New Delhi: India will oppose the move by China and most of the developed countries to make investment facilitation a part of the formal World Trade Organisation (WTO) negotiations as it would dilute the focus of the multilateral trade body, senior officials said.
Trade ministers of 164 countries are scheduled to meet in Abu Dhabi between February 26 and 29 for the WTO ministerial conference, the highest decision-making body of the multilateral trading organisation.
Countries like China, South Korea and the Gulf nations including the UAE, Saudi Arabia and Qatar that have deep pocket sovereign wealth funds, are likely to push for the inclusion of investment facilitation agenda in the Abu Dhabi ministerial meet.
“WTO is a body to discuss trade. Investment is not a trade issue,” said a senior official, adding that India will oppose any move that may dilute the WTO’s core principals.
In December 2021, a group of WTO members came out with a joint statement on “investment facilitation for development”. Majority 112 out of the total 164 WTO member countries supported the move.
Senior officials, who requested anonymity in line with the government’s policy on discussion at the international forums, said the number of countries supporting the investment facilitation move is likely to increase to 130 at the Abu Dhabi ministerial meeting.
“Investment is a ripe issue. We expect huge lobbying on this,” said another official. India along with South Africa and some other developing countries are opposing the move while the United States is neutral.
Decisions in the WTO are typically taken by consensus among all members. This means even if a majority of members support the so-called “Investment Facilitation for Development” agenda it cannot be pushed through if India, South Africa and other countries continue to oppose it.
The stated objective of developing a multilateral agreement on investment facilitation for development is that it will “improve the investment and business climate, and make it easier for investors in all sectors of the economy to invest, conduct their day-to-day business and expand their operations.”
Until now the so-called “investment facilitation for development” has been a part of informal discussion of the WTO.
Asked about the rationale for India’s opposition to investment facilitation move, the official said, “at the moment we are not looking at how it will impact investments”. The official added that the key reason for opposition is that it would dilute the core of WTO.
India will also continue to oppose the move by several countries including the US and European nations to push for non-trade issues like labour, women empowerment and climate change in the WTO agenda.
It will also veto any move for extension of moratorium on customs duties on e-commerce trade. Introduced in 1998, the moratorium restricts countries from applying customs duties on electronic transmissions. It has been extended periodically at the WTO’s ministerial conferences mainly at the behest of the US and the European countries. The last extension was agreed in June 2022. The extension is valid till the 13th ministerial conference which is scheduled to take place this month.
“At present there is no consensus on the scope of what this moratorium is... and we will oppose the extension of the moratorium,” the official said.
Referring to a WTO report released in 2017, the official said, developing countries lost about $10 billion in customs duties due to the e-commerce moratorium. The customs duty loss to India is pegged at $500 million.
“There is a need to look at the subject from a development dimension and not from the eyes of big tech companies,” the official said.