INVESTMENT FACILITATION FOR DEVELOPMENT
While emphasizing that reaching a multilateral agreement would be the ideal scenario, IFD participants agreed to pursue the plurilateral pathway to seek the incorporation of the IFD Agreement into the WTO rulebook under Annex 4 on Plurilateral Trade Agreements as established in Article X.9 of the WTO Agreement.
Mindful of the need for consensus among all WTO members in order to integrate a new Agreement into the WTO legal architecture, IFD participants deemed the plurilateral avenue the most pragmatic and viable option as it would not create any obligations for those members that have not accepted it.
The co-coordinators of the negotiations, Ambassador Sofía Boza of Chile and Ambassador Jung Sung Park of the Republic of Korea, stressed that “this is a significant achievement, which will allow us to focus on only one text, namely the plurilateral IFD Agreement in order to hopefully have a finalized text — including final provisions, legal review, and language consistency across all three versions — in time to reach a significant milestone” at the 13th WTO Ministerial Conference (MC13) to be held in Abu Dhabi in late February 2024.
Having reached a common position amongst IFD participants to pursue the plurilateral pathway, members continued discussion on the next steps, focusing notably on the objectives for the upcoming MC13. “All participants agreed that MC13 should be the occasion to celebrate the tremendous progress achieved in the IFD initiative since July and to build the political momentum that the IFD Agreement needs to be incorporated in the WTO rulebook,” said the co-coordinators.
On 6 July 2023, WTO members participating in the IFD talks announced the conclusion of the negotiations on the text of the Agreement following three years of intense text-based negotiations amongst over 110 delegations at all levels of development.
At the last round of talks, participating delegations also focused on the textual adjustments and final provisions needed in a plurilateral scenario. During the consultations of the co-coordinators with delegations, most participants either supported the proposed textual adjustments and final provisions or said that they are considering them positively.
The co-coordinators updated members on the good progress made at the first meeting of the small group established to carry out the legal review of the text of the IFD Agreement. Two additional meetings of the small group will take place before the end of October to make further progress.
Additionally, it was agreed to set up two small groups, one composed of French-speaking delegations, and the other composed of Spanish-speaking delegations, in order to ensure consistency among the English, French and Spanish versions of the text of the Agreement.
Intense outreach and engagement will take place in the remainder of 2023. Ambassadors Boza and Park will attend the World Investment Forum of the United Nations Conference on Trade and Development (UNCTAD) in Abu Dhabi from 16 to 20 October 2023. Moreover, Chile, China and the Republic of Korea will co-host a joint event on IFD for developing members in the margins of the WTO Senior Officials Meeting, which will take place on 23-24 in WTO headquarters in Geneva.
Finally, the co-coordinators reported on the “very substantive and well-attended” dedicated session on the IFD Needs Assessment process held on 12 October. They noted the timely nature of this session, taking into account that, in response to a survey launched in April 2023, 32 members had requested technical assistance and capacity building to conduct an IFD needs assessment. Most of these members envisage starting the needs assessment process in the first half of 2024.
The session focused notably on the lessons learnt from two ongoing IFD self-assessment pilot projects, one in Ecuador and the other conducted in the six members of the Organization of Eastern Caribbean States (OECS). Participants also heard the perspectives of donors and partner international organization and the information they need to activate their internal processes to contribute to the IFD Needs Assessment process.
The main aim of the IFD Agreement is attracting and retaining more and higher quality investment, taking into account the respective development priorities of members. By enhancing transparency, accountability and good governance in investment procedures, the Agreement will also foster a business climate more conducive to sustainable development. The text agreed by participating members also contains provisions addressing “Responsible Business Conduct” and “Measures Against Corruption” — breaking new ground within the WTO.
More information here.