This photo taken on April 2, 2019 shows the logo of the World Trade Organization (WTO) on the main gate of the WTO headquarters in Geneva, Switzerland. (PHOTO / XINHUA)
BEIJING – The Investment Facilitation for Development Agreement, the world's first multilateral investment accord under the aegis of the World Trade Organization, will better safeguard outbound investment made by Chinese businesses, narrow the gap between the Global North and Global South, and further shore up the confidence of investors worldwide, the Ministry of Commerce said on Friday.
Negotiations on the draft IFD Agreement concluded on Thursday. The accord was initiated by China and some other developing members of the WTO in 2017.
China, based on experience gained from its reform of government functions and other works, has been playing a proactive role to offer practical solutions and contributing to formulating high-standard international rules, the ministry said.
The world needs coordinated solutions to restore investment for business-led growth and build resilience for future shocks
Li Chenggang, China's ambassador to the WTO
Li Chenggang, China's ambassador to the WTO, said on Thursday at the negotiations that the COVID-19 pandemic, combined with new challenges and uncertainties, has been threatening cross-border investment in unprecedented ways.
The world needs coordinated solutions to restore investment for business-led growth and build resilience for future shocks, he said.
The success of the negotiations sends a much-needed signal that even in this challenging world, through mutual understanding and compromises, the WTO can still deliver concrete negotiating results on matters important to the business community, Li said.
The IFD Agreement places a high premium on enhancing the transparency of investment measures, streamlining and accelerating administrative procedures, and scaling up cooperation and sustainable investment-focused efforts, the ministry said in a news release posted on its website.
The IFD Agreement will help enhance the stability and predictability of global investment regulatory policies, further boost global investors' confidence and promote stable growth of global investment, the ministry said.
Since September 2020, some members have been negotiating on investment facilitation disciplines, following nearly three years of preparatory work.
As for China, the IFD Agreement will better safeguard outbound investment made by Chinese enterprises by enhancing the efficacy of investment approval procedures and lowering the costs of businesses, the ministry said.
More than 110 WTO members participated in the IFD Agreement negotiations, including the European Union, Japan, Canada, Brazil, Indonesia and Nigeria, covering most of the European, South American, Asian and African countries where Chinese investment remains robust, the ministry said.
The IFD Agreement will also be conducive to bridging the development disparity between Global North and Global South, as it will provide technical assistance to developing ones to enhance their capacity to exercise the agreement, optimize the business environment and promote sustainable development, the ministry said.
A study by the German Development Institute shows that the IFD Agreement, once it takes effect, could generate global welfare gains of between $250 billion and $1 trillion, with most of the gains accruing to middle — and low-income countries.
When the IFD Agreement comes into force, it would become an international treaty obligation for the participating economies under the WTO framework. Participants shall ensure that their investment regulatory measures are consistent with the commitments they pledged in the agreement, the ministry said.