

Milhaupt, C. J., & Zheng, W. 2014. Beyond ownership: state capitalism and the Chinese firm. Geo.

LJ, 103, 665. [please read p.700-717]

Wu, M., 2016. The China, Inc. challenge to global trade governance. Harv. Int'l LJ, 57, 261. [please read p. 300-308]

Skim through:

Bardhan, P., 2016. State and development: The need for a reappraisal of the current literature.

Journal of Economic Literature, 54(3), pp.862-92. [please skim through, in particular section 1, 6, 7, 8]

Lin, Li-Wen, and Curtis J. Milhaupt. 2013. We Are the (National) Champions: Understanding the Mechanisms of State Capitalism in China, Stanford Law Review 65:697–760. [please skim through Sections I, III and IV]

Lei, Zheng, Benjamin Liebman, and Curtis J. Milhaupt, SOEs and State Governance: How China’s State Enteprises Influence China’s Legal System, pp. 203-223 in Benjamin Liebman and Curtis J.

Milhaupt (eds.), Regulating the Visible Hand? The Institutional Implications of China’s State Capitalism, Oxford University Press: Oxford, 2016, United Kingdom. [please skim through whole paper]

SOEs in International Trade

If you have no background at all in trade/WTO, these optional, basic readings/vídeos/podcasts will help:

 Legal approach: Michael Trebilcock, Advanced Introduction to International Trade Law, 10- 23, 36-38 (MFN), 105-106 (agriculture), 116-120 (services), 149-166 (health & safety), 186- 189 & 192-198 (developing countries)

 Economic approach: Banerjee & Duflo, Good Economics for Hard Times, 2019, Chapter 3, The Pains from Trade

 Let’s Talk Trade, Official WTO Videos on tariffs, schedules, MFN, rules-based trade etc.

 Trade Talks Episode 9: GATT 70^th Anniversary – Origins of Multilateral Trade

 Video by Mike Moore, WTO dispute settlement

 How EU Keeps Wheels of Fair Trade Turning, Video on EU trade defence

3. SOEs in the GATT/WTO (March 7)

Basic introduction to the GATT/WTO

Historical evolution of the GATT/WTO and how it deals with non-market economies, state intervention & SOEs, State Trading Enterprises (STEs)

The Canada – Wheat dispute & Art. XVII of GATT on state-trading enterprises Was the GATT/WTO designed to functionally include countries like China?

Guest Presentation by Petros Mavroidis (TBC)

Readings:

Mavroidis & Sapir (2021), see above

Read the three Vox columns that summarize this book: (i) China and the WTO: Two Systems Meet, 28 April 2021, https://voxeu.org/article/china-and-wto-two-systems-meet; (ii) China and the WTO: An uneasy relationship, 29 April 2021, https://voxeu.org/article/china-and-wto-uneasy-relationship; (iii) China and the WTO: How can they work together better?, 30 April 2021, https://voxeu.org/article/china-and-wto-how-can-they-work-together-better

John H. Jackson, ‘State Trading and Nonmarket Economies’, 23 International Law (1989), read only p. 891-900, https://www.jstor.org/stable/40706876?seq=1#metadata_info_tab_contents

Canada – Wheat, WTO Appellate Body Report, 2004, excerpts only: paras. 9-12, para. 79, 84-6, 89, 91, 98, 100, 145, https://www.worldtradelaw.net/document.php?id=reports/wtoab/canada-

wheat(ab).pdf

Dani Rodrik, The WTO Has Become Dysfunctional, Trade rules must acknowledge the benefits of divergent economic models such as China’s, FT, 15 August 2018,

https://drodrik.scholar.harvard.edu/files/dani-

rodrik/files/the_wto_has_become_dysfunctional_financial_times.pdf

Read the abstract/gist of these three very different approaches to China & the WTO (no need to read full articles):

*Andrew Lang, Heterodox markets and ‘market distortions’ in the global trading system, 22 Journal of International Economic Law 2019, 677-719,

https://academic.oup.com/jiel/article/22/4/677/5664830?login=true

*Mark Wu, Managing the China Trade Challenge: Confronting the Limits of the WTO, Working Paper, https://cpb-us-w2.wpmucdn.com/web.sas.upenn.edu/dist/b/732/files/2020/10/Mark- Wu_Limits-of-WTO_Final.pdf

*Gregory Shaffer, Governing the Interface of US-China Trade Relations, American Journal of International Law, 2021, 622-670, https://www.cambridge.org/core/journals/american-journal-of- international-law/article/governing-the-interface-of-uschina-trade-

relations/EFF2A0B9987AD6683DED602DC9DC113F#

4. SOEs in WTO Accession Protocols & Preferential Trade Agreements (PTAs) (March 14)

What do Protocols & PTAs really add to basic WTO rules on SOEs?

What is missing or could be improved?

Readings:

Levy, P. I. (2017). The Treatment of Chinese SOEs in China's WTO Protocol of Accession. World Trade Review, 16(4), 635-653 (focus on section 3), https://www.cambridge.org/core/journals/world- trade-review/article/treatment-of-chinese-soes-in-chinas-wto-protocol-of-

accession/F4676B688DC9A055F2255D12F295F445

Zhou, W. (2021). Rethinking the (CP) TPP as a Model for Regulation of Chinese State-Owned Enterprises, 24 Journal of International Economic Law, 2021, 572-590,

https://academic.oup.com/jiel/article/24/3/572/6371063?login=true

Read the gist of the two overview articles below:

*Willemyns I, ‘Disciplines on State-Owned Enterprises in International Economic Law: Are We Moving in the Right Direction?’ (2016) 19 Journal of International Economic Law 657 (focus on sections II & III) https://academic.oup.com/jiel/article/19/3/657/1751149?login=true

*Borlini L, ‘When the Leviathan Goes to the Market: A Critical Evaluation of the Rules Governing State-Owned Enterprises in Trade Agreements’ (2020) 33 Leiden Journal of International Law 313 (focus on sections 3-5) https://www.cambridge.org/core/journals/leiden-journal-of-international- law/article/when-the-leviathan-goes-to-the-market-a-critical-evaluation-of-the-rules-governing- stateowned-enterprises-in-trade-agreements/AB984CFA35F95E27E75E70EA86576147

Rubini L and Wang T, ‘State-Owned Enterprises’ in Aaditya Mattoo, Nadia Rocha and Michele Ruta (eds), Handbook of Deep Trade Agreements (World Bank Group 2020), skim only for the main messages

5. SOEs & the WTO Subsidies Agreement (March 21)

The challenge of subsidies to & by SOEs

Are SOEs “public bodies” that can grant “subsidies”?

How to address the “China subsidy problema” in WTO reform

Readings:

Ding, R. (2014). ‘Public Body’ or Not: Chinese State-Owned Enterprise. Journal of World Trade, 48(1), https://kluwerlawonline.com/JournalArticle/Journal+of+World+Trade/48.1/TRAD2014007 Appellate Body Report, US – AD & CVDs, DS379, 2011, read paras. 276-322, and paras. 343-356, https://www.worldtradelaw.net/document.php?id=reports/wtoab/us-

adcvdchina(ab).pdf&mode=download#page=5

Michel CARTLAND, Gérard DEPAYRE & Jan WOZNOWSKI , Is Something Going Wrong in the WTO Dispute Settlement?, Journal of World Trade, 2012, 979-1015,

https://kluwerlawonline.com/api/Product/CitationPDFURL?file=Journals\TRAD\TRAD2012031.pdf (skim only as the critique here was already discussed in Ding, 2014)

Appellate Body Report, US – CVDs on Certain Producst from China (Art. 21.5), DS437, 2019, read paras. 5.52-5.68, 5.90-5.105, and separate opinion, paras. 5.242-8,

https://worldtradelaw.net/document.php?id=reports/wtoab/us-

countervailingmeasureschina(ab)(21.5).pdf&mode=download#page=4

Read the gist of how these 2 papers define the “China subsidy problem” and suggest how to deal with it at the WTO/beyond:

*Bown, C. P., & Hillman, J. A. (2019). WTO’ing a Resolution to the China Subsidy Problem. Journal of International Economic Law, 22(4), 557-578 (focus on sections III & IV)

https://academic.oup.com/jiel/article/22/4/557/5663478

*Howse, R., (2020) Making the WTO (Not So) Great Again: The Case Against Responding to the Trump Trade Agenda Through Reform of WTO Rules on Subsidies and State Enterprises, Journal of International Economic Law, 2020, 23, 371–389,

https://academic.oup.com/jiel/article/23/2/371/5878139

SOEs in International Investment

If you have no background at all in international investment/investor-state arbitration/finance, these optional, basic readings/videos will help:

 Bonnitcha et al., The Political Economy of the Investment Treaty Regime, Ch. 1, The Investment Treaty Regime in Context; Ch. 3, Investment Treaty Arbitration & Ch. 4 Standards of Investment Protection

 Video, What is an ISDS Clause?, 2014

 Buzzfeed series on ISDS

 Lex Rieffel, Normalizing China’s Relations with the Paris Club, Stimson, April 2021 (good intro to Paris Club and how China-held debt relates to it),

https://www.stimson.org/2021/normalizing-chinas-relations-with-the-paris-club/

6. SOEs invested in & exporting from third countries (March 28)

At the intersection of trade & investment: Can WTO rules deal with third country subsidies?

EU & US screening of foreign investment for national security reasons

Investment liberalization commitments in Bilateral Investment Treaties (BITs) and PTAs including the EU-China Comprehensive Agreement on Investment (CAI)

Readings:

Council on Foreign Relations, China’s Belt and Road, Implications for the US, Independant Task Force, 2021, https://www.cfr.org/report/chinas-belt-and-road-implications-for-the-united-

states/download/pdf/2021-

04/TFR%20%2379_China%27s%20Belt%20and%20Road_Implications%20for%20the%20United%

20States_FINAL.pdf, read introduction p. 8-11 & background p. 14-16 (see also this Video presenting the report: https://www.youtube.com/watch?v=Amq_jySMzYk)

Victor Crochet & Vineet Hegde, China’s ‘Going Global’ Policy: Transnational Production Subsidies Under the WTO SCM Agreement, JIEL, 2020, 841-863,

https://academic.oup.com/jiel/article/23/4/841/5974910 (make sure you understand the EU cases &

underlying problem; no need to go deep into question of WTO legal compliance)

Damjanovic & de Sadeleer, EU’s Foreign Investment Screening, Australian Institute of International Affairs, Dec. 2020, https://www.internationalaffairs.org.au/australianoutlook/european-unions- foreign-investment-screening-between-free-movement-of-capital-and-national-security-interests/

REGULATION (EU) 2019/452 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 March 2019 establishing a framework for the screening of foreign direct investments into the European Union, https://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:32019R0452&from=EN, read Article 4 (and spot the link to SOEs!)

Anat Alon-Beck, TikTok, Your Time is Up, Forbes, Dec. 2020,

https://www.forbes.com/sites/anatalonbeck/2020/12/08/tiktok-your-time-is-up/?sh=69fc01ed7179 Business Europe, The EU and China, Jan. 2020, read p. 64-71,

https://www.businesseurope.eu/sites/buseur/files/media/reports_and_studies/2020-01- 16_the_eu_and_china_-_addressing_the_systemic_challenge_-_full_paper.pdf

Garcia-Herrero A. and J. Xu, (2017), How to handle state-owned enterprises in EU-China investment talks, Bruegel Policy contribution N° 18, https://www.bruegel.org/wp-

content/uploads/2017/06/PC-18-2017_2.pdf (skim for the core message)

Listen to this Podcast: Trade Talks Ep. 148, https://www.tradetalkspodcast.com/podcast/148-the- eus-new-trade-policy-with-sabine-weyand-of-dg-trade/, minutes 1-11 (on China/EU comprehensive investment agreement)

USTR, (2018), Update concerning China’s acts, policies and practices related to technology

transfer, intellectual property and innovation, Washington DC, skim the part on Chinese “Outbound Investment”, p. 31-49,

https://ustr.gov/sites/default/files/enforcement/301Investigations/301%20Report%20Update.pdf

7. SOEs in Investor-State Arbitration & Investment Protection, SOE Loans to Developing Countries (April 4)

Basic introduction to BITs & Investor-State Arbitration

Can SOEs claim investor rights under BITs? Can conduct by SOEs be attributed to host states?

Chinese SOE loans to developing countries & their peculiarities Readings:

Beijing Urban Construction Group v. Republic of Yemen, ICSID case, 2017, read only p. 5, para. 22 to p. 13 para. 44, https://www.italaw.com/sites/default/files/case-documents/italaw8968.pdf

Yuri Shima, The Policy Landscape for International Investment by Government-controlled Investors, OCED Working Paper 2015, read only the Executive Summary,

https://www.oecd.org/investment/investment-policy/WP-2015-01.pdf

Oleg Alyoshin, Olha Nosenko and Ivan Yavnych, Attribution of Acts or Omissions to the State, Investment Treaty Arbitration Review, June 2021, read only section III.iii Structural and Functional

Tests (Maffezini, Deutsche Bank and Tulip case summaries), https://thelawreviews.co.uk/title/the- investment-treaty-arbitration-review/attribution-of-acts-or-omissions-to-the-state

David Gaukrodger, Foreign State Immunity and Foreign Government Controlled Investors, OECD Working Paper 2010, read only Executive Summary, Introduction & p. 13-14 (Rationale for State Immunity Law), https://www.oecd.org/corporate/mne/WP-2010_2.pdf

Gelpern et al., How China Lends, A Rare Look into 100 Debt Contracts with Foreign Governments, March 2021, read only Executive Summary (focus on seniority/no Paris Club clauses & policy influence, China’s treatment of SOE debt as “commercial”), https://www.cgdev.org/publication/how- china-lends-rare-look-into-100-debt-contracts-foreign-governments (see also this video presenting the report: https://www.youtube.com/watch?v=r1cOHo1RNU0)

Council on Foreign Relations, China’s Belt and Road, Implications for the US, Independant Task Force, 2021, https://www.cfr.org/report/chinas-belt-and-road-implications-for-the-united-

states/download/pdf/2021-

04/TFR%20%2379_China%27s%20Belt%20and%20Road_Implications%20for%20the%20United%

20States_FINAL.pdf, read Economics, p. 21-23, p. 27

8. SOEs and Social Responsibility (April 11)

Guest Presentation: Mihaela-Maria Barnes (TBC)

Relevant rules on corporate governance of SOEs, SOEs & sustainable development, human rights, labor standards and environmental protection, SOEs & the European Court of Human Rights

Readings:

Human Rights Watch, ‘“You’ll Be Fired if You Refuse”: Labor Abuses in Zambia’s Chinese State- owned Copper Mines’ (2011), available at https://www.hrw.org/report/2011/11/04/youll-be-fired-if- you-refuse/labor-abuses-zambias-chinese-state-owned-copper - Read the Summary and

Recommendations only.

‘Lawsuit filed against EDF for alleged failure to respect French duty of vigilance law over wind project in Mexico’ (Business & Human Rights Resource Centre). Litigation involving Electricité de France, a French SOE. https://www.business-humanrights.org/en/latest-news/devoir-de-vigilance- edf-assign%C3%A9-en-justice-pour-ses-activit%C3%A9s-au-mexique/

United Nations Global Compact: Human Rights and Business Dilemmas Forum: Working with SOEs: https://hrbdf.org/dilemmas/working-soe/ - Many real-world examples of human rights violations by SOEs are summarised on this website. Read the information under the tabs: ‘What is the dilemma?’; ‘Common dilemma scenarios’; ‘Examples’; ‘Risks to Business’; Suggestions for Responsible Business’; ‘Background to the dilemma’ and ‘Case studies’.

OECD standards and guidelines on SOEs: corporate governance, anti-corruption & competitive neutrality, see: https://www.oecd.org/corporate/soes/

OHCHR, ‘United Nations Guiding Principles on Business and Human Rights with Commentaries’:

Skim through the publication, but pay particular attention to the section on the ‘State-business nexus’ pages 6-8:

https://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.pdf

Mihaela-Maria Barnes, ‘The European Court of Human Rights and State-Owned Entities: A Review of the Jurisprudence’, forthcoming in The Law and Practice of International Courts and Tribunals, Volume 21, Issue 2). Read the Introduction pages 1-5; section 1.2.1 ‘Criteria for determining the nature and type of powers of an entity’ pages 6-9; and ‘Concluding remarks’ pages 29-30.

Optional readings:

Larry Catá Backer ‘The Human Rights Obligations of State-Owned Enterprises (SOEs): Emerging Conceptual Structures and Principles in National and International Law and Policy’ (2017) 50 Vand.

J. Transnat’l L. 827. Skim through the whole article.

Mikko Rajavuori, ‘State Ownership and the United Nations Business and Human Rights Agenda:

Three Instruments, Three Narratives’ (2016) 23 Indiana J. Glob. Leg. Stud. 665. Skim through the whole article.

Mihaela-Maria Barnes, SOEs and Human Rights, CUP, 2021, read Introduction, Section 1.4 (What is the concern with SOEs?) and Section 1.5.4 (Human rights, International law & State corporate ownership), https://www.cambridge.org/core/books/stateowned-entities-and-human-

rights/581BD34260BC5F5216134DE3B5CA6B86

Mihaela-Maria Barnes, State-Owned Entities as Key Actors in the Promotion and Implementation of the 2030 Agenda for Sustainable Development: Examples of Good Practices. Laws 2019, read abstract, Section 3 and Section 4 (p. 5-11), https://www.mdpi.com/2075-471X/8/2/10

**EASTER BREAK**

** April 24: Deadline for Paper 1 **

SOEs and Competition Regimes

If you have no background at all in anti-trust/competition policy, these optional, basic readings/videos will help:

 EU website primer on (EU) Competition Law

 The History of (US) Anti-Trust Law, video

 Why Is Competition Policy Important for Consumers, video

 How do you enforce anti-trust law in a global market place, video

 Werner, P and V. Verouden, 2016, Eu State Aid Control: Law and Economics, Kluwer

9. EU framework – neutrality, state aid policy and Art 106 (April 25)

Is EU law neutral towards ownership?

What are the limits on subsidies to private (or public) undertakings?

What is the benchmark for the existence of subsidies (Market economy investor principles) How can services of general economic interest be financed?

Readings:

Altmark, C 280/00

COMMISSION DECISION of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest FANG Xiaomin, The Application of Chinese Anti-Monopoly Law upon State-Owned Enterprises, 2018, in Di Porto, Fabiana; Podszun, Rupprecht (eds), "Abusive Practices in Competition Law" (Edward Elgar Publishing, 2018) 318

Kovacic, W., (2017) Competition Policy and State-Owned Enterprises in China, World Trade Review, 16: 4, 693–711

OECD, (2021), Recommendation of the Council on Competitive Neutrality, OECD/LEGAL/0462 Svetiev, Y and L. Wang, (2016), Competition law enforcement in China: between technocratic and industrial policy, Law and Contemporary Problems, 79(4), 187-222

10. Exclusive rights and state immunity (May 2)

Enforcing Art 106 ; can member states grants special or exclusive rights to particular enterprises ? Can these rights lead to restrictions of competition ?

Readings:

Buendía Sierra, 2014, “Article 106 – Exclusive or Special Rights and other anticompetitive State Measures” in Faull & Nikpay, The EU Law of Competition (3rd ed.) OUP, 2014 (pp. 809-879).

OECD, 2018, Competition Law and State-Owned enterprises, Background note by the Secretariat, DAF/COMP/GF(2018)10

Corbeau, Case C-320/91

Case C‑41/90, Höfner and Elser, Dimotisia, Case C-553/12

U.S. Postal Service v. Flamingo Industries (USA), Ltd.(“Flamingo”); United States Court Of Appeals For The Second Circuit, Docket No. 13‑

11. Governance and conduct of enterprises with special and exclusive rights (May 9)

Can firms entrusted with special and exclusive right exclude competitors Does the governance matter?

Should they be considered different from other dominant firms?

Readings:

M de la Mano, R Nazzini and H. Zenger , Article 102, in Faull & Nikpay, The EU Law of Competition (3rd ed.) OUP, 2014 (pp. 809-879). Section on predation

*D. Sappington and J.G. Sidak, (2003) Competition law for state-owned enterprises, Antitrust Law Journal, 2, 479-523.

Deutsche Post, 2002, Case COMP/35.141 — Deutsche Post AG

U.S. Supreme Court – NC State Board of Dental Examiners v. Federal Trade Commission

12. Acquisition by foreign SOEs in the EU (May 16)

What is the autonomy of the state owned enterprise from the state, to establish jurisdiction and to assess dominance and the competitive impact of transactions

Can the merger regulation be used for screening of Foreign Direct Investment?

What is the standard to anticipate the behavior or foreign acquirer? Should SOE be considered differently?

Readings:

Alexandr Svetlicinii, (2019), The Interactions of Competition Law and Investment Law: The Case of Chinese State-Owned Enterprises and EU Merger Control Regime in J. Chaisse et al. (eds.), Handbook of International Investment Law and Policy

Acquisition of Vosslo Locomotives GmbH by the Chinese company CRRC Zhuzhou Locomotives Co, 27/5/2020, BKA

EDF/CGN/NNB – Hinkley point, Case M.7850 CNRC/Pirelli, Case No M.7643

ChemChina/Syngenta, CASE M.7962 Alstom/Siemens, Case M.8677

Kyriakos Fountoukakos and Camille Puech-Baron, China/EU: The gradual evolution of the EU Commission’s merger control decisional practice towards SOEs amidst an increasingly protectionist world, Concurrences N° 4-2017

Lallemand-Kirche, G., C. Tixier, and H. Piffaut, (2017), The Treatment of State-owned Enterprises in EU Competition Law: New Developments and Future Challenges, Journal of European Competition Law and Practice, Volume 8, Issue 5, Pages 295–308, https://doi.org/10.1093/jeclap/lpx016

13. State action defense (May 23)

Can conduct required by a foreign state escape antitrust scrutiny?

Readings:

Fox, E. and M. China, the WTO, and State sponsored export cartels: Where trade and competition ought to meet, Concurrence, N° 4-2012

Gérard, D. (2010), EU Competition Policy after Lisbon: Time to Review the ‘State Action Doctrine’?

Journal of European Competition Law & Practice, Vol. 1, No. 3

Sea Breeze Salt, Inc. et al. v. Mitsubishi Corp. et al., CV 16-2345-DMG, ECF No. 45 (Aug. 18, 2016) and Sea Breeze Salt, Inc. v. Mitsubishi Corp., No. 16-56350 (9th Cir. 2018).

Italian matches, 2003, Case C-198/01

Special Topic: The EU Proposed Regulation on Foreign Subsidies

14. EU Proposed Regulation (May 30)

Guest Presentation by Marios Tokas Strategic competition enforcement Scope and diversion

Compatibility with WTO Readings:

The Application of Chinese Anti-Monopoly Law upon State-Owned Enterprises, FANG Xiaomin Kovacic, W., (2017) Competition Policy and State-Owned Enterprises in China, World Trade Review, 16: 4, 693–711

Lawful Remedy or Illegal Response? Resolving the Issue of Foreign Subsidization under WTO Law, Crochet, V. and Gustaffson, M., (2021) World Trade Review, 20:3, 343-366

Overview of the Proposed Regulation: https://ec.europa.eu/competition-policy/international/foreign- subsidies_en

Text of the Proposed Regulation: https://eur-lex.europa.eu/legal- content/EN/ALL/?uri=CELEX:52021PC0223

Text of the White Paper:

https://ec.europa.eu/competition/international/overview/foreign_subsidies_white_paper.pdf European Commission’s Press Release on the White Paper:

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1070

** June 8: Deadline for Paper 2 **