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Info Service on WTO and Trade Issues (Nov25/13) WTO:
IFDA faces pushback as proponents intensify lobbying ahead of MC14 Geneva, 14 Nov (D. Ravi Kanth) -- As members of the World Trade Organization approach the upcoming WTO's 14th Ministerial Conference (MC14), proponents of the controversial Investment Facilitation for Development Agreement (IFDA) have intensified their lobbying, said people familiar with the development. MC14 is scheduled to be held in Yaounde, Cameroon, on 26-29 March next year, although there is still no clarity as to whether the meeting will take place over four days or be concluded within two days. However, the proponents of IFDA appear to have upped the ante by pressuring countries to secure ministerial approval by 17 November in an attempt to bypass the consensus-based decision-making process, said people, who preferred not to be quoted. Over the past two days, a draft letter has been finalized on this issue, revealing the lengths to which the proponents of IFDA are willing to go to incorporate the agreement into the WTO rulebook, said a person familiar with the deliberations. The draft letter, addressed to one of the IFDA's leading opponents, South Africa's Minister of Trade, Industry and Competition Mr. Parks Tau, shows that signatures are being sought from the 128 IFDA members "to respectfully invite South Africa to join us in asking for the IFDA's incorporation into the WTO rulebook." It further urges that, "if South Africa is not ready to join the IFDA at this stage, we ask that South Africa does not prevent its incorporation into the WTO legal architecture." The appeal has been seemingly framed in diplomatic niceties, referencing "the South African Presidency of the G20" and Minister Tau's "pivotal role in reinforcing the power of international cooperation," before urging him to "help advance this [IFDA] initiative" so that "the WTO can demonstrate its ability to achieve tangible development outcomes." Last month, when WTO Director-General Ms. Ngozi Okonjo-Iweala called on the Indian Minister of Commerce and Industry, Mr. Piyush Goyal, at his hotel in Geneva, she reportedly sought India's support for the IFDA. However, according to sources, the Indian trade minister seemingly reiterated India's opposition. A Latin American legal official, speaking on condition of anonymity, explained that "consensus, as defined in the Marrakesh Agreement, is not the positive expression of collective agreement, but rather the absence of any formal objection by Members present when the decision is taken." The official added that while this definition has long been accepted in practice, "the tendency to equate consensus with silence raises questions about whether decision-making genuinely reflects the collective will of Members - especially when passive acquiescence replaces active engagement." The draft letter underscores how its appeal to South Africa to "not prevent" the incorporation of IFDA into the WTO rulebook seems to blur the line between legitimate consensus and coerced compliance, said another trade envoy, who asked not to be quoted. "When pressure replaces persuasion, consensus ceases to safeguard equality and becomes an instrument of expediency," the envoy stated. Several negotiators have described this as an unprecedented form of peer pressure. "It's an attempt to make dissent politically costly," said one African negotiator. "Consensus is supposed to reflect equality among Members, not conformity under pressure. This kind of tactic cheapens the process," said a Caribbean trade envoy, who preferred not to be quoted. According to multiple sources, the proponents of IFDA are seeking ministerial signatures by 17 November, with the draft letter forming part of a broader campaign to build political momentum before MC14. The push reportedly follows a discussion among IFDA proponents who decided to circulate such a letter without an in-depth assessment of the procedural or diplomatic ramifications. This effort coincides with an open meeting held in Geneva on 11 November between Turkiye and the IFDA proponents, focusing on Ankara's continued concerns over the agreement, said people familiar with the development. Trade envoys from Chile and South Korea, the central proponents campaigning for the IFDA, have also stepped up their lobbying efforts, said an African trade official who asked not to be quoted. ISOLATING INDIA At the WTO's 13th Ministerial Conference (MC13) held in Abu Dhabi in March 2024, the IFDA proponents held a meeting before the conference began. However, India, joined by South Africa, rejected any move to incorporate the IFDA into Annex 4 of the WTO Agreement, which had never been procedurally agreed upon since the WTO's Geneva ministerial conference in June 2022, said people familiar with the development. The recent meeting of the IFDA proponents, combined with the ongoing letter campaign, appear to be aimed at isolating India - one of three members, along with South Africa and Turkiye, that have formally opposed the incorporation of IFDA into Annex 4 of the WTO Agreement dealing with plurilateral agreements. India has consistently maintained that investment does not fall under the WTO's purview, and that the proponents negotiated the IFDA without a multilateral mandate, said people familiar with the development. The former US trade envoy under the Biden administration, Maria L. Pagan, had reportedly stated that the US will not join the IFDA but will not block its incorporation into Annex 4 of the WTO Agreement. Another trade envoy, who asked not to be quoted, said that the claims about the IFDA's development content are unsubstantiated, and that similarly "hyperbolic" claims have been made about every other new agreement, which in reality have proven to be false. The envoy said that the IFDA could risk fragmenting the WTO's legal framework, and that instead of addressing these substantive concerns, its proponents have opted for political isolation and lobbying. Currently, around thirty-eight WTO Members have not joined the IFDA. An African ambassador questioned whether similar letters were being sent to India and Turkiye, remarking that "if this is how far proponents must go to compel members to remove their objections, it exemplifies the lifeboat the WTO now finds itself in." The ambassador added that "the Director-General herself has contributed to this climate, having made a public spectacle at the WTO Public Forum in September by criticising South Africa, India, and Turkiye for "blocking progress". That display showed a clear lack of neutrality." CAMEROON'S ROLE & AFRICAN CONCERNS A letter from the Cameroon Mission in Geneva, dated 23 October, adds another dimension to this campaign. As host of the upcoming MC14, Cameroon wrote to South Africa's trade minister, echoing the request that South Africa support - or step aside from - the incorporation process of IFDA. The letter states that it was issued "after consultation with the South African delegation in Geneva." The letter notes that signatures will be solicited among other African capitals, effectively pressuring ministers to endorse the IFDA ahead of MC14. An African analyst described this as being "inappropriate" and "politically intrusive". "The letter states that it was drafted by the European Union and prepared in consultation with the South African mission. If any African expert carefully examined the IFDA, they would see that it is not what it purports to be. It introduces procedural and administrative obligations that will not facilitate investment, while also leaving structural barriers untouched." The analyst noted that the IFDA lacks a definition of "investment" - one of Turkiye's main concerns -, contains ambiguous Most-Favoured-Nation (MFN) provisions, is subject to the Dispute Settlement Understanding, and includes only a weak preambular reference to the right to regulate. In contrast, the analyst said that the African Continental Free Trade Area (AfCFTA) Protocol on Investment provides a comprehensive development framework, defining investment through its contribution to sustainable development and embedding binding investor obligations and policy-space safeguards. "From a coherence and policy-alignment perspective," the analyst said, "African countries would be better served by prioritising implementation of the AfCFTA Protocol rather than endorsing an externally driven plurilateral. The two instruments are conceptually inconsistent - one centres development, the other administrative conformity." A former African negotiator said, "There are no diplomatic or WTO protocols authorising one delegation - let alone the host of a Ministerial Conference - to solicit endorsements on a non-mandated plurilateral. This is outside the bounds of both propriety and process." Several delegates have privately expressed discomfort, warning that such tactics risk politicising MC14 and undermining Africa's unity on substantive priorities - particularly agriculture, WTO reform, and development issues. Delegates suggest that the WTO Director-General "is not worried" about South Africa or Turkiye, reinforcing perceptions that India is the real target. According to people familiar with the development, this represents a new form of "coercion" confronting developing Members - political pressure disguised as persuasion - fuelled in part by the major players, including China. The Marrakesh Agreement envisioned a WTO that is genuinely member-driven, where decisions reflect collective agreement rather than political expediency. The current pressure tactics, from coordinated letters to selective targeting, mark a worrying departure from that vision. As one negotiator observed, "If consensus is replaced by campaigns and coordination outside the rules, the WTO ceases to be member-driven. It becomes pressure-driven." +
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