New Delhi: Around 40 countries including India and Turkiye have raised concerns at the World Trade Organisation over a China-backed proposal for a new Investment Facilitation for Development (IFD) framework at this week’s ministerial meeting, officials privy to the development said.
The development assumes significance as proponents of the proposal are keen to secure a deal at the WTO’s 14th Ministerial Conference (MC14) in Cameroon from March 26-29.
While the 120-odd members backing the deal claim that it will help streamline procedures and improve transparency to facilitate international investments, the worries emanate from the fact that it would create a pre-investment appeal system to screen investments through an independent body, constraining policy flexibility.
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New Delhi and other members have flagged concerns around limited policy space and the absence of special and differential treatment for poorer countries, one of the officials said.
Turkiye has separately raised concerns over the lack of clarity on pre and post establishment provisions, absence of carve-outs for sensitive sectors such as defence and atomic energy, and the inclusion of ecommerce within the proposed framework.Also read: Complex dynamics of India-China ties & its future
Countries such as Nepal and Sri Lanka, which are non-participating members, also have expressed apprehensions, while the US is supporting the incorporation of the agreement despite not being an IFD member.
Say IFD will create pre-investment appeal system to screen investments via independent body
India and South Africa had blocked attempts to include IFD in the WTO framework at the 2024 ministerial conference.
Efforts are on to arrive at deliverables incorporating the IFD agreement into the WTO’s legal architecture as a plurilateral agreement under Annex 4 of the organisation.
Plurilateral agreements listed in Annex 4 bind only participating members and are not binding on non-participating members. Adding agreements to the annex requires the consensus of the entire membership.
“Members who have joined the initiative also have concerns related to lack of clarity on definition, scope and activities of the agreement,” an official said.
New Delhi has maintained that discussion on any aspect concerning trade and investment remains out of bounds within the WTO framework as it is not a trade agreement, and the organisation needs to ensure that plurilateral agreements remain an exception and do not become a norm.
India has insisted that inclusion of new agreements into Annex 4 of the Marrakesh Agreement is not only an issue concerning members’ right to enter into international agreements, but the functioning of the WTO.