Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter September 12, 2018

The RCEP and the Changing Landscape of World Trade

Assessing Asia-Pacific Investment Regionalism Next Stage

  • Julien Chaisse EMAIL logo and Richard Pomfret

Abstract

This article provides a detailed economic and legal analysis of the Regional Comprehensive Economic Partnership (RCEP) with regard to foreign investment with the objective to give an assessment of the impact of this new treaty on investment policies and flows in the Asia-Pacific region. Part One analyzes recent foreign direct investment flows in the ASEAN+ 6 countries, focusing on sectors of rapid growth and participation in global value chains and offers an overview of the RCEP rules on investment from an economic and legal perspective. Part Two analyzes the impacts of deep integration agreements on investment, as in the ASEAN Comprehensive Investment Agreement and RCEP’s rules on investment, with particular emphasis on the actual and potential role of small and medium-sized enterprises. The final section looks forward, with best case and plausible-scenario analysis of future impacts on FDI within RCEP, if deep integration progresses among the 16 countries.

Keywords: FDI; investment; FTA; ASEAN; GVC

Acknowledgements

The authors thank Deborah Elms and Arjun Goswami for comments on earlier versions.

References

Anukoonwattaka, W., M. Scagliusi and M. Mikic, Servicification and Industrial Exports from Asia and the Pacific, Trade Insights Issue No. 10 (United Nations Economic and Social Commission for Asia and the Pacific, Bangkok, 2015).Search in Google Scholar

ASEAN, ASEAN Investment Report 2015: Infrastructure Investment and Connectivity (Association of Southeast Asian Nations: Jakarta 2015).Search in Google Scholar

ASEAN, ASEAN Investment Report 2016: Foreign Direct Investment and MSME linkages (Association of Southeast Asian Nations: Jakarta 2016).Search in Google Scholar

Asian Agricultural Products Limited v. Democratic Socialist Republic of Sri Lanka (ICSID Case No. ARB/87/3), Award, 27 June, 1990.Search in Google Scholar

Athukorala, P.-C., “Global Production Sharing and Asian Trade Patterns: Implications for the Regional Comprehensive Economic Partnership (RCEP)”, in R. Kathuria and N.K. Nagpal (eds.), Global Economic Cooperation: Views from G20 Countries (Springer, for the Indian Council for Research on International Economic Relations, 2016).Search in Google Scholar

Baldwin, R., The Great Convergence: Information Technology and the New Globalization (Cambridge, MA: Harvard University Press, 2016).10.4159/9780674972667Search in Google Scholar

Bath, V. and L. Nottage, “Introduction”, in V. Bath & L. Nottage (eds.), Investment Law and Dispute Resolution Law and Practice in Asia 1 (London UJULIEN CHAISSE: Routledge, 2011).10.4324/9780203155530Search in Google Scholar

Behn, D., T.L. Berge and M. Langford, Poor States or Poor Governance? Explaining Outcomes in Investment Treaty Arbitration, 38 Nw. J. Int’l L. & Bus (2018), available at: <htts://scholarlycommons.law.northwestern.edu/njilb/vol38/iss3/1>.Search in Google Scholar

Bergsten, F., G. Hufbauer and S. Miner (eds.), Bridging the Pacific (Washington, DC: Peterson Institute for International Economics, 2014).Search in Google Scholar

Bernasconi-Osterwalder, N. and D Rosert, Investment Treaty Arbitration: Opportunities to Reform Arbitral Rules and Processes (Geneva: IISD, 2014), available at: <http://www.iisd.org/publications/investment-treaty-arbitration-opportunities-reform-arbitral-rules-and-processes>.Search in Google Scholar

Burke-White, W.W. and A.V. Staden, Private Litigation in a Public Law Sphere: The Standard of Review in Investor-State Arbitrations, 35 Yale Journal of International Law (2010).10.1093/acprof:oso/9780199589104.003.0022Search in Google Scholar

Cave, B., International Investment Arbitration in Asia—Year in Review, Google Scholar (2015), available at: <www.lexology.com/library/detail.aspx?g=ecb1496d-a05a-4841-a2c6-703ac8494813>.Search in Google Scholar

Chaisse, J., Assessing the Exposure of Asian States to Investment Claims, 6 Contemporary Asia Arbitration Journal (2013).Search in Google Scholar

Chaisse, J. and S. Hamanaka, The Investment Version of Asian Noodle Bowl-Proliferation of Agreements, Asian Development Bank Working Paper No. 128 (2014).Search in Google Scholar

Chaisse, J. and Hamanaka, S., The “Noodle Bowl Effect” of Investment Treaties in Asia– The Phenomenon, the Problems, the Practical Solutions, 33 ICSID Review, no. 1 (2018).10.1093/icsidreview/siy005Search in Google Scholar

Chaisse, J. and S. Jusoh, The ASEAN Comprehensive Investment Agreement: The Regionalisation of Laws and Policy on Foreign Investment (Cheltenham, UK: Edward Elgar, 2016).10.4337/9781785360022Search in Google Scholar

Chaisse, Julien, The Shifting Tectonics of International Investment Law-Structure and Dynamics of Rules and Arbitration on Foreign Investment in the Asia-Pacific Region, 47 George Washington International Law Review (2015).Search in Google Scholar

Chaisse, Julien and Christian Bellak, Do Bilateral Investment Treaties Promote Foreign Direct Investment? Preliminary Reflections on a New Methodology, 3 Transnational Corporations Review, no. 4 (2011).10.1080/19186444.2011.11658306Search in Google Scholar

CNUCED, World Investment Report 2016: Investor Nationality: Policy Challenges (UN 2016).Search in Google Scholar

Daly, M. and J. Ahmad, The EU-Vietnam FTA: What Does It All Mean? What Does It Mean for the Future? (Kluwer Arbitration Blog, 2015), available at: <http://kluwerarbitrationblog.com/2015/12/14/the-eu-vietnam-fta-what-does-it-all-mean-what-does-it-mean-for-thefuture/>.Search in Google Scholar

Driemeier, M.H., Do Bilateral Investment Treaties Attract FDI? Only a Bit … and They Could Bite, World Bank Dev. Research Grp., Research Working Paper No. 3121 (2003).Search in Google Scholar

Elms, D. and P. Low, Global Value Chains in a Changing World (Geneva: World Trade Organization, 2013).10.30875/0b68ab34-enSearch in Google Scholar

EU-Canada Comprehensive Economic and Trade Agreement, available at: <http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_152806.pdf>.Search in Google Scholar

Franck, S. and L. Wylie, Predicting Outcomes in Investment Treaty Arbitration, 65 Duke Law Journal (2015), available at: <http://trade.ec.europa.eu/doclib/press/index.cfm?id=1409>.Search in Google Scholar

G20 Guiding Principles for Global Investment Policymaking, Annex III.Search in Google Scholar

Gereffi, G. and K. Fernandez-Stark, Global Value Chain Analysis: A Primer (Chapel Hill NC: Duke University Center on Globalization, Governance, and Competitiveness, 2010), Available at: <http://www.cggc.duke.edu/pdfs/2011-05-31_GVC_analysis_a_primer.pdf>.Search in Google Scholar

GMS Secretariat, The Role of Special Economic Zones in Improving Effectiveness of GMS Economic Corridors (Manila: Asian Development Bank, 2016).Search in Google Scholar

Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership (2012).Search in Google Scholar

G.V. Harten, Investment Treaty Arbitration and Public Law (OUP 2007).10.1093/acprof:oso/9780199552146.001.0001Search in Google Scholar

Hansen, R.F., Parallel Proceedings in Investor-State Treaty Arbitration: Responses for Treaty-Drafters, Arbitrators and Parties, 73 Modern Law Review (2010).10.1111/j.1468-2230.2010.00807.xSearch in Google Scholar

Harten, G.V., Summary of G. Van Harten, “The Use of Quantitative Methods to Examine Possible Bias in Investment Arbitration” and “Reply” [To Franck, Garbin, and Perkins] in the Yearbook on International Investment Law & Policy, All Papers, Paper 33 (2011).Search in Google Scholar

<http://dfat.gov.au/trade/agreements/rcep/news/Pages/joint-leaders-statement-on-the-rcep-negotiations-14-november-2017-manila-philippines.aspx>.Search in Google Scholar

<http://investmentpolicyhub.unctad.org/ISDS/FilterByCountry>.Search in Google Scholar

<http://investmentpolicyhub.unctad.org/ISDS>.Search in Google Scholar

ICSID, 50 Years of ICSID, available at: <www.icsid.worldbank.org/apps/ICSIDWEB/Documents/ICSID%20Timeline%20-%20Featured.pdf>.Search in Google Scholar

IIA Issues Note No. 1 [2015].Search in Google Scholar

IIA Issues Note No. 2 [2016].Search in Google Scholar

Investor Protection and Investor to State Dispute Settlement in EU Trade and Investment Agreements with Third Countries, REX/411, available at: <www.eesc.europa.eu/?i=portal.en.rex-opinions.35922>, accessed February 12, 2017.Search in Google Scholar

Japan External Trade Organization, FY 2015 Survey of the International Operations of Japanese Firms, JETRO Overseas Business Survey, Tokyo.Search in Google Scholar

Kim, J., A Pivot to Asia in Investor-State Arbitration: The Coming Emergence of Asian Claimants, 27 ICSID Review (2012).10.1093/icsidreview/sis028Search in Google Scholar

Kingsbury, B., et al., The Emergence of Global Administrative Law, 68Law and Contemporary Problems (2005).10.2139/ssrn.692628Search in Google Scholar

Kollamparambil, U., Bilateral Investment Treaties and Investor State Disputes, ERSA Working Paper (2016).Search in Google Scholar

Lawrence, R., Regionalism, Multilateralism, and Deeper Integration (Washington, DC: Brookings Institution Press, 1996).Search in Google Scholar

Lodefalk, M., Servicification of Manufacturing Firms Makes Divides in Trade Policymaking Antiquated, Working Paper 2015 (Örebro, Sweden: Örebro University, 2015).Search in Google Scholar

Luttrell, S., ISDS in the Asia-Pacific: A Regional Snap-Shot, 19 International Trade and Business Law Review (2016).Search in Google Scholar

Malintoppi, L., Is There an ‘Asian Way’ for Investor-State Dispute Resolution, KLRCA Newsletter (2015), available at: <http://klrca.org/downloads/newsletters/2015Q3newsletter.pdf>.Search in Google Scholar

Miller, S. and G. Hicks, Investor-State Dispute Settlement: A Reality Check, Available at: <https://www.csis.org/analysis/investor-state-dispute-settlement-reality-check-working-paper>.Search in Google Scholar

Nakagawa, J., No More Negotiated Deals? Settlement of Trade and Investment Disputes in East Asia, 10 Journal of International Economic Law (JIEL) (2007), doi:10.1093/jiel/jgm032.Search in Google Scholar

Nottage, L. and J.R. Weeramantry, Investment Arbitration in Asia: Five Perspectives on Law and Practice, 28 Arbitration International (2012).10.1093/arbitration/28.1.19Search in Google Scholar

Petri, P., M. Plummer and F. Zhai, “The TPP, China and the FTAAP: The Case for Convergence”, in T. Guoqiang and P. Petri (eds.), New Directions in Asia-Pacific Economic Integration (Honolulu: East-West Center, 2014a).Search in Google Scholar

Plummer, M., Mega-Regionalism in Asia and Its Implications for Europe, 56 Asian Survey, no. 6 (2016).10.1525/as.2016.56.6.1040Search in Google Scholar

Pomfret, Richard, The Economic Development of Canada (London, UK: Routledge, 2013).10.4324/9781315019550Search in Google Scholar

Press release of the European Commission, available at: <http://ec.europa.eu/trade/policy/countries-and-regions/countries/vietnam/>, accessed February 1, 2016.Search in Google Scholar

Richard, Baldwin, Trade and Industrialisation after Globalisation’s 2nd Unbundling: How Building and Joining A Supply Chain are Different and Why It Matters, NBER Working Paper No. 17716 (Issued in December 2011, Revised in January 2013).10.3386/w17716Search in Google Scholar

Roberts, Cf.A., State-to-State Investment Treaty Arbitration: A Hybrid Theory of Interdependent Rights and Shared Interpretive Authority, 51 Harvard International Law Journal, no. 1 (2014).Search in Google Scholar

Sacerdoti, G., The Admission and Treatment of Foreign Investment under Recent Bilateral and Regional Treaties, 1 The Journal of World Investment: Law, Economics, Politics (2000).10.1163/221190000X00032Search in Google Scholar

Salacuse, J. and N. Sullivan, Do BITs Really Work? an Evaluation of Bilateral Investment Treaties and Their Grand Bargain, 46 Harvard International Law Journal (2005).10.1093/acprof:oso/9780195388534.003.0005Search in Google Scholar

Salomon, C. and S. Friedrich, Investment Arbitration in East Asia and the Pacific, 16 Journal of World Investment and Trade (2015).10.1163/22119000-01606002Search in Google Scholar

Shihata, F.I., Towards a Greater Depoliticization of Investment Disputes: The Roles of ICSID and MIGA, 1 ICSID Review (1986).10.1093/icsidreview/1.1.1Search in Google Scholar

Sourdin, Patricia and Richard WT Pomfret, Trade Facilitation: Defining, Measuring, Explaining and Reducing the Cost of International Trade (Cheltenham, UK: Edward Elgar Publishing, 2012).10.4337/9780857937438Search in Google Scholar

Thangavelu, S. and Oum, S., Servicification in Global Value Chains: Comparative analysis of East Asian countries with OECD, paper prepared for ERIA project on Services Supply Chain: Implications and opportunities for RCEP (Jakarta: Economic Research Institute for ASEAN and East Asia, 2017).Search in Google Scholar

UNCTAD, World Investment Report 2016, available at: <http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf>.Search in Google Scholar

UNCTAD, World Investment Report 2016, available at: <http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf>, <http://unctad.org/en/PublicationChapters/wir2015ch0_KeyMessage_en.pdf>.Search in Google Scholar

Vandevelde, K.J., A Brief History of International Investment Agreements, 12 UC Davis International Law and Policy (2012).10.1093/acprof:oso/9780195388534.003.0001Search in Google Scholar

Waibel, M. (ed.), The Backlash against Investment Arbitration: Perceptions and Reality (Netherlands: Kluwer Law International, 2010).Search in Google Scholar

Wellhausen, R., Recent Trends in Investor-State Dispute Settlement, 7 Journal of International Dispute Settlement (2016).10.1093/jnlids/idv038Search in Google Scholar

World Trade Organization, World Trade Report 2011: The WTO and preferential trade agreements: From co-existence to coherence (World Trade Organization (WTO), 2011).Search in Google Scholar

Published Online: 2018-09-12
Published in Print: 2019-01-28

© 2019 Law and Development Review

Downloaded on 25.4.2024 from https://www.degruyter.com/document/doi/10.1515/ldr-2018-0058/html
Scroll to top button