TWN Info Service on WTO and Trade Issues (Jul26/06)
9 July 2026
Third World Network

Trade: China revives IFDA push through WTO’s CTD after MC14 deadlock
Published in SUNS #10476 dated 6 July 2026

Geneva, 3 Jul (D. Ravi Kanth) -- China has floated a paper at the World Trade Organization's Committee on Trade and Development (CTD) focusing “on how work at the WTO could support trade and investment integration, thereby advancing industrialisation”, in what appears to be a backdoor attempt to revive a controversial issue.

This move comes after WTO members failed to agree on incorporating the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement at the failed WTO’s 14th ministerial conference (MC14) in Yaounde, Cameroon, earlier this year, according to people familiar with the development.

In a similar vein, Japan has circulated a paper seeking to inform members at the upcoming meeting of the CTD about “Critical Energy Transition Minerals (CETMs): Rapid Assessment of Value Addition and Diversification Capacity in Southern Africa”.

Observers familiar with the development suggest that this proposal signals the dawn of a “new age of extraction” targeting countries in Africa.

The Chinese proposal (WT/COMTD/W/311, WT/COMTD/AFT/W/101) issued on 26 June also links trade and investment with the development component of the controversial “WTO reform”.

China states, “Development remains a central pillar of all works of the WTO, including WTO reform,” well aware that under the guise of development, major industrialized countries led by the United States are attempting to downsize special and differential treatment (S&DT) for select developing countries through the notion of “differentiation”.

It is widely known that major industrialized countries oppose the continuation of the practice of self-designation by developing countries for availing of S&DT as a treaty right, a principle clearly outlined in the Enabling Clause.

According to WorldTradeLaw.net, the Enabling Clause “for Special and Differential Treatment (S&DT) allows developed countries to offer trade preferences to developing nations without violating the Most Favored Nation (MFN) rules. This clause, adopted in 1979, creates a permanent exception to the principle that all trading partners must be treated equally. It authorizes four specific categories of preferential treatment, including reduced tariffs under the Generalized System of Preferences and special market access for the least developed countries. The enabling clause is a political compromise that allows developing countries to benefit from reduced tariffs and preferential treatment while maintaining the principle of equal treatment for all other WTO members.”

As previously reported, on 24 September 2025, China announced that it will no longer avail itself of S&DT based on the self-designation criterion in current and future trade negotiations at the WTO, while insisting that it will retain its developing country status.

However, China emphasized that the S&DT provisions in its Accession Protocol will remain unchanged, adding that its latest decision applies only to current and future trade negotiations.

Against this backdrop, China’s latest attempt to allegedly inject investment into the areas of development and Aid for Trade appears to raise questions about Beijing’s underlying motives, with an African trade official - speaking on condition of anonymity - suggesting that it is a game plan to push trade and investment under any possible framework.

To recall, India blocked the incorporation of the controversial IFDA into the Annex 4 list of plurilateral agreements under the WTO Agreement on procedural and systemic grounds at MC14, voiding any early chance of advancing the IFDA.

While around 130 countries supported IFDA’s incorporation into Annex 4 of the WTO Agreement, a legal analyst noted that the attempt seems to be fundamentally incompatible with the WTO’s established rules.

In fact, WTO reform has seemingly become a “free-for-all” for major industrialized countries, as well as China, to ram through plurilateral initiatives by skirting the rules to the disadvantage of developing and least-developed countries, the analyst said.

NEW ARGUMENTS

In its paper, China argues that “industrialization continues to be one of the most effective pathways for developing economies to build productive capacities, create decent jobs, achieve structural transformation and enhance economic resilience.”

According to China, “global value chains have made trade and investment increasingly integrated and mutually reinforcing.”

China maintains that “trade improves access to regional and global markets, expanding sources of demand and supply”, while stressing that “investment plays a crucial role by improving access to capital and know-how and building productive capacities.”

However, analysts note that there have been complaints that investments by the major countries appear to be a “one-way street”, offering limited or no significant value addition in horizontal and vertical developments.

China attempts to drive home the message that “industrialization could be accelerated through measures to facilitate trade and investment integration, that is, measures to help connect productive capacity enabled through investment with market opportunities and linkages generated by trade”.

Nevertheless, another African trade official, who also preferred not to be quoted, said that some of these claims appear to be hardly established with evidence and studies.

China said that “trade and investment integration could enable economies to better transform trade opportunities into domestic value addition, industrial growth and participation in regional and global value chains.”

It emphasized that “this is among the key messages of the High-Level Meeting on Accelerating Africa's Industrialization: China's Investment held on the margins of MC14.”

To promote its case for trade and investment, China states: “the cases shared during the meeting [held at the margins of MC14] provide useful insights into how trade and investment integration can contribute to industrialization through the development of domestic productive capacities and supply-chain linkages, improve infrastructure connectivity, enhance skills and technological capabilities, and demonstrate how a stable, predictable and rules-based environment for trade and investment could contribute to this process.”

Against the above background, China outlined how the WTO could better support the development objectives.

“This communication proposes to deepen the deliberations on strengthening trade and investment integration, with the objective of further enhancing understanding of the interplay between trade, investment and industrialization, and exploring how relevant discussions and work at the WTO could better support development objectives,” China argued.

AREAS FOR DISCUSSION

In its paper, China proposed areas for further discussions, pointing out that they “could be structured around three dimensions surrounding trade and investment integration for industrialization: Members’ policy experiences, relevant WTO frameworks and tools, and WTO development cooperation mechanisms that can support productive capacity-building and industrial upgrading.”

China said, “Members are invited to share their perspectives on the following indicative guiding questions:

1. Members’ Practices and Policy Approaches: What policy approaches and institutional arrangements have members adopted to advance trade and investment integration that have contributed to industrialization, in areas such as the development of productive capacities and industrial infrastructure, creation of industrial and supply chain linkages, workforce skills training and industrial upgrading?

2. Relevant WTO Rules and Framework: What existing WTO rules and mechanisms are conducive to facilitating trade and investment integration for industrialization? Where do Members see gaps or limitations in the current framework from a development perspective, and what further analytical, deliberative or institutional work could the WTO undertake in this area?

3. WTO Development Cooperation: How can the Aid-for-Trade Initiative, and other development cooperation initiatives in the WTO complement Members' efforts in promoting industrialization through trade and investment integration?”

As part of “next steps”, China argues that “given the central role of industrialization in achieving development, the Committee on Trade and Development (CTD) is the appropriate committee to further the discussions on trade and investment integration for industrialization.”

China is seemingly pushing for the WTO to take a central role in this area, a concept previously suggested by the WTO Director-General during a past Aid for Trade meeting.

“As an initial step, it is suggested that the Secretariat could start to compile and disseminate a compendium of experiences and approaches on integrating trade and investment for industrialization based on Members’ experiences and practices, including voluntary submissions by Members, related discussions under the CTD, as well as impact stories shared for the 10th Aid for Trade Global Review, with key insights reflected in the 10th Aid for Trade Global Review's outcome report,” said China.

Without a ministerial or General Council mandate, it seems to have become a new game for the major industrialized countries to swamp the WTO with plurilateral initiatives, flexible decision-making, and non-developmental initiatives, said several trade envoys who preferred not to be identified.

JAPAN’S PROPOSAL

Meanwhile, Japan submitted a separate restricted proposal (JOB/COMTD/27) to the CTD on 26 June, titled “Trade as an engine for economic growth: promoting peer-learning and building a shared knowledge base”.

Under the sub-title “Critical energy transition minerals (CETMs): rapid assessment of value addition and diversification capacity in Southern Africa” that is being implemented by UNCTAD, Japan states, “with financial backing from the Government of Japan, UNCTAD launched a comprehensive initiative in March 2025 targeting Madagascar, Namibia, and Zambia. The project aimed to delineate each nation's strategic niche within Critical Energy Transition Minerals (CETM) value chains and to fortify their respective institutional and regulatory frameworks.”

“By leveraging national trade records from tax authorities alongside UN Comtrade statistics, the analysis rigorously assessed existing productive capabilities to identify latent export opportunities,” Japan said.

However, it did not mention that this seemingly aligns with the grand project of “the age of extraction”, a term coined by writer Tim Wu in describing how dominant platforms extract wealth and deepen inequality. +