India and South Africa block attempt to include ‘investment facilitation for development’ agreement at WTO meet

India and South Africa block attempt to include ‘investment facilitation for development’ agreement at WTO meet

Subject: IR

Section: Int Organisation

Context:

• Opposition to Investment facilitation for development (IFD) Agreement at WTO’s 13th Ministerial Conference.

Details:

• The 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) took place in Abu Dhabi, starting on February 26 and concluding on February 29.

Investment Facilitation for Development (IFD) Agreement:

• The IFD Initiative was initiated in the spring of 2017 by developing and least-developed WTO members.
• Its goal is to create a global agreement to enhance the investment and business climate, facilitating easier investment, daily business operations, and expansion for investors across all economic sectors.
  • The agreement is plurilateral, based on the most-favoured-nation principle, and is open for all WTO members to join. Plurilateral agreements are binding only on the WTO members that accept them.
• Over 120 countries supported the IFD agreement, aiming to integrate it into the WTO to improve the investment and business climate.
• The agreement, advocated by a China-led group, sought to be made binding through Annexure-4 of the WTO.
• Opposition by India and South Africa
  • India and South Africa formally opposed the IFD agreement’s consideration at MC13, labelling it a non-trade issue outside the WTO’s framework.
  • India argued that investment-related issues do not fall under the WTO’s jurisdiction, emphasizing that the Marrakesh Agreement requires explicit consensus for adopting new plurilateral agreements.
• Consensus and Attempts to Persuade
  • South Korea, a co-sponsor, acknowledged the need for consensus to incorporate the IFD agreement.
  • Civil society organizations reported efforts by the WTO Secretariat to persuade opponents to withdraw their objections.
  • WTO Director-General Ngozi Okonjo-Iweala mentioned the IFD agreement as a potential “deliverable.”
• India’s Stance on Development Issues
  • India emphasized the importance of addressing issues relevant to developing countries, insisting that new issues should not be considered unless previous decisions and mandates were fulfilled.
  • India defended the principles of ‘Special and Differential Treatment’, asserting they are fundamental to the WTO’s objectives and not exceptions to its rules.

Source: DTE