WTO Members Announce Finalisation Of Investment Facilitation Agreement

Ministers from 123 World Trade Organisation (WTO) members have recently announced a significant development in global trade negotiations. The finalisation of the Investment Facilitation for Development (IFD) Agreement marks a pivotal moment, with a request for its incorporation into Annex 4 of the Marrakesh Agreement Establishing the WTO at the upcoming 13th WTO Ministerial Conference (MC13) in Abu Dhabi. This group represents three-quarters of the WTO membership, including nearly 90 developing economies and 26 least-developed economies, showcasing a broad consensus across different levels of economic development.

The IFD Agreement is poised to play a crucial role in attracting foreign direct investment (FDI), which is essential for driving growth, productivity gains, job creation, and integration into global supply chains. WTO Director-General Ngozi Okonjo-Iweala highlighted the agreement's potential to make the global economy more resilient and inclusive. The successful conclusion of negotiations was led by Claudia Sanhueza, Vice-Minister of Trade of Chile, and Inkyo Cheong, Minister of Trade of the Republic of Korea, who both emphasized the WTO's capacity to address global trade and development challenges through this agreement.

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade and MC13 Chair, pointed out that the IFD Agreement is the culmination of over six years of collaboration and compromise among participating members. He lauded it as evidence of the effectiveness of open and rule-based trade. The agreement aims to establish global benchmarks for investment facilitation, reduce regulatory uncertainties, and simplify processes for investors while excluding market access, investment protection, and investor-state dispute settlement provisions.

Developing and least-developed countries involved in the agreement are expected to receive necessary technical assistance and capacity-building support to implement it once incorporated into the WTO. The proposed incorporation into Annex 4 of the Marrakesh Agreement would make it binding on members that accept it. Although it is a plurilateral agreement, its integration into the WTO framework is seen as critical for delivering its benefits widely, especially to developing and least-developed countries.

The negotiations for the IFD Agreement began in September 2020 after more than three years of preparatory work since the initial call for discussions on investment facilitation in 2017. The participants are looking forward to engaging with all WTO members during MC13 in an open and inclusive manner to discuss their request for incorporation. This step is viewed as a new beginning for the WTO in responding to current economic challenges and facilitating sustainable development through enhanced foreign direct investment flows.

With inputs from WAM