The signing of the Regional Comprehensive Economic Partnership (RCEP) on 15 November, 2020 marks a milestone for East Asian regionalism. It shows ASEAN’s determination to unify existing ASEAN+1 trade agreements and to showcase the bloc’s central role in regional cooperation.
As former Indonesian Foreign Minister Marty Natalegawa noted recently, the RCEP was “a response by ASEAN leaders to a series of initiatives that did not provide for ASEAN centrality”. One of those initiatives was the US-led Trans-Pacific Partnership (TPP).
If indeed the RCEP is an ASEAN-led initiative, it fell short of supporting the ASEAN Community Vision 2025. The RCEP offers little in terms of shedding ASEAN’s elitist image and committing to the development of a highly inclusive, people-oriented and people-centred community.
Not only does the RCEP agreement have 10 chapters less than the TPP, it also excludes labour, environment and capacity building where people-focused issues are arguably important.
The RCEP tilts heavily to the age-old neoliberal economics of cross border trade and investment, which are understandably essential for ASEAN since 77.5 percent of total trade has been with its external partners. Intra-ASEAN trade stood at only 22.5 percent in 2019. ASEAN’s trade with the five RCEP partner countries (Australia, China, Japan, New Zealand and South Korea) made up 44.2 percent or 47.7 percent if India is included.
The extensive coverage of the RCEP will complement the regional production networks of multinational corporations particularly in terms of the rules of origin and supply chains, and further boost the region’s attractiveness to foreign trade and investment. The latter point is key to speed up economic recovery due to the COVID-19 pandemic.
However, the mega trade deal is weak on human rights, environmental and social safeguards, and inputs from civil society organisations that were largely kept out of the negotiation process due in part to confidentiality.
In analysing the chapter on dispute settlement, Diane Desierto, a Professor of human rights law and global affairs at Notre Dame University, said that “there is hardly any conceivably significant space for non-State, local community, or civil society participation, input, or monitoring of these dispute settlement procedures. The procedures are exclusively State-driven, and accountable only to State Parties to RCEP”.
In addition, a number of important chapters such as Sanitary and Phytosanitary Measures, Standards, Technical Regulations and Conformity Assessment Procedures, Trade Remedies, E-Commerce, SMEs, Competition, Economic and Technical Cooperation, and Government Procurement were not covered. Future reviews notwithstanding, this means that these chapters will not have access to adversarial dispute settlement mechanisms.
Desierto adds that “considering the dearth of any significant environmental, social and human rights safeguards in RCEP, the absence of counterpart spaces for human rights in dispute settlement procedures in RCEP takes us back to an archaic revival of commercial, trade, investment and other economic interests being construed so narrowly, as to exclude supposedly ‘non-trade’ concerns such as human rights”.
The absence of an investor-state dispute settlement (ISDS) provision sets the RCEP apart from the TPP. The national treatment to be accorded to investors could intensify land grabbing and gender inequality. Large foreign corporations will be allowed to acquire land for investment purposes. Devoid of effectual regulations, more small-scale farmers including women who are breadwinners in certain farming communities would lose their traditional farmlands, which is already a serious problem in the Indochinese Peninsula.
Add to it the absence of international labour and environmental standards which leaves little to no recourse for victims of business-related human rights violations. Despite ASEAN making progress in the institutionalisation of human rights, the inability to incorporate social protective measures begs the question of how states that do not have the capacity or willpower to deal with human rights abuses can be functionally in conformity with the people-centred and rules-based community that ASEAN leaders have unanimously declared to establish.
One of the foreseeable areas of concern is in electronic commerce. Abuses could pertain to the wrongful usage of personal data, online scams, and breach of data privacy originating from increased digitalisation and e-commerce activities, more so during the current COVID-19 pandemic. As ASEAN governments intensify the process of shifting towards cashless and digital economies, safeguards that protect people from data theft, identity fraud and cyber extortion, to name a few, are pivotal.
The e-commerce chapter makes explicit that no Party (except for CVLM countries for a designated period) can prevent computing facilities from being located abroad or cross-border transfer of information by electronic means, while online consumer and personal information protections are left to the individual member state’s own devices.
Without collectively agreed protective regulations on data flows, and with disputes only to be addressed through state-driven consultation or a Joint Committee for further deliberation, the issues of illicit monetisation, discrimination and abuses of personal data will likely increase and be more challenging to resolve.
A further concern involves the 1991 Act of International Convention for the Protection of New Varieties of Plants or UPOV91 that would make the traditional practice of seed saving by local farmers an offense. All 5 RCEP partner countries (Australia, China, Japan, New Zealand and South Korea) and Singapore are members. In February 2019, 30 Malaysian civil society organisations and farmer groups jointly issued a memorandum expressing their objection to make the accession of this Act obligatory.
The Act is acknowledged under the intellectual property chapter but has not been made compulsory. This however does not rule out future efforts from the 5 RCEP partner states to pressure ASEAN countries to accede. The same goes for the ISDS provision should the former deem it necessary to better protect their investments in the latter.
ASEAN should use the review process as stipulated in Article 20.8 to ensure better representation and inclusivity of non-state stakeholders, effective safeguards on labour and the environment, and proper recourse for human rights violations in achieving a more equitable and sustainable development in line with a people-centred ASEAN.
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