A meeting of the World Trade Organization (WTO) Committee on Trade and Development discussed foreign direct investment (FDI) and a joint communication on accelerating implementation of the WTO’s Trade Facilitation Agreement (TFA).

El Salvador, Guatemala, and Saint Lucia – all members of the WTO’s Small, Vulnerable Economies (SVE) Group – presented on initiatives they have taken to increase FDI in order to expand their trading capacity and support economic diversification. Reductions in FDI and protectionist measures put in place as a response to the COVID-19 crisis have raised concerns in these countries, who stressed the importance of modernizing their economies’ trading and investment infrastructure such that it can build 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, where 105 WTO members are participating.

Members also highlighted that the Aid for Trade initiative can help mobilize resources to improve FDI flows, particularly into developing countries and least developed countries (LDCs). Underscoring the importance of addressing FDI in the SVE group and other emerging economies, the UN Conference on Trade and Development (UNCTAD) said small economies represent only a 1.3% global share of FDI inflows, and FDI to the SVE countries decreased by 17% in the first half of 2020.

Meeting participants also flagged the recent joint communication by Australia, Brazil, Colombia, Japan, and the US, which urges all WTO members to advance implementation of the TFA in light of the COVID-19 pandemic. The communication points to the TFA’s implementation as already resulting in improved customs efficiency and transparency, and commits to accelerated actions in areas of, inter alia, pre-arrival processing,  expedited shipments and border agency cooperation.

The meeting convened on 2 November 2020. [WTO Press Release]