Investment facilitation, norms for small firms gain push at WTO talks

Investment facilitation, norms for small firms gain push at WTO talks

Context

Ongoing WTO’s Nairobi ministerial

News

• Midway through the negotiations involving 164 World Trade Organisation (WTO) member nations being held here, India is holding its ground on issues such as food security as well as the centrality of development in the talks
• However, a notable group of countries, including Pakistan and China, have demanded taking forward discussions on investment facilitation and proposed norms relating to small firm

India’s views

According to India, these are “new issues” and, therefore, should be considered only after resolving outstanding issues relating to food security that are part of the ongoing round of negotiations which began in Doha in 2001

China’s communication

In a communication to the WTO mainly at the request of China, 66 countries (including European Union members), both from the developing and the developed world, said: “We call for a dedicated minister-level meeting on investment facilitation at the (Buenos Aires) Ministerial Conference, led by a facilitator, for members to discuss this important topic. We also encourage all WTO members to actively participate in this dedicated session and to endorse the Draft Ministerial Decision on Investment Facilitation for Development.”

MSME

82 nations (including the EU members) called for a dedicated Minister-level meeting on micro, small and medium enterprises (MSMEs) at the Buenos Aires meeting for all members to discuss the “important” topic

• Establishment of a work program: Meanwhile, in the other communication relating to MSMEs, the countries supporting the cause said they reaffirm their commitment to begin a multilateral discussion on the issue through the establishment of a Work Program in the WTO to address the obstacles faced by MSMEs in international trade
• Recognition of burden faced by MSMEs while participating in international trade: They noted that costs related to foreign trade operations represent a significant burden for the participation of MSMEs in international trade, and acknowledged that MSMEs from developing countries and especially the least developed countries among them face additional obstacles when participating in international trade
• These WTO member nations said they acknowledged that the participation of MSMEs in international trade has emerged as an important issue in the multilateral trading system and in the WTO agenda
• They also recognised that MSMEs perform a significant role in the national economies of WTO members, as sources of job creation, innovation, entrepreneurship and economic growth

Rationale of the countries supporting investment facilitation

The countries supporting the issue of investment facilitation said

• There were dynamic links between investment, trade and development in today’s global economy
• There was a need for closer international cooperation at the global level to create a more transparent, efficient, and predictable environment for facilitating cross-border investment
• They agreed that the right of members to regulate, in order to meet their policy objectives, shall be an integral part of the proposed multilateral framework on investment facilitation
• They welcomed what they called a ‘Draft Ministerial Decision’ on Investment Facilitation for Development which wanted structured discussions with the aim of developing the proposed framework

Discussions shall address

These discussions shall seek to identify and develop the elements of a framework for facilitating foreign direct investments that would:

• improve the transparency and predictability of investment measures
• streamline and speed up administrative procedures and requirements
• enhance international cooperation, information sharing, the exchange of best practices, and relations with relevant stakeholders, including dispute prevention

Facilitating greater developing and least-developed members’ participation in global investment flows will constitute a core objective of the framework

Discussions shall not address

These discussions shall not address

• Market access
• Investment protection, and
• Investor-State Dispute Settlement