Committee on Investment Facilitation

Investment facilitation has in recent years taken the center stage within international organizations. This is due to the contribution of investment facilitation to growth and its prevention of corruption (SOM’s Chairs Office, 2008, p. 2).

 

The current interest in investment facilitation is evident from the creation of the Friends of Investment Facilitation for Development, a committee consisting of 11 WTO members, NGOs, personnel from academia, as well as the WTO created Informal Dialogue on Investment Facilitation in May 2017 (Hees & Cavalcante, 2017). It is also noticeable in the change in wording in international investment agreements. Of more than 3,300 international investment agreements (IIAs), most do not discuss investment facilitation or only contain weak provisions to investment facilitation (UNCTAD, 2017a, p. 6). However, in recent years, ever more bilateral agreements have emerged focusing explicitly on Investment Facilitation, such as the Brazilian Cooperation and Investment Facilitation Agreement (CIFA). In light of the increasing focus on international willingness to discuss Investment Facilitation on the international stage, the WTO is in a unique position to aid countries in regulating investment facilitation and offer its forum for discussion, monitoring, and other activities.

 

Therefore, the Committee on Investment Facilitation shall discuss the definition of investment facilitation. As this is currently disputed on whether it should include pre-establishment topics such as market access (UN ESCAP, 2017, p. 2) or focus on the post-establishment side of the debate, determining that investment facilitation refers to measures by governments to render foreign investment more attractive by making the administration around investment more effective and efficient (SOM Chair‘s Office, 2008, p. 1). This discussion may occur using a negative approach, that is, by discussing what investment facilitation does not include, rather than specifically what it does include (Hees & Cavalcante, 2017).

 

Once it has been established which definition of Investment Facilitation is to be used throughout the discussion, the participating countries shall discuss the principles that nations can agree upon to facilitate investment. That is, what principles are needed for each country to abide by, to facilitate investment effectively. This may also include, the hurdles and conceptions that countries need to overcome to accept a multilateral solution to investment facilitation. Most importantly, after discussing the framework for a possible multilateral solution to investment facilitation, actual investment facilitation procedures shall be discussed, not only in regard to their effectiveness but also regarding their feasibility for individual countries. Further, it should not be assumed that all investment facilitation measures are beneficial for both countries. Each country must discuss investment facilitation measures with respect to the effects on their nation and especially its economy. Whilst discussing the investment facilitation measures, it must also be ensured that the principles of the WTO (most favored nation and national treatment) are being upheld and enforced. In this respect, the Committee shall also discuss the role of the WTO in investment facilitation, whether this includes a more active or merely a passive role, is to be discussed. Finally, the Committee shall bring all of these points of discussion together in either as part of a new regulatory agreement or within an existing agreement.

 

To discuss these questions and concepts, possible resources include the Brazilian Cooperation and Investment Facilitation Agreement, the Indian Proposal on Trade in Services Agreement, as well as the WTO Trade Facilitation Agreement.

 

 

Author of the Committees 2018:
Marisa Menzel (marisa.menzel@model-wto.org)
Model WTO Head of Simulation Design