Ministers representing 123 World Trade Organisation (WTO) members finalized the Investment Facilitation for Development (IFD) Agreement, marking a significant milestone in global investment and trade history. The conclusion of this landmark agreement, aimed at facilitating investment flows to drive growth and sustainable development, was announced at the 13th WTO Ministerial Conference (MC13) in Abu Dhabi.
Ministers also issued a submission asking for the MC13 to incorporate the IFD Agreement into Annex 4 of the Marrakesh Agreement establishing the WTO.
Key objectives and significance
The IFD Agreement holds immense promise in enhancing investment climates worldwide. By providing clear and consistent global benchmarks for investment facilitation, it aims to reduce regulatory uncertainty and streamline processes. This makes it easier for investors to engage in investments. Notably, the agreement excludes market access, investment protection, and investor-state dispute settlement, focusing solely on investment facilitation measures.
WTO Director-General Ngozi Okonjo-Iweala highlighted the importance of the achievement. She stated that members created a pioneering agreement that aims to attract the foreign direct investment (FDI) they want. Hence, this allows them to drive growth, productivity gains, job creation, and integration into global supply chains. She also emphasized that the IFD Agreement “will contribute to making the global economy more resilient and inclusive”.
Notably, the IFD Agreement will allow developing and least-developed country (LDC) members to receive the technical assistance and capacity-building support they need to implement it.
Read: WTO: 13th Ministerial Conference kicks off in Abu Dhabi
Incorporation into WTO
Participants are proposing to add the IFD Agreement to Annex 4 of the Marrakesh Agreement establishing the WTO. This move, if approved at MC13, will pave the way for the agreement to become part of the WTO’s framework. Therefore, it will be able to provide crucial support for developing and least-developed countries in attracting sustainable investment flows. Moreover, an IFD Agreement in the WTO will also serve as a key catalyst for international support for national and regional investment facilitation efforts.
The proposal underscores the participants’ commitment to open, inclusive, and transparent discussions. Moreover, it emphasizes the shared aspiration to integrate the IFD Agreement into the WTO at the earliest opportunity.
Conducted with transparency and inclusivity, the text-based negotiations for the IFD Agreement commenced in September 2020. These efforts stemmed from a directive by 70 WTO members during MC11 in Buenos Aires in December 2017, urging the initiation of “structured discussions” to formulate a comprehensive framework for investment facilitation for development.
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