THIS UPDATES AND REPLACES
“118 members want investment facilitation deal to be formal WTO agreement”
(from December 13, 2023)
Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’
WTO investment facilitation text completed but still faces uphill battlePune Stock
Technical note: types of plurilateral deals and adding them to WTO rules
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Technical note: Participation in WTO plurilateral talks
General Council minutes from this meeting and in general (published a few months after the meeting)
All articles tagged “investment facilitation”
POSTED DECEMBER 18, 2023 | UPDATED MAY 10, 2024
India says it will block adding to the official WTO rule-book a new investment facilitation agreement among over 70% of the World Trade Organization members, even though it was the only country to speak against the request in the organisation’s General Council on December 15, 2023.
India’s opposition has implications beyond this particular deal, which is backed by 117 developed and developing countries such as China, the EU, Bolivia, Chad and Laos.
It makes investment facilitation a test case for all rule-making negotiations among subsets of the membership.
The other subjects that could potentially line up to follow investment facilitation into the WTO rule-book include e-commerce and digital trade, plastics pollution, and fossil fuel subsidies, all involving only part of the membership.
WTO members are struggling to conclude several negotiations because of insoluble differences preventing them from reaching consensus agreement.Surat Investment
This means existing agreements are lagging behind the latest developments in global trade — for example in digital trade or sustainability.
Many governments now consider the best way to modernise WTO rules is to try to reach agreement among “the willing” first. The rest of the membership can join later when they are ready.
But to insert an agreement among only the willing into the rule-book still needs consensus support from the whole membership, including non-participants.
If India (previously also supported by South Africa and Namibia) continues to oppose anything short of a fully multilateral agreement, this would prevent the deal from becoming a proper WTO agreement.
And with India in such a small minority, this could turn into a major row at the Abu Dhabi Ministerial Conference just two months away.
The subject was on the agenda of the December 13–15 General Council meeting at the request of Chile and South Korea whose two ambassadors — Sofia Boza and Jung Sung Park — coordinate the negotiations.
Participants in the investment facilitation talks now have a completed and legally polished text on the proposed new rules and are ready to ask the full WTO membership to add the deal to WTO agreements, the coordinators said.Guoabong Investment
The deal was struck in July. The participants (now 117 after Armenia and Mali joined in December 2023) accepted in October that they will not be able to persuaded the rest of the WTO membership to join in.
They agreed instead to aim for a deal only among themselves. This would keep it “plurilateral” (only part of the membership involved) and not “multilateral” (WTO-wide). The latest version of the text has been adjusted legally to reflect that approach.
In their communication, circulated on December 4 (full text below), the coordinators informed the General Council — the WTO’s top decision-making body below the Ministerial Conference — that the negotiated text is now legally scrubbed.
They said participants intend to ask the membership to insert it into the set of WTO agreements as an amendment — officially attaching the deal to the WTO Agreement’s Annex 4.
According to sources (now confirmed by the the minutes, pages 123 to 134), over 30 delegations — over 60 members if the EU’s member states are counted — said they wanted to celebrate turning the deal into a proper WTO agreement at the February 26–29 Ministerial Conference. They included non-participants such as Pakistan, Panama and the US.
India was the only speaker in the meeting to oppose adding this agreement to the rule-book (see the minutes, pages 133 to 134). It had prepared a long statement but was cut short by the chair because the number of speakers meant each was restricted to a time limit.
India said it would put its case in writing. Six days later, it circulated a document on December 21, 2023, complaining about being given too little time to speak in the meeting and attaching the full statement it had intended to deliver.
… an outcome of an illegal process nurtured in a rule-based multilateral system
— India’s prepared statement
India said plurilateral talks are simply informal dialogues for sharing information among members, with no mandate to be anything more than that. It said it would oppose making the deal a WTO agreement at the Ministerial Conference.
It described the agreement as “an outcome of an illegal process nurtured in a rule-based multilateral system” and says: “We, therefore, do not agree to bring disciplines within the rule-based WTO legal framework through this illegal process.”
The US, which is not a participant, disagreed. In the meeting it said plurilateral agreements are legally consistent with WTO rules, are provided for in WTO rules (a reference to recognition of plurilaterals in the WTO Agreement — its Annex 4), and are a means for the WTO to progress.
When reaching out to other members, participants are emphasising that the plurilateral agreement will not create any obligations for non-participants and will benefit development.
The opponents argue that plurilateral deals conflict with the WTO’s multilateral nature, even though they have been part of the system for decades. Whether they will accept that non-participants will not be discriminated against remains to be seen.
The original plan included talks on the sidelines of the October 23–24 meeting of senior officials in Geneva as part of the preparations for the 2024 Ministerial Conference, although no information has emerged about how those discussions fared.
If consensus can be found to do so, then the Investment Facilitation Agreement would be added under Annex 4 on plurilateral agreements. That means applying rules on amending the WTO Agreement.
The coordinators’ paper
This is the communication submitted to the General Council by the talks’ coordinators (also available in pdf format):
INFORMATION ON INVESTMENT FACILITATION FOR DEVELOPMENT
ADDING THE AGREEMENT ON INVESTMENT FACILITATION FOR DEVELOPMENT (IFD) INTO THE MARRAKESH AGREEMENT ESTABLISHING THE WTO
Communication from Chile and the Republic of Korea
The following communication, dated 1 December 2023, is being circulated at the request of the delegations of Chile and the Republic of Korea, the Co-Coordinators of the negotiations on Investment Facilitation for Development, on behalf of 116 WTO Members participating in these negotiations.
Recognizing the complementary relationship between investment and trade and their key role in advancing development in the global economy;
Stressing the importance of foreign direct investment in the promotion of sustainable development, economic growth, poverty reduction, job creation, technology transfer, the expansion and diversification of productive capacity and trade, as well as for the achievement of the United Nations 2030 Sustainable Development Goals;
Reaffirming that facilitating greater developing and least-developed Members’ participation in global investment flows constitutes a core objective of the IFD Agreement;
Recalling the support expressed by APEC and G7 trade ministers for the negotiations of the IFD Agreement;
Recognizing that the IFD participants announced the conclusion of the negotiations on the text of the IFD Agreement on July 6, 2023.
We, as Co-Coordinators of the initiative, hereby wish to inform the WTO General Council that:
1. The IFD participating Members completed the legal review of the English text of the IFD Agreement as included in document INF/IFD/W/52 dated 27 November 2023, and are currently working on finalizing the French and Spanish versions of the IFD Agreement’s text;
2. The IFD participating Members intend to make a request in due course pursuant to paragraph 9 of Article X of the Marrakesh Agreement Establishing the WTO to add the IFD Agreement to Annex 4 of the Marrakesh Agreement Establishing the WTO;
3. In this context, the participating Members will engage with all WTO Members with a view to garnering consensus to add the IFD Agreement to Annex 4 of the Marrakesh Agreement Establishing the WTO in order for the IFD Agreement to produce its pro-development benefits.
The Co-Coordinators submit this communication reflecting the common aspiration of all participating Members that the IFD Agreement will reach another landmark at the WTO’s 13th Ministerial Conference in Abu Dhabi.
For more details, see “WTO investment facilitation text completed but still faces uphill battle” including: Plurilateral, multilateral and non-discrimination | Adding to the rulebook | What the agreement includes | Next steps — official | Multilateral but not multilateral | See also
May 10, 2024 — reflecting the publicly released General Council minutes
January 2, 2024 — adding the link to India’s circulated full statement and the quotes from itPune Investment
December 18, 2023 — adding the list of plurilateral talks that are potentially next in lineNew Delhi Wealth Management
Main image | Michelle Henderson, Unspalsh licence
Pune Investment
