There is no mandate for the adoption of the proposed pact on `investment facilitation for development’ negotiated by a group of WTO members, led by China, at the WTO’s 13th Ministerial Conference (MC13) and the “attack” on India and South Africa by WTO Director General Ngozi Okonjo-Iweala for opposing it was appalling, some Civil Society Organisations have said.

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“A sub-group of WTO members are set to celebrate the conclusion of a break-away agreement on investment facilitation and try to secure its adoption as a plurilateral agreement at this week’s 13th ministerial conference, that can only be done by consensus,” per a statement issued by a group of global CSOs.

Not only is there no mandate for these negotiations, but there is also a negative mandate, said Deborah James, facilitator of the Our World is Not for Sale network. “Countries who are trying to push this through at the MC13 are breaching fundamental WTO rules,” she said.

India, together with South Africa, has been opposing the China-backed IFD, which is supported by 130 nations, as it believes that a “non-mandated, non-multilateral issue” cannot be brought to the formal process in the WTO. “Such an attempt will be in violation of the WTO framework and fundamental rule of consensus-based decision-making,” an official said.

Investment dynamics

WTO members have explicitly rejected attempts to get an investment agreement ever since 1996, the CSO release pointed out. A decision in 2004 said that there would be no discussion of investment negotiations in the WTO until the Doha round was over and the round was not over. Moreover, in the 2015 Nairobi Ministerial Conference, it was decided that any such new issues would only be addressed if agreed by all members, the release said.

The WTO DG has gone far beyond her legitimate role as an international public official, who are legally required to be neutral, in her criticism of India and South Africa for opposing the pact , when what they have been insisting is that WTO acts in accordance with its own rules, said New Zealand law professor Jane Kelsey.

Pretending this investment facilitation agreement is for development is a sham, according to Simon Eppel of South African Union Centre (COSATU). “There is no ‘development’ in this agreement,” Eppel said.

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The main reasons that foreign investors don’t come to many developing countries, LDCs and small island developing states are the stark realities of poverty, distance and geography, small scale, poor infrastructure and high costs, the release noted. Foreign companies that do invest are mainly seeking to extract super-profits from exploiting natural resources.

“The long history of investment agreements shows this won’t address any of those issues. What countries really need is a commitment to actively facilitate investment to strategic sectors countries need and which is responsible and genuinely advances their development”, said Lucia Barcena from Transnational Institute.