Quick Win No. 8
Facilitate the participation of developing and least developed economies in global investment flows
Redirecting investment flows to developing and least-developed economies is one of the key challenges to overcome when thinking about a new paradigm for globalization and building resilience in trade. The Joint Initiative on Investment Facilitation for Development, launched by some WTO members in December 2017, aimed to address trade barriers that impede and restrict investment processes between countries. Although the conclusion of the negotiations on the Investment Facilitation for Development (IFD) Agreement was announced in February 2024, the Agreement was not incorporated into Annex 4 of the Marrakesh Agreement during the 13th WTO Ministerial Conference (MC13). Establishing these rules at the multilateral level is crucial to creating a cohesive and inclusive global investment environment, which will enhance the participation of developing and least-developed WTO members in global investment.
The disciplines contained in the IFD Agreement aim to create a regulatory environment that fosters foreign direct investment (FDI) flows to developing and least developed economies, promoting job creation, economic growth, integration into regional and global value chains, and ultimately helping them to achieve sustainable development goals. Indeed, the IFD Agreement includes a number of commitments that are related to crucial factors influencing international investors' decisions: enhancing transparency and predictability of investment measures; streamlining administrative procedures; fostering partnerships with investors; leveraging FDI benefits for local economies through foreign investors-supplier relationships; and promoting sustainable investment. These commitments are bolstered by technical-assistance and capacity-building provisions to support the effective implementation of the agreement by least developed and developing members. Moreover, assistance with the Investment Facilitation Needs Assessment—a self-assessment for these members to identify their needs and priorities regarding each of the substantial provisions of the IFD Agreement—is also foreseen. As of August 2024, 126 WTO members, including more than 90 developing economies supported the final text of the IFD Agreement.
The Agreement Establishing the WTO requires the consensus of all 166 WTO members to incorporate the IFD Agreement into the WTO’s legal architecture as a plurilateral agreement. A request with this aim was presented during MC13, and later to the General Council in March 2024. The Agreement is open for signature to all WTO members, and once consensus is reached on its incorporation, it will enter into force with the ratification of 75 members.
The IFD Agreement will neither reduce the existing rights and obligations of the parties under the WTO Agreement nor introduce new rights or obligations for members who have not ratified it. Delaying its incorporation and implementation would mean missing a critical opportunity for developing and least-developed WTO members to adapt to the fast-changing global investment environment and to increase resilience for future trade challenges. It is then desirable that WTO members unite in support of adding the IFDA to Annex 4 of the WTO Agreement through a consensus-based multilateral decision.
