India’s willingness to participate in discussions on investment facilitation with BRICS nations — Brazil, Russia, India, China, South Africa — comes with an important caveat that the negotiations cannot be used to push a similar agreement at the World Trade Organisation, a senior government official has said.
“Early this month, trade ministers from the five BRICS nations agreed to discuss guidelines on transparency in investment facilitation on a voluntary basis. However, a clause is being added to it explicitly stating that the arrangement cannot be used to replicate a similar pact at the multilateral forum,” the official told BusinessLine.
India waryAlthough the proposed investment facilitation talks at BRICS is limited to identifying some good practices that enhance the transparency of investment policies, New Delhi has insisted on the clause of non-replication as Brazil, Russia and China have been making a case for starting negotiations on investment facilitation at the WTO.
Total outbound investments of BRICS countries is about $200 million but investments within the member countries accounts for only 6 per cent of the amount. It is expected that with more transparency in the area among members, investment flows would go up.
A formal decision on investment facilitation is likely to be taken at the BRICS Summit in China early next week.
Prime Minister Narendra Modi will represent India at the meet.
The heads of states from the five nations are also expected to give their approval to to set up a BRICS pilot e-port Network at the Shanghai port which is an electronic platform to serve as a ‘single window’ system for faster clearances.
Although India has decided to back the proposed discussions on investment facilitation at the BRICS Summit, it is in no mood to do so at the WTO.
While the investment facilitation pact to be discussed at BRICS is aimed at identifying some good practices that enhance the transparency of investment policies, if it were allowed to form the basis of negotiations at the WTO, it could take any shape that the negotiators desired and controversial areas like investor-state dispute mechanism and pre-investment protection may get included, the official added.
“Apart from Brazil, Russia and China, there are a large number of other traditional supporters of investment facilitation at the WTO such as Japan, Switzerland, the EU, Canada and New Zealand.
If one is not careful, these members would try to launch negotiations at the WTO Ministerial meeting in Buenos Aires. India cannot allow that to happen,” the official said.