RCEP Market

Japan’s commitment on opening service market under the RCEP

RCEP is the only FTA that applies both “positive approach” and “negative approach” to open trade in services in the world. Specifically:

  • “Positive approach”: a country only opens its service markets to service suppliers of partners under the requirements, at the level and in the sectors as specified in “Schedule of Specific Commitments for Services” (in Annex II of RCEP’s Full Text);
  •  “Negative approach”: a country opens all of its service markets to service suppliers of partners without limit/restriction, except for specific reservations specified in the “Schedule of Reservations and Non-conforming measures for Services and Investment” (in Annex III of RCEP’s Full text).

RCEP allows member countries to choose whether to apply the "negative approach" or "positive approach" in the first phase of RCEP implementation (the transition period):

  • There are 8/15 RCEP members opening service markets under the "positive approach" during the transition period, including Cambodia, Laos, Myanmar, New Zealand, Philippines, Thailand, China and Vietnam.

The transition period for these countries is 6 years after the date of entry into force of RCEP Agreement (the transition period for Cambodia, Laos, and Myanmar is 15 years).

  • There are 7/15 RCEP members opening service markets under the "negative approach" from the date of entry into force of RCEP, including Australia, Brunei, Korea, Indonesia, Malaysia, Japan, Singapore.

Thus, Japan commits to open its service market under the "negative approach" with a Schedules of Reservations and Non-Conforming Measures (for both services and investment) in Annex III of the RCEP.

This schedule includes service sectors and sub-sector that Japan has not opened or has not fully opened as required in the basic principles of RCEP’s service liberalization (i.e opening at "non-conforming" level with RCEP's principles of openness for trade in services).

In each sector and sub-sector of reservation, details on the limit/method of reservation (also known as “non-conforming” aspects) will have to be specifically stated.

The schedule of non-conforming measures of each country includes 02 Lists (List A and List B) with different reservation methods:

  • For the reservations listed in List A:

Regarding the scope of application: Reservations for the service sectors and sub-sectors listed in this List are only for existing restrictive measures on services, foreign service suppliers (existing measures) or future amendments to these measures;

Regarding binding requirements: For measures within the scope of this List, if a member country later unilaterally amends the level of opening, the content of the amendment must comply with the principle of "Only forward, no backward" (Rachet - can only open wider, more favorable than the previous level)

  • For the reservations listed in List B:

Reservations listed in this List are allowed to be applied without being limited under the same conditions as List A.

Source: Center for WTO and International Trade

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