Multilateral Framework of Investment Facilitation at the WTO: Initiatives and Perspectives from the Global South

The focus of International Investment policymaking in the global South has been shifting from investment protection to investment facilitation (IF). This movement marks an attempt to improve the attractiveness of national economies for foreign direct investment (FDI) and to recover the policy space previously curbed by traditional investment protection clauses. The popularity of investment facilitation led to the beginning of a negotiation process at the World Trade Organization (WTO) to formulate a multilateral agreement in this area. However, the differing negotiation practices related to IF could provoke schisms between the WTO members engaging in this discussion. The latest international investment agreements (IIAs) featuring IF provisions, signed by countries in the global South, indicate that during multilateral negotiations, these countries will focus on improving transparency, predictability and simplicity of the investment environment, as well as preserving their ability to develop public policies that are in line with their development strategies. However, some of the provisions that bring such preferences to fruition would challenge these countries’ bureaucratic and financial capacity. As discussions evolve at the WTO, countries in the global South will need to clarify their positions and co-ordinate their efforts in order to shape an alternative framework that fits their interests.

Keeping ‘Development’ in a Multilateral Framework on Investment Facilitation for Development

In December 2019, World Trade Organization (WTO) Members agreed that the Structured Discussions on Investment Facilitation for Development would move into a negotiating mode, previously set to begin in March 2020. Their goal is to have a concrete outcome by the WTO’s 2021 Ministerial Conference. These negotiations are an important step towards creating a multilateral framework on a specific, technical area of foreign investment – investment facilitation. This paper seeks to do two things: (1) to provide a comprehensive analysis of a potential framework by chronicling the genesis of the idea for such a framework and the discussions, discussing competing views on an investment facilitation framework and outlining the principal elements a framework; and (2) to argue that a framework should include provisions focused on facilitating sustainable investment for sustainable development. To that end, it advances suggestions for promoting sustainable investment and introduces a provision, the Recognized Sustainable Investor, that could be included in the framework to incentivize international investors to invest sustainably.

8 Investment Promotion, Facilitation, Admission, and Establishment

This chapter assesses investment promotion, facilitation, admission, and establishment. International law recognizes that by virtue of its sovereignty a state has the right to control the entry and exit of persons and things into and from its territory and also to regulate the activities of nationals or foreign persons and companies within that territory. A corollary of that principle is that a state is not required to allow foreign nationals or companies to establish or acquire an enterprise or investment within its territory. With respect to foreign investment, states have complete legislative jurisdiction to determine to what extent foreign nationals and companies may undertake investments, which sectors and industries they may or may not enter, and whether or not they must fulfil additional conditions in order to undertake and operate an investment within state territory. Numerous factors have shaped individual countries' attitudes towards foreign investment and investment treaty negotiations. One of the traditional aims of the investment treaty movement has been to reduce these internal barriers to foreign investment, particularly through treaty provisions on investment promotion, admission, and establishment. The second decade of the twenty-first century witnessed a growing emphasis in both international discussions and a few treaties on a new concept: foreign investment facilitation.

Multilateralizing Investment Facilitation at the WTO: Looking for the Added Value

ABSTRACT Since 2017, World Trade Organization members have been engaged in Structured Discussions aimed at agreeing on a multilateral framework on investment facilitation for development. The negotiations focus on establishing binding disciplines for investment facilitation, which will likely be made subject to the World Trade Organization Dispute Settlement Understanding. Investment facilitation, however, is that something states already do. Over the past decade, states have adopted record numbers of reforms at the domestic, regional, and international levels to facilitate foreign investment. These reforms show no signs of slowing. This begs an important question regarding the World Trade Organization initiative: given all the attention that investment facilitation already receives from states and international organizations, how, if at all, would the conclusion of a World Trade Organization Framework bring added value to states, i.e. value that cannot be achieved by ongoing efforts? Examining this question is the focus of this paper.