AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
Copyright 1995 NLCIFT
Title:AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
Members,
Considering that Ministers agreed in the Punta del Este
Declaration that "Following an examination of the operation of
GATT Articles related to the trade restrictive and distorting
effects of investment measures, negotiations should elaborate, as
appropriate, further provisions that may be necessary to avoid
such adverse effects on trade";
Desiring to promote the expansion and progressive
liberalisation of world trade and to facilitate investment across
international frontiers so as to increase the economic growth of
all trading partners, and particularly developing country Members
while ensuring free competition;
Taking into account the particular trade, development and
financial needs of developing country Members, particularly those
of the least-developed country Members;
Recognizing that certain investment measures can cause trade
restrictive and distorting effects;
Hereby agree as follows:
Article 1
Coverage
This Agreement applies to investment measures related to
trade in goods only (hereafter referred to as "TRIMs").
Article 2
National Treatment and Quantitative Restrictions
1. Without prejudice to other rights and obligations under the
GATT 1994, no Member shall apply any TRIM that is inconsistent
with the provisions of Article III or Article XI of the GATT
1994.
2. An illustrative list of TRIMs that are inconsistent with the
obligation of national treatment provided for in Article III:4 of
the GATT 1994 and the obligation of the general elimination of
quantitative restrictions provided for in Article XI:1 of the
GATT 1994 is contained in the Annex to this Agreement.
Article 3
Exceptions
All exceptions under the GATT 1994 shall apply, as
appropriate, to the provisions of this Agreement.
Article 4
Developing Country Members
A developing country Member shall be free to deviate
temporarily from the provisions of Article 2 above to the extent
and in such a manner as Article XVIII of the GATT 1994, the
Understanding on the Balance-of-Payments Provisions of the
General Agreement on Tariffs and Trade 1994, and the 1979
Declaration on Trade Measures Taken for Balance-of-Payments
Purposes permit the Member to deviate from the provisions of
Articles III and XI of the GATT 1994.
Article 5
Notification and Transitional Arrangements
1. Members, within ninety days of the entry into force of the
Agreement Establishing the MTO, shall notify the Council for
Trade in Goods of all TRIMs they are applying that are not in
conformity with the provisions of this Agreement. Such TRIMs of
general or specific application shall be notified, along with
their principal features.
2. Each Member shall eliminate all TRIMs which are notified
under paragraph 1 above within two years of the date of entry
into force of the Agreement Establishing the MTO in the case of a
developed country Member, within five years in the case of a
developing country Member, and within seven years in the case of
a least-developed country Member.
3. On request, the Council for Trade in Goods may extend the
transition period for the elimination of TRIMs notified under
paragraph 1 above for a developing country Member, including a
least-developed country Member, which demonstrates particular
difficulties in implementing the provisions of this Agreement.
In considering such a request, the Council for Trade in Goods
shall take into account the individual development, financial and
trade needs of the Member in question.
4. During the transition period, a Member shall not modify the
terms of any TRIM which it notifies under paragraph 1 above from
those prevailing at the date of entry into force of the Agreement
Establishing the MTO so as to increase the degree of
inconsistency with the provisions of Article 2 above. TRIMs
introduced less than 180 days before the entry into force of the
Agreement Establishing the MTO shall not benefit from the
transitional arrangements provided in paragraph 2 above.
5. Notwithstanding the provisions of Article 2 above, a Member,
in order not to disadvantage established enterprises which are
subject to a TRIM notified under paragraph 1 above, may apply
during the transition period the same TRIM to a new investment
(i) where the products of such investment are like products to
those of the established enterprises, and (ii) where necessary to
avoid distorting the conditions of competition between the new
investment and the established enterprises. Any TRIM so applied
to a new investment shall be notified to the Council for Trade in
Goods. The terms of such a TRIM shall be equivalent in their
competitive effect to those applicable to the established
enterprises, and it shall be terminated at the same time.
Article 6
Transparency
1. Members reaffirm, with respect to TRIMs, their commitment to
obligations on transparency and notification in Article X of the
GATT 1994, in the undertaking on "Notification" contained in the
1979 Understanding Regarding Notification, Consultation, Dispute
Settlement and Surveillance and in the Ministerial Decision on
Notification Procedures.
2. Each Member shall notify the MTO Secretariat of the
publications in which TRIMs may be found, including those applied
by regional and local governments and authorities within their
territories.
3. Each Member shall accord sympathetic consideration to
requests for information, and afford adequate opportunity for
consultation, on any matter arising from this Agreement raised by
another Member. In conformity with Article X of the GATT 1994 no
Member is required to disclose information the disclosure of
which would impede law enforcement or otherwise be contrary to
the public interest or would prejudice the legitimate commercial
interests of particular enterprises, public or private.
Article 7
Committee on TRIMs
1. A Committee on Trade-Related Investment Measures shall be
established, open to all Members of the MTO. The Committee shall
elect its own Chairman and Vice-Chairman, and shall meet not less
than once a year and otherwise at the request of any Member.
2. The Committee shall carry out responsibilities assigned to
it by the Council for Trade in Goods and shall afford Members the
opportunity to consult on any matters relating to the operation
and implementation of this Agreement.
3. The Committee shall monitor the operation and implementation
of this Agreement and shall report thereon annually to the
Council for Trade in Goods.
Article 8
Consultation and Dispute Settlement
The provisions of Articles XXII and XXIII of the GATT 1994,
as elaborated and applied by the Understanding on Rules and
Procedures Governing the Settlement of Disputes, shall apply to
consultations and the settlement of disputes under this
Agreement.
Article 9
Review by the Council for Trade in Goods
Not later than five years after the date of entry into force
of the Agreement Establishing the MTO, the Council for Trade in
Goods shall review the operation of this Agreement and, as
appropriate, propose to the Ministerial Conference amendments to
its text. In the course of this review, the Council for Trade in
Goods shall consider whether it should be complemented with
provisions on investment policy and competition policy.
ANNEX
Illustrative List
1. TRIMs that are inconsistent with the obligation of national
treatment provided for in Article III:4 of the GATT 1994 include
those which are mandatory or enforceable under domestic law or
under administrative rulings, or compliance with which is
necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of
domestic origin or from any domestic source, whether
specified in terms of particular products, in terms of
volume or value of products, or in terms of a
proportion of volume or value of its local production;
or
(b) that an enterprise's purchases or use of imported
products be limited to an amount related to the volume
or value of local products that it exports.
2. TRIMs that are inconsistent with the obligation of the
general elimination of quantitative restrictions provided for in
Article XI:1 of the GATT 1994 include those which are mandatory
or enforceable under domestic law or under administrative
rulings, or compliance with which is necessary to obtain an
advantage, and which restrict:
(a) the importation by an enterprise of products used in or
related to its local production, generally or to an
amount related to the volume or value of local
production that it exports;
(b) the importation by an enterprise of products used in or
related to its local production by restricting its
access to foreign exchange to an amount related to the
foreign exchange inflows attributable to the
enterprise; or
(c) the exportation or sale for export by an enterprise of
products, whether specified in terms of particular
products, in terms of volume or value of products, or
in terms of a proportion of volume or value of its
local production.