India and South Africa on Wednesday blocked passage of a major investment deal at a World Trade Organization (WTO) meeting in Abu Dhabi, potentially resulting in the loss of hundreds of billions of dollars in investment. Much of the investment was destined for developing countries in the “Global South.” ”, a claim that India frequently defends.
trade representatives from western countries Said “It is ironic that India and South Africa stand in the way of something that is of such obvious benefit to developing countries,” Reuters said.
The “something” in question is the Investment Facilitation Agreement for Development (IFD), which Chile and South Korea introduced into the WTO with support from China. Depending on how they are implemented, the value of projects covered by IFD could be between $200 billion and $800 billion.
The WTO has rules that allow any of its 164 member countries to block an agreement by filing a formal objection. India and South Africa exercised that option, while 123 other member states actively supported the IFD.
India It has been submitted the objection This is because imposing binding regulations and agreements on all members would undermine the “multilateral” nature of the WTO. Indian officials have suggested that countries keen to join the IFD could negotiate among themselves and reach an agreement outside the World Trade Organization.
India fight Agreements such as the IFD must be adopted through a specific set of WTO procedures that require the unanimous consent of all member states. South Korea, a co-sponsor of the IFD, appeared to agree on this point at the Abu Dhabi meeting, and WTO leaders said they were trying to persuade India and South Africa to withdraw their objections.
India also believes that developed countries have a history of making promises to developing countries that they cannot keep, and that a carefully negotiated multilateral agreement would be preferable to the huge, sweeping IFD proposals advanced by South Korea and Chile. claimed to be desirable.
What is less clear is India’s concern that the IFD agreement, which has been swinging around the WTO with various changes since 2017, is a power play by China and its client states in the Belt and Road Initiative (BRI). .Indian media often refer Participate in the agreement as “China’s IFD”.
mint I got it. The IFD has been criticized for “potentially favoring countries that are heavily dependent on Chinese investment or have sovereign wealth funds,” the IFD said in a statement on Thursday.
South Africa did not comment on its reasons for blocking the IFD other than agreeing to India’s procedural objections.
