RESTRICTED
WORLD TRADE G/TRIMS/M/1
2May1995
ORGANIZATION(95-1118)
Committee onTrade-Related Investment Measures
MINUTES OFTHE MEETING HELD ON3MARCH 1995
Chairman: Mr.Vassilis Notis (Greece)
1. TheCommittee onTrade-Related Investment Measures helditsfirstmeeting on3March 1995.
2. TheCommittee adopted thefollowing agenda:
A. Election ofOfficers
B. Rules ofProcedure
C. NotificationsunderArticle5.1oftheAgreementonTrade-RelatedInvestmentMeasures
D. Operation ofArticle 5.1oftheAgreement incaseofGovernments which Accept the
Agreement after1January 1995
E. Notification Procedures under Article 5.5andArticle 6oftheAgreement
F. Procedures forImplementing Article 7.3oftheAgreement
G. Dates ofMeetings oftheCommittee
A. ELECTION OFOFFICERS
3. TheCommittee elected Mr.Vassilis Notis (Greece) asChairman.
4. TheCommittee authorized theChairman toholdinformal consultations onthequestion ofthe
election ofavice-chairperson.
5. TheChairman noted thataninvitation toattend thismeeting hadbeenaddressed to(i)Members
oftheWTO; (ii)signatories oftheFinal Actthatwere contracting parties totheGATT 1947 and
wereeligible tobecome original WTO Members; (iii)other governments withobserver status inthe
WTO; and(iv)certain intergovernmental organizations. Theinvitation tothesecond group of
participants wasbased onadecision taken bytheWTO General Council atitsmeeting of31January
1995.1Inrespect ofobserver governments, hereferred toadecision taken bytheGeneral Council
atthesame meeting onguidelines forobserver status intheWTO forgovernments2andtoadecision
oftheGeneral Council, alsotaken on31January 1995, toaccord observer status intheWTO toa
number ofcountries.
1WT/L/27
2WT/L/28, Annex 2G/TRIMS/M/1
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6. With reference toparagraph 6ofAnnex 2ofdocument WT/L/27, theChairman noted that
governments withobserver status wereallowed toparticipate asobservers atmeetings ofworking parties
andother subsidiary bodies oftheGeneral Council asappropriate, withtheexception oftheCommittee
onBudget, Finance andAdministration. Thisdidnotprevent thisCommittee, ifandwhen itconsidered
itappropriate, fromholding closed sessions without thepresence ofobservers. Heproposed thatthe
CommitteeproceedlikewisewithanygovernmentswhichmightbegrantedobserverstatusintheGeneral
Council inthefuture.
7. Itwassodecided.
8. TheChairman recalled thatthequestion ofguidelines onobserver status intheWTO for
intergovernmental organizations hadnotyetbeenresolved. Pending finalagreement onthismatter,
aninterim procedural arrangement hadbeenworked outregarding theattendance bysuchorganizations
atthefirstmeetings ofWTO bodies.3Pursuant tothisarrangement, theCouncil forTrade inGoods
haddecided atitsmeeting of20February 1995thattheIBRD andtheIMFwould beinvited toattend
thisfirstmeeting oftheCommittee.
B. RULES OFPROCEDURE
9. TheChairman saidthattheissue oftheCommittee 'srules ofprocedure hadbeeninscribed
ontheagenda ofthismeeting because under Article IV:6oftheWTO Agreement theCommittee, as
asubsidiary bodyoftheCouncil forTrade inGoods, wasrequired toestablish itsrulesofprocedure,
subject totheapproval oftheCouncil forTrade inGoods. Sofarrulesofprocedure hadbeenadopted
onlyfortheWTO Ministerial Conference andtheWTO General Council.4Heproposed thatthe
Committee authorize himtoholdinformal consultations onthequestion oftherulesofprocedure of
theCommittee andthatinthemeantime theCommittee conduct itsbusiness inaccordance with
established GATT practice.
10. Itwassodecided.
C. NOTIFICATIONS UNDER ARTICLE 5.1OFTHE AGREEMENT
11. TheChairman noted thatArticle 5.1oftheAgreement requires Members tonotify alltrade-
related investment measures thatarenotinconformity withtheAgreement within 90daysofthedate
ofentry intoforce oftheWTO Agreement. ThePreparatory Committee hadapproved arecommended
format fornotifications under thisprovision which appeared inPC/IPL/8 andhadalsobeenreproduced
inG/TRIMS/1. Asaresult ofdecisions taken bytheGeneral Council on31January 1995 andby
theCouncilforTradeinGoodson20February1995,thisrecommendedformat,andotherissuesrelating
tonotifications under theAgreement, hadbeenreferred totheCommittee forfurther action and/or
considerationasappropriate.Inaddition,theCouncilforTradeinGoodshaddecidedthattheCommittee
should carry outthetasksassigned tothatCouncil under theAgreement withrespect tonotifications.
Inlightofthese decisions oftheGeneral Council andtheCouncil forTrade inGoods, theChairman
proposed thattheCommittee endorse therecommended format fornotifications under Article 5.1and
takenoteofthefactthattheCouncil forTrade inGoods hadinstructed theCommittee tocarry out
thetasks assigned under theAgreement totheCouncil withrespect tonotifications. Asaresult,
notifications received pursuant totheprovisions oftheAgreement would becirculated asdocuments
oftheCommittee.
3WT/GC/COM/2
4WT/L/28G/TRIMS/M/1
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12. Itwassodecided.
13. TheChairman thendrew theCommittee 'sattention tothefactthat,while Members hadbeen
invited indocument G/TRIMS/1 tosubmit notifications under Article 5.1nolaterthan31March 1995,
sofarnonotifications hadbeenreceived. Thiswasamatter ofsome concern, given theimportance
ofthenotification provision inArticle 5.1totheoperation oftheAgreement. Apart from serving
thepurpose ofensuring transparency, notifications made within thetimeperiod stipulated inArticle 5.1
were aprecondition fortheexercise byMembers oftheirrighttoavailthemselves ofthetransition
provisions inArticle 5.2.Itwould beunfortunate ifdisputes arose inrespect oftrade-related investment
measures thatwereinconsistent withtheAgreement where suchdisputes could havebeenavoided by
atimely notification under Article 5.1.Inthisconnection, healsonoted thatanimportant reason for
convening ameeting oftheCommittee atthistimewasthatthismeeting could helptoalertallMembers
totheimportance ofatimely compliance withthenotification requirement ofArticle 5.1andcould
provide anoccasion forMembers todiscuss possible problems which might havearisen.
14. Therepresentative oftheUnited States seconded thecomments made bytheChairman onthe
importance ofnotifications under Article 5.1.Hisdelegation considered thatthenotification procedure
inArticle 5.1wasinmany waysthecentrepiece oftheAgreement. Heexpressed thehopethatMembers
would make notifications under Article 5.1oftrade-related investment measures falling within thescope
oftheIllustrative Listannexed totheAgreement andnoted thatitwould beveryunfortunate ifthe
burdens intended tobealleviated bythisAgreement would havetobeborne bytheDispute Settlement
Dispute Understanding.
15. TheCommittee tooknoteofthecomments made andagreed torevert atitsnextmeeting to
theissue ofthestatus ofnotifications under Article 5.1oftheAgreement.
D. OPERATION OFARTICLE 5.1INCASE OFGOVERNMENTS WHICH ACCEPT THE
WTO AGREEMENT AFTER 1JANUARY 1995
16. TheChairman recalled thattheContact Group which hadundertaken preparatory work on
notificationproceduresundertheAgreementhadsuggestedtheneedforanexaminationbythecompetent
WTO body ofthequestion ofthearrangements fornotification oftrade-related investment measures
bycountries eligible tobecome original Members oftheWTO butthataccepted theWTO Agreement
afterthedateofitsentry intoforce.5Ithadbeennoted inthisregard thatforsuchcountries theperiod
of90daysinArticle 5.1might haveexpired atthetimethese countries accepted theAgreement. At
itsmeeting of20February 1995, theCouncil forTrade inGoods hadreferred thismatter tothis
Committee, withtherequest thattheCommittee prepare appropriate recommendations. Thismatter
obviously wasofsome urgency, asacknowledged inthereport oftheContact Group which called
foranexamination ofthismatter "atanearly stage".
17. Therepresentative ofSwitzerland saidthat,asacountry which hadnotyetaccepted theWTO
Agreement, Switzerland wasdirectly affected bythismatter. Inorder tofacilitate thework ofthe
Committee andintheinterest oftransparency, hisauthorities intended tomake anotification assoon
aspossible, hopefully within thedeadline applicable toMembers. While Switzerland wasnotunder
alegalobligation doso,ithadtaken thisinitiative inorder toavoid possible operational difficulties
intheimplementation oftheAgreement.
18. Therepresentative ofEgypt proposed thatcountries thataccepted theWTO Agreement after
1January 1995begranted aperiod of90daysafterthedateoftheentry force oftheWTO Agreement
5PC/IPL/8, paragraph 6.G/TRIMS/M/1
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forsuchcountries tomake notifications under Article 5.1,ontheunderstanding thatthiswould not
entail anextension oftheperiod provided forinArticle 5.2forthephase-out ofmeasures notified
under Article 5.1.
19. Therepresentative ofJapan considered thatArticle XIV:2 oftheWTO Agreement didnotallow
forspecial arrangements regarding thestarting datefortheimplementation ofobligations bycountries
thataccepted theWTO Agreement afteritsentry intoforce. Accordingly, thebasic principle should
bethatcountries thataccepted theWTO Agreement within aperiod of90daysaftertheentry into
force oftheWTO Agreement should make notifications within thetimeperiod provided inArticle 5.1
andthatcountries thataccepted theWTO Agreement atalaterdateshould submit notifications at
thetimeoftheentry intoforce oftheWTO Agreement forsuch countries. While hisdelegation did
notoppose apractical solution, suchapractical solution hadtoberegarded assomething exceptional
given thisbasic principle.
20. Therepresentative oftheUnited States saidthattherepresentative ofJapan hadraised some
useful legalpoints. Hisdelegation wasoftheviewthat,asitwassome timesincetheWTO Agreement
hadbeenconcluded, countries thathadnotyetaccepted theWTO Agreement could beexpected to
havehadsufficient timetobecome aware ofthenotification requirements oftheWTO Agreements
andshould therefore beinaposition tomake notifications relatively quickly. However, hisdelegation
alsorecognized thatacountry intheprocess ofratification oftheWTO Agreement would make that
ratification apriority. Hetherefore sawsome room forflexibility onthisissue, subject tothefollowing
conditions. Firstly, aperiod of90daysfrom thedateofthedeposit oftheinstrument ofacceptance
would provide adequate timetomake notifications under Article 5.1. Secondly, itshould beclear
thatwhatever arrangement theCommittee would make withrespect tonotifications under Article 5.1
would notaffect theduration oftheperiod fortheelimination under Article 5.2ofmeasures notified
under Article 5.1.Thirdly, theissueunder consideration pertained onlytothesituation arising from
theacceptance oftheWTO Agreement bycertain countries; thequestion ofthearrangements for
notifications incaseofcountries acceding totheWTO Agreement would havetobedealtwithinthe
context ofnegotiations ontheprotocols ofaccession. Finally, inview ofthesubstantive legal
implications ofthematter under consideration, theappropriate course ofaction wasfortheCommittee
tosubmit adraftrecommendation through theCouncil forTrade inGoods totheGeneral Council.
21. TherepresentativeofPolandsaidthathiscountryhadnotyetcompletedtheprocessofratification
oftheWTO Agreement. While theobligation tomake notifications under Article 5.1oftheAgreement
obviously applied onlytoMembers, itwould beuseful ifcountries thatwereeligible tobecome original
Members buthadnotyetaccepted theWTO Agreement were allowed tomake notifications within
theperiod provided forinArticle 5.1soastobeabletobenefit fromthetransition periods stipulated
inArticle 5.2.
22. Therepresentative oftheEuropean Communities expressed sympathy forthelegalconcerns
expressed bytherepresentative ofJapan, butconsidered thatintheinterest oftransparency itwas
necessary tobeflexible andallow countries thataccepted theWTO Agreement atalaterdatesome
timetomake notifications under Article 5.1. Hisdelegation could accept thesuggestions thatsuch
countries begiven aperiod of90daysformaking notifications under Article 5.1,counted either from
thedateofthedeposit oftheinstrument ofacceptance orfrom thedateoftheentry intoforce ofthe
WTO Agreement forsuchcountries, itbeing understood thatthiswould notinanywayaffect theperiod
fortheelimination ofnotified measures, which period would becounted from 1January 1995, and
thatthesituation regarding countries thatwould accede totheWTO Agreement would havetobedealt
withinthecontext oftheprotocols ofaccession.
23. Therepresentative ofCanada stated thatapragmatic approach waswarranted asthesuccess
oftheAgreement depended verymuch upon theability ofMembers tomake notifications underG/TRIMS/M/1
Page5
Article 5.1. Therefore, Members should notbediscouraged from coming forward with such
notifications. Hisdelegation could agree toanapproach whereby countries thataccepted theWTO
Agreement after1January 1995 would beallowed aperiod of90daystomake notifications under
Article 5.1.Thisperiod could becounted fromthedateofthedeposit oftheinstrument ofacceptance
orfrom thedateoftheentry intoforce oftheWTO Agreement forsuchcountries.
24. Therepresentative ofSwitzerland expressed hisdelegation 'sdisagreement withthelegal
interpretation ofArticle XIV:2 oftheWTO Agreement advanced bytherepresentative ofJapan. He
noted withinterest theflexibility shown bytherepresentatives oftheUnited States, theEuropean
Communities andCanada.
25. Therepresentative ofJapan saidthathisdelegation wasnotopposed toapragmatic approach
tothequestion ofthenotification oftrade-related investment measures bycountries thataccepted the
WTO Agreement atalatertime, butfound itimportant nottolosesight ofbasic legal principles.
Suchcountries should beencouraged tomake notifications assoonaspossible andifasolution were
developed which would givesuchcountries anadditional period oftimetomake notifications, the
exceptional nature ofthatsolution hadtobeborne inmind.
26. Therepresentative ofHungary saidthathisdelegation initially believed thataperiod of30days
afterthedateofacceptance oftheWTO Agreement would provide sufficient timetocountries that
accepted theWTO Agreement after1January 1995 tomake notifications under Article 5.1,butthat
hecould goalong withtheapproach suggested bytherepresentatives oftheUnited States, theEuropean
Communities andCanada.
27. Inlightofthestatements made, theChairman urged countries eligible tobecome original WTO
Members tomake notifications under Article 5.1atthetimeoftheiracceptance oftheWTO Agreement,
ifpossible. Hefurther noted thatthere seemed tobeagreement intheCommittee that,where such
notifications were notpracticable, thecountries inquestion should begiven some additional timeto
make notifications. Hethensuggested thatthefollowing elements might beincluded inadraft
recommendationbytheCommitteetotheCouncilforTradeinGoods.Firstly,theCommitteerecognized
thedesirability ofensuring theeffective application ofArticles 5.1and5.2withrespect toallWTO
members. Secondly, theCommittee noted thepractical difficulty arising fromthefactthattheperiod
of90daysreferred toinArticle 5.1mayhaveexpired atthetimeoftheentry intoforce oftheWTO
Agreement forgovernments eligible tobecome original Members thataccept theWTO Agreement
after1January 1995. Thirdly, theCommittee emphasized thattheproblem under consideration was
limited totheperiod within which notifications aretobemade under Article 5.1anddidnotconcern
theduration ofthephase-out periods inArticle 5.2ortherequirements ofArticle 5.4,bothofwhich
would continue tobegoverned byreference tothedateofentry intoforce oftheWTO Agreement
itself. Thedraftrecommendation would thenprovide thatgovernments eligible tobecome original
Members thataccepted theWTO Agreement after1January 1995 should haveaperiod of90days
afterthedateoftheiracceptance oftheWTO Agreement tomake notifications under Article 5.1.
Heproposed that,iftheabove elements wereacceptable totheCommittee asabasis fordealing with
thismatter, theCommittee mandate himtoprepare, withtheassistance oftheSecretariat, adraft
recommendation oftheCommittee totheCouncil forTrade inGoods along these lines. This draft
recommendationwouldbecirculatedtotheCommitteeandwouldbedeemedapprovedbytheCommittee
andautomatically forwarded totheCouncil forTrade inGoods ifthere werenoobjection tothedraft
recommendation within aperiod of14days. Forthesakeoflegalcertainty, theChairman suggested
thattheCommittee recommend thattheproposed decision besentbytheCouncil forTrade inGoods
totheGeneral Council forfinaladoption.
28. TheCommittee tooknoteofthestatements made anddecided toproceed inthemanner proposed
bytheChairman.G/TRIMS/M/1
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E. NOTIFICATION PROCEDURES UNDER ARTICLE 5.5AND ARTICLE 6OFTHE
AGREEMENT
29. TheChairman recalled thattheContact Group which hadundertaken preparatory work on
notification procedures under theAgreement hadsuggested thatthenotification requirements in
Article 5.5andArticle 6could beaddressed bytheCommittee oncetheAgreement wasinforce.6
TheGeneral Council andtheCouncil forTrade inGoods hadrecently remitted these matters tothe
Committee forfurther action and/or consideration, asappropriate. ItwasthustheCommittee 'stask
toconsider whether there wasaneed toestablish guidelines and/or procedures toimplement the
notification requirements under these twoprovisions.
30. InrespectofthenotificationrequirementofArticle5.5,theChairmansuggestedthatonepossible
wayofproceeding might betoconsider whether itwasuseful todevelop acommon format for
notifications tobemade under thisprovision. Indeveloping suchacommon format, ithadofcourse
tobeborne inmind thatArticle 5.5dealt withtheapplication toanewinvestment oftrade-related
investment measures thathadalready beennotified under Article 5.1. Thequestion thenwaswhat
additional information should beprovided under Article 5.5withrespect totheapplication tonew
investments ofpreviously notified trade-related investment measures. Some specific elements ofthe
recommended format fornotifications under Article 5.1might berelevant inthisrespect, insofar
astheywouldgenerateinformationontheproductandenterprisescoveredbythetrade-relatedinvestment
measures applied pursuant toArticle 5.5andontheduration ofsuchmeasures. Inaddition, itmight
beusefultoconsiderwhatinformationshouldbeprovidedunderArticle5.5inrelationtotherequirement
thattheapplication toanewinvestment ofapreviously notified measure mustbenecessary toavoid
distorting theconditions ofcompetition between thenewinvestment andtheestablished enterprises,
andinrelation totherequirement thattheterms ofatrade-related investment measure applied toa
newinvestment must beequivalent intheircompetitive effects tomeasures applied toestablished
enterprises.
31. Inrespect ofArticle 6.2,theChairman asked whether delegations hadanysuggestions tomake
onwhether itwould beuseful thattheCommittee provide guidance onthetypeof"publications" covered
under thisprovision.
32. Therepresentative oftheEuropean Communities proposed thattheSecretariat, inconsultation
withdelegations, prepare aformat fornotifications under Article 5.5,which format would bebased
ontherecommended format fornotifications under Article 5.1,withtheappropriate adaptations.
33. Therepresentative oftheUnited States agreed withthesuggestion made bytherepresentative
oftheEuropean Communities inrespect ofthenotification requirement ofArticle 5.5.With respect
toArticle 6.2,hisdelegation wished toreflect further onhowtoimplement thisprovision. Aformat
fornotifications under thisprovision might notbenecessary, butthere wereseveral questions which
needed tobeaddressed regarding theprecise scope ofthisprovision. Henoted inthisregard that
theAgreement made itclear intheIllustrative Listwhat were prohibited trade-related investment
measures, butdidnotcontain ageneric definition ofatrade-related investment measure. Asaresult,
there could bedoubts astowhat were permissible trade-related investment measures subject tothe
notification requirement inArticle 6.2.Hewondered whether itwasadvisable toprovide some further
guidance astothenature ofthemeasures covered byArticle 6.2orwhether delegations should be
advised toerronthesideofgenerosity andtonotify anypublications dealing withgeneral investment
measures.
6PC/IPL/8, paragraph 5.G/TRIMS/M/1
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34. Therepresentative ofCanada saidthatMembers could onlyavailthemselves ofArticle 5.5
onlyiftheyhadmade notifications under Article 5.1. Given thatthusfarnosuchnotifications had
beenreceived under Article 5.1,thequestion ofnotification procedures under Article 5.5wasnota
matter ofgreat urgency. However, ifwork weretobeundertaken onaformat fornotifications under
Article 5.5,theformat thathadbeendeveloped forthenotifications under Article 5.1would provide
asolid basis. With respect toArticle 6.2,henoted thathisdelegation attached great importance to
thetransparency requirement contained inthisprovision, particularly inlightofthefactthatArticle 9
contemplated areview andpossible expansion oftheAgreement within aperiod offiveyears after
theentry intoforce oftheWTO Agreement. Article 6.2wasimportant inthisrespect inthatitcould
beameans forgathering information thatwould allow Members tobebetter informed oftheexistence
oftrade-related investment measures when thetimeforthatreview came.
35. Therepresentative ofPoland saidthatseveral aspects ofthenotification requirements in
Article 6.2required further consideration. Henoted inthisrespect theissue ofthedefinition ofthe
relevant "publications", theissue ofwhether thefulltextofsuchpublications should beprovided or
onlyareference tosuchpublications andquestions relating tothelanguage inwhich thesenotifications
were tobemade. Hesuggested thatinformal consultations beheldonthese matters.
36. TheChairman requested delegations which wished tomake suggestions onaformat for
notifications under Article 5.5tosubmit theirsuggestions totheSecretariat. TheSecretariat would
thenonthebasis ofthese suggestions attempt toformulate aninformal proposal forsuchaformat.
Withrespect tothenotification requirement ofArticle 6.2,hesaidthatitwasclearfromthestatements
made thatthismatter needed tobeexamined further. TheCommittee would revert tothenotification
requirements ofArticles 5.5and6.2atitsnextmeeting.
37. TheCommittee tooknoteofthestatements made anddecided toproceed asproposed bythe
Chairman.
F. PROCEDURES FOR IMPLEMENTING ARTICLE 7.3OFTHE AGREEMENT
38. TheChairman recalled thatArticle 7.3oftheAgreement provides thattheCommittee shall
monitor theoperation andimplementation oftheAgreement andshallreport thereon annually tothe
Council forTrade inGoods. Several questions arose astohowtoimplement thisprovision. With
respect totherequirement thattheCommittee monitor theoperation andimplementation ofthe
Agreement, thequestion arose astotheinformation onthebasisofwhich theCommittee should conduct
thismonitoring, andthearrangements which should bemade forundertaking thiswork. Withrespect
totherequirement ofanannual report totheCouncil forTrade inGoods, itmight beuseful toconsider
what could bethecontent ofsuchareport. Comparable requirements regarding thesubmission of
annual reports (totheCONTRACTING PARTIES totheGeneral Agreement) hadexisted under the
Tokyo Round Agreements andArrangements. Theexperience gained intheimplementation ofthose
requirements might berelevant totheCommittee 'sconsideration oftheprocedures forimplementing
Article 7.3.
39. Nostatements were made under thisagenda item. TheChairman saidthattheCommittee
would revert tothismatter atitsnextmeeting.
G. DATES OFMEETINGS OFTHE COMMITTEE
40. TheChairman drew theattention oftheCommittee toArticle 7.1oftheAgreement, which
provides thattheCommittee shallmeetnotlessthanonceayearandotherwise attherequest ofany
Member. There were various ways inwhich thisrequirement could bemet. TheCommittee could
decide toestablish acalendar ofregular meetings, withapossibility ofspecial meetings ifrequestedG/TRIMS/M/1
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byanyMember, ashadbeenthepractice ofmany GATT bodies inthepast. While theCommittee
wasrequired tohaveatleastoneregular meeting peryear, itwasfreetodecide toholdmore than
onesuchmeeting every year. Ontheother hand, theCommittee could adopt amore flexible approach
anddecide onthedates ofitsmeetings onanadhocbasis. TheChairman noted thatitmight be
somewhat premature totakeadecision onthismatter atthistimeandthatitmight bewiser towait
untiltheCommittee hadabetter ideaofitsworkload. Hetherefore proposed thattheCommittee proceed
inapragmatic manner andholdanextmeeting relatively sooninorder tocontinue theconsideration
ofmatters discussed atthismeeting, some ofwhich wererather urgent. Hementioned inthisconnection
thequestion oftheCommittee 'srulesofprocedure, thestatus ofnotifications received under Article 5.1
andtheimplementation oftheprovisions ofArticles 5.5,6.2and7.3.Inlightofthese considerations,
hesuggested thattheCommittee holditsnextmeeting attheendofApril orinMay. Atthatmeeting
theCommittee might beinaposition totakeupthequestion oftheschedule ofitsfuture meetings.
41. TheCommittee agreed toproceed assuggested bytheChairman.