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Multilateral investment pact: India against Canada, EU bid on investment agreement at WTO

The informal proposal was discussed at an “informal meeting” of some major WTO members — including India, China, Brazil, Japan and Australia — in Davos last week.

By: ENS Economic Bureau | New Delhi |
January 24, 2017 2:25:48 am
Nirmala Sitharaman, Multilateral investment pact, EU bid, European Union, investment agreement, wto, ISDS, indian express news, economy, buisness news Nirmala Sitharaman. (Express photo by Renuka Puri.)

India has rejected an informal proposal by the European Union (EU) and Canada for a multilateral investment pact with a provision for an investor-to-state dispute settlement (ISDS) at the World Trade Organization (WTO). “We rejected it. We want anything to do with investments to be a bilateral thing … We do not believe in making investments a subject of multilateral disputes,” commerce minister Nirmala Sitharaman said.

The informal proposal was discussed at an “informal meeting” of some major WTO members — including India, China, Brazil, Japan and Australia — in Davos last week. The informally proposed ISDS is actually part of a bilateral agreement between the EU and Canada.

Both the EU and Canada want other WTO members to agree to the regime proposed by them for dispute resolution at the multilateral level. Sitharaman said disputes against the government should ideally be settled by the domestic laws and courts first and only after that, an aggrieved party should appeal outside.

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Sitharaman said India has sought concrete work plans on a special safeguard mechanism (SSM) for developing countries to protect their farmers from a spurt in imports, and a permanent solution to the issue of its official grain procurement and food security in the country, as agreed on in the Bali ministerial.

“… there is no way, we will have investment treaty in which companies can take the sovereign or even the regional governments to court. Anything with regard to investments, w wanted to be settled by the domestic laws and courts and only after that… appeal outside,” she said.

Sitharaman said other WTO member countries, including Argentina and Brazil, too did not support the move. “So at this stage, to have this template for a multi-lateral approach to investment may be immature,” she said. However, the minister added that India put its view “informally” as this was an informal discussion of WTO member countries.

On WTO issues, she said the countries discussed the forthcoming ministerial conference in Argentina in December.

“We reinforce that the Bali and Nairobi issues to be fulfilled,” she said, adding that WTO DG Roberto Azevedo admitted that although Nairobi meeting was successful, the “process was not right”.

India, Sitharaman said, wants resolution on providing safeguards to poor farmers and permanent solution for public stock holding purposes.

India asked the members for detailed discussions on these issues among the groups before they meet in Paris in June.

On its proposal on trade facilitation agreement on services, Sitharaman said India will submit a proposal soon.

“Many people said it is a low-hanging fruit which can be harvested,” she said.

Sitharaman said that during a bilateral discussion with the EU, the bloc indicated that it will hold negotiations for the comprehensive free trade agreement only after concluding the new bilateral investment treaty with India.

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