China: RCEP, DEPA and services trade developments in early 2024
There have been a few China RCEP, digital trade and services developments in the last month that may be of interest to those who enjoy keeping track of this sort of thing.
First, on 26-27 March China hosted the Sixth RCEP Joint Committee meeting in Beijing. It was a low-key affair, seemingly the most interesting outcome of which was further work to establish the RCEP Support Unit (RSU) (for which the ASEAN Secretariat is currently recruiting an Executive Director). Getting the RSU up-and-running is important given it will eventually lead to an actual RCEP Secretariat being established, but the next big step for RCEP will be when its accession procedures are finalised (something that China has an interest in given Hong Kong was one of the earliest economies to express an interest in acceding).1
Second, China reported that the fourth meeting of Chief Negotiators of its Digital Economy Partnership Agreement (CEPA) accession working group met virtually on 26 March. The meeting included the three DEPA members (Chile, New Zealand, Singapore, and also South Korea - the most recent member).
Relatedly, Shanghai announced a “data flow service centre” that will “adopt internationally recognised standards [and]…seek data cooperation agreements with Singapore and New Zealand [and BRICS and Belt and Road countries]”. The announcement also links the centre to exploring ways to meet the standards of the CPTPP and DEPA. It looks like the centre is mainly focused on helping companies in China with the administrative burden associated with getting approvals to export their data. However, in March China also issued new regulations on cross-border data transfers which is supposed to allow for Free Trade Zones (which the service centre is located within) to put in place their own rules on some aspects of data transfers.
So on the one hand - the service centre seems like a positive development on the road to helping to free up data flows from China. On the other - though - it also suggests China’s overall regulatory regime is still far from meeting the digital trade requirements of CPTPP and DEPA (absent an expansive application of the essential security exception?).
And third, China released a national negative list of restrictions on cross-border services trade. This joins China’s existing foreign investment negative list and the government linked its adoption to “high-standard free trade agreements” (according to Google translate). The services negative list will be useful for trade negotiators from New Zealand (which is supposed to be negotiating negative list commitments with China under their FTA2), and RCEP Parties (with RCEP slated to transition its services commitments to negative list and Parties due to submit their proposed new commitments by 1 January 20253).
From my quick review (of a Google translation that I’ve uploaded here), China’s national services negative list looks similar to China’s negative list services commitments in the China-Nicaragua FTA - which I believe was China’s first FTA with negative list services commitments. Singapore has also said its upgraded FTA with China includes negative list services commitments. Of course - the CPTPP also has negative list services commitments, so having a national domestic system in place would presumably help China in any CPTPP accession negotiations as well.
All of this is a reminder that while the United States has stepped away from traditional trade liberalisation negotiations, the rest of the world and the Indo-Pacific in particular continues to push ahead.
An interesting aside is that my Google Alert on RCEP routinely returns significant amounts of China media stories on RCEP events, promotions and developments, as compared to media in other RCEP Parties.
Negotiations were meant to commence by 7 April 2024, but in March it sounded like these haven’t started yet.
With Cambodia, Laos and Myanmar receiving more time to submit their proposed negative list services schedules.