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Predictable and transparent investment rules that follow principles of due process can help to build a stable environment for attracting capital. At the same time, these rules also ensure that businesses can have confidence in the systems they are looking to invest in.
What does the initiative cover?
The aim of these World Trade Organisation (WTO) discussions is to develop a framework of rules governing the administrative procedures and requirements related to countries’ investment approval processes. In New Zealand, the Overseas Investment Office (OIO) is primarily responsible for the administration of these processes.
The goal of the negotiations is to agree to a framework of rules that will:
- Promote transparency and predictability, by introducing requirements for participating Members to publish investment laws and regulations, and to publish information about their investment authorisation procedures.
- Introduce certain minimum standards in countries’ administrative procedures and requirements (for example, accepting investment applications throughout the year or having timeframes for decision-making); and
- Encourage international cooperation, information sharing, and exchange of best practices.
What is not covered?
The following three areas have been agreed as not covered by these discussions:
- Matters related to investment market access. The framework of rules will not prevent participating WTO Members from having investment screening regimes like those established under New Zealand’s Overseas Investment Act 2005. Countries are also not required to grant screening approvals to any specific foreign investors – these are matters that will remain up to each country to decide according to their individual circumstances.
- Investment protection measures. These measures provide protection for investors in certain circumstances, such as in the event of war or civil strife or expropriation.
- Investor state dispute settlement (ISDS) which allows companies to seek damages from governments.
Who is involved?
At the 11th WTO Ministerial Conference in Buenos Aires in December 2017, 70 WTO members including New Zealand signed on to a Ministerial Statement on Investment Facilitation for Development. That Statement called for the beginning of discussions which are open to any WTO member wanting to participate.
At a meeting of trade Ministers on 6 November 2019 in Shanghai China, 92 WTO members including New Zealand issued another Joint Ministerial Statement on Investment Facilitation for Development. The latest Statement highlights the link between investment and development, and to make sure that any eventual framework considers the needs of members in developing and least developed countries.
Currently, there are 101 WTO Members participating in the process, comprised of a mix of developed, developing and Least Developed country Members, and this number is expected to keep growing.
What is the process so far?
Since the signing of the 2017 Joint Ministerial Statement, participating WTO Members have been conducting regular meetings to share views, examples and best practices, and to identify possible elements they have in common. These inputs have been collated into a Working Document which was used to guide discussions on possible elements that could form an eventual framework of rules on Investment Facilitation.
Following these discussions a collated text has been prepared to form a starting point for the negotiations. The key focus areas in this text include:
- Scope and general principles
- Carve-out of market access, investment protection and investor state dispute settlement
- Most Favoured Nation commitments
- Publication of investment laws and regulations
- Publication of information on investment authorisation procedures
- Notification of investment laws and regulations to the WTO
- WTO enquiry points
- Administrative procedures and requirements
- Indicative timeframes for the processing of applications
- Use of ICT in the application process
- Criteria for investment authorisations
- Fees and charges
- Contact points for investors, domestic coordination and international cooperation
- Special and differential treatment for developing and Least-Developed Members
- Including proposals for the phased implementation of commitments
- Cross-cutting issues
- Corporate social responsibility
- Other issues
- Institutional arrangements and final provisions
- General Exceptions
- Establishment of a Committee on Investment Facilitation
What do we want to achieve?
We want to ensure that any emerging international commitments on investment facilitation fit well with New Zealand’s domestic investment policy settings and practices, and contribute towards achieving the Government’s economic diversification goals, including attracting high quality, productive investment in New Zealand. We also want to support giving New Zealanders and our companies more certainty as to the rules applicable when investing offshore.
A key focus of our interventions and work at the WTO in this area has been to try to achieve an outcome that is inclusive and provides transparency and certainty to investment related administrative systems. We also want an outcome that includes public policy safeguards to ensure New Zealand can continue to make decisions about the types of foreign investment that are in New Zealand’s national interests.
For more information on New Zealand’s reasons for joining the negotiation, and the issues under discussion, see the Cabinet paper on WTO Plurilateral negotiations on Investment Facilitation for Development
Have your say
We want to hear your views on the issues under discussion so that we can take these into account in how we engage in the negotiations. Please get in touch and let us know about:
- what New Zealand should prioritise in the WTO Investment Facilitation for Development negotiations
- barriers you may face, or are concerned about, in investing offshore
- specific industries, businesses or products that you think could benefit from an outcome on Investment Facilitation at the WTO
- any concerns you or your business have with a possible WTO outcome on Investment Facilitation or that should be reflected in New Zealand’s approach to the negotiations.
Email us at email@example.com to share your views and register your interest in future engagement opportunities.
For more information on the WTO Investment Facilitation for Development initiative, visit the WTO website(external link).
For details on our upcoming trade policy events, see our public engagement on trade page.