Dr Asanka Wijesinghe Highlights the Crucial Role of Investment Provisions in Regional Trade Agreements

09-10 October 2023

During the recent “Workshop on Advancing Regional Trade Integration Through Regional Trade Agreements in Asia and the Pacific,” organised by the United Nations’ Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand, IPS Research Fellow Dr Asanka Wijesinghe underscored the pivotal role of investment provisions within regional trade agreements (RTAs) in facilitating efficiency-seeking investments in member countries’ manufacturing and services sectors.

Dr Wijesinghe pointed out that attracting investments, especially for developing nations that are latecomers to global manufacturing value chains in relatively high-tech manufacturing, is becoming increasingly harder owing to the developed countries’ industrial policy initiatives and domestic policy distortions.

As RTAs continue to evolve, becoming deeper and more complex, Dr Wijesinghe advocated for comprehensive investment provisions aimed at removing barriers to intra-regional investment flows. Such provisions can amplify the economic benefits of these agreements while also helping to mitigate the potential impact of liberalisation on labour markets by creating high-quality employment opportunities.

Dr Wijesinghe also drew attention to the evolving global investment landscape, highlighting the Inflation Reduction Act of the United States as a significant factor redirecting investments to North America through discriminatory consumer subsidies. Given these global developments, Dr Wijesinghe stressed the essential role of RTAs in the Asia-Pacific region in facilitating intra-regional efficiency-seeking investments, to increase the economic welfare of the member countries on a mutual basis.

These insights were shared during the session on “Investment in Regional Trade Agreements,” chaired by LeeHyung Chul, Director General of the Customs and Tariff Bureau at the Ministry of Economy and Finance in the Republic of Korea. The workshop saw the participation of policymakers, trade negotiators, researchers, and industry representatives from Asia-Pacific Trade Agreement member countries—Bangladesh, China, India, Lao PDR, Mongolia, Republic of Korea, and Sri Lanka—gathered to discuss these critical issues.

Download the presentation here.