Home / Politics / Policy /  India blocks discussion on global investment facilitation at WTO

Geneva: India on Wednesday blocked the World Trade Organization (WTO) General Council from approving an agenda to discuss investment facilitation on grounds of mandate, triggering an uproar and the suspension of proceedings, people familiar with the development said.

India has consistently maintained that there is no merit for any proposal on investment facilitation at the WTO, as investment falls outside the trade body’s mandate. It has emphasized that a multilateral agreement on investment will undermine its “policy space" and “right to regulate investment" in strategic sectors.

The General Council, the highest decision-making body of the WTO, during the biennial ministerial meeting is scheduled to discuss five proposals on investment facilitation, inserted by various countries for discussion. The countries include Argentina, Brazil, China, Indonesia, Korea, Mexico, Pakistan, Russia and Turkey.

As soon as the agenda came up for approval, India rose to block the proceedings. India said it chose to block the agenda under existing General Council rules, citing legal precedents such as the Marrakesh Agreement of 1994 that do not allow investment facilitation to be discussed at the WTO, trade envoys familiar with the development said.

India, which was supported by several countries such as Uganda, Ecuador and Bolivia, asked General Council chair Ambassador Xavier Carim to take investment facilitation off the agenda.

Countries who sought a discussion on investment facilitation strongly criticized India, saying blocking the agenda is unprecedented.

China, Russia, Pakistan, Chile, Colombia, Japan, Korea, Australia, the European Union, Norway, Switzerland, and Paraguay among others demanded the inclusion of the investment facilitation in the agenda. The US argued that the item has been placed inappropriately.

Some of the sponsors said India’s decision has caused a grave “systemic crisis", according to a trade envoy, who asked not to be quoted.

In response, Indian trade envoy Anjali Prasad said it was the sponsors of investment facilitation who had caused a “systemic" crisis by bringing issues that were not part of the WTO’s mandate.

By bringing proposals which are not in the realm of WTO mandate, they have undermined the credibility of the WTO, the envoy said.

The General Council chair suspended the meeting, informing members that he will hold informal consultations.

On Friday, a strong push by Germany to revive the failed Multilateral Agreement on Investment under the banner of investment facilitation agreement foundered at the G20 technical experts’ meeting in Berlin, after the US, India and South Africa blocked the draft agreement on different grounds.

After two days of discussions that began on 4 May, Germany held a meeting with the US, India and South Africa to see if the three are ready for a much a watered-down text on investment facilitation.

The US stuck to its stance that it is not in a position to agree to any outcome, while India and South Africa said that even a non-binding outcome on investment facilitation as proposed by the German presidency will undermine the policy space for developing countries to pursue their developmental policies.

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