Economic impacts of investment facilitation

Balistreri, Edward J. / Zoryana Olekseyuk
Externe Publikationen (2023)

published on yeutter-institute.unl.edu, 02.06.2023

Volltext/Full text

After the successful adoption of the Trade Facilitation Agreement (TFA) in 2014, investment facilitation is gaining importance as the next policy priority for a plurilateral agreement under the World Trade Organization (WTO). In fact, more than 110 WTO Members aim to conclude the negotiations on the Investment Facilitation for Development (IFD) Agreement by mid-2023 after only three years of formal negotiations. Investment facilitation refers to actions taken by governments designed to attract foreign investment and maximize the effectiveness and efficiency of its administration through all stages of the investment cycle. The IFD agreement focuses on allowing investment to flow efficiently for the greatest benefit, particularly to developing and least developed member countries, with the aim of fostering sustainable development. To provide policymakers with essential information for ongoing negotiations and to fill an existing research gap, we examine the economic impacts of a potential IFD agreement. Starting with a lower bound scenario, which incorporates investment facilitation commitments already present in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, we estimate that the IFD could improve global welfare by more than $250 billion. Pushing the boundaries of the policy scope by incorporating provisions from several proposals submitted at the beginning of the structured discussions, the ambitious IFD scenario suggests an increase of global welfare by almost $800 billion. Furthermore, extending the country coverage to India and the United States, currently disengaged from the negotiations, might boost global gains to as much as $1.1 trillion. Hereby, low and middle-income countries have the most to gain from a successful implementation of the IFD, given their low level of current practice in investment facilitation. Overall our analysis shows that the potential gains from an IFD agreement exceed those available from traditional trade liberalization. This provides a strong incentive for non-participating developing countries to join the IFD, reform their investment frameworks along the IFD agenda, and use the support structure contained in the section on special and differential treatment for developing and least-developed country members.

Über die Autorin

Olekseyuk, Zoryana

Ökonomie

Olekseyuk

Weitere Expert*innen zu diesem Thema

Baumann, Max-Otto

Politikwissenschaft 

Berger, Axel

Politikwissenschaft 

Brandi, Clara

Ökonomie und Politikwissenschaft 

Gitt, Florian

Ökonomie 

Goedeking, Nicholas

Vergleichende politische Ökonomie 

Haug, Sebastian

Politikwissenschaft 

Hilbrich, Sören

Ökonomie 

Inacio da Cunha, Marcelo

Wirtschaftswissenschaften, Geographie 

Kachelmann, Matthias

Politikwissenschaft 

Li, Hangwei

Politikwissenschaft 

Morare, Ditebogo Modiegi

Politikwissenschaften 

Novoselova, Anna

Politikwissenschaften 

Stender, Frederik

Ökonom 

Stewart, Benjamin

Sozialwissenschaft 

Vogel, Tim

Ökonomie 

Wingens, Christopher

Politikwissenschaftler