As a former WTO lawyer, I am always interested in comparing WTO procedures to those of other trade agreements. I have recently found myself dabbling in RCEP’s dispute settlement provisions. While this is yesterday’s news, perhaps some readers who have not studied the RCEP might be interested in my random observations.
RCEP dispute settlement – like that of most other RTAs – generally builds upon the structure of the DSU (with the notable exception that there is no Appellate Body). So my comments will tend to focus on areas where the negotiators have decided to deviate from the WTO approach (or not).
A first substantive observation – Article 19.3 explicitly excludes non-violation complaints. I am sure there is a back story here, but I don’t know it. Non-violation has always seemed to me to generate more debate than it is worth, but the decision is still an interesting one.
As in many other FTAs, a range of provisions/measures are carved out of dispute settlement. This is true of Section B to Chapter 7, regarding trade remedies (standard fare for FTAs), but is also the case for example for the (strikingly brief) anti-corruption provision in Article 17.9, and for decisions relating to investment screening (Article 17.11). The latter carve-out applies also to the enforcement of investment conditions/requirements, seemingly reversing the GATT case on Canada’s Foreign Investment Review Act.
Like most FTAs, RCEP incorporates by reference WTO obligations (for example, GATT Article III on national treatment, and the general exceptions in GATT Article XX and GATS Article XIV). In other cases, it includes provisions based on, but changed from, WTO provisions (for example GATT Article XXI, where RCEP adds critical infrastructure to the security exception). Article 19.4 makes clear that, where a WTO provision is incorporated by reference, relevant interpretations by WTO panels/AB shall be “considered”, while a note further clarifies that such interpretations can also be considered even if they do not relate to an obligation incorporated by reference.
Given the WTO’s current AB blockage, we may see more cases where what are in effect WTO obligations are litigated under FTAs (such as the EU case against Ukraine on log export prohibitions). It will be interesting to see how FTA panels deal with the fact that even a WTO provision incorporated by reference has to be interpreted in light of its context (the FTA as a whole), such that it might logically have a very different meaning in that new context.
Of course, the panel composition process differs notably from that in the WTO (and other FTAs). There does not seem to be a roster of panelists. Rather, the parties first consult about a composition procedure (Article 19.3). If they cannot agree, each party appoints its own panelist, and they seek to agree on a Chair. If they cannot agree, the WTO Director-General is requested to appoint the chair; if he is unavailable, the Secretary-General of the Permanent Court of Arbitration steps in. The Chair should, “wherever possible”, have served on a WTO panel/AB (Article 19.11(11)(c). Curiously, each party “shall bear the cost of its appointed panelist”, a provision that seems fraught to me (Article 19.19).
Turning to more mundane issues, RCEP’s approach to transparency is interesting. Regarding internal transparency, third parties fare well compared to the WTO (access to all submissions and hearings, right of participation in proceedings regarding levels of suspension). On external transparency, however, parties’ submissions remain confidential, and nothing in the text suggests there will be open hearings. So no evolution from the DSU, and no reflection of evolving WTO practice.
One area where RCEP seeks to clean up WTO deficiencies is the review of post-suspension compliance. Here, RCEP seems to adopt the AB’s approach in EU-Hormones, allowing a second compliance panel at the request of either party; that panel can also review the level of suspension in light of the purported compliance measure. This latter seems like a sensible idea (Article 19.16(13)).
Finally, language. “All proceedings …shall be conducted in the English language”. Article 19.21. It is hard to imagine Members of the WTO agreeing to any such provision.
I haven’t compared any of this to CPTPP, so inputs on that from readers would be welcomed!
