ITC Executive Director remarks at the High-Level Regional Roundtable on the WTO Investment Facilitation for Development Negotiations

Hon. Sandra Husbands

Hon. Ian Douglas

Ambassador Stephen Fevrier

Deputy Director General Yi

Excellencies,

Ladies and gentlemen,

I am very pleased to welcome you to this high-level Regional Roundtable on the WTO Investment Facilitation for Development Negotiations: Perspectives from Caribbean Economies. This roundtable is jointly organized by the International Trade Centre (ITC), the German Development Institute (DIE), the Shridath Ramphal Centre for International Trade Law, Policy and Services (SRC) of the University of the West Indies' Cave Hill Campus in Barbados, and the World Economic Forum (WEF). This is truly partnership in action.

We know the figures: as a result of the pandemic and the related economic downturn, global flows of Foreign Direct Investment (FDI) fell by 42% in 2020. In Latin America and the Caribbean, the decline is estimated to be even more, reaching upwards to 55%. Coupled with the shock to the tourism industry, the loss of jobs and the erosion of foreign reserves it has been a recipe for concern. Revitalizing investment flows is one important part of the recovery and 'building back better'.

Revitalizing Investment will depend on many elements- many of them out of the control of our small economies. Therefore we must identify what is in our control and action that. What is in our control is investment facilitation. Having a transparent, consistent and predictable investment facilitation regime provides a boost in confidence to domestic and foreign investors. At a time of speculation and risk the Caribbean can stay ahead of the pack by positioning itself as an attractive region to invest in.

Investment facilitation includes, among others, making investment-related information more easily available, reducing red tape, helping investors navigate domestic regulations, and assisting investors to amicably resolve complaints. All these measures can significantly boost investment flows, through improving transparency and clarity of the legislations and procedures, reducing the cost of doing business, minimising the risks of corruption, and enhancing FDI contribution to local communities.

With these objectives in mind, the significance of the Investment Facilitation for Development initiative at the WTO cannot be overstated. A successful outcome can contribute towards creating an enabling environment to facilitate FDI flows into productive activities.

The journey itself is as important as the destination.

It is a process of exchanging information and expertise, which is critical in helping developing country administrations understand where their gaps are, where their comparative advantages could be and what mechanisms need to be put in place to further develop their investment regime.

The Caribbean has always been an attractive destination for FDI. One of several reasons why the Caribbean is able to attract large amounts of FDI is because of its welcoming policies towards FDI, both financial and non-financial.

From ITC's experiences in implementing investment related projects, it is clear that improving the overall business climate is likely to have the strongest impact on economic growth, since it stimulates both domestic and foreign investment.

Many Caribbean economies have low corporate and income tax rates, but more could be done in terms of improving the regulatory environment, through for instance, increasing transparency and streamlining procedures, reducing the time and cost for investors to find information, and providing a 'single-window' to integrate administrative procedures.

These are essential for MSMEs who have limited resources and capacities. These micro and small businesses have told us that savings from completing administrative procedures can be put to more productive use to improve their international competitiveness. This is just one simple but impactful result of demystifying investment procedures.

Investment Promotion Agencies (IPAs) play an important role in facilitating and reviving investment flows. Many IPAs responded to the crisis by providing up-to-date information on COVID-19 related developments, strengthening aftercare services to help existing investors deal with immediate challenges, as well as mobilizing their networks to support companies with maintaining supply chain operations.

For developing countries, technical assistance and capacity building will play a key role in implementing policy reforms. ITC stands ready to help Caribbean economies in their further work to ensure that their countries' international engagement is in line with their sustainable development strategies and in line with their national and regional reform agendas.

Going forward, and working with stakeholders in the FDI space, ITC could assist with regulatory gap analyses, identification of capacity building needs, and the designing and implementation of institutional and regulatory reforms to encourage higher flows of sustainable investment for sustainable development.

ITC is here to be your partner.

Now I am very pleased to invite Mr. Yi Xiaozhun, Deputy Director General of the World Trade Organization, to provide the WTO's views on this important area.

Thank you.