Regional Comprehensive Economic Partnership

While RCEP creates a modified data governance template, it remains within the logic of 20th century treaty language and design. Meanwhile, a normative reevaluation of international economic law is overdue and ongoing. Depending on whether international economic law’s arc will continue to bend towards economic efficiency and aggregate welfare gains rather than planetary environmental sustainability, individual human flourishing, and justice, future international economic law may need to change in form and substance. To make treaties data-ready for the 21st century, more dynamism, flexibility, and experimentation are desirable.

The current century's threat to communities, including climate change and vast and deepening inequalities, may be aggravated by the Agreement. By limiting the power of governments to govern in the interests of the community and the environment, and bolstering a regulatory framework intended to advance the interest of multi-national corporations and only the wealthiest people, trade and investment agreements deepen issues of human rights. The RCEP may, as a consequence, advertently exclude marginalised groups, including women, indigenous peoples, migrants and essentially those without any capital or political power. 

Doubts have been raised whether RCEP can be a game changer for the region or not; due to many issues such as that, there already exists a good number of Free trade Agreements (FTAs) between these RCEP members (therefore RCEP is not adding something substantially new), some barriers and loopholes still remains, it does not offer any major breakthrough in new trade issues such as e-commerce. It will take some time to see the effects of RCEP, but surely the reduction of tariffs and non-tariffs will stimulate economic growth in the medium-long term. It will take some time to see how the member states benefit and reap the facilities of RCEP. But one impact is certainly visible if seen from the dynamics of geopolitics in the region, that at the moment, China has added an extra point in the game of strategic balance in Asia by clearly maintaining its dominance in the region. 

Regional trade agreements such as RCEP which include some of the major global palm oil producers including Malaysia and Indonesia could have been drafted to help sustainable palm oil production in both countries by eliminating markets for unsustainable palm oil. Despite all of the fanfare around RCEP, the RCEP treaty is a lost opportunity for using trade to advance human rights and environmental protection.

Without doubt, once in force, RCEP could stimulate COVID-19 recovery in the region by fostering greater investment among the fifteen Asia-Pacific countries. However, as the Agreement will be co-existing with other IIAs among the countries, it adds another noodle to the already growing spaghetti bowl of IIAs among the Asia-Pacific States.

Although the S&DT provisions relating to disputes involving LDC parties and the current state-to-state dispute settlement mechanism provided by the Agreement may seem comparatively more balanced than the mechanism of Investor-State Dispute Settlement (ISDS), nonetheless, the real extent of the effectiveness and advantages of the mechanism for the LDC parties cannot yet be inferred,

To grasp an idea of the impacts of the RCEP for international economic law governance, this blog post looks at why the RCEP has been pursued, how it contrasts with the CPTPP, how it reshapes existing and future trade relations and lastly if and how it relates to the African Continental Free Trade Area (AfCFTA).

For years UNCTAD has argued that hyperglobalisation, and the free trade agreements that promote it, has created unsustainable levels of instability, inequality, insecurity and ecological harm and called for a new paradigm of trade rules that is participatory and development-friendly, recognises the role of regulation and local political oversight, and can promote a level playing field and prosperity for all. The final RCEP argument is a symptom of that malaise - a step back from the excesses of the TPPA, but is a long way from a new paradigm. 

The RCEP can be seen as a crucial step within the longer process of integrating the Asia-Pacific region and of its increased geopolitical centrality. This process started with the idea of the “Asia-Pacific” and then, with the establishment of ASEAN in 1967, and later ASEAN+3 in 1997 that improved dramatically the relationship between nations in Southeast Asia and in the Asia-Pacific, allowing to avoid major conflicts. However, there remains a deficit of trust among Asia-Pacific members—complicated by China’s rise and a lack of an Asian identity—necessary to respect commitments on trade, investments, and intellectual property. While we are witnessing a pivot to the Asia-Pacific region, the Atlantic bloc and “the West” more broadly are far from disappearing.

On November 15, 2020, 15 nations signed the Regional Comprehensive Economic Partnership (RCEP) trade agreement. The signatories comprise the ten members of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) as well as Australia, China, Japan, New Zealand and South Korea.This post will highlight three significant aspects of the agreement: market access opportunities; increased opportunities for intra-agreement supply chains; and implications for the United States as a non-participant.