{"id":262308,"date":"2023-09-29T19:21:44","date_gmt":"2023-09-29T13:51:44","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=262308"},"modified":"2023-09-29T19:21:44","modified_gmt":"2023-09-29T13:51:44","slug":"we-should-join-the-wtos-investment-facilitation-talks","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/we-should-join-the-wtos-investment-facilitation-talks\/","title":{"rendered":"We should join the WTO\u2019s investment facilitation talks"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cWe should join the WTO\u2019s investment facilitation talks\u201d <\/strong>published in the \u201cmint\u201d <\/strong>on 28th September 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Economy<\/p>\n

Relevance- <\/strong>Issues related to WTO<\/p>\n

News<\/strong>– On 6 July 2023, over 110 of the WTO 164 members concluded text-based negotiations on the Agreement on Investment Facilitation for Development (IFA).<\/p>\n

What are some facts about IFA (Investment Facilitation Agreement)?<\/strong><\/h2>\n

The primary goal of the IFA is to create a business environment that is favourable to investors.<\/p>\n

The IFA primarily focuses on FDI<\/strong>.<\/p>\n

It achieves this by implementing transparent and predictable investment measures, streamlining administrative procedures <\/strong>related to investment, and establishing mechanisms for international cooperation<\/strong>.<\/p>\n

IFA does not cover areas like market access, investment protection, government procurement, specific subsidies, or investor-state dispute settlement (ISDS)<\/strong>. It contains safeguards to shield it from international investment agreements (IIAs). <\/strong><\/p>\n

In essence, the IFA is not aimed at liberalising investment policies. Its objective is to simplify investment procedures.<\/p>\n

IFA incorporates provisions for special and differential treatment<\/strong>, which adjust the scope and timeline <\/strong>of the agreement’s implementation for developing and least developed countries based on their respective capacities.<\/p>\n

The IFA also includes provisions for providing technical assistance and capacity building<\/strong> to these countries.<\/p>\n

What is the difference between investment facilitation and investment promotion?<\/strong><\/h2>\n

UNCTAD’s Global Action Menu for Investment Facilitation<\/strong> draws a distinction between the two approaches.<\/p>\n

While both aim to attract foreign investment, promotion places emphasis on showcasing a particular location as an attractive investment destination. <\/strong><\/p>\n

In contrast, facilitation concentrates on simplifying the proces<\/strong>s for foreign investors to establish or expand their businesses. Investment facilitation<\/strong> seeks to address practical challenges encountered by foreign investors.<\/p>\n

What are issues faced by international investment agreements (IIAs)?<\/strong><\/h2>\n

High-standard investment protection provisions<\/strong> have been included within international investment agreements.<\/p>\n

Their inconsistent interpretation<\/strong> by various arbitration panels has constrained the policy flexibility<\/strong> available to host countries to regulate in alignment with their developmental priorities.<\/p>\n

For instance, India has terminated its older bilateral investment treaties (BITs)<\/strong> and is in the process of negotiating new agreements based on its 2016 Model BIT text.<\/p>\n

What is India’s approach towards investment facilitation?<\/strong><\/h2>\n

Indi does not fundamentally oppose the concept of investment facilitation.<\/strong> Recent India-UAE agreement<\/strong> in 2022 and the India-Brazil BIT<\/strong> in 2020, include provisions related to investment facilitation.<\/p>\n

India is also a participant in the BRICS Understanding on Investment Facilitation<\/strong> and signed a similar mechanism with the EU in 2017.<\/p>\n

Why has India decided to not participate in the IFA (Investment Facilitation Agreement) talks?<\/strong><\/h2>\n
    \n
  1. India is against utilising the WTO as a platform for investment facilitation<\/strong>, as it holds the misconception that investment matters<\/strong> fall outside the WTO’s mandate. Instead, India prefers bilateral negotiations <\/strong>for investment provisions.<\/li>\n
  2. India perceives the IFA as part of a strategy by developed nations to initiate investment facilitation <\/strong>within the WTO, possibly followed by the introduction of contentious investment protection rules<\/strong> at a later stage.<\/li>\n
  3. India opposes plurilateral agreements <\/strong>within the WTO, as they bypass the consensus decision-making process.<\/strong><\/li>\n
  4. India is against the inclusion of ‘Most Favoured Nation’ (MFN)<\/strong> provisions in the IFA due to past negative experiences, such as the repercussions faced after including an MFN provision in its Australia BIT.<\/li>\n<\/ol>\n

    How WTO’s investment facilitation framework is a potential opportunity for India?<\/strong><\/h2>\n

    New Delhi has opened up foreign investment in most sectors, and participation in the IFA could advance the goal of attracting foreign direct investment (FDI). India is also a capital-exporting country,<\/strong> and involvement in the IFA could facilitate its overseas investments.<\/p>\n

    India has ambitious aspirations for achieving a $5 trillion economy by 2025-26<\/strong>. Therefore, it is essential for the country to move beyond a mindset shaped by historical experiences<\/strong>, and actively engage in shaping the global economic framework.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

    Source– The post is based on the article \u201cWe should join the WTO\u2019s investment facilitation talks\u201d published in the \u201cmint\u201d on 28th September 2023. Syllabus: GS3- Economy Relevance- Issues related to WTO News– On 6 July 2023, over 110 of the WTO 164 members concluded text-based negotiations on the Agreement on Investment Facilitation for Development… Continue reading We should join the WTO\u2019s investment facilitation talks<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184,10501],"class_list":["post-262308","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/262308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=262308"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/262308\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=262308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=262308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=262308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}