The hidden costs of RCEP and corporate trade deals in Asia
The Regional Comprehensive Economic Partnership (RCEP) is currently being negotiated between 16 countries in the Asian region. It includes China, members of the Association of Southeast Asian Nations (ASEAN) and other key trading nations such as Australia, South Korea, Japan and India. Over 50% of the world’s population lives in the negotiating countries, which account for over a quarter of global exports and almost 30% of the world’s GDP . Like other trade agreements, such as the Trans Pacific Partnership (TPP), these negotiations include a focus on trade liberalisation, address varying regulatory disciplines.
If signed, RCEP would grant corporations the exclusive right to bypass domestic legal systems and sue governments at international tribunals whenever they feel government regulation can limit their profits. New research reveals that investors have launched 50 lawsuits at secret international arbitration tribunals against governments negotiating the RCEP agreement for at least $31 billion US dollars.
The report by The Transnational Institute (TNI), Friends of the Earth International (FOEI), Indonesia for Global Justice (IGJ), Focus on the Global South and Paung Ku exposes a growing wave of corporate lawsuits against Asian countries, which could lead to a drain in public budgets of millions of US dollars and undermine governments’ rights to regulate in the public interest.
The report argues that these lawsuits provide a warning of the potential high costs of the proposed RCEP trade deal. RCEP will deepen the rights of investors and lock in place this system of privatized justice. Governments will find it much more difficult to withdraw their commitments to the rights accorded to foreign investors in RCEP than in Bilateral Investment Treaties, because they would need to put an end to the whole agreement and not just the sections on investors’ rights.
This report compiles available data on ISDS cases taken against countries party to the RCEP negotiations. The report highlights the ongoing corporate attack on Asian governments’ right to regulate, including actions following the introduction of measures to protect the environment. It also underlines the costs that this system has already had to democracy in the region.
1. Australian government (2016) Regional Comprehensive Economic Partnership, Department of Foreign Affairs and Trade