WTO members are targeting the last week before Easter to wrap up negotiations on the substance of the proposed new agreement on ‘investment facilitation for development’, with only two key issues still awaiting resolution.
In their latest round of discussions late last week, participants in the plurilateral negotiations, who number around two-thirds of the WTO’s 164-strong membership, made further significant progress in narrowing down the disagreements over the text
The target for participants will be to conclude discussions on what the investment facilitation agreement should cover at the next round of talks, scheduled for 3-5 April.
Sofia Boza, the Chilean ambassador who co-chairs the negotiations with South Korea’s Jung Sung Park, stressed that the early April meeting would be “a particularly important one” in getting the deal done.
Launched in 2017 as part of the ‘joint initiative’ series of plurilateral negotiations, the IFD agreement will aim to codify best practice on government provisions for investment controls and restrictions.
Its objective is to make the investment environment more predictable in developing country economies, thereby encouraging international foreign direct investment.
The latest iteration of the text makes it clear that the agreement only covers such direct investments as long-held brackets around the words ‘foreign direct’ in the first article of the draft agreement were removed.
This means that short-term financial investments are not covered by this agreement. It has also been agreed that the initiative will not cover market access, investment protection or investor-state dispute settlement.
Outstanding: rules on movement of business persons, monetary policy measures
Views over what the agreement should contain have started to converge over recent months.
Prior to the most recent meeting, four points were still listed in an annex to the main agreement which contained questions over which there was no consensus.
That list has now been reduced to just two.
Proposals to exclude measures relating to e-commerce from the scope of the agreement have been dropped by the countries which had been sponsoring a carve-out in this area, while calls to define an “enterprise” for the purposes of the agreement have also been withdrawn.
This leaves just key two points still to resolve, one covering movements of business persons for investment purposes, and another point relating to the exclusion of “non-discriminatory measures of general application in the pursuit of monetary and related credit policies or exchange rate policies”.
On the first point, delegations are said to be moving towards convergence on wording which would require countries to make information on the entry and temporary stay of business persons “publicly available”.
There are no clear solutions in sight on the other outstanding point – although delegations have pledged to work to bridge their differences between now and the April meeting.
Easter sunset to MC13 sunrise
Participants have agreed to adopt a “sunset approach” for the final stages of the negotiations. Under this approach, any proposal which has not attracted wide support by the time of the next meeting will be withdrawn by the proposing delegation.
Negotiations are still continuing to address textual variants in the main part of the text of the agreement, although these are not seen as representing a significant hurdle.
The overall target is to complete the negotiations by July, and have it ready for official adoption at the next WTO ministerial meeting in Abu Dhabi in February 2024.
As well as the textual elements within the agreement, the IFD also contains provisions for financial and practical support for developing and least-developed countries, the modalities of which still have to be thrashed out.
The IFD looks set to be the second of the JSI negotiations to be concluded, after the agreement on services domestic regulation which was wrapped up in the latter part of 2021.
A third set of talks, covering ground rules for e-commerce, is currently targeted for completion by the end of this year.