RESTRICTED
WORLD TRADE G/TRIMS/M/2
29August 1995
ORGANIZATION(95-2513)
Committee onTrade-Related Investment Measures
MINUTES OFTHE MEETING HELD ON15JUNE 1995
Chairman: Mr.Vassili Notis (Greece)
1. TheCommitteeonTrade-RelatedInvestmentMeasureshelditssecondmeetingon15June1995.
2. TheChairman recalled thatpursuant totheadhocarrangements regarding theparticipation
ofinternational intergovernmental organizations inmeetings ofWTO bodies1,theCommittee should
decide ateachofitsmeetings which organizations toinvite toattend itsnextmeeting. TheIBRD,
IMF, OECD, UNandUNCTAD hadexpressed theirinterest infollowing thework oftheCommittee
inanobserver capacity. Following consultations withMembers, representatives oftheseOrganizations
hadbeeninvited toattend thismeeting. Heproposed thattheCommittee formally confirm thisinvitation
andthattheCommittee alsoagree toinvite these Organizations toattend thenextmeeting ofthe
Committee.
3. Itwassodecided.
4. TheCommittee adopted thefollowing agenda:
A. Rules ofprocedure
B. NotificationsunderArticle5.1oftheAgreementonTrade-RelatedInvestmentMeasures
C. Notification procedures under Articles 5.5and6.2
D. Procedures forimplementing Article 7.3
E. Other Business
- derestriction ofdocuments
F. Dates ofmeetings oftheCommittee
A. RULES OFPROCEDURE
5. TheChairman drewtheCommittee 'sattention todraftrulesofprocedure fortheCommittee,
which werecontained inanannex toaninformal notebytheSecretariat of30May. Contrary towhat
wasexpected atthetimeofthecirculation ofthese draftrules ofprocedure, therules ofprocedure
1Document WT/GC/M/3, page 3anddocument G/C/M/2, page 2G/TRIMS/M/2
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oftheCouncil forTrade inGoods2,which formed thebasisfortheproposed rulesfortheCommittee,
hadnotyetbeenformally adopted bytheGeneral Council. TheCommittee therefore wasnotina
position toadopt theproposed rules atthepresent meeting.
6. TheChairman thenmade several remarks toexplain certain elements oftheproposed rules
ofprocedure. These proposed rules weremodeled ontherulesofprocedure adopted bytheCouncil
forTrade inGoods, butwithsome adaptations, which wereessentially ofthreekinds. First, inrespect
ofitems (i)and(iv),ithadbeennecessary totakeintoaccount thatonsome procedural matters the
AgreementonTRIMscontainedprovisionswhichdifferedsomewhatfromtherulesofprocedureadopted
bytheCouncil forTrade inGoods. Forexample, whereas under theCouncil 'srules ofprocedure
theelection ofavice-chairperson wasoptional, under Article 7.1oftheAgreement theelection of
avice-chairperson wasmandatory. Second, inregard toitems (ii)and(iii)oftheproposed rules of
procedure, which dealt withprocedures fortheconvening ofmeetings, informal consultations had
indicated thatitwasgenerally feltthat,inviewofthetechnical nature ofthework ofthesubsidiary
bodies oftheCouncil, itwasdesirable tocirculate anotice convening ameeting earlier thanprovided
forintheCouncil 'srulesofprocedure. Itwasalsoagreed thatthere wasnoneedforthecirculation
ofadefinitive agenda oneortwodaysbefore ameeting. Third, items (v)and(vi)oftheproposed
rules, which dealtwithquorum anddecision making, wereprovisions onwhich informal consultations
hadresulted inastandard formulation tobeusedintherules ofprocedure ofallsubsidiary bodies
oftheCouncil forTrade inGoods.
7. TheCommittee tooknoteofthestatement made bytheChairman anddecided torevert tothe
question ofitsrulesofprocedure aftertheGeneral Council hadformally approved therulesofprocedure
oftheCouncil forTrade inGoods.
B. NOTIFICATIONS UNDER ARTICLE 5.1
8. TheCommitteehadbeforeittwentynotificationsreceivedunderArticle5.1.Thesenotifications
were contained intheG/TRIMS/N/1/.../- series ofdocuments.
9. TheChairman saidthatinformal consultations hadbeenheldtodiscuss howtheCommittee
wastoproceed inrespect ofthenotifications. Itwasgenerally agreed thatitwasnotthejobofthe
Committee toundertake acollective evaluation ofthelegalvalidity ofeachnotification received under
Article 5.1.Rather, thestatements made during theconsultations suggested thatanypoints made in
respect ofindividual notifications were likely tobeofafactual nature anddesigned toseekabetter
understanding ofthenotified measures. There appeared tobegeneral acceptance thatanopportunity
should begiven todelegations toseekanysuchclarifications intheCommittee. TheChairman said
thathewould openthefloor foranydelegation wishing tospeak. Itwasforindividual delegations
todecide whatpoints theywished tomake, itbeing understood thatdelegations towhom questions
were addressed might notbeabletorespond directly andwould needtimetoprepare theirreplies.
10. Therepresentative ofPoland welcomed thenotifications submitted under Article 5.1,which
contributed togreater transparency andabetter understanding ofnational trade régimes inthearea
oftrade-related investment measures. However, thenotifications raised aserious problem regarding
thelegalcharacterization ofthenature ofmany ofthenotified measures. Thisproblem arose from
theabsence intheAgreement ofaprecise definition oftheconcept ofatrade-related investment measure
andfromtheoverlapbetweenArticle3.1(b)oftheAgreementonSubsidiesandCountervailingMeasures
("Subsidies Agreement") andparagraph 1(a)oftheillustrative listannexed totheTRIMs Agreement.
Especially inthose cases inwhich measures notified asTRIMs wererelated tofinancial assistance of
2Document G/C/W/2G/TRIMS/M/2
Page3
akindcovered bythedefinition oftheterm"subsidy" inArticle 1.1oftheSubsidies Agreement, such
astaxexemptions, thequestion arose whether themeasure wascovered under theSubsidies Agreement
orunder theTRIMs Agreement. Theimportance ofthisissuestemmed fromthefactthat,while the
provisions regarding notification requirements andtransition periods inrespect ofmeasures inconsistent
withArticle 3.1(b) oftheSubsidies Agreement werenotsignificantly different from theprovisions
inArticles 5.1and5.2oftheTRIMs Agreement, subsidies covered byArticle 3.1(b) oftheSubsidies
Agreement could besubject tocountervailing measures applied byother WTO Members. Nosimilar
remedy wasavailable toMembers inregard totrade-related investment measures. Hisdelegation would
welcome theviews ofotherMembers onthisproblem which wasduetoalackofprecision intheTRIMs
Agreement andtotheexistence ofoverlap between theSubsidies Agreement andtheTRIMs Agreement.
11. Therepresentative oftheUnited States stated thattheissueraised bytherepresentative ofPoland
regarding therelationship between Article 3.1(b) oftheSubsidies Agreement andparagraph 1(a)of
theillustrative listannexed totheTRIMs Agreement wasnotunanticipated bythenegotiators ofthe
Agreement. Theexistence ofanoverlap between theSubsidies Agreement andtheTRIMs Agreement
waswellknown atthetimeofthenegotiations. Infact,inthefinalphase oftheUruguay Round
negotiations onTRIMs, adeliberate decision hadbeentaken andaccepted thattheTRIMs Agreement
would apply tomeasures applied inreturn foradvantages. Thisoverlap didnotcreate aparticular
problem. Many measures taken byWTO Members weresubject toanumber ofdifferent obligations
under various WTO instruments. There wasnolegalconflict between Article 3.1(b) oftheSubsidies
Agreement andparagraph 1(a)oftheillustrative listintheTRIMs Agreement. Bothobligations existed
andneeded tobehonoured. Itwastherefore tobeexpected thatnotifications would bemade under
theSubsidies Agreement covering thesame information asnotifications made inthecontext ofthe
TRIMs Agreement. Thefactthatmeasures were subject tonotification requirements inthecontext
ofdifferent WTO Agreements wasnotamatter ofconcern.
12. Therepresentative oftheUnited States thenmade several comments ofageneral nature on
thenotifications received under Article 5.1.First, hisauthorities werepleased withtheresults ofthe
notification process andgratified toseethevolume and,forthemostpart,quality, ofthenotifications
submitted. Hisdelegation wasnotentirely confident thatallmeasures thatshould havebeennotified
hadbeennotified andhereserved hisdelegation 'srights inthisregard. Thenotifications confirmed
theexpectation ofhisdelegation thatTRIMs werewidespread butnotpervasive, i.e.many countries
usedTRIMs butwithin individual countries TRIMs were confined toasmall number ofproducts.
Thiswasareason forcomfort inrespect ofthetransition periods. Second, itwasamatter ofconcern
tohisdelegation thatanumber ofnotifications didnotfittheagreed standard format. Itwasessential
thatMembers comply withtheagreed standard format toensure thatallnecessary information was
made available toenable other Members tounderstand thenature ofthenotified measures. Third,
twonotifications hadbeenreceived wellafterthedeadline. Hisdelegation tooktheobligations under
theAgreement veryseriously andwasoftheviewthatMembers which didnotmeetthedeadline laid
down inArticle 5.1didnotbenefit fromthetransition period. However, thisdidnotmean thatthese
notifications were devoid ofvalue; totheextent thatthese notifications reflected anunambiguous
commitment toeliminate themeasures within therelevant period oftime, other Members might wish
totakethiscommitment intoaccount inexercising theirrights.
13. Therepresentative ofUruguay saidthathisdelegation would intheverynearfuture submit
completeinformationinaccordancewiththeagreedstandardformatonthemeasuresnotifiedindocument
G/TRIMS/N/1/URY/1.
14. Therepresentative ofCanada saidthathisauthorities werepleased withthenumber andquality
ofthenotifications submitted under Article 5.1. With respect tostatements appearing inafew
notifications totheeffect thatthenotification ofameasure waswithout prejudice tothecompatibility
withtheAgreement ofthenotified measure, hisdelegation wasoftheviewthatitwasquiteclearthatG/TRIMS/M/2
Page4
Article 5.1pertained onlytothenotification ofmeasures thatwereinconsistent withtheAgreement
andthatwere required tobeeliminated during thetransition periods provided inArticle 5.2. He
welcomed theannouncement bytherepresentative ofUruguay ofthesubmission ofamore detailed
notification andwould liketoseethesame withother delegations which hadmade notifications that
were notinaccordance withtheagreed standard format. Inregard tothenotification submitted by
Colombia3,herequested clarification astotheexact dateofthemostrecent decree mentioned inthis
notification andontheextent towhich thisdecree provided forpreferential treatment formembers
oftheAndean Pact. Inrespect ofthenotification submitted byIndia4,heasked what wasthedate
ofentry intoforce ofthedecree inquestion, what wastheprevious decree towhich itrelated, and
towhatextent themostrecent decree increased ordecreased thedegree ofinconsistency ofthemeasure
withtheAgreement.
15. TherepresentativeofIndiasaidthathisdelegationwouldshortlyprovideanswerstothequestions
raised bytherepresentative ofCanada andsubmit detailed information onthemeasures inquestion
inaccordance withtheagreed standard format.
16. Therepresentative ofMexico, referring totheremarks made bytheChairman inhisintroduction
ofthisagenda item, stated thatitwashisunderstanding that,inaddition toquestions ofafactual nature
onnotifications submitted under Article 5.1,itwasalsoappropriate fordelegations toraisefactual
questions onmeasures thathadnotbeen notified. Thesubstantive disciplines wereamore important
aspect oftheAgreement thanthenotification requirements. Therefore, ifanyMember haddoubts
astomeasures applied byother Members thathadnotbeennotified, thatMember should havean
opportunity toaskquestions ofafactual nature inrespect ofsuchmeasures. Henoted thathisdelegation
hadinitsnotification made astatement ofthetypementioned bytherepresentative ofCanada and
explained thatthisstatement wasmotivated bythefactthatforanumber ofreasons itwasoften very
difficult todetermine inagiven casewhether ameasure wasinconsistent withtheAgreement. First,
theAgreement made itclearinseveral places thatinaddition toArticles IIIandXIother provisions
ofGATT 1994needed tobetaken intoaccount indetermining whether aTRIM wasinconsistent with
theAgreement. Thus Article 2.1provided thattheprohibition contained inthatprovision ofTRIMs
inconsistent withArticle IIIorArticle XIwas"[w]ithout prejudice tootherrights andobligations under
GATT 1994". Article 3provided that"[a]ll exceptions under GATT 1994shallapply, asappropriate,
totheprovisions ofthisAgreement". Second, uncertainty asregards thecharacterization ofameasure
asaTRIM wasalsocaused bythelackofageneric definition intheAgreement ofwhatconstituted
atrade-related investment measure. ThefactthattheAgreement onlyincluded anillustrative listof
TRIMs meant thatitwaspossible thatmeasures notexplicitly identified inthatlistwerealsosubject
tothedisciplines oftheAgreement. Inviewofthese difficulties ofinterpretation, hisauthorities had
preferred, intheinterest oftransparency, tomake anotification ofcertain measures rather thanmaking
unilaterally adetermination thatthemeasures were notinconsistent withtheAgreement.
17. Therepresentative oftheEuropean Communities expressed hissatisfaction withthenumber
ofnotifications submitted under Article 5.1.Heurged delegations which hadmade notifications that
didnotfollow theagreed standard format tosubmit more detailed information induecourse andhe
reserved hisdelegation 'srights inrespect ofnotifications thathadbeensubmitted afterthedeadline
stipulated inArticle 5.1.
18. Inresponse tothepoints raised bytherepresentative ofCanada, therepresentative ofColombia
explained thatthere werefourlegalinstruments relevant tothemeasures described inthenotification
3Document G/TRIMS/N/1/COL/1
4Document G/TRIMS/N/IND/1G/TRIMS/M/2
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submitted byherdelegation.5InSeptember 1993, anagreement hadbeenconcluded between three
members oftheAndean Pact, followed byasupplementary agreement concluded inMay1994. This
supplementaryagreementhadinadvertentlybeenomittedinthenotification.Theagreementsconcluded
inthecontext oftheAndean Pacthadbeenimplemented inColombian domestic lawbytwodecrees
enacted in1993and1995, respectively. Inrespect oftheissueofthenature ofthepreferential treatment
accorded tomembers oftheAndean Pact, sheclarified thatthemeasures notified byherdelegation
applied onlytothethree members oftheAndean Pactthatwereparties totheautomotive agreement
(Colombia, Ecuador andVenezuela). These measures provided forasub-regional content requirement,
which could bemetbyusing parts originating inanyofthethree countries.
19. Therepresentative ofJapan stated thathisauthorities were pleased withthenumber of
notifications received butwerealsoconcerned about thefactthatseveral notifications hadbeensubmitted
after theexpiry ofthedeadline ofArticle 5.1. Inaddition, some notifications didnotmeet the
requirements oftheagreed standard format. Forexample, inanumber ofcases therewasnoindication
oftheexpected dateoftermination ofthemeasure. Heexpressed thehope thatinsuch cases
supplementary information would beprovided induecourse.
20. Therepresentative ofVenezuela stated thatitwasimportant totakeaccount ofthenature of
thenotification process under Article 5.1when considering theissue ofnotifications submitted after
theexpiry ofthedeadline ofArticle 5.1. Inthisconnection, heendorsed theviewexpressed bythe
representative oftheUnited States thatanotification ofameasure inconsistent withtheAgreement
reflected avaluable commitment onthepartofthenotifying Member toeliminate thatmeasure over
acertain period oftime. There wastherefore aneedforreasonable flexibility onthismatter, having
regard totheflexibility shown inother WTO bodies withrespect tosimilar matters andbearing in
mind thepractical difficulties faced byMembers insubmitting theirnotifications ontime.
21. Therepresentative ofMalaysia noted thatthestandard format fornotifications under Article 5.1
wasimportant asameans tofacilitate thenotification process butthatcompliance withthisformat
wasnotanobligation under theAgreement. Themainobligation under theAgreement wastoprovide
necessaryinformationonnotifiedmeasures.Thelargenumberofnotificationrequirementsinthevarious
WTOAgreementshadcausedpracticalproblemstodelegations.Hisdelegationwouldattempttoimprove
thenotification submitted under Article 5.1byrevising thenotification inaccordance withtheagreed
standard format, buthenoted thatinsome cases thenature ofthemeasures applied byhiscountry
wassuchthatitmight notbepossible tofullyrespond toalltheitems contained intheformat.
22. Therepresentative ofSwitzerland saidthathiscountry haddeposited instruments ofratification
oftheWTO Agreement on1June. IfanyTRIMs wereapplied bySwitzerland, theywould benotified
induecourse, buthedoubted thatthere were suchmeasures.
23. Inregard tothequestion oflatenotifications, therepresentative ofKorea stated that,while
under Article 5.1Members were required tosubmit notifications within three months afterthedate
ofentry intoforce oftheWTO Agreement, itwasnotclearthatthesubmission ofatimely notification
under Article 5.1wasanecessary condition foraMember tobeabletobenefit from thetransition
period inArticle 5.2.Thismatter required further discussion intheCommittee. Inanyevent, ifthe
Committee weretotaketheviewthatintheabsence ofatimely notification under Article 5.1aMember
could notinvoke Article 5.2,thatinterpretation should notbeseenasaprecedent forsimilar issues
arising under other WTO Agreements.
5Document G/TRIMS/N/1/COL/1G/TRIMS/M/2
Page6
24. TherepresentativeofIndonesiaexplainedthathisauthoritieshadintendedtosubmitanotification
within thetimeperiod prescribed inArticle 5.1buthadencountered difficulties inregard tothequestion
ofwhether certain measures were toberegarded asTRIMs orassubsidies. Hereferred inthis
connection tothepoints made earlier atthemeeting bytherepresentative ofPoland. Heappealed
tootherdelegations toshow some flexibility andunderstanding inthismatter andsupported theremarks
oftherepresentative ofKorea ontheneedformore discussion onthequestion ofwhether Members
which hadsubmitted latenotifications could benefit from thetransition period inArticle 5.2.
25. Therepresentative ofNewZealand welcomed thenotifications made sofarunder Article 5.1
andtheundertakings given atthismeeting toprovide further information. Sheurged delegations which
hadnotprovided information inaccordance withtheagreed standard format todosoinduecourse.
Herdelegation would welcome theopportunity torevert tothenotifications inthefuture, aftermore
detailed information hadbecome available.
26. Incommenting onthepoints made ontheissueoflatenotifications, therepresentative ofSouth
Africa stated thatadistinction should bemade between obligations ofasubstantive nature andobligations
ofaprocedural nature. Itwasimportant tobearinmind inthecaseoftheTRIMs Agreement and
several other WTO Agreements thatthetransition period wasfixed andnotaffected bythedateof
submission ofanotification.
27. Therepresentative ofKorea, referring tothestatement made bytherepresentative ofPoland,
saidthat,notwithstanding theintervention bytherepresentative oftheUnited States, itwasnecessary
togivefurther consideration totheproblem ofthedefinition ofthecoverage oftheTRIMs Agreement
inrelation tothatoftheSubsidies Agreement. Inaddition, there wasaquestion raised earlier atthe
meeting byhisdelegation regarding therelationship between Articles 5.1and5.2oftheTRIMs
Agreement. Heproposed thattheSecretariat prepare abackground notewithinformation onthe
negotiating history oftheTRIMs Agreement inrelation tothese twoquestions ofinterpretation.
28. Therepresentative oftheSecretariat stated that,ifsorequested bytheCommittee, theSecretariat
could seewhatbackground information could beprovided onthedrafting history ofrelevant provisions
thatwould beofuse.
29. Therepresentative ofMexico stated that,ifindividual delegations hadquestions regarding the
evolution oftheTRIMs negotiations, themostpractical wayofproceeding wasforsuchdelegations
tocontact theSecretariat andseekfurther clarification. However, itwould beinappropriate forthe
Committee tomandate theSecretariat toundertake work thatcould involve questions ofinterpretation
oftheAgreement. Theauthority tointerpret theAgreement wasvested notintheCommittee butin
other WTO bodies.
30. TherepresentativeoftheUnitedStatesdoubtedthattheSecretariatwouldfindanyusefulmaterial
regarding thenegotiating history oftheAgreement inrespect ofthepoints raised bytherepresentative
ofKorea. Inanyevent, inthefinalanalysis itwasnotforindividual delegations ortheCommittee
tointerpret theAgreement. Theissue oftherelationship between Articles 5.1and5.2wasamatter
forprocedures under theWTO Dispute Settlement Understanding. Whether thismatter would ever
beraised inthatcontext depended upontheflexibility shown byindividual Members inexercising their
rights. Hereiterated inthisconnection thatalatenotification wasstillvaluable insofarasitrepresented
anunambiguous commitment onthepartofthenotifying Member toeliminate itsmeasures overa
fixedperiod oftime. Hewelcomed thestatements bytherepresentatives ofUruguay, IndiaandMalaysia
thattheirdelegations would submit additional information intheformoftheagreed standard format.
Inresponse totheremark oftherepresentative ofMalaysia onthestandard format, hesaidthatall
Members hadvoluntarily undertaken anobligation inthisCommittee tousethestandard format when
making notifications under Article 5.1.Onthedistinction made bytherepresentative ofSouth AfricaG/TRIMS/M/2
Page7
between obligations ofasubstantive nature andobligations ofaprocedural nature, herecalled that
atarecent meeting oftheCouncil forTrade inGoods anumber ofdelegations hadmade thepoint
thatobligations relating toprocess were asimportant assubstantive obligations.
31. Therepresentative oftheEuropean Communities saidthat,inviewoftheimportance ofthe
notification procedure ofArticle 5.1,adebate onsubstantive versus procedural obligations wasnot
helpful. Inregard totheagreed standard format, hepointed outthat,contrary towhatseemed tobe
implied bytheremarks oftherepresentative ofMalaysia, theAgreement itself made itclear thatit
wasnotsufficient tonotify thefactthataTRIM existed which wasinconsistent withtheAgreement
butthatinformation ontheprincipal features oftheTRIM hadtobeprovided. Theprovision ofadequate
information innotifications under Article 5.1wasalsoimportant fortheprocess ofnotifications under
Article 5.5.Hisdelegation wasoftheviewthatthetextoftheAgreement wasquite clearregarding
theissue oftherelationship between Articles 5.1and5.2andthatinanyevent itwasnotforthe
Committee tointerpret theAgreement. There wastherefore noneedtoengage inadiscussion ofthis
matter intheCommittee.
32. TheCommittee tooknoteofthenotifications received under Article 5.1andthestatements
made onthese notifications andagreed torevert tothismatter atitsnextmeeting.
C. NOTIFICATION PROCEDURES UNDER ARTICLES 5.5AND 6.2
Article 5.5
33. TheChairman recalled thatatitsfirstmeeting theCommittee hadbriefly discussed theissue
oftheimplementation ofthenotification requirement ofArticle 5.5. Assuggested atthatmeeting,
theSecretariat hadmade aninformal proposal forastandard format fornotifications under this
provision.6
34. Therepresentative ofColombia indicated thatherauthorities needed more timetostudy the
proposed format, which hadnotyetbeenmade available inSpanish, andshetherefore reserved her
delegation 'srighttomake comments atalaterstage.
35. Therepresentative oftheEuropean Communities considered thattheproposed format wasin
linewiththethinking ofhisdelegation onwhatshould becontained innotifications under Article 5.5.
HewelcomedinparticularthefocusonthespecificrequirementsofArticle5.5,whichwerewellcovered
inpoints 4-6oftheproposed format. Heasked theSecretariat toexplain whatwasintended byitem7.
36. Therepresentative oftheSecretariat explained thatthethought behind thesuggestion initem7
wasthat,instead ofasking Members torepeat information thathadalready been provided inthe
underlying notification under Article 5.1oftheTRIM thatwasapplied toanewinvestment, itwas
more efficient toaskMembers tosimply indicate anyinformation ontheapplication oftheTRIM to
thenewinvestment thatdiffered from theinformation provided intheearlier notification under
Article 5.1.
37. Therepresentative oftheEuropean Communities saidthatthisexplanation bytheSecretariat
underlined theimportance ofadequate notifications under Article 5.1.
6Secretariat non-paper dated 6June 1995, No.1853G/TRIMS/M/2
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38. Therepresentative oftheUnited States stated thattheSecretariat 'sproposal wasagood basis
foradecision onaformat fornotifications under Article 5.5.Hewelcomed inparticular thesuggestion
initem5.
39. Therepresentative ofPakistan wished tohavemore timetoreflect ontheimplications ofthe
Secretariat 'sproposal, bothfrom asubstantive andfrom aprocedural point ofview. Referring to
comments made under theprevious agenda itemontheimportance oftheagreed standard format for
notifications under Article 5.1,hestated thataformat fornotifications didnotrepresent asubstantive
obligation. ItwasforeachMember todecide whatitregarded astheprincipal features ofameasure
which itconsidered should benotified. Iftheprovision ofinformation along thelinesofthestandard
format developed forArticle 5.1hadbeenasubstantive obligation, thatformat would haveformed
partoftheAgreement.Heexpressedconcernsparticularlywithregardtoparagraph5oftheSecretariat's
proposal andstressed inthisrespect thatthedecision onwhether theextension ofaTRIM toanew
investment wasnecessary within themeaning ofArticle 5.5wasinthehands ofindividual Members.
40. Therepresentative oftheUnited States reacted totheremarks made bytherepresentative of
Pakistan bysaying thatinhisearlier remarks hehadnotsuggested thatthestandard format for
notifications under Article 5.1conditioned theobligations under theAgreement. Rather, hispoint
wasthatMembers hadaccepted anobligation intheCommittee tousethisformat when making their
notifications under Article 5.1. WTO Members hadaccepted similar obligations inother contexts,
forexample, under theSubsidies Agreement. While heagreed thatitwasinthefirstinstance for
individual Members tointerpret therequirements ofArticle 5.5inorder tocomply withthisprovision,
ifother Members believed thataMember hadnotmettheconditions ofthisprovision theycould refer
thematter toadispute settlement proceeding. Afundamental requirement ofArticle 5.5wasthatthe
extension ofaTRIM toanewinvestment must benecessary inorder toensure alevelplaying field
forexisting investors. Item5oftheSecretariat 'sproposal washelpful inthatitrequested relevant
information toallow other Members tounderstand whyaTRIM wasapplied toanewinvestment.
41. Therepresentative ofArgentina welcomed theproposal bytheSecretariat asagood basis to
begin work onaformat fornotifications under Article 5.5. Hethenmade several points ofageneral
nature inresponse tocomments made under thisandtheprevious itemontheagenda ontherelevance
ofnotification formats. First, hedrewadistinction between provisions which required priornotification
asanecessary condition fortheapplication ofameasure, andnotifications pertaining toprovisions
which leftittoindividual Members tointerpret theconditions ofapplication, subject tothepossibility
ofrecourse todispute settlement byother Members. Notifications ofnon-actionable subsidies under
theSubsidies Agreement fellintheformer category; notifications under Article 5.5oftheTRIMs
Agreement belonged tothelattercategory. Second, herecalled thathisdelegation hadinanother context
expressed doubts astowhether avaliddistinction could bemade between obligations ofasubstantive
nature andobligations ofaprocedural nature.
42. Therepresentative ofPoland noted thatoneoftherequirements inArticle 5.5wasthatthe
products ofthenewinvestments towhich anexisting TRIM wasextended be"like products" ofthe
established enterprises. Inthisconnection, item4oftheproposed format might needtobereformulated
torequest more explicitly evidence thattheproduct covered bytheTRIM applied toanewinvestment
wasalikeproduct totheproduct covered bytheoriginal TRIM.
43. Therepresentative oftheUnited States stated thatthepurpose ofnotifications wastoprovide
asufficient leveloftransparency toallow other Members toassess whether therewascompliance with
therequirements oftheAgreement. While therepresentative ofPoland wascorrect thatArticle 5.5
used theterm "like product", intheabsence ofageneric definition ofthisterm intheGATT
jurisprudence, theonlyrational waytohandle thisrequirement inthecontext ofnotifications wasto
simply asknotifying Members toidentify thespecific product towhich theTRIM related, asproposedG/TRIMS/M/2
Page9
initem4oftheSecretariat 'sdraftformat. Based onsuchinformation, other Members could come
totheirownconclusions astowhether ornottheproducts wereliketheproducts covered bytheTRIM
applied toexisting enterprises. Iftherewasdisagreement onthisissue, Members could haverecourse
todispute settlement.
44. Therepresentative ofthePhilippines sawtheSecretariat 'sproposal asagoodbasisforfurther
work andexpressed hisagreement withthecomments made bytherepresentative oftheUnited States
ontheissue ofthetreatment ofproduct coverage initem4oftheproposed format.
45. Therepresentative ofIndia expressed reservations onitem5oftheproposed format, which
inhisviewimposed obligations thatwentbeyond theobligations contained intheAgreement.
46. TheChairman concluded thatitseemed generally agreed thattheformat proposed bythe
Secretariat wasagood basisfordeveloping astandard format, subject tosome minor improvements.
TheCommittee would revert tothismatter atitsnextmeeting. Inthemeantime itwould beuseful
ifdelegations having specific comments could make theirsuggestions totheSecretariat. Inlightof
suchsuggestions, itmight benecessary tohaveaninformal meeting inadvance ofthenextformal
meeting oftheCommittee.
47. Itwassodecided.
Article 6.2
48. TheChairman recalled thatatthefirstmeeting oftheCommittee several delegations had
suggested thatfurther reflection wasnecessary oncertain aspects ofthenotification requirement of
Article 6.2. Another delegation hadhighlighted theimportance ofArticle 6.2asapossible means
forgathering information thatmight beuseful asabasis forthereview oftheAgreement provided
forinArticle 9.
49. Therepresentative oftheUnited States noted thatatthemeeting inMarch hisdelegation had
drawn attention totheinherent difficulty ofimplementing Article 6.2,which difficulty arose fromthe
factthattheAgreement lacked ageneric definition oftheterm"trade-related investment measure".
Hisdelegation believed thatapractical wayofimplementing thenotification requirement ofArticle 6.2
would betoagree thatMembers would provide information oninstruments inwhich information on
investment measures generically appeared. Thiswould bewithout prejudice totheviews ofMembers
ofwhether ornottheymaintained TRIMs asitwould simply beamatter ofapprising other Members
ofthepublications inwhich information onTRIMs could befound ifsuchTRIMs existed.
50. Therepresentative ofBrazil expressed some concern about thesuggestion made bythe
representative oftheUnited States asitseemed toimply thatMembers would havetonotify under
Article 6.2allinvestment rules applicable atalllevels ofgovernment within theirterritories.
51. TherepresentativeofCanadasaidthatthesuggestionoftheUnitedStateswasinterestingbecause
itcorresponded towhathisdelegation sawasthebasic objective ofArticle 6.2,which wastoprovide
abasisforenlarging theinformation ontheexistence ofTRIMs. However, theremight beother ways
toimplement thisprovision. Further reflection wasnecessary onthismatter. Forexample, therewas
aneedtodefine more closely thetypeofpublication envisaged byArticle 6.2. Thebestwayof
proceeding would betoinvite delegations tobring forward concrete suggestions andhaveinformal
consultations onthebasis ofsuchsuggestions.
52. Inresponse tothecomment bytherepresentative ofBrazil, therepresentative oftheUnited
States clarified thathehadnotintended tosuggest thatMembers would havetoprovide copies oflawsG/TRIMS/M/2
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andregulations; Article 6.2simply provided foranidentification ofpublications inwhich information
onTRIMs could befound. Hisproposal thatMembers identify publications containing information
oninvestment measures generally wasintended toovercome theproblem thattheAgreement didnot
contain ageneric definition ofwhatwasatrade-related investment measure.
53. Therepresentative ofPoland stated thattheimplementation ofArticle 6.2would befacilitated
ifitwasagreed thatMembers would notberequired toprovide under Article 6.2information onlaws
andregulations thathadalready beenannexed tonotifications under Article 5.1.
54. Therepresentative ofArgentina stated thattheimplementation ofArticle 6.2raised someserious
difficulties. Hisdelegation wasprepared togivefurther consideration tothesuggestion bytheUnited
States. Itwasimportant thatArticle 6.2beimplemented inamanner which would notimpose agreat
administrative burden onMembers.
55. Therepresentative ofSingapore asked whether theproposal bytheUnited States meant that
Members would needtonotify allinvestment measures, including those relating totrade inservices.
56. Therepresentative oftheUnited States reiterated thathisproposal didnotenvisage notification
ofanymeasure, butrather anidentification ofpublications inwhich information appeared oninvestment
measures asapractical wayofimplementing Article 6.2.
57. Therepresentative ofSingapore expressed concerns about thesuggestion ofalisting of
publications containing information oninvestment measures onthegrounds thattheAgreement only
coveredtradeingoods.Shealsostressedthat,inconsideringthenotificationrequirementofArticle6.2,
account should betaken ofthefactthatsmall delegations already experienced serious difficulties in
meeting themany notification requirements under WTO Agreements. Sherequested theChairman
toholdinformal consultations onways ofimplementing Article 6.2.
58. Therepresentative ofVenezuela supported thesuggestion forinformal consultations asthere
seemed tobedifferences ofviewonthescope ofArticle 6.2.
59. Therepresentative oftheUnited States clarified thathisproposal onArticle 6.2wasnotmeant
tosuggest thatthisprovision substantively covered allinvestment measures. Rather, theproposal was
anattempt tofindapractical waytogiveeffect tothenotification requirement ofArticle 6.2,bearing
inmind thatthisprovision usedanundefined term.
60. TheCommittee tooknoteofthestatements made andagreed torevert tothismatter atitsnext
meeting. Inthemeantime, theChairman would holdinformal consultations.
D. PROCEDURES FOR IMPLEMENTING ARTICLE 7.3
61. TheChairman saidthatArticle 7.3required theCommittee tomonitor theoperation and
implementation oftheAgreement andtoreport thereon annually totheCouncil forTrade inGoods.
While notamatter ofgreat urgency, itwasuseful togivesome thought tothequestion ofhowbest
toimplement thisprovision. OnthefirstpartofArticle 7.3,i.e.therequirement thattheCommittee
monitor theoperation andimplementation oftheAgreement, theChairman asked delegations tostate
their views astohowtheCommittee could carry outthismandate. Astothesecond aspect of
Article 7.3,i.e.theannual report totheCouncil forTrade inGoods, perhaps themostefficient and
straightforward approach wastofollow theprocedure thathadexisted under many oftheTokyo Round
Agreements andArrangements, which contained annual reporting requirements similar toArticle 7.3.
Under thisprocedure, annual reports contained factual information ontheactivities oftherelevant
body(e.g.datesofmeetings, notifications received anddecisions taken during thereview period, etc.).G/TRIMS/M/2
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Itwould seemthatinthecaseofthisCommittee theformat ofsuchareport wasrather straightforward,
given thatmost ofthework oftheCommittee related tonotifications. Thus thereport could have
twomainsections; afirstsection dealing withtheorganization oftheCommittee 'swork andasecond
section dealing withtheactivities oftheCommittee withrespect tonotifications. Thefirstsection
would contain information onthenumber anddatesofmeetings heldbytheCommittee andondecisions
taken bytheCommittee inrespect ofmatters suchasrulesofprocedure andobservers. Thesecond
section would, ontheonehand, provide information onaction ofaprocedural nature taken bythe
Committee inrespect ofnotification requirements (e.g.therecommendation addressed bytheCommittee
totheCouncil forTrade inGoods ontheimplementation ofArticle 5.1incaseofMembers which
accepttheWTOAgreementafter1January1995andtheworkoftheCommitteeonnotificationformats).
Ontheother hand, thissection would contain factual information onnotifications received under the
various notification provisions oftheAgreement. IftheCommittee decided tofollow thisapproach,
theSecretariat could prepare adraftreport foradoption bytheCommittee atameeting intheautumn.
62. Therepresentative oftheEuropean Communities saidthatahorizontal approach should be
taken tothequestion ofprocedures andformats forannual reports bythesubsidiary bodies oftheCouncil
forTrade inGoods. Hesawnoproblems withtheproposal made bytheChairman butwished tohave
some more timeforreflection.
63. Therepresentative ofArgentina agreed withtheremark made bytherepresentative ofthe
European Communities ontheneedforahorizontal approach. Itwould beuseful iftheSecretariat
could prepare adraftreport bythetimeofthenextmeeting oftheCommittee.
64. TherepresentativesofVenezuelaandtheUnitedStatesagreedwiththeproposalbytheChairman
ontheformat fortheannual report andrequested thattheSecretariat prepare adraftreport along the
linessuggested bytheChairman.
65. TheChairman concluded bysaying thatinaccordance withhissuggestion theSecretariat would
prepare adraftannual report forconsideration bytheCommittee atitsnextmeeting.
E. OTHER BUSINESS
66. Therepresentative oftheUnited States requested theChairman toholdconsultations onthe
issue ofderestriction ofnotifications received under Article 5.1onceahorizontal decision hadbeen
taken intheWTO onthequestion ofderestriction ofdocuments.
67. TheCommittee tooknoteofthestatement made bytherepresentative oftheUnited States.
F. DATES OFMEETINGS OFTHE COMMITTEE
68. TheChairman saidthat,asfarastheCommittee 'sprogramme intheshorttermwasconcerned,
itwould seem thatonemore meeting wasnecessary thisyearinorder todealwithanumber ofpoints
thathadbeenraised inconnection withthenotifications submitted under Article 5.1.Inaddition, it
waslikely thattheCommittee would receive notifications under Article 5.1fromMembers thataccepted
theWTO Agreement after1January 1995. TheCommittee alsoneeded tofinish itsworkonnotification
requirements under Articles 5.5and6.2andtoadopt itsannual report totheCouncil forTrade inGoods.
Hetherefore suggested thattheCommittee holditsnextmeeting toward thebeginning ofOctober.
69. Itwassodecided.