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South Africa and India have formally opposed the adopton of the Investment Facilitaton “for Development” Agreement for consideraton during the 13th Ministerial Conference (MC13) of the WTO, upholding legal procedures regarding plurilaterals of the global trade body.

The Marrakesh Agreement is unambiguous that a new plurilateral agreement can only be adopted in the WTO through “Annex 4” rules, as proponents of the IF agreement are proposing, exclusively by explicit consensus of all WTO Members.

There is no consensus at the MC13 that the IF can even be legally entered on the agenda. Previous decisions of WTO Ministers are clear that negotatons on investment can only be launched by consensus, once the Doha round is over, so the IF has no legal status in the WTO.

The Minister of Trade for South Korea, a co-sponsor of the agreement, acknowledged they would need consensus to incorporate the deal, and let slip that the “WTO Secretariat is trying to persuade opponents” to drop their oppositIon.

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 More than 120 countries on 25 February circulated the Joint Ministerial Declaration on Investment Facilitation for Development (IFD) at the World Trade Organization’s 13th ministerial conference (MC13) in Abu Dhabi, setting the stage for a tense battle over the entry of the IFD Agreement into the WTO on procedural and systemic grounds, said people familiar with the development.

India and South Africa have consistently blocked the entry of the IFD agreement as a plurilateral agreement on both procedural and systemic grounds.

After maintaining a rather low profile for 23 years, China seems to be asserting its influence at the WTO’s 13th Ministerial Conference (MC13), set to commence on 26 February in Abu Dhabi, said people familiar with the development.

Upon its access to the World Trade Organization at its fourth ministerial conference in Doha, Qatar, in 2001, China initially assumed a cautious stance.

Amidst a tense negotiating climate, the fate of the World Trade Organization’s 13th ministerial conference (MC13), which commences on 26 February in Abu Dhabi, will be decided by three main issues among others, said people familiar with the development.

The three issues that could tilt the outcome at MC13 one way or the other are the permanent solution for public stockholding (PSH) programs for food security, the termination/extension of the moratorium on customs duties on electronic transmissions, and the controversial proposal to integrate the proposed plurilateral agreement on Investment Facilitation for Development (IFD) into the WTO rule book.

Tonight, a sub-group of WTO Members will celebrate the conclusion of a break-away agreement on investment facilitation and try to secure its adoption as a plurilateral agreement at this week’s 13th ministerial conference.  That can only be done by consensus.

The convenors – South Korea and Chile, backed by China – have announced that plan, in the face of sustained objections from India and South Africa that these negotiations have no legitimacy.

WTO Members have explicitly rejected attempts to get an investment agreement ever since 1996. A decision in 2004 said no discussion of investment negotiations in the WTO until the Doha round is over. It is not. In the 2015 Nairobi Ministerial Conference, WTO Members agreed that any such new issues will only be addressed if agreed by all Members.

Ministers representing 123 WTO members issued on 25 February a Joint Ministerial Declaration marking the finalization of the Investment Facilitation for Development (IFD) Agreement and made it available to the public. Ministers also issued a submission asking for the 13th WTO Ministerial Conference (MC13), taking place in Abu Dhabi on 26-29 February, to incorporate the IFD Agreement into Annex 4 of the Marrakesh Agreement Establishing the WTO. Participants represent three-quarters of the WTO membership, including close to 90 developing economies and 26 least-developed economies.

rom February 26–29, 2024, the United Arab Emirates (UAE) will host the 13th Ministerial Conference (MC13) of the World Trade Organization (WTO). Governments from 164 countries will be joined by Timor-Leste and Comoros, the first two nations to join the group since 2017.

At stake is a fight between two visions of what role the WTO, as the world’s most powerful rule-making body in the global economy, should play.

Should the institution expand as an even more corporate-influenced body, with rich countries allowed to set agendas, impose negotiation mechanisms in their favor, and leave poorer countries — and multilateralism itself — in the dustbin of history?

Or should members of the institution recognize the constraints that the current rules place on developing economies, including the harm caused to workers, farmers, and the global environment, and increase flexibilities so that these countries can use trade for their development?

Ministerial Declaration

1. The stated objective of the investment facilitation (IF) disciplines is ‘facilitating the flow of foreign direct investment between Members/Parties, particularly to developing and least developed country Members/Parties, with the aim of fostering sustainable development’ (see Article 1 under WTO document INF/IFD/W/52). Yet, the way the disciplines have been designed does not effectively serve this projected objective. Instead, it exposes developing countries and least developed countries (LDCs) to extensive burdens of implementation, especially because the institutional and administrative approaches required by the disciplines are generally based on practices applied in developed countries. Overall, the disciplines focus on the obligations of host States of investors and keep largely unaddressed any real or hard requirements for home States of investors. There is nothing in the text that would require home States of investors to properly regulate the conduct of their nationals abroad so as to avoid harm that might emerge through their investments and to hold them to account in case they are involved in such harmful activities.

At the year-end meeting of the World Trade Organization’s General Council, India apparently argued that the proposed Investment Facilitation for Development (IFD) Agreement is allegedly “illegal” and cannot be placed on the agenda of the upcoming WTO's 13th ministerial conference (MC13).

by D. Ravi Kanth

At the year-end meeting of the World Trade Organization’s General Council, India apparently argued that the proposed Investment Facilitation for Development (IFD) Agreement is allegedly “illegal” and cannot be placed on the agenda of the upcoming WTO's 13th ministerial conference (MC13).