The WTO Investment Facilitation for Development Agreement
Fall 2023 Dayene Peixoto, Coordinator of Multilateral Disciplines at MDIC
On July 6th, the WTO Joint Statement Initiative (JSI) on Investment Facilitation for Development concluded the text negotiations for an Investment Facilitation for Development Agreement. More than 110 WTO Members take part in the initiative launched in 2017 by a group of developing and least-developed countries.
The negotiations for an Investment Facilitation for Development Agreement were formally launched in September 2020, aiming to improve investment climate by enhancing transparency, predictability, and simplification of investment-related measures; strengthening the dialogue between governments and investors; promoting both Responsible Business Conduct (RBC) and Special and Differential Treatment (SDT).
One of the main purposes of the Agreement is to assist countries, notably the developing and the least developed ones, in attracting sustainable Foreign Direct Investment (FDI). The substantive commitments in the document cover principles and standards of RBC with the aim of contributing to sustainable development in all sectors. Market access, investment protection, investor-state dispute settlement, government procurement and certain subsidies fall outside the scope of the instrument. One key component of the Agreement is to provide SDT, including technical assistance and capacity building to developing and least developed countries.
The next steps for the initiative at the Organization include carrying out of an outreach process with other WTO Members; the negotiations to define the legal architecture of the Agreement; and the intensification of the Needs Assessment process. For the legal architecture there are currently two possibilities to go forward: (1) multilaterally, in Annex 1 of the WTO framework; or (2) plurilaterally, in Annex 4 of the WTO framework. Both decisions for legal definition require consensus of the Organization's Members.
Full implementation of the Agreement in Brazil will entail commitments regarding electronic availability of up-to-date information on measures related to investment and on requirements and procedures for the entry and temporary stay of persons. As for requirements and procedures for investing, the information must be in one of the official languages of the WTO (English, Spanish, or French). The Brazilian government also needs to evaluate authorization procedures to ensure simplified, impartial, and adequate procedures; to establish and/or monitor the periodic review process of measures related to investments to determine their maintenance, modification or revocation; to promote the permanent improvement and updating of the electronic database of domestic suppliers for foreign investors; to implement programs to increase the capacity of local providers; and to establish cooperation mechanisms with other countries, among other measures.