RCEP, ISDS and a non-gold standard

I have blogged about RCEP and ISDS in the past few posts. Well, that is the flavour of the season. Now this one is on RCEP and ISDS!

Julien Chaisse in this post records that RCEP has been disappointing in terms of not setting a gold standard in investment rule making, especially in the context of ISDS.

Malaysia’s trade minister publicly stated that all countries involved had agreed to exclude ISDS provisions from RCEP.[3] India’s strict position on ISDS and numerous other trade-related issues caused a lowest common denominator approach, explained by its own BITs renegotiations. Both India and Indonesia were opposed, as matter of principle, to ISDS. Despite India’s decision not to join the consensus, the investment chapter should remain untouched, partly because there is still hope that India will sign RCEP in 2020. Capital exporting countries (especially the Republic of Korea, Japan and Australia) agreed to the exclusion of ISDS. Japan could compromise on ISDS (as it did in the ASEAN-Japan FTA which has no investment chapter) as Japanese investors can still rely on BITs (containing ISDS) with ASEAN countries. This means that the noodle bowl of IIAs remains largely unaddressed. In terms of substantive protections, RCEP resembles a slightly enhanced ASEAN Comprehensive Investment Agreement (ACIA). In particular, RCEP further clarifies—and limits—provisions regarding fair and equitable treatment, denial of benefits and performance requirements (which were provisions repeatedly re-assed by ASEAN negotiators in the context of the ACIA implementation).   

The results on ISDS don't seem to be quite striking considering the positions most members held on the issue. ISDS continues to be a contentious issues across forums and trade negotiations - from UNCITRAL to RCEP!