| Syllabus: GS II, Subject: International Relations, Topic: Regional and global groupings, Issue: World Trade Organization (WTO) |
Context: Non-adoption of the agreement on investment facilitation for development (IFD) at MC13 of the WTO
Investment facilitation for development (IFD):
- Negotiations for an IFD agreement began in 2017 on a plurilateral basis by 70 countries.
- The agreement was finalized in November 2023.
- The agreement aims to create legally binding provisions to facilitate investment flows.
- Focuses on enhancing regulatory transparency and administrative procedures to boost foreign investment.
- Lacks provisions on market access, investment protection, and investor-state dispute settlement (ISDS).
India’s concern with IFD:
- India highlights the absence of a mandate for WTO negotiations on investment.
- India refers decisions from the 2004 General Council and 2015 Nairobi ministerial.
- IFD negotiations were launched on a plurilateral basis, not multilateral, challenging the application of the negative mandate.
Conclusion:
- Plurilateral agreements like the IFD agreement are viewed as essential for revitalizing the WTO’s legislative function amidst consensus challenges.
- India, as a major economy, may benefit from reevaluating its defensive stance on issues like the proposed IFD Agreement.
| Prelims Connect (Plurilateral agreements)· Article II.3 of the WTO Agreement permits plurilateral agreements, which bind accepting member countries without obligating non-participants.
· PAs offer a mechanism for advancing specific trade objectives among willing WTO members. |
