Investment Facilitation At The World Trade Organization
STUDYInvestment Facilitation at theWorld Trade OrganizationProgress and the Road AheadPradeep S MehtaSanjay Kumar Mangla
Investment Facilitation at the WorldTrade Organization: Progress and theRoad AheadAuthored by:Pradeep S MehtaSanjay Kumar ManglaPublished by:CUTS INTERNATIONAL, GENEVARue de Vermont 37-391202 Geneva, Switzerlandwww.cuts-geneva.orgThis paper was undertaken by Pradeep S Mehta and Sanjay Kumar Mangla. It is published under CUTS InternataionalGeneva’s project “Keeping Pace with Trade Developments”, undertaken with funding support from the Ministry of ForeignAffairs, Sweden.Citation: MEHTA, P., MANGLA, S. (2019). Investment Facilitation at the World Trade Organization: Progress and the RoadAhead. Geneva: CUTS International, Geneva.Disclaimer: The views expressed in this publication represent the opinions of the author, and do not necessarily reflectthe views of CUTS or its funders.Cover Photo: Kevin Jarrett 2019. CUTS International, GenevaThe material in this publication may be reproduced in whole or in part and in any form for education or non-profit uses,without special permission from the copyright holders, provided acknowledgment of the source is made. The publishers wouldappreciate receiving a copy of any publication, which uses this publication as a source. No use of this publication may bemade for resale or other commercial purposes without prior written permission of the copyright holders.2
Table of ContentsTable of ContentsAbstract . 41. Background . 52. Investment Facilitation for Development at the WTO . 93. Investment Facilitation in Regional Trade Agreements and SimilarArrangements . 194. Investment Facilitation in the Multilateral Trading System: The WayForward . 21References. 253
AbstractInvestment, especially foreign investment, hasbeen recognised as an important driver of growthand development. Recognising the dynamic linkbetween investment, trade, and development,several member states of the World TradeOrganization (WTO) including developingcountries from Asia and Latin America, anddeveloped countries like the European Union areraising their voice to develop and adopt anInvestment Facilitation Agreement (IFA) at themultilateral level.The Joint Statement on Investment Facilitation forDevelopment issued by a group of 70 countriesduring the 11th Ministerial Conference of theWTO, held at Buenos Aires during 10-13December 2017, paved the way for StructuredDiscussions on Investment Facilitation forDevelopment at the WTO. The StructuredDiscussions started on 28 June 2018 and havehad four meetings. There has been some progressof these discussions through proposals onpossible elements of the proposed IFA. In thisbackdrop the issue of investment facilitation at themultilateral level is analysed in terms of itsprogress and way ahead.4
BackgroundSECTION 1BackgroundDiscussions on multilateral rules on investmentdate back to the 1948 draft Havana Charter toestablish the International Trade Organization(ITO). The Charter addressed foreign directinvestment (FDI) issues and spelled out extensiverights for investors such as obligations of hostcountries to extend national treatment (NT) andmost-favoured-nation treatment (MFN). However,it did not extend to issues like dispute settlementand performance requirements. Some countriesdid not wish to offer NT or MFN to all memberstates. Whereas the corporates of the UnitedStates (US) opposed the Charter’s provisions thatinter alia provided for regulating anti-competitivepractices of private businesses. The proposed ITOcould not be established due to disagreements onseveral issues, with the US Congress’s oppositionto the fact that its sovereignty can be challengedin some areas by foreign bodies. The failure toestablish the ITO led to the signing of the GeneralAgreement on Tariffs and Trade (GATT) on 30October 1947, which came into effect on 1stJanuary 1948. The GATT did not address theissue of investment during the course of itsnegotiations. However, it was its 8th round ofmultilateral trade negotiations, the UruguayRound (during the late 1980s to early 1990s)when it was agreed to formulate and adopt theAgreementonTrade-RelatedInvestmentMeasures (TRIMs). In fact many countriesincluding the US wanted a high standardinvestment agreement but to wrap up theUruguay Round as soon as possible a lowambition TRIMs was agreed upon. TheMarrakesh Agreement of the Uruguay Round,signed on 15 April 1994, established the WorldTrade Organization (WTO) thus bringing tofruition the still born ITO envisaged in 1948., TheWTO officially commenced on 1st January 1995.Furthermore, many new agreements were alsowrought which included TRIMs in 1994, whichcame into effect along with the WTO.12https://www.wto.org/english/docs e/legal e/18-trims e.htmThe Agreement on TRIMs provides a set of ruleson domestic regulations on foreign investment,applied by a country as part of its industrial policy.It is important to note that the Article 9 of theAgreement on TRIMs (Review by the Council forTrade in Goods) states, “the Council shallconsider whether the Agreement should becomplemented with provisions on investmentpolicy and competition policy". 1 Thus the richmembers of the WTO could create a built inagenda to negotiate investment policy coupledwith competition policy in future.Around the time the WTO was born, the WTOmember states, about 27 countries, who weremembers of the Organisation for Economic Cooperation and Development (OECD) launchednegotiations on a proposed multilateral agreementon investment (MAI) at its Annual Meeting of theCouncil at Ministerial Level in May 1995. “Theobjective was to provide a broad multilateralframework for international investment with highstandards for the liberalisation of investmentregimes and investment protection and witheffective dispute settlement procedures, open tonon-OECD countries”. 2 This did take thedeveloping world by surprise because there was asimultaneous move at the WTO to negotiate t.htm5
same even before the ink had dried on the WTOtexts. In June, 1996 both EU and Canada floatedthe idea of an investment agreement in informalmanner at the WTO to build up a storm. However,the OECD negotiations were discontinued in April1998 due to strong civil society pressure andFrench intransigence which did not want itsaudio-visual sector to be covered by the OECDMAI. The biggest flaw of these negotiations wasthat the MAI was targeted at the developing worldbut they were not in the negotiating room.There was an all out pressure on the developingworld to frame multilateral rules on internationalinvestment and the WTO being a member body ofboth developed and developing countries was thebetter forum. Consequently, the issue ofinvestment was raised at the First MinisterialConference of the WTO, held in Singapore during9-13 December 1996. Here, Trade Ministers ofthe Member States agreed to convene a workinggroup to examine the relationship between tradeand investment; and explore the scope fornegotiating investment at the WTO beyond theambit of the General Agreement on Trade inServices (GATS) where investment in servicescomes under Mode 3 of supply (commercialpresence), and the Agreement on TRIMs. 3 Theworking group was established in 1996 andcalled as the Working Group on Trade andInvestment (WGTI) alongwith three other studygroups covering competition, transparency ingovernment procurement and trade facilitation(collectively referred to as Singapore ged, at the insistence of India, thatfuture negotiations would not be a foregoneconclusion, but would require an “explicit3https://www.wto.org/english/thewto e/minist e/min96 e/wtodece.htm4Luke Eric Peterson, “Investment Officially Jettisoned fromWTO’s Doha Round”, INVEST-SD: Investment Law and PolicyNews Bulletin, August 14, 2004. Retrieved fromhttps://www.iisd.org/pdf/2004/investment investsd aug14 2004.pdf on 19 November 2018.consensus decision” by the Member States. Theissue seemed to linger on the WTO agenda andthe unbeatable opposition on the issue becameclear at the Fifth WTO Ministerial Conference atCancun in 2003. There the Africa Group walkedout of green room negotiations on the SingaporeIssues and the Cancun meetings collapsed withthe Mexican chair calling off the Ministeialmeeting without any declaration. Moreover, inAugust 2004, the General Council decided todrop the issue from the Doha Round trade talks.4Of the four Singapore issues only trade facilitationwas retained for future negotiations.It is worth mentioning here that there has been amajor debate on the definition of investmentwithin the WTO, especially after the formation ofthe WGTI. Some of the WGTI documents haveadopted a broader definition of investment i.e.investment by a resident entity in one economy toobtain a long-term interest in entity resident inanother country. However, the constantlyevolving nature of international economicrelations has created several other means offoreign investment beyond the traditionalinvestment in manufacturing and naturalresources such as investment in technology,intellectual properties, services, and gninvestments to create employment, enhanceexports and economic growth, and achieveSustainable Development Goals (SDGs); manyMember States, including those who wereopposing it earlier, have again raised the issue ofinvestment at the multilateral level but with adifferent focus, named as investment facilitation.Many developing countries including leading5Gara, J. (2003). Scope and definition of investment. In CUTSCentre for International Trade, Economics & Environment(Eds.), Putting our fears on the table: Analyses of the proposalson investment and competition agreements at the WTO (7578). Jaipur, India: CUTS Centre for International Trade,Economics & Environment6
proponents of investment facilitation such asBrazil have remained opposed to the idea ofinvestment rules at the multilateral level, whatthey aspire is for its facilitation. India has beenopposed to this as it feels that once investmentfacilitation is on the WTO acquis the day will notbe far off when there will be a demand for acomprehensive agreement on investment rules.Granted that investment facilitation is quitedifferent from the investment rules discussions atthe WTO under WGTI in the sense that it is limitedto processes and does not cover substantiveissues such as entry requirements, marketaccess, investor protection, and disputesettlement etc. The major issues pertaining toinvestment discussed in WGTI meetings includetechnological development, transparency, nondiscrimination, and dispute settlement. Whilediscussions on investment facilitation focus onlyabout guaranteeing a central point of informationon investment procedural requirements in acountry and do not cover issues such asinvestment protection, market access, disputesettlement etc.Brazil, China, and Russia had introduced theirvision on elements of investment facilitationthrough their papers before the 11th MinisterialConference of the WTO held in Buenos Aires,Argentina during 10-13 December 2017.Additionally, in April 2017, the "Friends ofInvestment Facilitation for Development" (FIFD) –comprising 14 developing and least-developedcountry members – proposed an Informal WTODialogue on Investment Facilitation forDevelopment. 6 The FIFD point out thatinvestment facilitation at all levels is very muchessential to fulfil an annual US 2.5tn investmentdeficit in developing countries for achieving the2030 SDGs. A series of WTO Informal Dialogueshave taken place on investment facilitation fordevelopment since June 2017.A group of WTO members agreed to initiatecontinuous discussions on investment facilitationduring the 11th Ministerial Conference of theWTO. Consequently, 70 WTO Member Statesissued a Joint Statement on InvestmentFacilitation for Development (JSIFD), which callsfor Structured Discussions on InvestmentFacilitation for Development (SDIFD) at the WTO.Subsequent to the 11th Ministerial Conference,Brazil proposed Structured Discussions onInvestment Facilitation (SDIF) through its formalcommunication to the General Council on 1stFebruary 2018 (JOB/GC/169). ion to the General Council on 12September 2018 (JOB/GC/197).The JSIFD and formal proposals on SDIF haverecognised the importance of dynamic relationsamong investment, trade and development. Themember countries have called for closer globalcooperation to create an efficient, transparent,and predictable environment for facilitating FDIand aim at arriving at a plurilateral ‘investmentfacilitation agreement’ (IFA).In this backdrop, this paper examines the issue ofinvestment facilitation at the multilateral level inthe context of its definition; major developmentsin WTO discussions, so far, on the issue; andclauses on investment facilitation in selectregional trade agreements (RTAs). The paperaims at analysing the WTO InvestmentFacilitation initiative, with a view of highlightingthe main issues therein.6https://www.wto.org/english/thewto e/minist e/mc11 e/briefingnotes e/bfinvestfac e.htm7
SECTION 2Investment Facilitation forDevelopment at the WTOAccording to the World Investment Report 2018by the United National Conference on Trade andDevelopment (UNCTAD), global FDI fell by 23 percent to US 1.43tn in 2017 from US 1.87tn in2016, which signals a cause of concern for globalflows of FDI.Table 1: FDI Flows (2015-17) andProjections (2018) by Group ofEconomies and Regions in US BillionGroup 68(-3)1430(-23)1450 to1570(1 to 10)Developedeconomies1141(91)1133(-1)712(-37)740 to 800(5 to 10)595(117)511(96)565(-5)494(-3)334(-41)300(-39) 380( 15) 320( 5)744(9)670(-10)671(0)640 to 690(-5 to 5)57(8)516(12)53(-6)475(-8)42(-21)476(0) 50( 20) 470( 0)Latin America andthe Caribbean169(-1)140(-17)151(8) 140( -5)Transition economies36(-36)64(78)47(-27)50 to 60( -20)EuropeNorth AmericaDevelopingeconomiesAfricaAsiaSource: World Investment Report 2018, UNCTAD, p. 15.Figures in parentheses indicates annual growth rate (percent) which are rounded up.The table 1 indicates that there was a significantdecline in FDI flows in 2017 in developedeconomies of Europe and North America, andAfrica. These declining trends become moreworrisome as developing countries and leastdeveloped countries (LDCs) require a massiveinvestment (approx. US 2.5tn per year) toachieve the SDGs. Thus at such a time,discussions on investment facilitation at themultilateral level becomes more eye-catching.2.1 Definition and scope ofinvestment facilitationAs against the complete clarity on definition oftrade facilitation (i.e. promotion and expansion ofglobal trade through simplified and streamlinedcross-border trade procedures), investmentfacilitation is a broader notion which is not clearlydefined and confused/mixed with investmentpromotion. However, with the passage of timeand increasing importance of investment ions have provided more clarity ondefinitional aspect of investment facilitation.The OECD separates investment facilitation frominvestment promotion. 7 The latter is aboutmarketing a country or a region as an investmentdestination while the former aims to make it easyfor investors to establish, operate and expandtheir existing investments. Under tion.pdf8
Investment Facilitation for Development at the WTOpromotion, the key functions of investmentpromotion agencies (IPAs) include image buildingand investment generation while for investmentfacilitation; they are investor servicing, aftercare,and policy advocacy.According to the OECD, “investment facilitationaims to encourage new investments andreinvestments by providing investors with atransparent, predictable and efficient regulatoryand administrative framework for investmentwhile ensuring the benefits of investment aremaximised. It aims to reduce or eliminatepotential and existing obstacles faced bycompanies in the host country when they decideto invest, including the lack of clarity on thelegislation and administrative procedures, thecost of doing business (in terms of time andresources), the lack of capacities of the civilservice, and the risk of corruption wheninteracting with government officials”.8enhanced predictability and stability of the policyenvironment for investors. Investment facilitationis distinct from investment promotion, which isabout promoting a location as an investmentdestination (e.g. through marketing andincentives) and is therefore often country-specificand competitive in nature”.UNCTAD Global Action Menu for InvestmentFacilitation has provided the following 10 lines ofactions with several other sub-lines of actions: Promote accessibility and transparency ininvestment policies and regulations andprocedures relevant to investors. Enhance predictability and consistency in theapplication of investment policies. Improve the efficiencyadministrative procedures. Designate a lead agency, focal point orinvestment ninvestment promotion through supporting aprospective investor during the investor’s locationselection and decision-making procedure”.9 Establishmonitoringandreviewmechanisms for investment facilitation. Enhance internationalinvestment facilitation.According to Global Action Menu for InvestmentFacilitation, UNCTAD (2018) 10 , “investmentfacilitation is the set of policies and actions aimedat making it easier for investors to establish andexpand their investments, as well as to conducttheir day-to-day business in host countries. Itfocuses on alleviating ground-level obstacles toinvestment, for example through improvements intransparency and information available toinvestors, more efficient and effectiveadministrative procedures for investors, estment Build constructive stakeholder relationshipsin investment policy practice.The World Bank contemplates investmentfacilitation as a sub-function of investmentpromotion and defines it as “the most basic and8ofcooperationon Strengthen investment facilitation efforts indeveloping country partners, through supportand technical assistance. Enhance investment policy and proactiveinvestment attraction in developing countrypartners, through capacity pload/Action%20Menu%2023-05-2017 7pm print.pdf9
Complement investment facilitation byenhancing international cooperation forinvestment promotion for development,including through provisions in IIAs.According to the Asia-Pacific EconomicCooperation (APEC), “investment facilitationrefers to actions taken by governments designedto attract foreign investment and maximize theeffectiveness and efficiency of its administrationthrough all stages of the investment cycle Transparency, simplicity and predictability areamong its most important principles”.11investment facilitation underline the importanc
between investment, trade, and development, several member states of the World Trade Organization (WTO) including developing countries from Asia and Latin America, and developed countries like the European Union are raising their voice to develop and adopt an Investment Facilitation Agreement (IFA) at the
May 02, 2018 · D. Program Evaluation ͟The organization has provided a description of the framework for how each program will be evaluated. The framework should include all the elements below: ͟The evaluation methods are cost-effective for the organization ͟Quantitative and qualitative data is being collected (at Basics tier, data collection must have begun)
Silat is a combative art of self-defense and survival rooted from Matay archipelago. It was traced at thé early of Langkasuka Kingdom (2nd century CE) till thé reign of Melaka (Malaysia) Sultanate era (13th century). Silat has now evolved to become part of social culture and tradition with thé appearance of a fine physical and spiritual .
On an exceptional basis, Member States may request UNESCO to provide thé candidates with access to thé platform so they can complète thé form by themselves. Thèse requests must be addressed to esd rize unesco. or by 15 A ril 2021 UNESCO will provide thé nomineewith accessto thé platform via their émail address.
̶The leading indicator of employee engagement is based on the quality of the relationship between employee and supervisor Empower your managers! ̶Help them understand the impact on the organization ̶Share important changes, plan options, tasks, and deadlines ̶Provide key messages and talking points ̶Prepare them to answer employee questions
Dr. Sunita Bharatwal** Dr. Pawan Garga*** Abstract Customer satisfaction is derived from thè functionalities and values, a product or Service can provide. The current study aims to segregate thè dimensions of ordine Service quality and gather insights on its impact on web shopping. The trends of purchases have
Chính Văn.- Còn đức Thế tôn thì tuệ giác cực kỳ trong sạch 8: hiện hành bất nhị 9, đạt đến vô tướng 10, đứng vào chỗ đứng của các đức Thế tôn 11, thể hiện tính bình đẳng của các Ngài, đến chỗ không còn chướng ngại 12, giáo pháp không thể khuynh đảo, tâm thức không bị cản trở, cái được
National Trade Facilitation Action Plan 1. Introduction India ratified the WTO Agreement on Trade Facilitation (TFA) in April 2016. However, the measures for trade facilitation have been underway since long as enhancing trade facilitation dovetails with the government's policy objective of improving the ease of doing business climate.
MARCH 1973/FIFTY CENTS o 1 u ar CC,, tonics INCLUDING Electronics World UNDERSTANDING NEW FM TUNER SPECS CRYSTALS FOR CB BUILD: 1;: .Á Low Cóst Digital Clock ','Thé Light.Probé *Stage Lighting for thé Amateur s. Po ROCK\ MUSIC AND NOISE POLLUTION HOW WE HEAR THE WAY WE DO TEST REPORTS: - Dynacó FM -51 . ti Whárfedale W60E Speaker System' .
