Books

Investment facilitation for development: a toolkit for policymakers

Berger, Axel / Yardenne Kagan / Karl P. Sauvant (eds.)
Books (2022)

Geneva: International Trade Centre (ITC), 2nd edition

Since the previous version of this publication (September 2020), WTO negotiations on Investment Facilitation for Development have made steady progress. The number of participating members has increased to over 110, and the consolidated draft negotiation text has been updated to reflect progress made regarding a number of provisions. A number of investment facilitation measures that were highlighted in the first edition of this publication seem to have been included in the current WTO Investment Facilitation for Development (IFD) Agreement draft text, or are under consideration by Members. Among the measures that indirectly contribute to development by increasing FDI inflows, the following seem to be included: maintain a list of support measures offered to inward investors, through online portals and notification to the WTO; enable the payment of fees and charges online; use new technology to facilitate investment, e.g., digital single window; grant permits or licences automatically if no government action is taken within statutory time limits: ‘silence is consent’; provide for risk-based approvals as part of authorisation procedures; track complaints through an investment grievance mechanism or ‘early warning system’ to identify and address issues early before they worsen; make it easy to secure work permits for skilled expatriates by making available e-visas or ‘green channels’; make publicly available lists of support measures for outward investors through online portals; and publish information on requirements and procedures for outward investment, if any, to assist interested parties. Furthermore, the ITC-DIE project called to facilitate not only more FDI, but also more sustainable FDI through the inclusion of facilitation measures aimed at directly increasing the development impact of FDI, to fully reflect the ‘for development’ purpose of the IFD Agreement. The first edition of this publication proposed the following direct investment facilitation measures that seem to have been included in the IFD Agreement draft text or are under consideration by negotiators: encourage foreign investors to incorporate internationally recognised principles, standards and guidelines of responsible business conduct; build and maintain a database of local enterprises to help investors identify potential subcontractors and local partners; and establish supplier-development programmes to increase the number and capacity of qualified local enterprises that can contract or partner with foreign affiliates. The project also emphasised the importance of providing technical assistance to developing countries and least developed country (LDC) Members to enhance their ability to facilitate FDI and, specifically, sustainable FDI. The current IFD Agreement draft text includes a section on the provision of technical assistance and capacity building for developing countries and LDC Members. In addition, the first edition of this publication included the recommendation to insulate the IFD Agreement from international investment agreements, and especially their dispute-settlement provisions, through appropriate treaty-interface clauses, to avoid the use of the IFD Agreement in investor-state dispute-settlement cases; the current IFD text contains an appropriate clause in this regard. This updated version synthesises what has been learned from numerous capacity-building workshops and consultations with stakeholders (governments, international organisations, investment promotion agencies (IPAs), the private sector, civil society, academia) conducted in the framework of the ITC-DIE project on Investment Facilitation for Development (parts of the project are co-organised with other organisations).