Back in mid-November, something significant happened in Asia, largely unnoticed. While most of the western world continued to grapple with daily reports of increasing COVID-19 hospitalizations and deaths, (well before the word “variant” became part of our everyday vocabulary), and while we watched transfixed to see whether Donald Trump would succeed in overturning the expressed will of the American people, fifteen countries came together on November 15, 2020 to sign the Regional Comprehensive Economic Partnership (RCEP) Agreement.
These countries, the ten members of the Association of Southeast Asian Nations, known as ASEAN (comprised of Myanmar, Thailand, Malaysia, Cambodia, Laos, Vietnam, Singapore, Indonesia, the Philippines and Brunei), plus China, South Korea, Japan, Australia and New Zealand will form the bloc. India was an original negotiating partner but elected not to join the others, largely from fear that its internal market would be swamped with Chinese goods. Even without India, the amount of trade within the bloc will encompass 30% of global trade. This is not surprising given the presence of the world’s second and third largest economies, China and Japan, plus major trading countries like Korea and Indonesia. The RCEP was built on the foundation of several “ASEAN Plus” agreements, that is to say, ASEAN plus China, ASEAN plus Japan, ASEAN plus Korea and ASEAN plus Australia/New Zealand, all agreements negotiated some ten years back or more. RCEP brings these disparate ASEAN-centered agreements together under one umbrella, with common Rules of Origin (qualifying rules for preferential tariff treatment under the agreement). It is estimated that through its trade liberalizing provisions RCEP could lead to income gains of over $200 billion by 2030 and add $500 billion to world trade.
Because of the widely varying levels of economic development among the RCEP participating members, the level of “ambition” in accepting trade disciplines is not as great as in some other trade agreements, notably agreements like those between the US, Canada and Mexico (the USMCA/CUSMA), or between the EU and Japan or Korea. In fact, I have heard RCEP described as being “as wide as the Pacific and as deep as a puddle”. There is something to be said for this description. Compared to another regional trade pact, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the eleven-country successor to the Trans-Pacific Partnership that included the United States until the US withdrew shortly after Donald Trump took office, the RCEP has fewer binding commitments to trade liberalization and is less aggressive in its reduction of tariffs. (Some of the countries in RCEP—Japan, Australia, New Zealand, Malaysia, Brunei, Vietnam and Singapore—are also members of the CPTPP. The others in the CPTPP are Canada, Mexico, Peru and Chile).
Unlike the CPTPP, RCEP does not contain chapters covering labour, the environment or state-owned enterprises, all issues of great importance in dealing with large emerging markets like China. It also does not provide for common commitments to liberalize trade in services, although there is improvement in some areas for some countries. However, it does contain a chapter on intellectual property (IP), including a number of provisions relating to copyright. While it would be fair to say that the RCEP’s IP chapter is not the most ground-breaking or sophisticated, the inclusion of a chapter on intellectual property is nonetheless important. It is worth remembering that this agreement covers 15 countries with widely differing levels of economic development and capacity, ranging from highly advanced countries like Japan, Korea, Singapore, Australia and New Zealand to rising emerging powers like China and Indonesia to lesser developed countries like Cambodia, Laos and Myanmar. A look at per capita GDP levels is revealing. They range from a high of $65,233 in Singapore to just $1,407 in Myanmar, with a huge variety in between including Australia at $55,060, Japan at $40,246, Korea at $31,846 and China at $10,261. (All figures are from the World Bank, 2019, expressed in USD).
What the IP chapter does do is to set some minimum standards across all these economies. It is based largely on the TRIPS commitments (the Agreement on Trade-Related Aspects of Intellectual Property Rights) in the World Trade Organization (WTO), and includes accession to several IP-related international treaties. In the area of copyright, these include the Berne Convention, the WIPO (World Intellectual Property Organization) Copyright Treaty and the WIPO Performers and Phonograms Treaty, commonly known as the WCT and WPPT, respectively. This will result in Cambodia and Myanmar acceding to Berne, and Cambodia, Myanmar, Laos, Thailand, and Vietnam acceding to the WCT and WPPT, although some of these countries have a grace period of up to a decade or more in which to implement their obligation. The IP chapter includes articles dealing with the protection of broadcast and encrypted program-carrying satellite signals and the establishment of collective management organizations. On this latter point, the wording is somewhat laboured and non-binding, i.e. “the parties shall endeavour to foster the establishment of appropriate organisations for the collective management of copyright and related rights”. Still, it is a start for countries where no such organizations exist.
There is also standard language on technological protection measures (TPMs) and rights management information (RMI). On TPM’s the agreement requires each party to “provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors, performers, or producers of phonograms in connection with the exercise of their rights…”, although exceptions can be provided in accordance with laws and regulations. RMI refers to information that identifies the work, performance, author and so on, of a recording, normally embedded in code. Signatories to the agreement will make illegal the removal or altering of any electronic RMI or allowing the import, distribution, broadcast etc. of works or recordings where the RMI has been removed or altered. All of this is pretty standard stuff in most modern trade agreements, but its inclusion in the RCEP will help propagate these minimum standards.
There is also language requiring the destruction of seized pirated and counterfeit products to avoid them simply being returned to channels of commerce (as often happens in developing countries), and provisions to suspend release of suspected pirate goods at a rights-holders request. Damages in civil cases will be commensurate with injury, i.e. statutory damages are not referenced.
What is not in the agreement is any reference to providing safe harbours for internet platforms, absolving them of any civil liability for content posted by their users. Of late, this has become one of the standard “asks” put forward by USTR when the United States negotiates trade agreements. The USTR language is based on Section 230 of the Communications Decency Act, 1996, a highly controversial piece of legislation in the US. I and others have argued that it has no place in the text of a trade agreement. Canada and Mexico agreed to a watered down version of Section 230 in the new NAFTA, known as the USMCA (CUSMA in Canada), but given calls in the US to amend or eliminate Section 230 it is hard to believe that its inclusion in the USMCA will have any material effect on any of the parties in terms of holding the platforms to greater account for hosting illegal or harmful content. With respect to the RCEP, this is all moot. Since the US was not a party to the negotiations, Section 230-type safe harbours didn’t come up and none of the fifteen RCEP countries had the least interest in raising the issue. Likewise, there is no inclusion of a safe harbour regime for intellectual property infringement as in some other agreements, where implementation of a notice and takedown (or equivalent) regime gives platforms protection against liability provided they respond expeditiously to bona fide takedown requests.
Some commentators have argued that the RCEP “focuses more on the balance of rights and obligations to prevent the abuse of IP rights”, but the language in the preamble, which talks about reducing impediments and distortions to trade, fostering innovation and creativity and maintaining an appropriate balance between rights-holders and users is not significantly different from the TRIPs preamble (1995) or the IP chapter preambles in more recent trade agreements like the USMCA/CUSMA. In fact, it’s a good beginning. It would have been very concerning had there not been an IP chapter in this large regional trade agreement.
For RCEP to come into effect it still has to be ratified by at least six ASEAN member states and three non-ASEAN states. Once ratified, it will join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) as an operating trade bloc in the Asia-Pacific region. The CPTPP has been ratified by seven (Australia, Canada, Japan, Mexico, New Zealand, Singapore, Vietnam) of its eleven members and has now been in effect for two years. The overlap between some RCEP and CPTPP members has led to talk of a long term aspirational goal of a Free Trade Area of the Asia Pacific (FTAAP) that would be an eventual merger of the two agreements. If that ever happened, the more comprehensive terms of the CPTPP’s IP chapter would undoubtedly prevail. (Right now, the US is the only major Asia-Pacific state not in either, but under the Biden Administration the US position may eventually change).
RCEP is a welcome step forward at a time when global trade has been threatened not only by the global pandemic but also by the increasing resort to unilateral protectionist policies on the part of some countries, such as the US under the Trump Administration. While the IP chapter and its copyright provisions are not the most sophisticated or far-reaching, they nevertheless provide a positive step forward in terms of levelling up standards of IP awareness, compliance and commitments across 15 economies–large and small, developed and developing–in the Asia-Pacific region.
© Hugh Stephens 2021. All Rights Reserved.