Monday, November 16, 2020

RCEP, digital economy and innovation

News of the mega trade deal RCEP is trickiling in here, here, here and here. The IELP blog has a preliminary analysis of some of the provisions. 

The signing ceremony of RCEP

That took me to the Electronic Commerce chapter of RCEP legal text and I was curious to know the data localisation standard. A number of interesting aspects in Article 12.14 covering "Location of Computing facilities".

Article 12.14: Location of Computing Facilities 

1. The Parties recognise that each Party may have its own measures regarding the use or location of computing facilities, including requirements that seek to ensure the security and confidentiality of communications. 

2. No Party shall require a covered person to use or locate computing facilities in that Party’s territory as a condition for conducting business in that Party’s territory.11 

3. Nothing in this Article shall prevent a Party from adopting or maintaining:

(a) any measure inconsistent with paragraph 2 that it considers necessary to achieve a legitimate public policy objective12 provided that the measure is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; or 

(b) any measure that it considers necessary for the protection of its essential security interests. Such measures shall not be disputed by other Parties. 

11 Cambodia, Lao PDR, and Myanmar shall not be obliged to apply this paragraph for a period of five years after the date of entry into force of this Agreement, with an additional three years if necessary. Viet Nam shall not be obliged to apply this paragraph for a period of five years after the date of entry into force of this Agreement.

12 For the purposes of this subparagraph, the Parties affirm that the necessity behind the implementation of such legitimate public policy shall be decided by the implementing Party. 

The mandate to not require local computing facilities ahs its exceptions. Cambodia, Lao PDR and Myanmar can have measures that require dta localisation for a periof of 5 more years, extendable to eight. Transition time seems to apply only to these three members.

Essential security exception is available to all members wherein obligations under paragraph 2 are violated. Moreover, there is a non-justiciable element here.  Article 12.4 (3)(b) states that such measures shall not be disputed by other Parties. Therefore, it is self-judging to the core. Whether it satisfies the standard set forth in the exception si to be decided by the Party whileno other Party can challenge it in the dispute settlement proceedings under RCEP.

It would be an interesting to compare three new norm setting legal paradigms and their impications for policy space and standradisation - CP-TPP, RCEP and the Australia Singapore Digital Economy Agreement.

Fertile ground for experimentation and innovative solutions.


Sunday, November 1, 2020

Not self-judging no more!

 The security exception has hogged the limelight of late. Recent WTO decisions have called into question the self-judging character of the security exception in WTO agreements.I have blogged about it here, here and here.

A recent blogpost in Opinio Juris throws some light of the issues involved:

The tussle between the ‘self-judging’ nature and the objective assessment of these requirements has arisen in the past. In defending her export restrictions against Czechoslovakia, USA contended that the WTO had no jurisdiction to question a Member State’s exercise of sovereignty. Similarly, the EC defended the suspension of imports from Argentina on the ground that the security exception was a repository of “unspecified, inherent rights”. This exception has been litigated recently in the Russia – Traffic in Transit and Saudi Arabia – Measures Concerning Protection of IPR (Saudi Arabia – IPR), largely putting this debate to rest by rejecting the notion of the security exception as an unlimited escape clause.

A recent blogpost on Kluwer Arbitration Blog on space law and ISDS, took me to an interesting analysis of the security exception in a BIT as compared to WTO law.

While analysing the security exception clause in a BIT in the CC/Devas vs. India arbitration dispute, the Tribunal tried to make a distinction between the broad exception in the BIT as agains the seemingly "self-judging character" of the provisions under WTO law. 

Indeed, it is well established by judgments of the International Court of Justice (the “ICJ”) and investment arbitration awards that, unless a treaty contains specific wording granting full discretion to the State to determine what it considers necessary for the protection of its security interests, national security clauses are not self-judging.

In footnote 286, the tribunal notes:

Self-judging “essential security interests” provisions are far from being unknown in international law. See, for instance, Article XXI of the General Agreement on Tariffs and Trade 1947 (“GATT”): “Nothing in this Agreement shall be construed: (a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests…” (emphasis added); ...

I found this reference to self-judging clauses interesting. In the end, they are no longer self-judging as they seemed to be with recent WTO jurisprudence.