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1994-01-11
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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 4Developing 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.[1]
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.
1. In the case of TRIMs applied under discretionary authority each specific
application shall be notified. Information that would prejudice the
legitimate commercial interests of particular enterprises need not be
disclosed.