View this email in your browser

*Columbia FDI Perspectives*
Perspectives on topical foreign direct investment issues
No. 240  December 3, 2018
Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Marion A. Creach ([log in to unmask])
*Investment facilitation: leaving the past behind*
* <#m_5114511922102785472__edn1>
Felipe Hees, Henrique Choer Moraes, Pedro Mendonça Cavalcante,
and Pedro Barreto da Rocha Paranhos** <#m_5114511922102785472__edn2>

The Joint Ministerial Statement on Investment Facilitation for Development
,[1] <#m_5114511922102785472__edn3> co-sponsored by 70 WTO members during
the Ministerial Conference in December 2017, has initiated a dialogue on
investment facilitation at the WTO. In a particularly challenging moment
for multilateral decision-making, the statement was co-sponsored by members
from virtually all the informal groupings at the WTO, including
least-developed countries; the African group; developed countries; the
BRICS; African, Caribbean and Pacific countries; small, vulnerable
economies; and the Bolivarian Alliance for the Americas. Since then, some
30 more WTO members have joined the informal dialogue organized by the
Friends of Investment Facilitation for Development.[2]

India introduced investment facilitation into the WTO in 2016 with a
proposal on  “Trade Facilitation in Services Agreement”.[3]
<#m_5114511922102785472__edn5> In 2017, Russia circulated a proposal
specifically focusing on investment facilitation,[4]
<#m_5114511922102785472__edn6> which was soon followed by a Chinese
proposal.[5] <#m_5114511922102785472__edn7> Brazil subsequently submitted a
draft agreement on investment facilitation[6] <#m_5114511922102785472__edn8>
inspired by its Cooperation and Facilitation Investment Agreement (CFIA)
template—a bilateral treaty premised on binding rules on investment
facilitation. For Brazil, investment facilitation is about transparent
access to information about the regulatory and institutional environment in
the host country; the streamlining of procedures associated with incoming
FDI; and the post-establishment relationship between host countries and
investors. Brazil negotiated CFIAs since 2015 with developing countries in
Latin America, Africa and India, and two of them have already entered into

In a recent *Perspective*,[7] <#m_5114511922102785472__edn9> Kavaljit Singh
raised questions relating to the discussions on investment facilitation at
the WTO. We offer insights and clarifications from the Brazilian approach
to advance this conversation:

   - Multilateral disciplines at the WTO, as those adopted by any other
   international rule-making institution, deliberately affect the policy space
   of its members on the whole range of areas covered by its agreements, from
   services to public stockholding for food security. Still, an agreement on
   investment facilitation will not prevent members “to choose the tools that
   are consistent with their peculiar administrative structures.” Rather, it
   would help members to implement a basic legal framework in this area.

   - Under the Brazilian proposal to the WTO, national policy decisions
   related to foreign investment are not subject to dispute-settlement
   provisions. The latter are limited to the implementation of the proposed
   agreement. Likewise, the most-favored-nation clause in the draft does not
   apply to policy matters.

   - Certainly, many investment measures are taken at sub-federal levels,
   and most of Singh’s concerns relate to these levels. In contrast, Brazil
   advocates to focus primarily on the federal level; sub-federal measures
   would be left for a later stage. This view is premised on the understanding
   that the implementation of facilitation measures at the federal level is
   already complex since it has an impact on a wide range of disciplines,
   involves numerous competent authorities and affects different procedures.

   - Regarding the single electronic window, Brazil proposes voluntary
   participation by sub-federal entities. If the latter so choose, they could
   add their own establishment approval procedures to the single electronic
   window managed by the federal government. While the Brazilian proposal
   seeks to encourage all spheres of government to achieve digitalization and
   integration, only federal authorities would be mandated to follow the
   envisaged rules.

   - The approval process for inward investment sometimes requires the
   involvement of a large number of agencies. Investors are asked to approach
   each of them individually, sometimes facing overlapping requirements. This
   is avoided with single windows, which channel interactions by setting up
   one-stop shops. This is precisely the reason why single electronic windows
   can have a real facilitating role for governments and investors, especially
   when multiple authorities are involved.

   - Singh also raises concerns about the “vast responsibilities” allocated
   to national focal points. The Brazilian draft only requires focal points to
   implement the agreement. These responsibilities will add to those already
   associated with the implementation of the “wide range of
   investment-facilitation measures at the national and sub-national levels”
   being carried out by “most members.” There is nothing suggesting that
   national focal points would set policies or include sub-federal levels.

Importantly, the Joint Ministerial Statement clearly states that the
investment facilitation discussions “shall not address market access,
investment protection, and investor-state dispute settlement.”[8]
<#m_5114511922102785472__edn10> By excluding these controversial issues,
WTO members are able to focus on an issue that directly contributes to
improving the domestic governance of developing countries without reviving
the negative experience of past multilateral investment discussions. This
is the value-added of investment facilitation.

* <#m_5114511922102785472__ednref1> *The Columbia FDI Perspectives are a
forum for public debate. The views expressed by the author(s) do not
reflect the opinions of CCSI or Columbia University or our partners and
supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed
** <#m_5114511922102785472__ednref2> Felipe Hees (
[log in to unmask]), Henrique Choer Moraes (
[log in to unmask]), Pedro Mendonça Cavalcante (
[log in to unmask]),  and Pedro Barreto da Rocha Paranhos (
[log in to unmask]) are diplomats, Ministry of Foreign Affairs
of Brazil. The opinions expressed in this *Perspective* are the sole
responsibility of the authors and do not necessarily reflect the views of
the Brazilian government. The authors are grateful to Ahmad Ghoury, Zhou
Zixuan and an anonymous peer reviewer for their helpful comments.
[1] <#m_5114511922102785472__ednref3> WT/MIN(17)/59.
[2] <#m_5114511922102785472__ednref4> The “Friends” are: Argentina, Brazil,
Chile, China, Colombia, Guatemala, Hong Kong (China), Kazakhstan, Liberia,
Mexico, Mauritania, Nigeria, Pakistan, Qatar, Republic of Korea, The
Gambia, and Uruguay.
[3] <#m_5114511922102785472__ednref5> Felipe Hees and Pedro Mendonça
Cavalcante, “Focusing on investment facilitation – is it that
difficult?,” *Columbia
FDI Perspectives*, no. 202, June 19, 2017.
[4] <#m_5114511922102785472__ednref6> JOB/GC/120.
[5] <#m_5114511922102785472__ednref7> JOB/GC/123.
[6] <#m_5114511922102785472__ednref8> JOB/GC/169.
[7] <#m_5114511922102785472__ednref9> Kavaljit Singh, “Investment
facilitation: another fad in the offing?,” *Columbia FDI Perspectives*, no.
232, August 13, 2018. The subsequent quotes refer to this *Perspective*.
[8] <#m_5114511922102785472__ednref10> WT/MIN(17)/59, para. 4.
*The material in this Perspective may be reprinted if accompanied by the
following acknowledgment: “Felipe Hees, Henrique Choer Moraes, Pedro
Mendonça Cavalcante, and Pedro Barreto da Rocha Paranhos, ‘Investment
facilitation: leaving the past behind,’ Columbia FDI Perspectives, No. 240,
December 3, 2018. Reprinted with permission from the Columbia Center on
Sustainable Investment (**
<>**).” A copy should kindly be sent to the
Columbia Center on Sustainable Investment at **[log in to unmask]*
<[log in to unmask]>*.*

For further information, including information regarding submission to the
*Perspectives*, please contact: Columbia Center on Sustainable Investment,
Marion A. Creach, [log in to unmask]

*Most recent Columbia FDI Perspectives*

   - No. 239, Joseph M. Wilde-Ramsing and Marian G. Ingrams, “High time for
   government action to make the OECD Guidelines a force for sustainable FDI,”
   November 19, 2018
   - No. 238, Andreas Tornaritis and Evi Neophytou, “Regional cooperation
   to enhance FDI in the development of offshore resources,” November 5, 2018
   - No. 237, Alvaro Cuervo-Cazurra, “Host country concerns and policies
   toward state-owned MNEs,” October 22, 2018

*All previous FDI Perspectives are available at
<>**. *

*Other relevant CCSI news and announcements*

   - *We are accepting applications for our three upcoming executive
   trainings on: Extractive Industries and Sustainable Development
   (June 3–14, 2019), Sustainable Investments in Agriculture
   (June 11–21, 2019) and Investment Treaties and Arbitration for Government
   (June 17–27, 2019).* Each program is designed to equip participants with
   the necessary skills, analytical tools and frameworks to address relevant
   challenges and opportunities, and to encourage a rich dialogue about best
   practices from around the globe.* More information about each training,
   including brochures and applications, is available at the links above.*
   Applications are accepted on a rolling basis. Participants will receive a
   Statement of Attendance from Columbia University.
   - *In November, 2018*, CCSI and The Observatory for Sustainable
   Infrastructure submittted comments to UNCITRAL
   regarding proposed updates to the Legislative Guide on Privately Financed
   Infrastructure Projects.
   - *In November, 2018*, CCSI published a new briefing note, Inconsistency’s
   Many Forms in Investor-State Dispute Settlement and Implications for Reform

Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
Ph: (212) 854-0689
Fax: (212) 854-7946
*Copyright © 2018 Columbia Center on Sustainable Investment (CCSI), All
rights reserved.*
[log in to unmask]

*Our mailing address is:*
Columbia Center on Sustainable Investment (CCSI)
Columbia Law School - Earth Institute, Columbia University
435 West 116th Street
New York, NY 10027

Add us to your address book

unsubscribe from this list
update subscription preferences

[image: Email Marketing Powered by Mailchimp]

Not spam
Forget previous vote


*Karl P. Sauvant, PhD*

*Resident Senior Fellow*
*Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
| p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask]
| w: | t: @CCSI_Columbia

"Arriving at Sustainable FDI Characteristics", "Putting FDI on the G20
Agenda", "International Investment Facilitation: By Whom and for What?",
"Moving the G20's Investment Agenda Forward", "Emerging Markets and the
International Investment Law and Policy Regime", "Sustainable FDI for
Sustainable Development", "Towards an Investment Facilitation Framework:
Why? What? When?", "Beware of FDI Statistics!", "Towards an Indicative List
of FDI Sustainability Characteristics", “The Importance of Negotiating Good
Contracts", "A New Challenge for Emerging Markets: the Need to Develop an
Outward FDI Policy”, "China Moves the G20 toward an International
Investment Framework and Investment Facilitation", "The Next Step in
Governance: The Need for Global Micro-regulatory Frameworks", and "The
Evolving International Investment Law and Policy Regime: Ways Forward"
*are* available
at and

AIB-L is brought to you by the Academy of International Business.
For information:
To post message: [log in to unmask]
For assistance:  [log in to unmask]
AIB-L is a moderated list.