S Africa, Namibia, Turkey back India in opposing China-led WTO pact: Official
The China-led Investment Facilitation for Development (IFD) agreement has gained the support of 128 countries at the World Trade Organization (WTO) but India, along with South Africa, Namibia, and Turkey, will continue to oppose the initiative due to its potential to undermine the policy space of weaker nations, a central government official said on Tuesday ahead of the WTO General Council meeting in Geneva on December 16-17.
This comes at a time when investment flows are increasingly shifting away from China due to a possible US-China trade war and a weakening consumer demand in China. These investments are increasingly moving to ASEAN countries as Chinese firms have increased their overseas assets to record levels.
“There is tremendous pressure and momentum from China. They have secured support from 128 out of 166 WTO members, including Pakistan. Four nations—India, South Africa, Namibia, and Turkey—are opposing it. The US is not opposing it but has opted to stay out of the agreement,” the official said. Notably, Pakistan was initially not part of the IFD.
The official emphasised that India believes many nations supporting the IFD are under the wrong impression that it will benefit them. “For developing countries, this agreement will impact their policy space. While more members may join, India will continue to oppose it,” the official said.
The IFD claims to improve the global investment climate and foster international cooperation to facilitate foreign direct investment (FDI) flows among WTO members, particularly benefiting developing and least-developed countries, a WTO note said.
Proposed in 2017 by China and other nations reliant on Chinese investments, the agreement is supported by countries with substantial sovereign wealth funds. However, experts argue the pact could harm India’s interests and restrict its policy space on FDIs.
‘Per capita distribution of subsidies for fisheries’
Separately, the official noted that India has advocated for a “per capita distribution of subsidies” criterion to address concerns about overfishing and overcapacity within the WTO framework. India informed the WTO that its annual fisheries subsidy amounts to $35 per fisher, significantly lower than the $76,000 provided by some European nations. India has submitted a document, ‘Designing Disciplines for the Overcapacity and Overfishing Pillar: A Case for Intensity-Based Subsidies Approach’, which will be discussed at the WTO General Council meeting in Geneva.
The WTO is negotiating an agreement to discipline subsidies that contribute to overfishing and overcapacity. In 2022, member countries finalised a pact to curb subsidies for illegal, unreported, and unregulated fishing. “Adopting a per capita distribution of subsidies criterion could provide a more accurate and fair basis for managing overfishing and capacity issues, addressing both stock sustainability and livelihood concerns,” India stated. It added annual aggregate fisheries subsidies cannot be an accurate measure, as they include both beneficial and subsistence subsidies linked to livelihoods, which do not contribute to overcapacity or overfishing.
