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The rise of modern state capitalism has cast doubt on the current global economic system and its assumption of a clear division between state and market. At the core of this systemic challenge are the state-owned enterprises of the 21st century. Unlike their predecessors, the state-owned enterprises of today have been transformed into powerful tools for global competition, shrouded under corporate veils. With the existing legal framework both unyielding and unprepared to accommodate these new developments, the momentum for reform soon reached its zenith. The Trans-Pacific Partnership’s chapter on state-owned enterprises, the first stand-alone chapter on the subject, should be analyzed in this context. It consolidates and updates preexisting rules by introducing a bright-line definition of what state-owned enterprises are and incorporates tools to enhance the enforceability of the rule. Despite the significant accomplishments of the new rule and the rationale for the changes, the rule suffers from several shortcomings. This Note provides a legal analysis and critical evaluation of the rule, focusing on how it departs from the preexisting rule and highlights the factors that undermine its effectiveness. To breathe life into this theoretical analysis and evaluation, the Note also provides a case study of how the rule will affect a potential new entrant, South Korea.
