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India opposes EU, Canada's proposal on global investment pact

India opposes EU, Canada's proposal on global investment pact

India has put its foot down on a proposal made by the European Union and Canada about a global investment pact with an investor-to-state dispute settlement provision to be incorporated in the WTO agreement.

India has put its foot down on a proposal made by the European Union and Canada about a global investment pact with an investor-to-state dispute settlement provision to be incorporated in the WTO agreement. The issue was discussed at an informal meeting of key WTO members, including India, China, Brazil, Japan and Australia at Davos last week.

``We rejected it completely. We want anything to do with investments to be a bilateral thing... We do not believe in making investments a subject of multilateral disputes,'' Commerce and Industry Minister Nirmala Sitharaman told reporters here.

The minister said she is not in favour of the contentious investor-to-state dispute settlement (ISDS) mechanisms, which is part of a bilateral agreement between the European Union (EU) and Canada. Under ISDS, corporates can take sovereign governments to international arbitration for resolution of disputes. Both these countries want other WTO members to agree to this mechanism and the template to resolve investor disputes at the multi-lateral level. ... there is no way, we will have investment treaty in which companies can take the sovereign or even the regional governments to court, the minister said.

We want that anything with regard to investments should be settled by domestic laws and courts and only after that an appeal can be made outside, she explained.


Sitharaman said other WTO member countries, including Argentina and Brazil, too did not support the move. So at this stage, to have this template for a multi-lateral approach to investment may be immature, she said. However, the minister added that India put its view informally as this was an informal discussion of WTO member countries. On WTO issues, she said the countries discussed the forthcoming ministerial conference in Argentina in December. ``We reinforce that the Bali and Nairobi issues be fulfilled, she said, adding that WTO DG Roberto Azevedo admitted that although Nairobi meeting was successful, the process was not right. India, Sitharaman said, wants resolution on providing safeguards to poor farmers and permanent solution for public stock holding purposes. India asked the members for detailed discussions on these issues among the groups before they meet in Paris in June.

On its proposal on trade facilitation agreement on services, Sitharaman said India will submit a proposal soon. Many people said it is a low-hanging fruit which can be harvested, she said. Sitharaman said that during a bilateral discussion with the EU, the bloc indicated that it will hold negotiations for the comprehensive free trade agreement only after concluding the new bilateral investment treaty with India.

``I went to check up with the EU Trade Commissioner as to when the talks could start. They are keen to get the investment agreement negotiated, she said.

Last year, India had asked all countries with which India has investment protection agreements, including the EU, to renegotiate those pacts on the basis of the new model draft text of BIT.

Published on: Jan 24, 2017, 10:48 AM IST
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