Perfecting, Not Subverting — — Interpretation of the Dispute Settlement Clause of RCEP Agreement

One of the highlights of RCEP, compared with the WTO, is its most efficient dispute settlement mechanism, the most typical of which has been the removal of the appeal procedure set in the WTO. The WTO Appellate Body accepts numerous cases, but its handling efficiency is average. Losing parties often make malicious use of the appeal procedure to increase the burden on the winning party and increase bargaining chips. Therefore, reform of the Appellate Body has always been one of the key issues in the WTO rules. For efficiency, RCEP directly removed the Appellate Body. The decisions and decisions of the panel shall be final and binding on the parties to the dispute. In addition to the simplification of the appeal procedure, the RCEP has expedited the process of consultations. The period for consultations has changed from 60 days after the requested party receives the request for consultations to 30 days, and 15 days in exceptional emergencies (Chapter 19, Article 6).

Better protection for Underdeveloped Countries

The emphasis on the equality of contracting parties is also placed at the composition and trial stages of the panels, particularly important in the context of RCEP where the level of development of the contracting parties is uneven. This reflects, first of all, the greater importance attached to the opinions of the parties to the dispute in the course of the formation of the Arbitration Commission, one panelist shall be appointed by each of the parties to the dispute and the last panelist to be appointed by agreement between the parties. One party to the dispute may propose a list of three panelists to choose from (Chapter 19, Article 11). In contrast, under WTO rules, panelists shall be nominated by the Secretariat and the parties to the dispute may not object thereto except in exceptional circumstances. In substantive adjudication, in addition to reaffirming the principle that the WTO shall, in particular, take the special situation of least- developed countries into account in the course of dispute settlement, it has been clarified that the panel shall have the competence to propose "special and differential treatment" in the course of the dispute settlement proceedings and that one party in the report is the least- developed country Party for this purpose only to be taken into account in their decisions. Of course, this provision is still general, and the extent to which the interests of least- developed countries can be protected is subject to further practice in the future. 

Conflicts between RCEP Provisions and Other International Agreements

The RCEP provides that the settlement of disputes between Contracting States shall be mainly based on the RCEP provisions and interpreted in accordance with the customary rules of interpretation of public international law. While reference is not made to other international treaties and related interpretations in disputes, reference is made to any provision of the WTO Agreement that is specifically provided for in Article 4 of Chapter XIX of the Agreement. The panel shall also take into account the relevant interpretations made in the WTO Group of Experts Report and the WTO Appellate Body Report adopted by the WTO Dispute Settlement Body. However, no decisions or rulings of the panel shall increase or diminish the rights and obligations under this Agreement. In the selection of experts, it is expressly stated that membership in the WTO Group of Experts or working experience is important qualification. 

When the provisions of the Agreement conflict with other international agreements, including the WTO, the treaty does not adopt a certain rule as applicable law, or "new law prevails over old law" and "lex specialis prevails over general law", but continues the principle of negotiated settlement of disputes emphasized in the RCEP. Article 2 of Chapter XX provides that "If a Party considers that a provision of this Agreement is incompatible with a provision of another agreement to which that Party and at least one of the other Parties are parties, the relevant Parties to that other Agreement shall, upon request, enter into consultations with a view to reaching a mutually satisfactory solution."At present, it appears that the Contracting Parties have adopted a relatively flexible mechanism for the application of the law in conflict with other international agreements. How it works and how it works should be paid continuous attention to in future practice. 

As a whole, up to now, the WTO and a series of previous multilateral trade agreements have gradually formed a relatively stable international trade dispute settlement mechanism. Apart from simplifying procedures and improving efficiency, the RCEP has not made particularly significant changes to the existing international trade dispute settlement mechanism, and the Contracting Parties have not established the principle that RECP shall prevail over other trade agreements. In practice, the market players of the contracting Parties still need to pay attention to the multilateral agreements and WTO rules that have been signed. At present, RCEP is an extension and supplement to the current international trade system, indicating that countries are more open to trade and economic cooperation, and that some countries may start to take precautions against globalization, rather than subverting the existing international trade and economic order.