Leaders from 15 of the countries negotiating the Regional Comprehensive Economic Partnership (RCEP) announced on November 4, 2019, that they had clinched a deal that would govern trade and investment across a wide swath of the Asia–Pacific region. India, however, did not endorse the outcome, though left open the prospects of joining the pact at a later date.
“We noted 15 RCEP Participating Countries have concluded text-based negotiations for all 20 chapters and essentially all their market access issues; and tasked legal scrubbing by them to commence for signing in 2020,” leaders said in a joint statement, while noting that they would continue working with India in the hopes that the country will later come back on board.
The 20 chapters of the RCEP accord include various aspects of goods and services trade, as well as electronic commerce, competition, investment, intellectual property, government procurement, economic and technical cooperation, and small and medium-sized enterprises.
The full RCEP text is not yet available publicly, though it will be published upon being signed. Summaries of its contents have been circulated by some of the participating governments. According to an overview provided by Australia’s Department of Foreign Affairs and Trade, the agreement reportedly includes various provisions aimed at investment facilitation, though further details on what this would entail are not yet known. Other outcomes on investment include MFN treatment to foreign investors, along with provisions involving investment protection, such as an FET standard and compensation in instances of conflict or expropriation.
“RCEP will reserve the right of parties to regulate in areas of particular sensitivity. Parties will retain current flexibility to regulate for important public welfare objectives, including public health,” the outcomes summary notes.
Importantly, RCEP will reportedly not include an ISDS mechanism, a matter that participating countries will continue to discuss in the future.
India stated its continued interest in the agreement and has not ruled out the option of continuing with RCEP pending further negotiations with the other countries while expressing concern that the deal as written would hurt domestic industry and that it might lead to “unsustainable trade deficits.”
Various leaders from the RCEP countries expressed their hope that the final version of the agreement ultimately includes India, noting both the commercial significance as well as the strategic importance of linking these economies.
The RCEP process was launched in 2012 and has featured 28 negotiating rounds, as well as various intersessional and ministerial meetings, along with leaders’ gatherings. The participating countries in this initiative include all 10 members of the Association of Southeast Asian Nations (ASEAN) and their six FTA partners, namely Australia, China, India, Japan, New Zealand and South Korea.