Investment Facilitation Negotiators Welcome Substantive Progress in Draft Agreement

At a plenary meeting on 4 May following two days of consultations, WTO members participating in the negotiations on investment facilitation for development (IFD) commended the substantive progress made in the Draft Agreement since the start of this year. The co-coordinators of the talks, Ambassador Sofía Boza of Chile and Jung Sung Park of the Republic of Korea, introduced the latest revision of the draft text, which reflects solid progress towards the objective of finalizing the negotiations by mid-2023.

Ambassadors Boza and Park presented the revised single text used as the basis for the negotiations, including the removal of the Annex in line with the "sunset approach" (the time limit set to discard those issues which did not garner wide support) as well as the cleaning and resolution of most of the bracketed text (indicating text still under review) across various sections of the text.

The co-coordinators reported that, over the two days of consultations in various configurations, delegations made further progress. All brackets in Section V (Special and differential treatment for developing country and least-developed country members) were resolved and most brackets in Section VII (Institutional arrangements and final provisions) removed.

Participating delegations also discussed a joint communication by a group of ten delegations, which reflects the outcome of intersessional discussions on text adjustments aimed at improving the technical coherence of the Draft IFD Agreement. Delegations actively considered the proposed text adjustments but requested more time to consult on them internally. The proposed technical coherence adjustments will be further addressed in the upcoming June meeting, with a view to resolving them.

Participating members also addressed a joint communication by three delegations containing text contributions relating to three articles in Sections II (Transparency of Investment Measures) and III (Streamlining and Speeding up Administrative Procedures) of the Draft Agreement presented under each delegation's individual responsibility.

They also considered a revised text proposal making it clear that nothing in the Agreement precluded members' right to refuse an investment or to set standards and conditions for authorizing it. Furthermore, they discussed a proposed footnote to Article 41 on "General and Security Exceptions" and a further refinement of the proposal on monetary and exchange rate policies.

Ambassadors Boza and Park reported on a "very good discussion" among participating members on the legal architecture of the future IFD Agreement. The objective of this preliminary discussion was to have more clarity and a common understanding on the principles that would guide the remaining work of delegations as well as on how to draft the most-favoured nation (MFN) article and the final provisions of the Draft Agreement.

The Co-coordinators noted that the drafting of these provisions would differ depending on whether the IFD Agreement would be a multilateral agreement under Annex 1 of the Marrakesh Agreement (which would create rights and obligations for all WTO members) or a plurilateral agreement under Annex 4 (which would create obligations only for those members who signed onto them).

Participants discussed a number of key guiding principles, namely the Investment Facilitation for Development Agreement (IFDA) should be an integral part of the WTO treaty architecture and the Agreement should, in principle, apply horizontally to all sectors (services and non-services sectors). They also discussed the principle that the Agreement should be a standalone agreement and that it should be open to accession by all WTO members – with the possibility that its benefits be extended to all WTO members (based on the MFN principle).

Participants welcomed what they deemed to be a very timely discussion and generally supported these guiding principles.

Regarding the Agreement's final provisions, the Co-coordinators during their consultations with participants provided some examples found in existing WTO agreements such as the Trade Facilitation Agreement and the Government Procurement Agreement suggesting some ideas on what could be addressed. These examples included issues such as acceptance and entry into force of the Agreement, accessions, procedures for amendments, withdrawal and reservations. Participants highlighted the importance of including a final provision on accessions to reflect the open-ended and inclusive nature of the IFD Agreement.

Finally, delegations were reminded of the survey for developing and least developed country (LDC) members to indicate their interest in undertaking an investment facilitation needs assessment. The objective of this survey is to gauge demand and make sure that the necessary funding and experts can be made available in time to ensure a successful IFD needs assessment process. The co-coordinators reminded delegations that the deadline for submitting the survey was extended until 31 May 2023.

In this regard, on 5 May, delegations attended a workshop on "Investment Facilitation Self-Assessments: Determining implementation gaps and technical assistance needs" organized by the International Trade Centre (ITC), focusing on the operational aspects of how to conduct a successful self-assessment.