Non-Commercial Assistance Rules in the TPP: A Comparative Analysis with the SCM Agreement

Abstract

This paper analyzes the concept of non-commercial assistance (NCA) introduced in the Trans-Pacific Partnership (TPP) Agreement. While certain concerns about subsidies provided to state-owned enterprises (SOEs) can be addressed under the WTO agreements, in particular, the Agreement on Subsidies and Countervailing Measures (SCM Agreement), it is questioned whether such existing disciplines are sufficient to properly address the current situation. Against this backdrop, the TPP Agreement has introduced the new concept of non-commercial assistance (NCA), the main aim of which is to prevent adverse effects or injury to the interests of other TPP parties as a result of advantages that SOEs obtained from their home states. Despite the unfamiliar terminology of NCA, these new rules share the basic philosophy of the SCM Agreement, and indeed they incorporate numerous principles from WTO practice. For this reason, it will be useful to analyze individual NCA provisions with reference to the SCM Agreement. This paper discusses the four elements of the NCA rules — the definition clause, substantive disciplines regarding the concept of adverse effects and injury, exceptions to the NCA rules, and provisions pertaining to the implementation of the NCA rules.