The meeting of the Committee on Trade and Development of the World Trade Organization (WTO) on Wednesday (11.11.2020) examined foreign direct investment (FDI) and a joint communication on accelerating the implementation of the WTO Trade Facilitation Agreement (TFA).
According to insights of the multilateral organization, El Salvador, Guatemala and Saint Lucia, all members of the WTO's Small and Vulnerable Economies (SVE) Group, presented the initiatives they have taken to increase FDI in order to expand their commercial capacity and support economic diversification. The reductions in FDI and the protectionist measures implemented in response to the COVID-19 crisis have raised concerns in these countries, who They stressed the importance of modernizing trade and investment infrastructure of their economies in a way that can generate resilience to external shocks. The three countries emphasized the importance of the SDGs and the ongoing WTO negotiations for a multilateral agreement on investment facilitation for development, in which 105 WTO members participate.
Members also highlighted that The Aid for Trade initiative can help mobilize resources to enhance FDI flows, particularly towards developing countries and least developed countries (LDCs). Underlining the importance of addressing FDI in the group of small, vulnerable economies and other emerging economies, the United Nations Conference on Trade and Development (UNCTAD) said that small economies account for only a 1,3 per cent global share of FDI inflows, and that FDI in small, vulnerable economy countries declined by 17 per cent in the first half of 2020.
The meeting participants also noted the recent communication joint statement by Australia, Brazil, Colombia, Japan and the United States, calling on all WTO members to move forward with TFA implementation in light of the COVID-19 pandemic. The communication notes that the implementation of the TFA is already resulting in improved Customs efficiency and transparency, and commits to accelerate actions in areas of, inter alia, pre-arrival processing, expedited shipping, and border agency cooperation.
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