Vo Tan Huy

Tran Thi Thuan Giang

Lecturers, Faculty of International Law,

Ho Chi Minh City University of Law

In the context of strongly promoting the deep integration of the global supply value chain, facilitating regional economic recovery, and creating new impetus for regional trade and investment growth, on 15 November 2020, ASEAN members and ASEAN’s five major regional trading partners (including China, Japan, South Korea, Australia, and New Zealand) signed the Regional Comprehensive Economic Partnership (RCEP) and this agreement officially entered into force on January 1, 2022. The RCEP is said to go beyond the concept of “regional economic integration” when it is an agreement that not only comes from a central role of ASEAN but also is underpinned by free trade agreements (FTAs) between ASEAN and each of its major partners, which made up of diverse economies with different levels of economic development in the Asian region. The RCEP has created an extensive free trade market with many regulations on trade in goods and services, investment, intellectual property, e-commerce, and competition policy, with the stated goal of creating a “modern, comprehensive, high-quality, and mutually beneficial”. This reflects the increasing development of investment law in the context of countries developing policies, legislation, and strengthening regional trade strategies. Thus, the RCEP has enacted the basic principles of investment protection and, at the same time, improved some of the rules for covered investments under existing FTAs. However, the “attractiveness” of RCEP also faces many challenges and doubts, among which is the lack of provisions on Investor-State Dispute Settlement (ISDS) - terms inherent in FTAs between ASEAN and each partner. Instead, it includes a built-in workflow for Parties to discuss ISDS in the future while its current regulation seems to only allow investors to protect themselves through a dispute settlement mechanism between member states. The RCEP’s omission of the ISDS provision reflects a different approach that may face challenges with respect to cross-country settlement procedures and investor protection under overlapping investment treaties. This article will analyze and evaluate the challenges posed by the RCEP regulations to the ISDS. Is it possible for RCEP to build a new ISDS model, at least has different points from previous ISDS models? And does it prevent the purpose of promoting and attracting investment in the region and with each country, including Vietnam? In addition, the authors present other ISDS models in different institutions for comparison and reference.