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TWN
Info Service on WTO and Trade Issues (Dec23/06) Geneva, 11 Dec (D. Ravi Kanth) — The year-end meeting of the World Trade Organization’s General Council (GC) starting on 14 December seems to be replete with several contentious issues, one of which is on deciding how the entry of the controversial plurilateral Joint Statement Initiatives (JSIs) will be incorporated into the WTO rule-book, said people familiar with the development. With just about two months left before the WTO’s 13th ministerial conference (MC13) commences in Abu Dhabi on 26 February 2024, the GC meeting assumes considerable importance as it would likely decide the fate of several contentious issues. In the long list of issues on the agenda for the GC meeting, there is one item that states somewhat innocuously: “Information on Investment Facilitation for Development – Request from Chile and the Republic of Korea.” Under normal circumstances, mere information on Investment Facilitation for Development (IFD) would not have caused a storm at any meeting. But the real intention of the inclusion of this agenda item is something different. It seeks the approval of the General Council for incorporating the IFD Agreement into Annex 4 of the Marrakesh Agreement. In a restricted document (Job/GC/373) issued on 4 December, Chile and Korea said there is a “complementary relationship between investment and trade and their key role in advancing development in the global economy.” The two coordinators of the IFD initiative along with 116 countries stressed the “importance of foreign direct investment in the promotion of sustainable development, economic growth, poverty reduction, job creation, technology transfer, the expansion and diversification of productive capacity and trade, as well as for the achievement of the United Nations 2030 Sustainable Development Goals.” They pointed out that “facilitating greater developing and least-developed Members’ participation in global investment flows constitutes a core objective of the IFD Agreement,” while recalling “the support expressed by APEC (Asia-Pacific Economic Cooperation) and G7 trade ministers from major industrialized countries for the negotiations of the IFD Agreement.” Having concluded negotiations on the text of the IFD Agreement on 6 July 2024, the co-coordinators of the initiative informed members that: “The IFD participating Members completed the legal review of the English text of the IFD Agreement as included in document INF/IFD/W/52 dated 27 November 2023, and are currently working on finalizing the French and Spanish versions of the IFD Agreement’s text.” They said, “IFD participating Members intend to make a request in due course pursuant to paragraph 9 of Article X of the Marrakesh Agreement Establishing the WTO to add the IFD Agreement to Annex 4 of the Marrakesh Agreement Establishing the WTO.” Paragraph 9 of Article X of the Marrakesh Agreement states: “The Ministerial Conference, upon the request of the Members parties to a trade agreement, may decide exclusively by consensus to add that agreement to Annex 4. The Ministerial Conference, upon the request of the Members parties to a Plurilateral Trade Agreement, may decide to delete that Agreement from Annex 4.” Annex 4 of the Marrakesh Agreement deals with plurilateral agreements. The co-coordinators argue that the participating members of the IFD “will engage with all WTO Members with a view to garnering consensus to add the IFD Agreement to Annex 4 of the Marrakesh Agreement Establishing the WTO in order for the IFD Agreement to produce its pro-development benefits.” Further, Chile and Korea maintained that their communication reflects “the common aspiration of all participating Members that the IFD Agreement will reach another landmark at the WTO’s 13th Ministerial Conference in Abu Dhabi.” CONTROVERSIAL RECORD Progress on the IFD appears to be mired in one controversy or the other since the WTO’s first ministerial meeting in Singapore in 1996 when the issue of trade and investment was grouped together with trade and competition policy, trade facilitation, and government procurement, said people familiar with the discussions. When these so-called “Singapore issues” were discarded due to lack of explicit consensus at the WTO’s fifth ministerial conference in Cancun in 2003, WTO members agreed to negotiate on trade facilitation as part of the “July package” at the GC meeting in 2004. Subsequently, China along with several other countries included the issue of investment facilitation in the GC meeting in May 2017, which was blocked by India on account that there was no merit for any proposal on investment facilitation at the WTO, as the issue of investment fell outside the trade body’s core mandate. At the WTO’s 11th ministerial conference (MC11) in Buenos Aires, Argentina in December 2017, the proponents of investment facilitation announced it as a JSI on the margins of the meeting, after it failed to garner consensus at the open-ended meeting of the heads of delegation in the main hall of the venue in Buenos Aires. While the other JSIs such as on digital trade, disciplines for micro, small and medium enterprises (MSMEs) and trade and gender are at varying levels of discussion, only two JSIs have seemingly concluded the negotiations on their legal texts, namely, on domestic regulation in services and investment facilitation. India and South Africa have consistently opposed the JSIs since 2018 arguing that they allegedly violate the core provisions of the Marrakesh Agreement. The United States appears to have indicated in October that it may not stand in the way of consensus, suggesting that it will remain silent on the issue, said people familiar with the discussions. Against this backdrop, Chile and Korea have introduced the IFD proposal which is likely to test the waters at the upcoming GC meeting. Interestingly, the proponents of IFD seemingly dropped the notion that the agreement be incorporated into Annex IA of the Marrakesh Agreement like the Trade Facilitation Agreement, said people, who asked not to be quoted. However, there was no consensus among the IFD participants on including it as an Annex IA multilateral agreement, as proposed by China. It appears that Korea and a few other countries sought to have it incorporated as a plurilateral agreement under Annex 4, for which consensus is needed at the GC meeting. It remains to be seen if India and South Africa will join the consensus or oppose the issue, said people familiar with the discussions. In all probability, the discussion on IFD will take place on 15 December given the roster of several other difficult issues to be taken up before the agenda item on the IFD. If the issue does not gain any traction at the GC meeting, the chances of its success at MC13 seem somewhat remote, said people, who asked not to be quoted. +
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