India, along with South Africa, Namibia, and Turkey, opposes the China-led Investment Facilitation for Development (IFD) agreement ahead of the WTO General Council meeting on December 16-17 in Geneva.
WTO General Council
- The WTO General Council is a continuous body that meets regularly throughout the year.
- Meetings: The General Council convenes multiple times a year, both formally and informally. Formal meetings are typically held every few months, while informal meetings can occur more frequently.
- Purpose: The primary functions of the General Council are:
- Decision-making: It exercises the authority of the Ministerial Conference when it’s not in session.
- Oversight: It oversees the WTO’s work programs and activities.
- Dispute Settlement: It functions as the Dispute Settlement Body (DSB) to resolve trade disputes between WTO members.
- Trade Policy Review: It oversees the Trade Policy Review Mechanism (TPRM) to monitor the trade policies of WTO members.
- Participation: All 164 member countries of the WTO are represented in the General Council. Each member country sends delegates to participate in the meetings. The meetings are typically attended by senior trade officials, diplomats, and experts.
- Decision-Making Process: The WTO operates on a consensus-based decision-making process. This means that decisions are typically made by general agreement among all member countries.
- However, in cases where consensus cannot be reached, decisions can be made by a three-fourths majority vote at the level of the Ministerial Conference and the General Council.
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More on the News
- The IFD agreement has gained the support of 128 out of 166 WTO members, including Pakistan.
- India’s Position: However, India and the opposing nations argue it undermines the policy space of weaker countries.
- The opposition coincides with shifting global investment flows, as investments move away from China due to a potential US-China trade war and weakening consumer demand in China.
- India’s Suggestion: Separately, India has advocated for a “per capita distribution of subsidies” criterion to address concerns about overfishing and overcapacity within the WTO framework.
About the Investment Facilitation for Development (IFD)
- Objective: To improve the global investment climate and foster international cooperation to facilitate foreign direct investment (FDI) among WTO members.
- It is based on most-favoured-nation (MFN) treatment, and is open to all WTO members to join.
- Proposed in 2017: Initiated by China and countries heavily reliant on Chinese investments and launched at the 11th WTO Ministerial Conference (MC11).
- Supporters: Backed by countries with significant sovereign wealth funds and developing nations seeking to attract FDI.
- Potential benefits:
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- Creating clear and consistent global benchmarks for investment facilitation.
- Reducing regulatory uncertainty, minimizing transaction costs, and making it easier for investors to invest.
- Anchoring domestic investment facilitation reforms in shared international commitments.
- Providing a global forum to promote best investment facilitation practices.
Concerns Raised Against the IFD
- Threat to Policy Space: India and other opposing nations believe the agreement would limit the policy autonomy of weaker nations, particularly in regulating foreign investments.
- Misconceptions Among Supporters: India contends that many nations supporting the IFD are under the false impression that it will universally benefit them.
- Potential Impact on Sovereignty: Experts argue the pact may harm India’s interests and restrict its ability to implement policies on FDIs based on national priorities.
- Unequal Power Dynamics: With 128 countries supporting the agreement, including Pakistan, and the US choosing to stay out, India highlights the tremendous pressure from China to gain global consensus.
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India Call on Fishery Subsidies
- India’s Advocacy: India has proposed a “per capita distribution of subsidies” criterion to address overfishing and overcapacity issues at the WTO.
- Comparison of Subsidies:
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- India’s annual fisheries subsidy: $35 per fisher.
- European nations’ subsidy: $76,000 per fisher.
- Document Submission: India presented a paper, ‘Designing Disciplines for the Overcapacity and Overfishing Pillar: A Case for Intensity-Based Subsidies Approach’, for discussion at the WTO meeting.
- Fairness in Subsidy Distribution: India emphasized that annual aggregate subsidies are not an accurate measure, as they include both beneficial and subsistence subsidies, which do not contribute to overfishing or overcapacity.
- Proposed Solution: A per capita criterion can provide a more fair and accurate basis for managing overfishing, balancing stock sustainability with livelihood concerns.
Additional Reading: WTO
December 11, 2024
