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Info Service on WTO and Trade Issues (Apr20/25) Geneva, 29 Apr (D. Ravi Kanth) – Kazakhstan has informed the World Trade Organization that it is ready to host the WTO’s 12th ministerial conference (MC12) in Nur Sultan in June 2021. While communicating readiness to host MC12 in June 2021, Kazakhstan’s trade envoy Ambassador Zhanar Aitzhanova urged General Council Chair Ambassador David Walker from New Zealand to consult with WTO members on its proposal. The Kazakh government had intended to host the ministerial this June, but had been forced to cancel the meeting due to the ravaging COVID-19 pandemic. In a communication sent to the WTO on 27 April, Kazakhstan’s trade envoy Ambassador Zhanar Aitzhanova said her government “is glad to inform that the Republic of Kazakhstan remains ready to host the next WTO Ministerial Conference in June 2021 in Nur-Sultan.” “I would also like to reaffirm the commitment of the Republic of Kazakhstan to the principles of a transparent, rules-based and inclusive multilateral trading system,” she added. The GC chair had told trade envoys on 17 April that his consultations on the date and venue of MC12 “showed that the options of June 2021 or December 2021 can be envisaged, depending on the availability of a suitable venue.” Ambassador Walker had told trade envoys then that “a number of delegations pointed out that these options for a new date should not constitute an impediment to progress of work and potential adoption of decisions by the General Council where appropriate, and in particular on issues which are time-bound, such as fisheries subsidies.” The GC chair had then said at that meeting that “the possibility of holding a Special General Council meeting at the end of this year was also mentioned in this context.” Several trade envoys from developing countries appear to have come away from the 17 April informal HOD, with the impression that Ambassador Walker seemed determined to finalize an agreement on fisheries subsidies by end of 2020, even though several countries had raised sharp concerns over accelerating work on it during the worst lockdown conditions put in place by various governments due to COVID-19. [It is not clear what effect the consultations he is now undertaking on the latest communication from Kazakhstan on MC12 will have over his earlier expressed determination to finalise by end-2020 a fisheries subsidies agreement, and have it adopted by the General Council, acting when the Ministerial Conference is not in session. SUNS] JSI ON INVESTMENT FACILITATION Meanwhile, in an unrelated development, the participants of the plurilateral Joint Statement Initiative (JSI) group on investment facilitation have on 22 April circulated a draft “informal consolidated text”. Under the pretext that IF (investment facilitation) agreements are beneficial for the developing and least-developed countries, the draft text seeks substantial market access through liberalization of norms and conditions governing foreign direct investment. The draft text is replete with language proposed by the European Union and Japan, the two large investors, among others. The 36-page draft restricted text comes at a time when major developed countries such as the United States, the European Union, Japan, and several other developing countries, including India, are drawing-up new policies to restrict foreign takeovers. The US Trade Representative Ambassador Robert Lighthizer had told his counterpart at the G20 trade ministers’ virtual meeting on 30 March that the US will develop its supply chains within its borders following the Covid-19 crisis. He almost declared that the US will not depend on foreign companies after the Covid-19 crisis, according to the participants familiar with the proceedings of the G20 trade ministers’ virtual meeting. The US is not a member of the JSI group on IF because it is dominated by China among others. The European Union’s trade commissioner Phil Hogan has told his trade ministers of the EU bloc to cooperate in screening merger bids. “Economic vulnerability could result in a sell-off of critical infrastructure or technologies,” he warned. “Remember, the acquisition of a company in your country may have a security effect in other member states or it may negatively affect a project of union interest,” Mr Hogan had told a video-conference of the EU’s trade council, according to a report in Financial Times on 16 April. “Today more than ever, the EU’s openness to foreign investment needs to be balanced by appropriate screening tools,” the EU trade commissioner said, indicating that the comments from the EU trade chief are one of Brussels’ starkest warnings yet that the Covid-19 crisis risks leading to a fire-sale of prized companies whose share prices have been hit hard by the economic fallout, according to the FT report. Japan also reportedly indicated that it would withdraw its companies and investments from China because of the Covid-19 crisis. Against this backdrop, the draft JSI text emphasizes “the importance of investment in the promotion of sustainable development, economic growth, poverty reduction, job creation, expansion of productive capacity and trade.” The JSI group says that the proposed agreement will “facilitate the increasing participation of developing countries in investment flows including, inter alia, through the strengthening of their domestic investment environment and its efficiency.” Given “the impact that the regulatory environment may have on trade and investment between the Members, and aiming to provide investors, especially small and medium-sized enterprises,” the JSI group underscores the urgent need for “a transparent and predictable regulatory environment, as well as with efficient procedures.” The JSI group says that it recognizes “the right of Members to regulate in the public interest and to introduce new regulations in their territories so as to achieve legitimate public policy objectives.” In order to address “the particular needs of developing and especially least developed country Members,” the JSI group says that it will “enhance assistance and support for capacity building in this area” for developing and least- developed countries. Japan, which is one of the major global investors along with China and the European Union, proposed language in square brackets: “considering the particular needs of developing and especially least developed country Members and recognizing the importance of facilitating assistance and support for capacity building which these Members need for formulating and implementing measures necessary for facilitating investment in accordance with this framework.” The JSI draft largely reflected the objectives of the much-discredited Multilateral Agreement on Investment that was promoted by the Paris-based Organization for Economic Cooperation and Development (OECD). The MAI was dropped in 1998 following massive protests from international civil society organizations. The JSI plurilateral initiative on IF (investment facilitation) attempts to provide a new rationale, using the pretext of assisting the developing and least-developed countries. It says that the proposed JSI deal is aimed at bringing about “economic development, social development and environmental protection, (which) are interdependent and mutually reinforcing components of sustainable development, and reaffirming their commitment to promoting the development of foreign direct investment in such a way as to contribute to the objective of sustainable development, for the welfare of present and future generations.” The JSI participants say that the agreement on IF will follow the United Nations Global Compact. It also affirms the JSI members’ “commitment to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good public governance.” Lastly, it takes recourse to “the 2030 Agenda for Sustainable Development of the United Nations” to justify the need to conclude this agreement. The contents of the draft informal consolidated text include 32 items. They are grouped as follows: 1. “Scope and general principles” such as scope, most-favoured nation treatment; 2. Transparency of investment measures that includes publication and availability of measures and information (including by electronic means), notification to the WTO, enquiry points and specific exceptions applicable to transparency requirements; 3. Streamlining and speeding up administrative procedures and requirements to include consistent, reasonable, objective and impartial administration of measures, reduction and simplification of administrative measures; clear criteria for administrative procedures, authorization procedures, treatment of incomplete and rejection of applications, fees and charges, periodic review of administrative procedures and requirements, use of ICT (information and communications technology)/e-government and electronic applications, one stop/shop single window mechanism for clearances, independence of competent review and appeal mechanism; 4. Contact/focal point/ombudsman type of mechanisms to enhance domestic coordination and also for cooperation between governments for enhancing investment facilitation; 5. Domestic regulatory coherence; 6. Special and differentiation treatment for developing and least-developed countries and cross-cutting issues; 7. Measures against corruption; 8. Security exceptions; 9. Dispute settlement. Effectively, the JSI agreement on investment facilitation is a comprehensive, overarching brand new plurilateral agreement with intrusive and onerous commitments that would bind the developing and least-developed countries to give up their specific development-oriented trade and investment policies. The JSI group’s investment facilitation agreement which comes amidst the Covid-19 pandemic indicates the group’s preoccupation with a business-as-usual approach. Sadly, when developing and least-developed countries are mired in what appears to be an irretrievable debt-spiral with trillions of dollars of debt, it is somewhat disconcerting to witness the fresh push for the plurilateral agreement on investment facilitation.
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