Dispute Settlement under the Regional Comprehensive Economic Partnership:
Part 3: Third Parties under Chapter 19
by Yvette Foo
Thus far, this blog series focused on provisions pertaining to the Complainant and Respondent parties disputing under RCEP. Part 1 analysed specific procedural issues, while Part 2 focused on the rights/benefits that Least Developed Country Parties have under Chapter 19. Part 3 now analyses the role of third parties (3Ps) in the dispute.
Part 3 first gives a brief overview of Chapter 19’s 3P provisions, before comparing them with existing ASEAN and the WTO provisions. I note that the 2019 ASEAN Protocol on Enhanced Dispute Settlement Mechanism (2019 EDSM) entered into force on 20 June 2022.[1] While earlier blog posts in this series referred to the 2004 EDSM, it will now refer to the 2019 EDSM, which supersedes the 2004 EDSM.[2]
Part 3 then highlights the balance struck between confidentiality and 3P involvement. This post will discuss how the ‘ASEAN Way’ of limiting external influence in disputes affects RCEP’s 3P provisions. Lastly, Part 3 concludes with a brief discussion on participation rates of RCEP members as 3Ps: some ASEAN countries are unlikely to join disputes, while their dialogue partners may participate more eagerly.
3Ps Rights and Responsibilities under Chapter 19
3P joining panel disputes
The main provision on 3P joinders in a panel dispute is Article 19.10. The 3P must: (i) be a member of RCEP, and (ii) have a “substantial interest” in the matter.[3] The member must notify the parties to the dispute of its interest within 10 days of a request to establish/reconvene a panel. To recall, parties can request a panel for a dispute, for compliance review, or for compensation/suspension of concessions or obligations.
3Ps should expect to have their interests “fully taken into account during the panel process.”[4] Their specific rights and responsibilities in a dispute include:
- presenting at the first and second hearings of the Panel before an Interim Report is published;[5]
- making one written submission;[6]
- making one oral statement;[7]
- responding to questions from the panel in writing,[8] and;
- any additional/supplemental rights granted by a panel during proceedings.[9]
Article 19.10 is similar to Article 13 of the 2019 EDSM. Under Article 13, 3Ps are (ASEAN) member states with a substantial interest in a matter before a panel,[10] with similar rights and responsibilities.[11] Likewise, the same is provided for under Article 10 of the WTO DSU. Since RCEP is a compilation of ASEAN’s existing FTAs with its dialogue partners, Article 19.10 mirrors the 3P provisions under the ASEAN-Australia-New-Zealand FTA,[12] ASEAN-China FTA,[13] ASEAN-Japan FTA,[14] and ASEAN-Korea FTA.[15]
One key difference between RCEP and the 2019 EDSM and WTO DSU is that 3Ps are not allowed to commence their own dispute if its outcome leads to nullification or impairment of any benefits accrued to it under RCEP.[16]
3P joining consultations
3Ps can also request to join consultations: Article 19.6(9) states that the 3P must inform the parties to the dispute of its “substantial trade interest” in the consultations no later than 7 days after receipt of the request for consultations. Unlike Article 19.10 however, the 3P can only join the consultation if both parties to the dispute agree to let them.[17]
The same rule applies to joining consultations under the ASEAN-Australia-New-Zealand FTA.[18] However, RCEP is quite different to the 2019 EDSM and WTO DSU. The latter two have separate dispute settlement bodies to receive a 3P’s request to join consultation, namely the Senior Economic Ministers Meeting (SEOM) and WTO DSB respectively.[19] Furthermore, both Article 3(8) of the 2019 EDSM and Article 4.11 of the WTO DSU place the decision in the hands of the “member to which the request for consultations was addressed”, who must agree that that “the claim of substantial interest is well-founded.” The ASEAN-China FTA follows the 2019 EDSM/WTO DSU.[20]
The important point of difference here is that RCEP places the decision in both disputing parties’ hands, rather than just the party receiving the request for consultations or a dispute settlement body. In this way, RCEP limits the input of 3Ps early in the dispute settlement process by making it more difficult for 3Ps to join consultations.[21] However, it is not the most extreme in doing so; for instance, the ASEAN-Japan FTA[22] and ASEAN-Korea FTA[23] both do not allow 3Ps to join consultations.
3Ps joining at other stages of the dispute,
It is unlikely that 3Ps would have any involvement in conciliation, mediation, or good office deliberations. Article 19.7(3) states that such proceedings will be confidential and without prejudice to the rights of any of the parties to the dispute.
A Limited Role: Confidentiality and Excluding Non-Members
Confidentiality provisions
At this point, it should be noted that there are several factors limiting the 3P’s involvement in a dispute. RCEP has several confidentiality provisions that impact 3Ps. Under Article 19.10(4), a 3P is only able to get access to non-confidential written submissions/transcribed oral submissions from the disputing parties. Article 19.10(4(a)) allows 3Ps to be present at panel hearings, but this is also subject to the protection of confidential information. Lastly, Article 19.10(7) states that 3Ps must be invited to present before the panel, and panel deliberations will otherwise be confidential.
Exclusion of external stakeholders
Another factor is how only RCEP members can be 3Ps to a dispute. External stakeholders such as international organisations, non-governmental organisations, and amicus curiae submissions, have no role in RCEP disputes.[24] This outcome might not come as a surprise as concerns about transparency and the protection of confidential information were already voiced during the negotiations leading up to RCEP: non-members had to be invited to negotiations, and all discussions were kept private.[25]
This is not to say that the public will not have access to the outcome of dispute proceedings at all. Under Article 19.13(11), 3Ps and parties to the dispute can be required to produce non-confidential summaries of written submissions to disclose to the public. A non-confidential final panel report can also be released to the public.[26]
However, the exclusion of external stakeholders entirely from the dispute settlement process, save for the very end when they may learn of the outcome of the dispute, is apparent. As Desierto writes: “[t]here is hardly any conceivably significant space for non-State, local community, or civil society participation, input, or monitoring of these dispute settlement procedures.”[27] An interesting parallel therefore exists: RCEP covers one-third of the world’s economies, and yet excludes its majority from participating.[28]
The ASEAN Way Limits 3P Participation
RCEP limits the freedom of 3Ps to participate in disputes under RCEP and brings the dispute back to the Complainant and Respondent parties. This can be attributed to the ASEAN Way, which “protects state sovereignty” by promoting non-interference and consensus-building,[29] while ensuring that “high-profile or conflict-relevant discussions are resolved with a preference for a high degree of informality, private meetings, face-saving, and secrecy.”[30]
Recalling that RCEP is an ASEAN-led endeavour, it is expected that 3Ps will face barriers in joining in disputes. The ASEAN Way finds itself into Article 19.6(9) by making participation dependent on the disputing parties’ consent.[31] Doing so is also a reminder to the parties to the dispute to resolve the dispute between themselves before it escalates to the panel where the 3P has fewer barriers to enter and the dispute is subject to greater scrutiny (although 3Ps will still be subject to numerous confidentiality provisions).[32] The same argument would also explain why only members of RCEP can be 3Ps, and why RCEP limits external stakeholder engagement; Chapter 19 ensures that only immediate members to RCEP are involved in settling the dispute—something that is consistent with the ASEAN Way.[33]
Differing Participation Rates between RCEP Members
The discussion on confidentiality above is dependent on the members joining disputes as 3Ps in the first place. Here, the issue is more about differing levels of ‘readiness’ of the members to join as 3Ps. It is a fact that ASEAN 3P participation—in WTO disputes—has increased over time,[34] but not for all of its members. Brunei, Cambodia, Laos, and Myanmar have not participated as 3Ps in any disputes thus far. This gap is further exacerbated when directly compared to how many cases their dialogue partners in RCEP have joined as 3Ps.
The following table presents the number of WTO cases that RCEP member countries have attended as 3Ps in 2022:
|
RCEP Member State |
Number of WTO Cases Joined as 3P in 2022[35] |
|
Brunei |
0 |
|
Cambodia |
0 |
|
Indonesia |
47 |
|
Lao PDR |
0 |
|
Malaysia |
26 |
|
Myanmar |
0 |
|
The Philippines |
18 |
|
Singapore |
69 |
|
Thailand |
101 |
|
Vietnam |
37 |
|
Australia |
117 |
|
China |
192 |
|
Japan |
225 |
|
Korea |
139 |
|
New Zealand |
63 |
Challenging the ASEAN Way?: Dialogue partners as 3Ps
With these statistics in mind, there is room to argue that dialogue partners have been given new liberties. Previously, ASEAN’s dialogue partners operated under separate dispute settlement regimes in their separate FTAs and could not join as co-complainants or 3Ps for another partner’s dispute.[36] Disputes under the 2004 and 2019 EDSM pertain to intra-ASEAN economic treaties thus do not allow dialogue partners to join.
Now, with RCEP uniting the countries under a single dispute settlement mechanism, a dialogue partner can can now join disputes between an ASEAN and another dialogue partner, which means greater external input and political pressure.[37] Doing so seems antithetical to the ASEAN Way, which, as discussed above, focuses on private, face-saving dispute resolution.
Although 3P still need to have a “substantial interest” under Article 19.10 to join a dispute, this is a relatively test to pass. In DS98: Korea – Definitive Safeguard Measure on Import of Certain Dairy Products, “substantial interest” was found to not need an economic interest.[38] Other critics have argued that the term “had no use as a term of limitation” after it developed to mean that all GATT members had substantial interests equally.[39] It seems strange for Article 19.10 to rely on such a low-threshold test; simply swapping it with Article 19.6(9)’s “substantial economic interest” threshold could better limit 3P involvement.
In a way, RCEP takes a significant stride out of ASEAN’s comfort zone by allowing its dialogue partners some leeway around established ASEAN Way principles, especially considering how actively some of its partners participate as 3Ps. However, it may also be the case that RCEP’s confidentiality provisions sufficiently limit this newfound influence that dialogue partners have in disputes. To this end, only a practical test of Chapter 19’s 3P provisions will demonstrate what RCEP’s balance between ASEAN Way confidentiality and 3P involvement looks like.
—
While there is room for 3Ps to play a role in disputes, the reality under RCEP is that it is procedurally a minor one. Chapter 19’s 3P provisions were drafted in accordance with the ‘ASEAN Way’. By limiting the influences of 3Ps in disputes, subjecting their participation to numerous confidentiality provisions, and excluding external stakeholders, RCEP ensures that disputes remain largely between the disputing parties. Some ASEAN member states and its five dialogue partners will likely join as 3Ps in future disputes, which will test the balance currently struck in RCEP between 3P involvement and confidentiality of disputes.
[1] 2019 ASEAN Protocol on Enhanced Dispute Settlement Mechanism, adopted in Manila, the Philippines on 20 December 2019, <http://agreement.asean.org/media/download/20200128120825.pdf> accessed 22 June 2022 [2019 EDSM].
[2] Note, however, that Article 27(3) of the 2019 EDSM states that the 2019 EDSM replaces the 2004 EDSM, but not for disputes where the request for consultations were made under the 2004 EDSM.
[3] Article 19.10(2) RCEP. This should be read together with Article 19.1(f), which states that “Third Party means any Party that makes a notification pursuant to paragraph 2 of Article 19.10” (emphasis added).
[4] Article 19.10(1) RCEP.
[5] Article 19.10(5)(a) RCEP.
[6] Article 19.10(5)(b) RCEP. Under Article 19.10(6), if a 3P makes a submission/document to the panel, this must also be provided to the parties to the dispute.
[7] Article 19.10(5)(c) RCEP.
[8] Article 19.10(5)(d) RCEP; see also Article 19.13(12) RCEP.
[9] Article 19.10(7) RCEP.
[10] Article 13(2) 2019 EDSM.
[11] See Article 13(4), (6) 2019 EDSM.
[12] Article 10.1 of the 2009 Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area.
[13] Article 10.1 of the 2004 Agreement on Dispute Settlement Mechanism of the Framework Agreement on Comprehensive Economic Co-Operation between the Association of Southeast Asian Nations and the People’s Republic of China.
[14] Article 66(1) of the 2008 Agreement on Comprehensive Economic Partnership among Member States of ASEAN and Japan.
[15] Article 7(1) of the 2005 Agreement on Dispute Settlement Mechanism Under the Framework Agreement on Comprehensive Economic Cooperation Among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea.
[16] Article 13(7) 2019 EDSM; Article 10.2 WTO DSU.
[17] For a discussion of the problems caused by requiring disputing parties to agree to a 3P’s presence at the consultation stage, see Massimo Lando, ‘Enhancing Conflict Resolution ‘ASEAN Way’: The Dispute Settlement System of the Regional Comprehensive Economic Partnership’, <https://academic.oup.com/jids/article/13/1/98/6527017?rss=1> at p 105–7.
[18] Article 17.6(7) of the 2009 Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area.
[19] Lando, supra note 17 at 107.
[20] Article 4(6) of the 2004 Agreement on Dispute Settlement Mechanism of the Framework Agreement on Comprehensive Economic Co-Operation between the Association of Southeast Asian Nations and the People’s Republic of China.
[21] Lando, supra note 17 at 105–6.
[22] Article 62(6) of the 2008 Agreement on Comprehensive Economic Partnership among Member States of ASEAN and Japan.
[23] Article 3(5) of the 2005 Agreement on Dispute Settlement Mechanism Under the Framework Agreement on Comprehensive Economic Cooperation Among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea.
[24] See for debates on allowing amicus curiae submissions in lieu of 3P participation: Maxime Somda, ‘Protecting Social Rights Using the Amicus Curiae Procedure in Investment Arbitration: A smokescreen against third parties?’ International institute for Sustainable Development (23 April 2019), <https://www.iisd.org/itn/en/2019/04/23/protecting-social-rights-using-the-amicus-curiae-procedure-in-investment-arbitration-a-smokescreen-against-third-parties-maxime-somda/>, accessed 24 June 2022. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership also allows for amicus curiae submissions for arbitral proceedings, at Article 28.13(e).
[25] See for example ‘Regional MPs call for greater transparency of RCEP negotiations’, ASEAN Parliamentarians for Human Rights (9 November 2022), online: <https://aseanmp.org/2020/11/09/rcep-negotiations-call/>, accessed 16 June 2022. C.f. Brasukra G Sudjana, Cazadira F Tamzil, ‘RCEP: Milestone Trade Deal in an Age of Trade Wars’, Asia Group Advisors (27 November 2022), <https://asiagroupadvisors.com/insights/rcep:-milestone-trade-deal-in-an-age-of-trade-wars/54> accessed 28 June 2022, which argues that RCEP was already a major shift from usual ASEAN consultations in that it did involve regular consultations with civil society organisations and businesses.
[26] Article 19.13(19) RCEP.
[27] Diane Desierto, ‘The Regional Comprehensive Economic Partnership (RCEP)’s Chapter 19 Dispute Settlement Procedures’, EJIL: Talk! (16 November 2020), accessed 10 June 2022, online: <https://www.ejiltalk.org/the-regional-comprehensive-economic-partnership-rceps-chapter-19-dispute-settlement/>. See also Benny Teh, ‘RCEP Fails To Promote A People-Centred ASEAN’, The ASEAN Post (5 December 2020), online: <https://theaseanpost.com/article/rcep-fails-promote-people-centred-asean>, accessed 16 June 2022, which cites Desierto.
[28] Lisa Cornish, ‘Civil society criticizes secretive Asia-Pacific free trade negotiations’, Devex (3 July 2019), online: <https://www.devex.com/news/civil-society-criticizes-secretive-asia-pacific-free-trade-negotiations-95222>, accessed 16 June 2022: “There is a lot of secrecy around RCEP despite the fact that it will cover 16 countries and almost half the population of the world.”
[29] Mely Caballero‑Anthony, ‘The ASEAN way and the changing security environment: navigating challenges to informality and centrality’, International Politics (2 May 2022), <https://link.springer.com/article/10.1057/s41311-022-00400-0> accessed 23 June 2022. See also Mely Caballero-Anthony, ‘Mechanisms of Dispute Settlement: The ASEAN Experience’, (1998) ISEAS Yusof Ishak Institute, Contemporary Southeast Asia 38.
[30] Deepak Nair, ‘Saving face in diplomacy: A political sociology of face-to-face interactions in the Association of Southeast Asian Nations’, (2019) 25 European Journal of International Relations 672 at 693.
[31] Lando, supra note 17, at 107, 120.
[32] Ibid., at 107.
[33] Ibid., at 106.
[34] See Ponciano Intal, Jr., Yoshifumi Fukunaga, Fukunari Kimura, Phoumin Han, Philippa Dee, Dionisius Narjoko, ‘Global ASEAN’, in Ponciano Intal, Jr., Yoshifumi Fukunaga, Fukunari Kimura, Phoumin Han, Philippa Dee, Dionisius Narjoko, Sothea Oum eds., ASEAN Rising: ASEAN and AEC Beyond 2015, online: <https://www.eria.org/Key_Report_ASEAN_Rising_Chapter_6.pdf>, accessed 10 June 2022, at p 299.
[35] World Trade Organisation, “Disputes by member”, online: <https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm> accessed 14 June 2022 (numbers also as of 14 June 2022).
[36] See Henry S. Gao, ‘Dispute settlement provisions in ASEAN’s external economic agreements with China, Japan and Korea’ in Pasha L. Hsieh and Bryan Mercurio, eds, ASEAN Law in the New Regional Economic Order, Global Trends and Shifting Paradigms (Cambridge University Press, 2019) 64, at p 81.
[37] Ibid.
[38] DS98: Korea – Definitive Safeguard Measure on Import of Certain Dairy Products, ‘Report of the Panel WT/DS98/R’ (21 June 1999), at 7.13–5.
[39] Chi Carmody, ‘Of Substantial Interest: Third Parties Under GATT’ (1997) 18 Michigan Journal of International Law 615, at 631.