./.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/271
26 July 1999
(99-3140)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
The Agreement on Trade-Related Investment Measures (TRIMs)
Communication from Brazil
The following communication, dated 20 July 1999, has been received from the Permanent
Mission of Brazil.
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Background
1. The WTO Agreement on Trade-Related Investment Measures (TRIMs Agreement)
established equal disciplines, rights and obligations for all Members.  Except for a few transitional
provisions, there are no actual clauses for spec ial and differential treatment, which would allow
developing countries to address specific needs regarding economic, financial or social policies.
2. The disciplines of the TRIMs Agreement disregard obvious structural inequalities among
Members, which could not have been overcome with in the five-year transition period.  Solutions to
those problems would require, for the most part, long-lasting policies and adequate financing for their
execution.
3. However, the implementation of development policies is usually constrained by lack of
official funds, either from domestic or foreign sources.  Investments from the private sector could
cover those shortcomings, but they have proved to be, for the most part, highly volatile and closely
linked to the fortuitous circumstances of the international financial markets.
4. Apart from the fundamental need of developing countries to attract investments in order to
maintain adequate economic growth and to improv e social conditions, other important fiscal and
monetary factors come into play.  The high vola tility of international capital flows, for example,
aggravates balance-of-payment difficulties inherent  to the early stages of productive investments,
when expenditures with imports largely outstrip export revenues.  Liberalizing undertakings, such as
those expected to ensue from a multilateral round of negotiations, usually set off an investment cyclethat requires special care in sensitive areas such as employment relocation, currency stability, and
fiscal equilibrium.
5. All these elements make clear that developing countries must have some flexibility when
making use of trade-related investment measures.  Developing countries should be allowed some
latitude in devising policies that may attenuate the negative effects of investment cycles, create ahospitable environment for foreign and domestic investors, and promote social and economic
development, also addressing the situation of im poverished regions.  Thus, it would be fair andWT/GC/W/271
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imperative to review the concepts that led to the acceptance of horizontal and uniform TRIMs
disciplines without due consideration to the needs and singularities of developing countries.
6. Brazil therefore submits the following proposal to  the General Council and reserves its right
to complement it with other proposals or to further specify its particulars.
Proposal
7. Specific provisions shall be included in the TRIMs Agreement to provide developing
countries the necessary flexibility to implement development policies (intended to address, among
others, social, regional, economic, and technological concerns) that may help reduce the disparities
they face vis-à-vis  developed countries.
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