BEIJING: The Investment Facilitation for Development (IFD) agreement 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 Commerce Ministry says.
The IFD is the world’s first multilateral investment accord under the aegis of the World Trade Organisation (WTO).
Negotiations on the draft IFD agreement concluded last 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.
Li Chenggang, China’s ambassador to the WTO, said 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 statement posted on its website.
“The 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, it 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, optimise 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 US$250bil and US$1 trillion (RM1.2 trillion and RM4.67 trillion), with most of the gains accruing to middle and low-income countries. — China Daily/ANN
