112 countries signed up to the IFD agreement to unlock FDI into the developing world.
A multilateral agreement has been reached at the World Trade Organization (WTO) after three years of negotiations to help facilitate more foreign direct investment (FDI) into developing countries at a time of rising protectionism and downward pressure on cross-border capital flows.
The Investment Facilitation for Development (IFD) agreement aims to improve the global investment climate and promote cross-border cooperation on FDI facilitation to help foster sustainable development. Negotiations over the draft text of the agreement were concluded on July 6, effectively paving the way for the more than 110 signatory countries to begin implementation of its provisions. IFD participants will have to approve a final version of the text by October 2023.
"The proposed IFD Agreement would not just help WTO members attract and retain more investment, but also higher-quality investment," director general Ngozi Okonjo-Iweala said on July 6.
The agreement focuses on several areas that could help increase FDI flows to developing countries, including boosting the transparency of countries’ investment measures and streamlining administrative practices. A 2017 World Bank survey of 754 multinational investors in developing countries found that 82% of them rate transparency and predictability of public agencies’ conduct as important to where they invest.