India and South Africa thwarted attempts by some members at the 13th WTO Ministerial Conference in Abu Dhabi on Wednesday to make the proposed China-led investment facilitation for development (IFD) agreement part of the formal WTO framework, sources said.

“The two countries put on record in the ‘trade and development’ session that there was no consensus for adoption of IFD as a ‘plurilateral’ Joint Statement Initiative (JSI) in the WTO MC13. This means that the investment facilitation agreement cannot be part of the MC13 agenda, it can’t be discussed formally there and it can’t be voted on or adopted,” a source tracking the matter told businessline.

In a joint statement, India and South Africa said there was no exclusive consensus to add the proposed Agreement (IFD) as an Annex 4 Agreement (plurilateral agreement between some member countries). They stressed that given the lack of exclusive consensus, this was not a matter for the MC13 agenda. Further discussions and consultations on the matter could take place in the General Council, including on concerns, it added.

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A joint ministerial declaration finalising the China-led IFD Agreement was issued by Trade Ministers from 123 WTO member countries, late on Sunday, who wanted it to be formally brought into the WTO as a plurilateral agreement at the MC13.

India and South Africa have been opposed to making the IFD part of the WTO as there was no Ministerial mandate for it and it had not been endorsed by the entire membership when negotiations began informally on it.

Key pillars

The key pillars of the IFD Agreement are its sections on transparency of investment measures; streamlining and speeding-up investment-related authorisations procedures; enhancing international cooperation, information sharing, and the exchange of best practices; and sustainable investment, according to the proponents which include developed countries, developing nations as well as LDCs.

It would create clear and consistent global benchmarks for investment facilitation, reducing regulatory uncertainty and making it easier for investors to invest, they say.

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“India has stayed out of the IFD as it believes that some of its provisions would put the onus on the government to consult investors on policy matters which could encroach on its policy space,” another source had earlier explained.

New Delhi is opposed to its inclusion in the WTO as an Agreement to Annex 4 of the Marrakesh Agreement as the issue does not have a Ministerial mandate which is a fundamental requirement. Also, investment is not a trade issue and it had been decided in earlier Ministerials that it should be kept out.