WTO’s investment facilitation negotiations are not illegal

La Excellence IAS Academy

March 28, 2024

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La Excellence IAS Academy | March 28, 2024 | International Relations

Syllabus: GS II, Subject: International Relations, Topic: Regional and global groupings, Issue: World Trade Organization (WTO)

Context: Non-adoption of the agreement on investment facilitation for development (IFD) at MC13 of the WTO

Investment facilitation for development (IFD):

Negotiations for an IFD agreement began in 2017 on a plurilateral basis by 70 countries.
The agreement was finalized in November 2023.
The agreement aims to create legally binding provisions to facilitate investment flows.
Focuses on enhancing regulatory transparency and administrative procedures to boost foreign investment.
Lacks provisions on market access, investment protection, and investor-state dispute settlement (ISDS).

India’s concern with IFD:

India highlights the absence of a mandate for WTO negotiations on investment.
India refers decisions from the 2004 General Council and 2015 Nairobi ministerial.
IFD negotiations were launched on a plurilateral basis, not multilateral, challenging the application of the negative mandate.

Conclusion:

Plurilateral agreements like the IFD agreement are viewed as essential for revitalizing the WTO’s legislative function amidst consensus challenges.
India, as a major economy, may benefit from reevaluating its defensive stance on issues like the proposed IFD Agreement.

Prelims Connect (Plurilateral agreements)

· Article II.3 of the WTO Agreement permits plurilateral agreements, which bind accepting member countries without obligating non-participants.

· PAs offer a mechanism for advancing specific trade objectives among willing WTO members.