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Why RCEP Should Think Twice About Admitting Hong Kong

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Why RCEP Should Think Twice About Admitting Hong Kong

Current members should seriously consider how Hong Kong’s National Security Law would impact their investments under the trade deal.

Why RCEP Should Think Twice About Admitting Hong Kong
Credit: Depositphotos

As the United States prepares to host the Asia-Pacific Economic Cooperation (APEC) Summit, a notable absent from the line-up will be John Lee, the handpicked chief executive of Hong Kong. Lee is currently the subject of U.S. sanctions for his ongoing involvement in the rolling human rights crackdown in the city.

Lee’s disinvitation was not always assured. It came as a result of heavy pressure from Hong Kong civil society groups, who noted the Hong Kong government’s lack of autonomy from Beijing following the imposition of the draconian National Security Law as a further reason for Lee to be stopped from attending.

Of course, this hasn’t stopped the Hong Kong government from issuing a press release stating that the chief executive was “personally invited by the State Department” and that he cannot attend the APEC Summit due to his “schedule.” Yet, the difficulties for the Hong Kong government of seeking to present an independent and autonomous position overseas while increasingly following Beijing’s line at home appear likely to continue.

This week, 51 Hong Kong civil society groups from across the world urged the governments of Australia, Indonesia, Japan, Malaysia, New Zealand, the Philippines, and South Korea to block the ratification of Hong Kong’s membership of the Regional Comprehensive Economic Partnership (RCEP) on human rights grounds.

Founded on November 15, 2020, by the 10 members of the Association of Southeast Asian Nations (ASEAN), plus a further five countries in the Asia-Pacific region that have free trade deals with ASEAN, RCEP spans 15 member countries: Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam. RCEP’s members account for 30 percent of the world’s population and 30 percent of global gross domestic product, making it the largest trade bloc in history.

Given the Hong Kong government’s attempts to woo back investment following the introduction of the draconian National Security Law, it is unsurprising that stated aspiration is to join RCEP.

Often incorrectly framed as a China-led alternative to the Trans-Pacific Partnership (TTP), which was created in part by the efforts of the Obama administration in the United States, RCEP was designed to bundle and consolidate disparate trade and custom agreements amongst ASEAN countries into one trade agreement.

RCEP also marks the first free trade bloc that has both Japan and the People’s Republic of China as members, as well as Japan and South Korea. This is a remarkable achievement given the political obstacles these countries have faced in previous collaboration attempts.

As part of the agreement, members of RCEP commit to reduce custom barriers and tariffs on goods by approximately 92 percent over a period of 20 years, as well as supporting recognition of intellectual property, standards and technical regulation, e-commerce, and market access for investment, finance, telecommunications and services logistics.

In a recent forum held by the Hong Kong Law Society titled “Springboard GBA Opportunities,” Fred Kan, the chairman of the committee overseeing Hong Kong’s RCEP membership application, argued that Hong Kong’s “robust legal system” and participation in the Greater Bay Area (GBA) would make it a strong candidate for RCEP.

Of course, what Kan omitted from his remarks is far from guaranteeing the unique regulatory environment of Hong Kong, the Greater Bay Area is instead a project designed to water down the city’s standards in favor of those of mainland China in the name of “integration.” China’s current economic woes offer further evidence why integration into the Greater Bay Authority may not be in the city’s economic interests.

Nor does his claim of Hong Kong having a “robust legal system” take into consideration the National Security Law’s ongoing assault on judicial independence and the rule of law, which has been led by a broad interpretation from Beijing that gives the Hong Kong chief executive the power to overturn decisions from the Hong Kong courts.

This draconian law has not just dismantled the independence of the courts, but it has hollowed out the autonomy of the Hong Kong government which was previously guaranteed under the Sino-British Joint Declaration and Basic Law, turning one of the most open and liberal cities in Asia into little more than a police state.

For those businesses and individuals within RCEP members who may be undeterred by Hong Kong’s National Security Law, it’s worth noting that the carve out for domestic security laws within the trade bloc means that this ambiguous, extraterritorial, and retrospective law would be boosted by RCEP membership. Far from protecting their investment, this carve-out could invertedly lead to the National Security Law overriding the protections RCEP membership is meant to grant. There are no guarantees or safeguards ensuring that the National Security Law does not affect business.

Within this context, it is hard to see what the appeal for RCEP members would be of offering Beijing a second seat within the trade bloc. On the other hand, rejecting the Hong Kong government’s application would send a clear signal that members of the trade pact will not allow it to become dominated by China.

After all, this is not the first time that RCEP members have had to weigh the human rights record of applicants versus the economic benefit of ratifying their membership. In February 2022, both the Philippines and New Zealand announced that they would block the ratification of Myanmar’s membership on human rights grounds following the military coup.

Whether it is the United Nations Human Rights Committee finding that Hong Kong has undermined its obligations under the International Covenant on Civil and Political Rights, the Hong Kong government’s criminalizing of social media posts by overseas students in Japan, or the targeting of Australian citizens with arrest warrants and bounties, the Hong Kong government has shown a disregard for human rights and international law.

Democratic members of RCEP would do well to consider the increasingly belligerent, unpredictable, and unreliable behavior of the Hong Kong government when it comes to ratification of Hong Kong’s pending membership.

Hopefully they will conclude that a police state in Hong Kong is no more credible a candidate for membership of RCEP than a military junta in Naypyidaw.