India blocked Wednesday the China-led Investment Facilitation Development Agreement (IFD) at the World Trade Organization (WTO), resulting in the proposal being unlikely to be mentioned in the outcome document of the ministerial conference.
Official sources revealed that both India and South Africa opposed the IFD proposal in the WTO, indicating that it may not find mention in the final outcome document. South Africa joined India in blocking the Investment Facilitation Development Agreement within the WTO.
During a working group meeting on development, a 123-member group led by China attempted to push forward the IFD proposal. However, India had previously classified IFD as a non-trade issue within the forum.
The entry into force of new disciplines on services domestic regulation at #WTOMC13AbuDhabi marks the first WTO result in services in over 25 years! These disciplines are set to reduce global services trade costs by over USD 125 billion.
More: https://t.co/6bCmyKxNPe pic.twitter.com/6YMBKsEttd
— WTO (@wto) February 28, 2024
A Western trade delegate characterised India and South Africa’s opposition as ironic, considering the potential benefits the IFD Agreement could offer to developing countries. The initiative, known as the Investment Facilitation for Development (IFD) Agreement, led by Chile and South Korea with China’s backing, could potentially lead to significant improvements in global welfare, with estimates ranging from $200 to $800 billion, according to a study.
The four-day WTO talks aimed at establishing new global trade rules covering various topics such as fishing and agriculture are set to conclude on Thursday. However, delegates reported limited progress, aside from the formal accession of two new members: East Timor and Comoros.
On Tuesday, the U.S. trade chief ruled out a deal on reforming the WTO dispute settlement system, which has been hindered for four years due to U.S. objections. A paragraph related to climate change has been confined to a WTO annex of the draft package of deals due to the inability of members to reach a consensus.
India, supported by several countries including Uganda, Ecuador, and Bolivia, urged General Council chair Ambassador Xavier Carim to remove investment facilitation from the agenda. However, countries seeking a discussion on investment facilitation strongly criticized India, labeling the move as unprecedented.
Several countries including China, Russia, Pakistan, Chile, Colombia, Japan, Korea, Australia, the European Union, Norway, Switzerland, and Paraguay among others demanded the inclusion of investment facilitation in the agenda. The U.S. argued that the item had been placed inappropriately.
