WTO meeting: India, SA oppose China-led investment facilitation proposal

Two developing countries say there is no consensus on proposal and it can't be included in outcome document of ministerial conference

India, along with South Africa, has objected to the China-led group's Investment Facilitation for Development (IFD) proposal, ensuring that it does not become part of the outcome document of the World Trade Organization's (WTO) 13th Ministerial Conference (MC13).

The two developing countries said that as there is no consensus on the agreement, it couldn’t be included in the outcome of MC13. The four-day ministerial meeting is underway in Abu Dhabi.

The IFD proposal, agreed upon by 123 member nations of the WTO, seeks to improve transparency in investment regulations and make countries more attractive to foreign and national investors. The proposal also aims for higher-quality investment at a time when many developing countries are grappling with weak growth and high inflation.

 

India opposes the proposal, saying it will dilute the multilateral nature of the WTO. The China-led group wants to bring the proposal through Annexure-4 of the WTO, under which the proposal would be binding for signatory members and not for those who oppose it. India has said a "non-mandated, non-multilateral issue" becoming a formal process in the WTO will violate the organisation’s framework.

India believes that if countries want to negotiate on the subject, they should do so outside the formal structure of the WTO.

"India blocked it (the IFD proposal) in December last year as well, and in the General Council Meeting of the WTO. This is not an agreement as per the definition. It is debatable whether it is a trade agreement," said a senior government official.

The IFD was first mooted in 2017 by China and countries dependent on Chinese investments. Those with sovereign wealth funds are party to the pact.