Title: RCEP rules on cross-border data flows Asian characteristics and implications for developing countries
Domain: Law

Question: How does the Regional Comprehensive Economic Partnership (RCEP) demonstrate the "Asian paradigm" in terms of cross-border data flow regulations, and what benefits will it bring to the construction of corresponding rules for other developing countries?

Background: 1.Global digital governance has emerged as a core battlefield of international strategic competition：As data becomes a pivotal production factor, nations are increasingly competing over rules for data flows and technical standards. The focus has shifted from R&D capability to rule-making authority, with cross-border data governance—intertwined with national security and economic interests—standing as a strategic high ground. | 2.Contrasting paradigms between U.S. and EU：The U.S. promotes "free data flow" through agreements like USMCA to sustain data hegemony, while the EU advances a "data sovereignty" framework via GDPR, leveraging the "Brussels Effect" to globalize high-standard regulations. These approaches starkly differ in prioritizing economic efficiency versus individual privacy rights. | 3.WTO’s limitations on emerging digital issues：Hampered by multilateral negotiation deadlocks, the WTO struggles to address cross-border data flows and other digital trade challenges. Mismatches between traditional trade rules and digital economy dynamics—compounded by member-state interest divergences—have pushed regional agreements，such as CPTPP and DEPA，to fill regulatory gaps, accelerating global governance fragmentation. | 4.Asia’s need for differentiated governance amid diverse development：RCEP encompasses 15 Asia-Pacific nations with stark digital divides—from tech-leading economies like Singapore to least-developed states like Myanmar. Led by ASEAN and supported by China, it requires rules balancing data liberalization, national security, and developmental inclusivity, forging an Asian paradigm distinct from Western models.

Definitions: 1.The Brussels Effect：The capability of the European Union to unilaterally export rules and standards to the outside world and thus formulate demonstrative rules affecting the global market by virtue of its huge internal market and strong institutional framework, without the need for collaboration from other countries or regions. | 2.Public Policy Objectives Exceptions：Clauses in international treaties or domestic laws allowing parties to deviate from general obligations to achieve legitimate public policy goals, requiring measures to be reasonably related, necessary, and non-discriminatory. | 3.Basic Security Interest Exception：Provisions in international treaties allowing parties to waive obligations or take special measures to protect core security interests (e.g., defense, sovereignty, territorial integrity), typically defined by members themselves, but requiring good faith interpretation and evidentiary burden for invocation. | 4.The Non-Reciprocity Principle： A principle in international economic law where one party unilaterally grants benefits or unequal advantages without demanding equivalent reciprocation, aimed at balancing rights and obligations amid developmental disparities. | 5.Temporary Exemption Clauses：Provisions in laws or agreements allowing entities to temporarily waive obligations under specific conditions (e.g., public crises, trade secrets), characterized by temporariness, conditionality, and specificity.

Methodology: 1.Normative Analysis Method:Based on legal texts, analyze the specific provisions of RCEP regarding cross-border data flow, and combine GATT 1994 Article 21 and the general exception clauses of GATS to clearly define the legal sources and constituent elements of RCEP's exception clauses. | 2.Case Analysis Method:Analyze examples such as the US ban on TikTok and China's data security law, and demonstrate the practical needs of RCEP's exception clauses in balancing national security and data flow. Taking the data governance practices of ASEAN member states (such as Singapore and Myanmar) as an example, illustrate the adaptability of RCEP's non-reciprocal principle to countries at different levels of development. | 3.Comparative Research Method:Horizontally compare RCEP with regional trade agreements such as CETA, CPTPP, DEPA, and USMCA, and point out that RCEP uses declarative language such as "encouragement" and "efforts", does not set mandatory protection standards, and emphasizes the "self-determination" of member states' greater regulatory autonomy and its necessity. | 4.Empirical Research Method:Analyze the differences in data governance levels among RCEP member states, point out the need to protect the interests of developing countries, and demonstrate the practical necessity of the non-reciprocal principle. Analyze the pilot projects of cross-border data flow in China's free trade zones (such as the "data classification supervision" model), providing practical references for the future rule upgrading of RCEP.

Answer: 1.Setting the Scene: The Blurring Line between Military and Civilian Applications in the Times of Global Insecurity | The concept of dual-use products reflects the reality that certain commodities have both civilian and military value. However, the specific meaning of this concept is dynamically changing, contingent upon the epistemological context and instrumental interpretation. In recent years, significant changes have occurred in both dimensions, leading to a notable expansion of the scope of dual-use products. First, the technologization of modern warfare and the commercialization of military applications have greatly widened the range of dual-use products. Concurrently, the evolution of the concept of security has resulted in items previously outside the scope of conventional security concerns being incorporated into it. | | 1.1 Recent disputes regarding restrictions on dual-use items by the World Trade Organization | In 2022, China initiated a trade dispute against the US semiconductor export control measures, pointing out that the US imposed export controls on civilian items or commercial entities' activities, aiming to undermine the technological development of other WTO member countries and maintain its technological superiority. The US continued to implement its "Small Yard, High Fence" strategy under the slogan of "economic security equals national security", formulating regulatory policies based on the premise of economic growth, resources, and technological innovation necessary for maintaining advanced military forces. Other countries also followed suit. In the "European Economic Security Package" released in early 2024, the European Commission further called for enhanced coordination of control lists among countries to ensure that the EU has a common voice in European security and international trade control of dual-use items. The further expansion of export control measures by various countries and regions may trigger new trade disputes and retaliatory actions, further highlighting the urgency of clearly defining trade rules applicable to dual-use items. | | 1.2 Increase in the variety of dual-purpose products | In everyday language, the term "dual-use" refers to products, activities, or technologies that have at least two different uses. Traditionally, the definition of dual-use products is based on the binary opposition of civilian and military. In the current geopolitical confrontation context, there are three trends that have expanded the scope of dual-use products, thereby posing new challenges to the regulation of these products: | Firstly, the technologicalization of modern warfare and the privatization of military supply chains. The enhancement of the technological level of modern warfare and the privatization of military supply chains have accelerated the expansion of dual-use items that can be used for both military and civilian purposes, while further enhancing the role of private contractors in defense-related procurements. | Secondly, the control of dual-use items based on moral or value considerations. Based on the more ethical and value-oriented "good" and "bad" purposes, the identification of dual-use items is increasing. These purposes typically involve counter-terrorism, combating crime, cybersecurity, and human rights protection. In recent years, the subjectivity of identifying dual-use items has become increasingly prominent. Not only are products used for military purposes reviewed, but those that may be used for malicious purposes are also reviewed. | Finally, are the deficiencies of multilateral export control systems. So far, the export control of dual-use items has been managed under the "Vassenar Agreement". This agreement was created in the 1990s to limit the transfer of weapons and dual-use technologies to communist countries during the Cold War. With the change in the traditional security basis of the "Vassenar Agreement", this list is considered outdated as it no longer meets new security concerns and gradually becomes obsolete. At the same time, there is a lack of a multilateral platform for discussing emerging security issues, leading to the absence of multilateral solutions. | | 2.Dual-Use Items within the Meaning of Article XXI(b)(ii) GATT | WTO rules do not distinguish between dual-use items and single-use items. Any measure restricting international trade in dual-use items must comply with WTO rules. If the regulation of dual-use items takes the form of export controls, it may violate basic obligations such as the prohibition on quantitative restrictions and non-discrimination principles, and may undermine related commitments. At this point, the WTO Member may be exempt from liability by invoking exceptions in the agreements, and Article XXI(b)(ii) GATT is precisely the key basis for regulating trade in dual-use items. | | Through doctrinal analysis, the following conclusions can be drawn: First, unlike Article XXI(b)(iii), which applies only to "war or other emergency in international relations", paragraph (b)(ii) can be invoked in peacetime without relying on war or emergency as a prerequisite. Second, paragraph (b)(ii) only focuses on trade in military supplies and does not cover emerging issues such as human rights. Third, paragraph (b)(ii) is divided into two parts, both of which may apply to trade restrictions on dual-use items. The first part covers trade in "arms, ammunition and implements of war", including raw materials, technologies and services that contribute to their manufacture and maintenance. The second part covers trade in other items "carried directly or indirectly for the purpose of supplying a military establishment", which must satisfy the "purpose test". In practice, governments that wish to impose restrictions on dual-use items under paragraph (b)(ii) must show that they have conducted due diligence or obtained evidence from reliable sources, leading them to believe that the restricted products serve military purposes "directly" or "indirectly". This is crucial to prevent abuse of the provision. | | | 2.1 Interpretation of "Self-Judging" Elements in Security Exceptions | Article XXI of the General Agreement on Tariffs and Trade reads as follows: | Noting in this Agreement shall be construed | (a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or | (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests | (i) relating to fissionable materials or the materials from which they are derived; | (ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried directly or indirectly for the purpose of supplying a military establishment; | (iii) taken in time of war or other emergency in international relations. | | Article XXI provides two grounds for WTO Members to legitimize their trade restrictions. Paragraph (a) permits states to withhold information they consider detrimental to their essential security interests, while paragraph (b) allows trade-restrictive measures to be taken to protect essential security interests under certain circumstances. Regarding the chapeau of paragraph (b), there has long been a debate over whether its wording constitutes self-judgment. Proponents argue that sovereign states have unrestricted discretion in defining security interests and the actions needed to protect those interests; opponents, however, are concerned about the unrestricted invocation of the provision and call for the development of appropriate legal standards to review such invocations. | | In a series of recent cases, WTO panels have been required to consider the interpretation of the chapeau of paragraph (b) and its sub-paragraphs. Despite minor differences, the panels have almost consistently held that security exceptions include both subjective and objective elements. When invoking security exceptions, WTO Members are entitled to determine the specific content of their core security interests, including any interests or threats deemed essential to the existence of the state, such as international war, civil war, domestic riots, terrorism, and even human rights violations occurring in territories other than that of the invoking state. Regardless of what a WTO Member considers to be its essential security interests, it must articulate those interests sufficiently to demonstrate their veracity and convince the panel that the invocation is made in good faith. Meanwhile, the elements mentioned in sub-paragraphs (i), (ii) and (iii) can and should be objectively verified by the panel. From these cases, it can be concluded that the panels’ interpretation of "it considers" in the chapeau of paragraph (b) falls into two parts: first, it grants WTO Members significant discretion over their essential security interests and the means of protection; second, it lowers the standard of proof for the specific paragraphs mentioned in the sub-paragraphs. | | 2.2 Interpretation of Objective Elements in Sub-Paragraph (b)(ii) | Sub-paragraph (b)(ii) covers trade in "arms, ammunition and implements of war" and trade in goods "carried directly or indirectly for the purpose of supplying a military establishment". Unlike the security measures in emergency situations mentioned in sub-paragraph (b)(iii), this indicates that such trade can be restricted even in peacetime. | | Structurally, Article XXI(b)(ii) is divided into two separate parts by the conjunction "and", with mutually exclusive scopes of coverage. "Traffic" is equivalent to "trade". "Arms, ammunition and implements of war" shall be understood in their ordinary sense unless there is evidence to the contrary. Meanwhile, the juxtaposition of "implements of war" with the other two items indicates that this definition should exclude items that may be used by the military but are not specifically intended for combat. However, there remains controversy over whether raw materials, technological products and services that may be used in weapons manufacturing and maintenance can be included. The second part of sub-paragraph (b)(ii) originated from a proposal by the United States during the negotiations of the International Trade Organization (ITO), aiming to address the "legitimacy of trade restrictions related to military supplies". The United States was the primary drafter of this article, and "military establishment" is regarded in U.S. foreign policy as a broader military bureaucracy or defense system. However, ITO negotiators, except for U.S. representatives, had doubts about the precise meaning of this term. Since the intended purpose of such "traffic" is to support the "military establishment", the "purpose test" is the core of this analysis. From the negotiating history of the provision, it can be seen that GATT/WTO members were aware that the provision might be interpreted more broadly, but they were not prepared for it to cover "almost everything", and the scope of the provision remains an open question. | | The final compromise was reflected in two aspects: first, "military establishment" should not be interpreted as involving long-term defense or security plans; second, the form of "indirectly" supplying was added during the negotiations. In "directly or indirectly", "direct" refers to situations where items are delivered directly to military establishments; "indirect" refers to situations where items may initially be used in civilian scenarios but ultimately may serve military purposes. This formulation stems from considerations of "the integrity of military supply chains" during the negotiations. | | | 2.3 Legitimate Restrictions on Dual-Use Items | First, it should be clarified that sub-paragraph (b)(ii) can be invoked in peacetime. | Second, sub-paragraph (b)(ii) can only be used to justify trade restrictions on direct or indirect military supplies. Dual-use items are expected to be categorized under the second part of sub-paragraph (b)(ii). This provision does not permit restrictions on dual-use items identified based on ethical or value-based categories outside the civil-military dichotomy. Export controls imposed to restrict trade in goods and technologies that may be used to violate human rights are unlikely to meet the requirements of sub-paragraph (b)(ii) unless such violations are perpetrated by the military using the controlled items. | Third, sub-paragraph (b)(ii) provides a safety valve to curb disguised protectionism. The state invoking this provision must prove that the trade of restricted items is for the purpose of "directly or indirectly supplying a military establishment", rather than based on vague grounds such as long-term defense plans. At the same time, when imposing trade-restrictive measures, the invoking state must have a clear subjective awareness of the items’ purpose of military supply through due diligence or reliable information, and such awareness cannot be established retrospectively. In terms of export controls, the aforementioned purpose test should be carried out in two stages. The first stage is inclusion in the control list, where the invoking state must prove that the items listed have potential military applications to justify their inclusion in the control list. The second stage involves the granting of export licenses, where the invoking state must demonstrate its awareness that the export of specific batches of items may directly or indirectly supply military establishments. However, the highly confidential nature of military supply means that importing countries and traders usually do not disclose information about military-related transactions, increasing the difficulty of verifying the "purpose test". | Invoking states should be given a certain degree of flexibility in determining the ultimate use and destination of items. Nevertheless, this poses challenges for reviewing bodies in defining the boundaries of the invoking states’ discretion, and this challenge ultimately translates into the issue of the standard of proof in adjudication. In addition, even if the invoking state has accurate information, requiring it to disclose such information to the reviewing body may endanger national security interests. | | 3.The Standard of Proof Issue | The difficulty in effectively reviewing the conditions specified in sub-paragraph (b)(ii) lies in the fact that WTO Members have the right to refuse to provide specific confidential information. Therefore, adjudicators may consider that the invoking country has fulfilled its burden of proof if it can demonstrate that certain products were included in the control list because they have military uses, regardless of whether they are actually used or will be used in the future. This limits the effectiveness of the purpose test in preventing the abuse of this provision. | | In the 1949 Czechoslovakia v. US case, the US imposed export controls on the grounds that "ball bearings could be used for military purposes". Although Czechoslovakia argued that the scope of the controls was too broad, the GATT Contracting Parties ultimately rejected its claim. This case shows that the "purpose test" requires the invoking country to prove its subjective awareness of the ultimate military use of the items, but the actual determination is extremely difficult. The US was able to meet the proof requirements merely by inferring military use from product specifications, reflecting the relaxation of the standard of proof. The US argues that the "purpose test" should be judged by the invoking country itself and opposes secondary review by adjudicative bodies. This conflicts with the position confirmed by recent WTO panels that "the elements of sub-paragraphs need to be objectively verified". However, the "subjective awareness" element still weakens the objective standard of proof. | | Article XXI(a) GATT explicitly allows contracting parties to refuse to disclose information that "is contrary to their essential security interests". In the "Russia – Measures Concerning Traffic in Transit" case, Russia refused to explain the specific basis for the "emergency in international relations" on the grounds that "the information is confidential" and only cited public information as evidence. The panel ultimately recognized that its "elaboration of essential security interests meets the minimum standard". This indicates that when the invoking country refuses to disclose information on the grounds of national security, adjudicative bodies can only rely on public information, making it difficult to verify whether the "purpose test" has actually been satisfied. | | Although the purpose test is intended to curb the abuse of Article XXI(b)(ii) GATT, imposing countries still retain considerable flexibility in their decisions. The question as to whether the invoking states adequately fulfill the ‘purpose test’, and discharge their burden of proof in so doing, can only be decided on a case-by-case basis. Furthermore, when the WTO Members refuse to provide certain information on the grounds of security, the panels will have to consider publicly available information. This provides significant room for maneuver to countries seeking to use, or abuse, security exceptions to justify trade restrictions on certain products. | | 4.The Provision in Action: Implications for Trade Governance | Take export control measures as an example. According to the Wassenaar Arrangement, Article XXI(b)(ii) of the GATT is based on traditional security concepts. Therefore, this clause only covers items used for military deployment. It is outdated in reflecting emerging security threats and demonstrates its lack of inclusiveness. Besides, another defect of this clause lies in its weakness in curbing malicious citation. This is mainly attributed to the difficulty in implementing the "purpose test". Export control already allows for taking punitive measures against companies that fail to meet the notification requirements. This means that traders may face penalties such as bans and fines for being preliminarily identified as dual-use items, without the need for further investigation into their actual transactions. | | Moreover, due to the lower proof standard, the licensing authority will have greater discretion when conducting such investigations. The core issue lies in whether the citing country actually has the information to support its judgment on military supplies. Under a more lenient proof standard, it is difficult for the referee to verify this information. Therefore, this clause is prone to being abused to restrict trade for products that have dual uses but are not intended for military institutions. | | Conclusion | While the Purpose Test aims to curb abuse, its effectiveness is limited by relaxed proof standards for security measures, leaving states substantial flexibility in interpreting the test. When Members withhold evidence on security grounds, panels must rely on public data, enabling broad misuse of security exceptions to justify trade restrictions on dual-use items. | | Security exceptions embody a realist challenge to the neoliberal foundations of the international trading system. The "self-judging" elements in these clauses, rooted in negotiators’ consensus, render them prone to abuse. For seven decades, states exercised political (not legal) self-restraint in invoking these clauses, but this restraint has eroded as states increasingly exploit security exceptions for expanding or pretextual security interests. Restrictions on dual-use items now pose the next challenge to the global trading system, with uncertainties growing as the dysfunctional WTO dispute settlement mechanism fails to resolve emerging trade conflicts.

Checklist: 1. Elaborate the concept of dual-use items and analyze the international situation to show urgency of establishing rules.  
2. Identify factors expanding the scope: modern warfare technologization, privatization, ethics/value-based control, and deficiencies of export control regimes.  
3. Explain Article XXI(b)(ii) GATT as the key provision covering arms and goods for military supply in peacetime.  
4. Clarify the “purpose test” requiring proof of supply to military establishment and subjective awareness, preventing abuse.  
5. Note the proof difficulties due to secrecy, reliance on public info, relaxed standards, and conclude that this ambiguity threatens trade governance and balance.