Free trade or women`s rights?
January-March 2018
By: Kate Lappin

RCEP, which covers China, India, members countries of the Association of Southeast Asian Nations, Japan, South Korea, Australia and New Zealand, will impact a larger number of people than any previously proposed trade agreement. RCEP covers traditional trade issues including trade in goods, services and agriculture, customs, tariff­s and trade subsidies – but this represents only a small portion of the agreement. The agreement goes far beyond trade and seeks to impose an entire regulatory framework on member states that could dictate the extent to which governments can regulate every part of the economy in which the private sector operates. The chapters extend to intellectual property, standards and labeling, telecommunications, competition policies, financial services, e-commerce governance and, more recently, government procurement.

RCEP has implications for women throughout the region in addition to those in the member countries. It potentially represents a large shift in positions taken on trade by India and China within the WTO. India has been the most vocal Asian country defending nations’ rights to provide food subsidies and retain public stockholdings, as well as to produce the world’s generic medicines. In addition, RCEP represents a significant step toward the planned Free Trade Area of the Asia-Pacific. RCEP will serve as the basis for such an agreement, significantly disadvantaging least developed countries and small island developing countries that are not currently part of the negotiations. While the text of RCEP has not yet been released, chapters leaked online reveal that some negotiating countries seek to mirror, and even deepen, the chapters agreed upon in the TPP.

A leaked RCEP investment chapter contains clauses of what is known as the Investor-State Dispute Settlement (ISDS) mechanism. ISDS is a legacy of colonialism, whereby European corporations, led by Deutsche Bank, drafted what they called a “Magna Carta for investors.” Introduced in the late 1950s, ISDS appeared in many treaties between former colonial governments and newly independent governments as a means to prevent the nationalization of their multinational corporations’ physical property following independence. ISDS gives corporations the power to sue governments in secret tribunals if the governments pass any laws, policies or regulations that infringe on the capacity of corporations to profit. Recent lists of known ISDS cases show that corporations have used ISDS to avoid paying taxes, challenge public interest laws and policies, and prevent the remunicipalization of public services. Consumer laws, environmental protection laws and climate policies, labor laws, public health laws and food labeling laws can all potentially be regarded as infringing upon “investor rights.” In 2015, UN experts noted that governments are less likely to pass laws essential for women’s rights because of the fear of being sued. “We believe the problem has been aggravated by the ‘chilling effect’ that intrusive ISDS awards have had, when states have been penalized for adopting regulations, for example, to protect the environment, food security, access to generic and essential medicines … or raising the minimum wage,” the UN experts said in a statement. Drawing from the leaks and the experience of previous agreements and proposed chapters, we can be concerned that the RCEP may have the following consequences for women.

Deepening inequalities and reducing expenditures

Researchers who have analyzed the economic impact of existing preferential trade agreements have found that there “is a marked increase in the concentration of economic activity within countries following the formation of these agreements, which results in the deepening of economic inequality.” The reduction in tariffs denies governments an important source of revenue, as well as depriving them of an instrument capable of balancing the advantages foreign multinational producers have over developing countries. Tax revenue in the Asia-Pacific region represents a low 17.6 percent of gross domestic product, and any reduction in revenue will either have to be replaced by regressive taxes, such as goods and services or value added taxes, which have been found to have discriminatory effects, or reduced public services.

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