On Investment Subsidy Rules Of CPTPP

At present,WTO countervailing rules have defects and are unable to deal with new changes from international economic and trade activities,China proposed the "Belt and Road" initiative to encourage enterprises to go out and invest abroad,at the same time,Europe and the United States continue to promote competitive neutrality,trying to constrain state-owned enterprises.Under such background,the Comprehensive and Progressive Agreement on Trans-Pacific Partnership(CPTPP)introduced new investment subsidy rules.The investment subsidy rules of CPTPP apply to state-owned enterprises and belong to the covered-investments part of CPTPP non-commercial assistance system,which reshape the WTO Agreement on Subsidies and Countervailing Measures.The investment subsidy rules of CPTPP extend the application scope from goods and services to investment field,regard state-owned enterprises as providers of subsidies,and expand the geographical scope to the third country.They make some progress but still have some shortcomings.The investment subsidy rules of CPTPP are too absolute in the prohibition of investment subsidies,lack of diversified countervailing relief measures and excessively expand the scope of prohibited subsidies.To solve these problems,some suggestions are put forward to provide diversified countervailing relief ways and limit the scope of prohibited subsidies by referring to the subsidy classification of WTO,the countervailing relief measures in the Agreement on Subsidy and Countervailing Measures,the Regulation of the European Parliament and of the Council on Foreign Subsidies Distorting the Internal Market and the EU-China Comprehensive Agreement on Investment.China has applied to join the CPTPP,but China’s investment subsidy rules are still fragmented and not systematic.After joining the CPTPP,there is still the problem of how to integrate with the CPTPP investment subsidy rules.After joining,investment subsidies of state-owned enterprises are included in the scope of restraint and the risk of countervailing litigation will increase.However,it will also help China to deepen the reform of state-owned enterprises and promote a higher level of opening-up.About the risks and challenges China may face after joining the CPTPP,it is suggested to make full use of the exception clause to negotiate,improve China’s state-owned enterprise subsidy rules and strengthen the compliance review of enterprise investment.