Non-Commercial Assistance Rules in the TPP: A Comparative Analysis with the SCM Agreement
The Trans-Pacific Partnership (TPP) and the Agreement on Subsidies and Countervailing Measures (SCM Agreement) are two important trade agreements that govern commercial transactions between countries. Both agreements contain rules regarding non-commercial assistance, which refers to aid given to non-profit organizations or for non-commercial purposes. This article will compare the non-commercial assistance rules in the TPP and the SCM Agreement, and analyze their similarities and differences.
The TPP is a trade agreement between 12 countries, including the United States, Japan, Australia, and Canada. The agreement aims to promote free trade and investment among member countries, and includes provisions on intellectual property, labor rights, and environmental protection. The TPP also contains rules regarding non-commercial assistance, which are found in Chapter 9 of the agreement.
Under the TPP, non-commercial assistance is defined as “any assistance provided by a Party or a state enterprise that is not intended to promote commercial interests.” This includes aid given to non-profit organizations, cultural institutions, and educational institutions, among others. The TPP provides that non-commercial assistance shall not be subject to countervailing duties, which are duties imposed on imports to offset subsidies given by exporting countries.
The SCM Agreement, on the other hand, is a multilateral agreement administered by the World Trade Organization (WTO). The agreement governs the use of subsidies and countervailing measures in international trade, and aims to prevent unfair trade practices. The SCM Agreement also contains rules regarding non-commercial assistance, which are found in Article 1.1.
Under the SCM Agreement, non-commercial assistance is defined as “any assistance which is provided by a government or any public body within the territory of a Member to economic operators for the production of goods or services, or which is otherwise connected with the production, export or sale of goods or services.” This includes aid given to non-profit organizations, but only if such aid is related to the production of goods or services. The SCM Agreement provides that non-commercial assistance shall not be subject to countervailing duties, unless such aid is related to the production of goods or services.
One key difference between the TPP and the SCM Agreement is the definition of non-commercial assistance. Under the TPP, non-commercial assistance includes any assistance that is not intended to promote commercial interests, whereas under the SCM Agreement, non-commercial assistance only includes aid that is related to the production of goods or services. This means that non-commercial assistance given to non-profit organizations that are not involved in the production of goods or services may be exempt from countervailing duties under the TPP, but not under the SCM Agreement.
Another difference between the two agreements is their scope. The TPP is a regional agreement between 12 countries, whereas the SCM Agreement is a multilateral agreement between all WTO member countries. This means that the rules regarding non-commercial assistance in the TPM only apply to member countries, while the rules in the SCM Agreement apply to all countries that are members of the WTO.
In conclusion, the TPP and the SCM Agreement both contain rules regarding non-commercial assistance, but there are differences in their definitions and scope. The TPP provides broader exemptions from countervailing duties for non-commercial assistance, while the SCM Agreement only exempts aid related to the production of goods or services. It is important for countries and non-profit organizations to be aware of these differences when engaging in international trade and seeking non-commercial assistance.