Drafting Investment Law: Patterns of Influence in the Regional Comprehensive Economic Partnership (RCEP)

Abstract

ABSTRACT The investment chapter in the recently signed Regional Comprehensive Economic Partnership (RCEP) has the potential to affect investment decisions in the Asia-Pacific region and beyond. Yet, we know relatively little about the pathways through which countries determine the content of investment law in preferential trade agreements (PTAs). In this article, we use quantitative text analysis to test theoretically informed conjectures about the negotiation process. We focus on which of the signatories’ past agreements most influenced RCEP, and whether countries chose to draw more from treaty practice through their previous PTAs or bilateral investment treaties (BITs). Our analyses yield several noteworthy findings. First, we show that no single country dominated the negotiation process, instead RCEP represents an effort to reconcile overlapping agreements around a more common template. Second, contrary to the fears of some observers, we show that larger powers such as China and Japan did not overwhelmingly impact the agreement, instead portions were influenced by Association of Southeast Asian Nations agreements, the Comprehensive and Progressive Trans-Pacific Partnership, and others. Finally, we show that, on average, countries drew more from PTAs than BITs, but that they switch strategically between them to reuse language that they deem important for the development of investment law.