A new World Trade Organization (WTO) agreement to facilitate investment could be ready by 2023, according to WTO Deputy Director General Anabel González.

By early 2023, the WTO is on the verge of reaching a new agreement on investment facilitation for development (FID).

More than 110 WTO members have been working hard to reach an agreement that will help countries in all regions improve their investment climate and attract Foreign Direct Investment (FDI).

With global growth expected to slow this year to its third weakest pace in nearly three decades and governments’ fiscal space tightening, an agreement to facilitate investment could help reverse the difficult outlook by boosting growth and investment, especially in developing and least developed countries.

Gonzalez said a final push is needed to close the deal.

WTO

According to her, private investment is key to fostering growth, as well as financing the digital and energy transitions.

For poor countries, it is key to achieving the Sustainable Development Goals.

Under the right conditions, Gonzalez stressed, FDI fosters economic transformation to drive growth and prosperity through increased productivity and efficient use of resources; increased global trade integration through improved access to international markets and participation in global value chains; local technology transfer and innovation spillovers; and job creation and upgrading of new skills, know-how and management skills.

Given the potential contribution of FDI to sustainable growth, most countries aspire to increase private investment. Unfortunately, even before the pandemic, FDI flows had already weakened.

The war in Ukraine, rising inflation and concerns about a possible recession have further dampened investor confidence, so countries must redouble their efforts to attract new investment.