The Proposed Multilateral Framework on Investment Facilitation: An analysis of its relationship to international trade and investment agreements

This legal analysis, co-authored by TULIP Consulting with the International Institute for Sustainable Development (IISD) and CUTS International Geneva, examines the legal architecture of the proposed Multilateral Framework on Investment Facilitation (MFIF) under negotiation among a group of WTO members through a Joint Statement Initiative (JSI), analysing its relationship with existing WTO obligations and international investment agreements.

Investment facilitation has risen rapidly up the international policy agenda, attracting the attention of UNCTAD, the OECD, the G20, and WTO members alike. The JSI’s structured discussions — which led to the development of a consolidated text circulated in April 2020 — aim to identify the elements of a framework for facilitating foreign direct investment and clarify its relationship with existing WTO provisions. The paper seeks to facilitate a greater understanding of the technical issues under consideration, building on a seminar held in January 2020 where participants identified key questions for further research.

The analysis is structured around three main areas of analysis. The first places the structured discussions in their broader context, examining how investment facilitation has been addressed in other international forums, including the UNCTAD Global Action Menu for Investment Facilitation, which emphasises that any facilitation initiative cannot be considered in isolation from the broader investment-for-development agenda.

The second examines the scope and coverage of the proposed Multilateral Framework on Investment Facilitation, finding that the framework’s scope is currently unclear, with different approaches used across various provisions. The coverage appears potentially very broad, though its precise contours remain to be defined. The paper underscores the importance of agreeing on the desired scope of disciplines and ensuring consistency across the text’s relevant provisions.

The third and most substantial part analyses the relationship between the proposed framework’s commitments and existing WTO obligations, with a particular focus on the General Agreement on Trade in Services (GATS). The paper finds that the framework builds upon, and in various places goes significantly beyond, the transparency and administrative obligations contained in the GATS, either by extending their scope, adding new requirements, or both. It also identifies a number of obligations not present in the existing GATS framework. The extent to which the Multilateral Framework on Investment Facilitation would exceed a member’s existing GATS obligations would depend in part on the breadth of that member’s specific commitments, with the gap being larger for developing countries and LDCs that have made fewer commitments under the GATS.

The analysis concludes by highlighting the importance of ensuring coherence between the framework and existing WTO obligations, and of providing developing countries and LDCs with the flexibility, support, and transition time needed to implement new commitments in a manner consistent with their sustainable development objectives.