WORLD TRADE
ORGANIZATIONWT/WGTI/7
11 July 2003
(03-3792)
Working Group on the Relationship
between Trade and Investment
REPORT TO THE GENERAL COUNCILWT/WGTI/7
Page i
TABLE OF CONTENTS
Page
I. INTRO DUCTION ................................................................................................................. ...1
II. PROCEDURAL IN FORMATION..........................................................................................1
A. S OURCES AND MATERIALS USED IN THE GROUP 'S WORK .........................................................1
B. M EETINGS HELD IN 2002-2003...................................................................................................1
C. C OOPERATION WITH OTHER INTERGOVERNMENTAL ORGANIZATIONS ......................................1
III. WORK OF THE WORKING GROUP IN 2002-2003...........................................................2
A. T ECHNICAL ASSISTANCE ACTIVITIES PURSUANT TO PARAGRAPH 21 OF THE DOHA
MINISTERIAL DECLARATION ......................................................................................................2
B. I SSUES RELATED TO PARAGRAPH 22 OF THE DOHA MINISTERIAL DECLARATION ....................3
1. Scope and Definition......................................................................................................... ........3
2. Transparency ................................................................................................................. ...........4
3. Development Provisions ....................................................................................................... ....5
4. Non-discrimination and Modalities for Pre-establishment Commitments..........................6
5. Balance-of-payments Safeguards ............................................................................................7
6. Investors’ and Home Gove rnments’ Obligations...................................................................7
7. The Relationship Between a Multilate ral Framework on Investment and the
GATS........................................................................................................................... ...............8
8. General...................................................................................................................... .................9
ANNEX 1: TEXT OF THE DOHA MINISTERIAL DECLARATION
ANNEX 2: SUMMARY OF CONTRIBUTIONS RECEIVED IN THE
WORKING GROUP ON THE RELATIONSHIP
BETWEEN TRADE AND INVESTMENT
ANNEX 3: TECHNICAL ASSISTANCE AND CAPACITY-BUILDING
ACTIVITIES HELD IN 2002-2003WT/WGTI/7
Page  1
I. INTRODUCTION
1. The Working Group on the Relationship between Trade and Investment was established by a
decision taken at the WTO’s First Ministerial Conference in Singapore in 1996.  Between 1997 and
2001, work was based on a Checklist of Issues Suggested for Study which the Group took note of at
its meeting in June 1997.  At the Fourth Ministerial Conference in Doha in 2001, the WorkingGroup's mandate was revised (Annex 1).
1
2. The present report is submitted by the Working Group in light of the decision taken by the
General Council at its meeting of 10 February 2003 that "the Ministerial Conference would ... have
before it, as the annual report of the General Council, a compilation of the 2002 Annual Reports of all
the WTO bodies, together with an update report concerning developments in 2003".2 This report
therefore needs to be read in conjunction with the 2002 Annual Report of the Working Group
(WT/WGTI/6).
II. PROCEDURAL INFORMATION
A. SOURCES AND MATERIALS USED IN THE GROUP 'S WORK
3. The work of the Working Group in 2003 has been based on written contributions by the
Secretariat and Members, and on statements by Members in the Group’s meetings. A list of all the
written contributions provided to the Group in 2002 – June 2003 is attached (Annex 2).
B. MEETINGS HELD IN 2002-2003
4. This report covers the last three meetings of the Working Group held under the Chairmanship
of Ambassador Seixas Corrêa (Brazil): on 3-4 December 2002; 14-15 April 2003; and 10-12 June
2003.  A full account of the discussions can be found in the minutes of the meetings, contained in
documents WT/WGTI/M/20, 21, and 22.  At its June meeting, the Group adopted its report to theGeneral Council.
3
5. The Working Group received regular updates on the Secretariat’s technical assistance
activities carried out under the Doha Ministerial Declaration, and continued to focus on the items set
out for clarification in paragraph 22 of the Doha Ministerial Declaration, as well as on additional
related subjects.  Provision was made at the meetings for Members to continue their discussions onthe Checklist of Issues Suggested for Study.
C. C
OOPERATION WITH OTHER INTERGOVERNMENTAL ORGANIZATIONS
6. The Doha Ministerial Declaration encouraged the WTO to work in cooperation with other
relevant inter-governmental organizations, particularly in providing enhanced support for technical
assistance and capacity building.  In this regard, all technical assistance activities carried out in 2003
under paragraph 21 of the Doha mandate have been undertaken jointly by the WTO and UNCTAD
Secretariats, in some cases in co-operation also with other agencies.  The IMF, World Bank,UNCTAD, OECD and UNIDO were invited to attend the Working Group's meetings in an observer
capacity.  These organizations have kept Members informed of their relevant activities and have
contributed to the debate in the Group’s meetings.  The Working Group is appreciative of the valuable
contributions to its work made by these inter-governmental organizations.
                                                     
1 WT/MIN(01)DEC, paras. 20-22.
2 WT/GC/M/78, para. 155.
3 This report covers the discussion that took place at the Group’s final meeting in 2002, and at its two
meetings in 2003.WT/WGTI/7
Page 2
III. WORK OF THE WORKING GROUP IN 2002-2003
7. This part of the report provides a summary of the discussions in the Working Group pursuant
to paragraphs 20-22 of the Doha Ministerial Declaration.
A. TECHNICAL ASSISTANCE ACTIVITIES PURSUANT TO PARAGRAPH 21 OF THE DOHA
MINISTERIAL DECLARATION
8. The WTO and UNCTAD Secretariats prepared a Note on "Future WTO-UNCTAD
Collaboration in the Area of Investment on Technical Assistance and Capacity Building for
Developing and Least-Developed Countries" (WT/ WGTI/W/161).  A written contribution was also
received from the EC (WT/WGTI/W/163).
9. The WTO and UNCTAD Secretariats continued to brief the Group regularly on their
technical assistance activities, most of which were conducted jointly. A list of all the technical
assistance and capacity building activities in 2002 – June 2003 is attached (Annex 3).  Based oncomments and suggestions from delegations, the WTO and UNCTAD also prepared an overview
paper on proposals for future investment-related technical assistance work.  The proposals addressed
several related themes, including improving the division of labour between the WTO and UNCTAD
to better reflect their respective areas of expertise; involving other international organizations with
expertise in the investment area more directly in support of the Doha mandate; and placing thefinancing of the coordinated programme of technical assistance activities on a secure long-term basis.
10. The Working Group expressed general satisfaction with the breadth and depth of the technical
assistance programme carried out by the WTO and UNCTAD, which had placed governments in a
better position to evaluate the implications of cl oser multilateral cooperation in investment, and to
take informed decisions on future investment-related work at Cancún. A number of delegations saidthat there was still much to be learned about the implications of a possible multilateral investment
framework and its impact on investment flows and national policies, and they underlined the need to
continue and expand the technical assistance programme beyond Cancún.  The point was made that
one- or two-day national and regional seminars, while beneficial, did not leave enough time to enable
participants to explore and understand the many complex subjects raised.  Others urged that regionalexperts needed to be involved more directly in future technical assistance activities, and that the
mandated cooperation between the WTO and UNCTAD should be expanded to include other
international and regional bodies with investment ex pertise.  There was also a suggestion that Geneva-
based officials should be encouraged to play a more active role in technical assistance activities in the
field.  The point was made that technical assistance and capacity building should extend beyond
examining the implications of closer multilateral cooperation in investment, and support developing
and least-developing countries’ efforts to improve components of the enabling environment forattracting FDI.
11. There was support for the suggestion that the division of labour between the WTO and
UNCTAD should be more clearly delineated in future activities, in order to avoid duplication or
overlap, and to ensure that both organizations accentuated their comparative advantages in the
delivery of technical assistance.  UNCTAD’s critical role in assisting developing and least-developedcountries to understand the development dimens ion of a possible investment framework was
reaffirmed, and delegations underlined the need to guarantee that adequate financial resources were
found to underwrite UNCTAD's collaboration with the WTO.
12. It was also understood that any ideas or propos als for continuing, expanding, or amending the
joint WTO-UNCTAD programme of technical assistance and capacity building in the investment areawould clearly depend on the nature of the mandate received from Ministers at the 5
th Ministerial
Conference in Cancún in September.WT/WGTI/7
Page 3
B. ISSUES RELATED TO PARAGRAPH 22 OF THE DOHA MINISTERIAL DECLARATION
1. Scope and Definition
13. Written contributions were received from Canada (WT/WGTI/W/157) and China
(WT/WGTI/W/159).
14. The Working Group was in agreement that the definition of investment would play a central
role in shaping any prospective multilateral investment framework, as it would delineate the scope
and reach of its substantive provisions and specific commitments.  Discussion continued to focus on
the relative merits of a narrow versus a broad definition of investment.
15. One view was that a narrow definition of in vestment would allow Members to attract FDI
effectively while avoiding financial risks.  By limiting the focus to FDI, a narrow definition would
most clearly reflect the mandate of the Doha Ministerial Declaration to secure transparent, stable and
predicable conditions for long-term, cross-border investment, while making it unnecessary to further
delineate an agreement's scope and coverage through operative provisions.  It would also allow any
framework to be focused on encouraging the economic development and trade promotion of host
countries, particularly developing countries, without exposing them to the inherent risks and
instabilities of speculative, short-term capital flows.  A narrow definition would also facilitate striking
a balance between the interests of host and home countries, thus commanding greater support amongWTO Members.
16. One suggestion, made in this context, was that a further distinction needed to be made
between different types of FDI, given their diffe rential impacts on – and implications for – the
"crowding out" of domestic investment, and the wider development, financial, macro-economic and
regulatory policies of governments. It was also suggested that in order to bring out the developmentpolicy implications in relation to these parameters further, studies would have to be undertaken on the
nature and effects of cross-border capital flows.
17. Another view was that a broad definition of investment would allow for a more flexibile
architecture – one that better reflected business behaviour in the contemporary world economy.
Attempts to define FDI in terms of imprecise concepts such as a lasting interest or an ownershipthreshold would interfere with the development of clear substantive provisions, and would not be
intrinsically meaningful.  In light of the evolving nature of international financial flows and new
forms of foreign investment, any agreement that ignored minority share holdings and/or strategic
alliances risked being obsolete. A broad definition would also ensure consistency with most existing
international investment agreements (IIAs), particularly bilateral investment treaties, which used
asset-based definitions.
18. It was noted that adopting a broad approach did not imply that all types of assets should
necessarily fall within the scope of an investment  agreement, or that all assets under its umbrella
should be covered with respect to all provisions at all times.  It was noted that various options existed
for excluding certain categories or sub-categories of assets within a broad definition.  The more
general point was also made that the eventual scope of an investment framework would depend not
only on the definition of investment used but also on the framework’s substantive provisions –particularly provisions dealing with non-discrimination, pre-establishment commitments,
development, exceptions, and balance-of-payments safeguards – and the structure of its specific
commitments.
19. It was suggested that an article on "Scope" could help to delineate the coverage of a possible
framework agreement and help to anchor a WTO investment accord more firmly and clearly withinthe framework of international trade and investment agreements (including WTO agreements).  It wasWT/WGTI/7
Page 4
also suggested that the Group would need to examine how the definition used in a prospective
investment agreement and the concept of "commercial presence" used in the GATS might be
reconciled.
20. One approach recalled was that different definitions could be used for the different phases of
investment – a narrow approach for market access and investment liberalization (pre-establishment),covering FDI only, and a broad approach, covering  a wide range of assets, for the protection of
investment once it had established locally (post-establishment).  Such an approach could maximize
the benefit of multilateral investment rules, while protecting countries from any negative effects of
short-term capital flows.
21. The point was made that the detailed issue of which specific types of investment should be
covered by an agreement was more relevant than the more abstract question of whether broad or
narrow approaches were preferable.  Some suggest ed that the dividing line between covered and non-
covered investments could be made clearer in the context of substantive negotiations should
consensus be reached on the main direction of a possible multilateral investment framework.  Others,
however, argued that clarity on the issue of definitions was an important prerequisite to achieving
consensus on future work on a possible multilateral investment framework.
2. Transparency
22. Written contributions were received from Canada (WT/WGTI/W/155), Japan
(WT/WGTI/W/158) and China (WT/WGTI/W/160).
23. It was reaffirmed that transparency played an important role in creating a predictable, stable
and secure climate for foreign investment.  It was also agreed that achieving greater transparency in
investment regimes brought benefits to host countries and investors alike.  While some saw this as anargument for incorporating transparency obligations  in a possible multilateral investment framework,
others questioned why binding international obligations were necessary at all, when it was in a
country’s self-interest to be "transparent".
24. Discussion in the Working Group continued to focus on the nature and scope of possible
transparency obligations.  It was suggested that existing transparency provisions in the WTO offered auseful starting-point for examining the kind of obliga tions that might be incorporated in a multilateral
investment framework.  There was debate, however, as to what precisely constituted a "transparency"
provision in the WTO.  While requirements to publish and to notify relevant laws, regulations, and
other policies were clearly seen as transparency provisions, views differed as to whether the concept
of transparency also extended to obligations governing the way laws and regulations were
administered.  It was also noted that investment was subject to a far broader range of domestic
policies and regulations than trade, thus extending the potential scope of transparency provisions in apossible investment framework in comparison to the trade system – raising concerns about the
technical and resource capacities of developing countries to meet new transparency requirements.
25. Some suggested that transparency obligations in any prospective investment agreement
should apply to investors and home countries as well as host countries.  Others, however, questioned
the appropriateness and practicality of – and the need for – developing and enforcing rules ontransparency in relation to home countries and especially investors.
26. A recurring theme was the need to direct technical assistance and capacity building towards
host countries' efforts to make their domestic investment regimes more transparent. It was suggested
that a multilateral framework should include cl ear and detailed provisions for linking the
implementation of transparency obligations and procedural reform to technical assistance and capacitybuilding.  The view was also expressed that technical assistance should not be seen as a substitute forWT/WGTI/7
Page 5
clearly delineating the extent and limit of transparency obligation in any prospective investment
agreement.
27. Views were exchanged on whether a "positive list" approach to scheduling commitments was
inherently more or less transparent than a "negative list" approach.
3. Development Provisions
28. Written contributions were received from India (WT/WGTI/W/148) and the European
Communities (WT/WGTI/W/154).
29. The Working Group continued its discussion of how to strike a balance between Members’
needs both to secure "policy space" for development and other purposes, and to create a transparent,
stable and predictable framework for investment.
30. One view was that national "policy space" for development objectives was inherently
incompatible with binding intern ational rules.  Multilateral obligations placed limits on developing
countries' freedom and flexibility to pursue strategies towards foreign investment, including the ability
to screen and channel FDI and to avoid the "crowd ing out" of domestic investors, and to regulate in
the national interest. Others suggested that there was no contradiction between, on the one hand, a
host-country's "policy space" and ability to regulate and, on the other hand, its participation in a
framework of transparent and predictable multilateral rules. While views might differ on theappropriate mix, international rules were seen as a way of securing, not overriding, a country’s
"policy space", and enhancing its ability to attract FDI.
31. There was discussion of two main areas where "policy space" was seen to be potentially
relevant to many developing-country Members: first, in regulating the entry of foreign investment,
through general screening, selective restrictions, and conditions on entry; and second in using policiesto enhance the contribution that foreign investment made to their economic and social development
needs and objectives, through performance requirements (including technology transfer), investment
incentives and preferences for domestic investors.
32. It was further noted that there were two basic ap proaches to incorporating "policy space" in a
possible multilateral investment agreement: (i) ensuring flexibility in the design of an agreement’ssubstantive provisions; and/or (ii) formulating special provisions or exceptions for development
purposes.
33. There was a discussion of whether the GATS provided a useful model for designing sufficient
"policy space" in a prospective multilateral investment framework.  The view that a GATS-type
"positive list" approach to scheduling specific co mmitments provided more "policy space" than a
"negative list" approach to scheduling specific exce ptions was advanced by some Members.  It was
pointed out that the GATS not only allowed countr ies to phase-in commitments regarding market
access and national treatment according to their individual needs and levels of development, but gave
them freedom to attach to these commitments other possible conditions related to development
objectives (e.g. joint ventures, ownership limits, or performance requirements).  Attention was also
drawn to GATS provisions recognizing the need to pay due respect to individual Members' national
policy objectives and their level of development in any process of liberalization.
34. Others, however, doubted the usefulness of the GATS model.  Some felt that the kind of
binding market access – or pre-establishment – commitments embodied in mode 3 of the GATS
conflicted with developing countries’ need for "policy space" to screen and channel the entry of
foreign investment.  It was also felt that the GATS negotiations had, in practice, generated pressure on
countries to assume broader and deeper commitments than they wanted, narrowing down the "policyWT/WGTI/7
Page 6
space" available to them. Also the GATS had presented developing-country negotiators with
problems in a range of areas including MFN exemptions, industrial classifications, the scheduling of
commitments, and regulatory issues.  Some pointed out that the GATS was an incomplete agreement,
and that in important areas such as safeguards and subsidies, its potential impact on "policy space" for
development remained unclear.  One view, expressed in this context, doubted the relevance of theGATS to any discussion of a prospective investment agreement. The GATS was essentially a trade
agreement – with limited relevance to the regulation of capital flows – and as such, could not provide
the flexibility needed by developing countries in the area of foreign investment.
35. Another view was that the GATS positive list and progressive liberalization approach would
not translate into the kind of open and transparent policy environment that developing countries
needed in order to attract FDI.
4. Non-discrimination and Modalities for Pre-establishment Commitments
36. Written contributions were received from India, the European Communities, and Canada
(WT/WGTI/W/149, W/150, W/154 and W/157, respectively).
37. The Working Group continued its discussion of the extent to which the principle of non-
discrimination – as embodied in national treatment and Most-Favoured-Nation (MFN) treatment –
should be incorporated in a prospective multilatera l investment agreement.  One view was that the
standards of non-discrimination as applied to trade could not be applied to investment, as financial
flows were distinct from flows of goods and serv ices.  Another view was that trade and investment
were inherently linked – and complementary – which was why Ministers in Doha had recognized the
case for a multilateral investment framework that  would contribute to the expansion of trade.
38. Four broad and related issues were raised.  The first was how standards of non-discrimination
might be applied at the pre- and post-establishment phases of investment.  While some could agree
that standards of non-discrimination should apply to the post-establishment stage, subject to certain
exceptions, the idea of extending a commitment of non-discrimination to the pre-establishment stage
was more controversial. Some felt that pre-establishment commitments should not be part of a
multilateral approach to investment at all.  Another view was that no distinction should be drawnbetween the different phases of investment when applying the principle of non-discrimination if the
objective was to create a secure and predictable policy framework for investment.
39. A second issue was the distinction drawn between MFN and national treatment.  One view
was that MFN treatment should be a general rule of application for both pre- and post-establishment
treatment, as a way of guaranteeing equality of treatment for foreign investments, of creating a more
transparent and uniform system of investment rule s, and of maintaining consistency with other WTO
agreements, including the GATS.  Differences in vi ew were more marked as regards the application
of national treatment.  While some felt that nationa l treatment should be extended to all stages of
investment – its entry, its operation after establishment, and its liquidation – others felt that host
countries, particularly developing countries, needed to be able to differentiate in their treatment of
domestic and foreign investment, and in particular to retain the freedom to control, screen and channel
foreign investment in line with their national policy objectives.
40. A third issue was whether standards of non-discrimination should apply differently to
different kinds of investment.  One view was that host countries should be free to discriminate
between FDI and short-term portfolio investment , in order to avoid giving legal coverage to
speculative and potentially destabilizing capital flows.  Another view was that it was important to
extend non-discriminatory treatment to all kinds of investment – portfolio investment as well as FDI –in order to reflect the evolving nature of financial flows, the changing relationship between states and
investors, and the specific needs of developing countries.WT/WGTI/7
Page 7
41. A fourth issue discussed was the merits of a "positive list" versus a "negative list" approach to
scheduling commitments.  Some supported a "positive list" approach which allowed for selective
liberalization of entry and establishment in specific activities under defined conditions, thus providing
host countries with more flexibility to pursue domestic development policies and to harness FDI in
ways that contributed to their economic development goals.  Another view was that a "negative list"approach – whereby countries lodged exceptions to the rules of general application – was preferable.
It was felt that the "positive list" approach considerably weakened the scope for market access and the
legal guarantee of non-discrimination, which could deter flows of foreign investment to host
countries. One suggestion was that a "positive list" approach could be applied to the pre-establishment
phase of investment, while a "negative list" approach could be used for the post-establishment phase.
42. The point was made that the issue of sub-national governments’ obligations under any
prospective multilateral investment agreement was an  important one, which needed to be examined in
greater detail by the Working Group.
5. Balance-of-payments Safeguards
43. A written contribution was received from the European Communities (WT/WGTI/W/153).
44. The Working Group continued its discussion of balance-of-payments safeguards.  It was
reaffirmed by many delegations that flexibility for governments to address balance-of-paymentsconcerns needed to be an integral part of any investment framework.  At the same time, many
emphasized the need to guarantee the free transfer of all current and capital account transactions, and
that clear conditions be attached to any safeguard provisions to ensure that they did not involve
arbitrary or unjustifiable discrimination, or create  disguised restrictions.  As in the GATT and the
GATS, additional flexibility should be provided to developing countries in meeting those objectives.Many also emphasized the need for compatibility between a possible investment agreement in the
WTO and the Articles of Agreement of the IMF.
6. Investors’ and Home Governments’ Obligations
45. A written contribution was received jointly from  China, Cuba, India, Kenya, Pakistan and
Zimbabwe (WT/WGTI/W/152).
46. The argument was advanced that more attention should be paid to the subject of investors' and
home countries' obligations.  The recent rise of FDI had brought into focus the disparity between the
economic power and global reach of multinational enterprises and the limited scope for regulation of
their conduct by host countries as well as the potential for conflict of interests between the objectives
of multinational enterprises and the development policy objectives of host countries.  The absence of
binding international standards of conduct for multinational enterprises had been highlighted by
recent instances of fraudulent corporate practices.  In light of the statement in paragraph 22 of theDoha Ministerial Declaration that any multilateral framework on investment should reflect in a
balanced manner the interests of home and host countries and take due account of the development
policies and objectives of host governments as well as the right of host Members to regulate in the
public interest, it was necessary to balance the rights of investors against those of host governments
and against the obligations of investors and home countries.
47. In this connection, suggestions were made with respect to general principles to serve as the
basis for drawing up investors' obligations as well as specific obligations of investors in the areas of
restrictive business practices, technology transfer, balance-of-payments, ownership and control,
consumer and environmental protection, disclosure and accounting. It was argued that the policies of
home countries could influence the behaviour of their multinational enterprises and that it wasWT/WGTI/7
Page 8
important, therefore, that home-country governments undertook obligations to ensure responsible
behaviour of multinational enterprises.
48. A different point of view on this subject was that, while it was important to ensure responsible
corporate behaviour, establishing binding international rules on corporate conduct and home-country
obligations was inappropriate. According to this  view, the preferable approach was to rely on
domestic regulation by host countries complemented by non-legally binding guidelines and other
voluntary initiatives. It was argued that the concept of binding rules applicable to enterprises was not
meaningful under international law and that the proposal that home countries should enforce
obligations with respect to the activities undertak en abroad by their investors posed serious legal
difficulties, including with respect to extraterritoriality. The specific suggestions made on issues such
as performance requirements, transfer of technology and balance-of-payments were viewed by some
as being economically counterproductive. It was also argued that the concept of corporate socialresponsibility also encompassed subjects such as bribery and employment and labour standards and
that, in addition to governments and firms, shareholders and non-governmental organizations had an
important role to play in ensuring the observance of social responsibility standards.
49. The subject of investors' obligations and home countries' obligations was also viewed by
some as not being within the mandate of the Working Group under paragraph 22 of the DohaMinisterial Declaration or, more broadly, as not being within the competence of the WTO.  On the
other hand, it was argued that consideration of this subject was well within the mandate of the
Working Group in light of the requirement contained in paragraph 22 that any framework be balanced
between the interests of host and home countries and take into account the development policies and
objectives of host-country governments and their right to regulate. WTO rules in areas such as TRIPS,TRIMs, anti-dumping and subsidies and countervailing measures had a direct impact on private
business activity, sometimes in an extraterritorial ma nner.  This contradicted the argument that the
WTO was not competent to address private conduct and that home countries could not be required to
assume obligations in relation to conduct of their investors in other countries.
7. The Relationship Between a Multilateral Framework on Investment and the GATS
50. Written contributions were received from Japan (WT/WGTI/W/156 and WT/WGTI/W/158).
51. There was a debate on whether the inclusion of the "commercial presence" mode of supply in
the GATS meant that foreign investment was covered by the GATS.  One view was that it was
inappropriate to draw a parallel between the c oncept of commercial presence, on the one hand, and
investment disciplines, on the other, since commercial presence was covered under the GATS only to
the extent that it facilitated the delivery of services – and that, too, was subject to various conditions
and limitations.  Another view was that the concept of commercial presence, as defined in the GATS,clearly covered forms of foreign investment service sectors, particularly FDI.  The point was also
made that there was no economic reason to distinguish between the establishment of a commercial
presence in a service sector and FDI in non-services sectors and that many international agreements
contained investment disciplines that did not distinguish between goods and services.
52. The relationship between a possible multilater al framework on investment and commitments
of Members under the GATS with respect to the commercial presence mode of supply was identified
as a matter requiring further consideration. One possible approach that was mentioned was to exclude
services from the coverage of such a framework.  It was observed that this would require that the
framework be harmonized with the GATS so as to avoid unjustifiable differences between investment
in services and investment in non-services.  A second approach that was mentioned was to includeservices within the ambit of a multilateral framework on investment, which might require changes to
the GATS in order to avoid conflicts and inconsiste ncies.  The point was made that a third approachWT/WGTI/7
Page 9
was possible, whereby a multilateral framework would apply to both goods and services, but its
application to services would be limited to ru les that went beyond the provisions of the GATS.
53. In respect of the suggestion that commitments on commercial presence in services be made
part of a multilateral framework on investment, it was pointed out that removing these commitments
from the overall context of the GATS might require an adjustment in the level of commitments.
8. General
54. Written submissions of a more general nature were received from Japan (WT/WGTI/W/158),
Canada (WT/WGTI/W/157 ), and Canada, Costa Rica and Korea (WT/WGTI/W/162).
55. It was noted that the Working Group had had many exchanges on  the issues singled out for
clarification in paragraph 22 of the Doha Ministerial Declaration, as well as other related subjects that
had been raised in the course of the Group’s work.  Some noted that their contributions and
interventions were made without prejudice to their position with regard to the need for a multilateralframework on investment in the WTO.
56. Some suggested that the work done since the Doha Ministerial Conference had successfully
clarified all these core issues – and their interlinkages – as mandated by the Doha Declaration,
facilitating the conceptualisation of a realistic, meaningful, and integrated multilateral framework for
investment under the WTO.  While differences remained on a number of substance issues – and newsubjects had been raised in the course of discussions – the point had been reached where further
progress could be made only by moving beyond the analytical phase of work and entering into a
negotiating phase.
57. Some observed that they might be open to investment negotiations provided that the concerns
of developing countries were sufficiently taken into account.
58. Some others felt that the Working Group’s deliberations had revealed the extent to which the
substance, implications and rationale of a prospective multilateral investment framework were still
unclear.  On all the subjects set out for clarification in paragraph 22 wide and significant differences
among Members remained.  Further analysis and discussion was needed before decisions could be
reached regarding the Group’s future work.  For them, the notion of moving into a negotiating phasewas premature.WT/WGTI/7
Page 10
Annex 1
TEXT OF THE DOHA MINISTERIAL DECLARATION4
RELATIONSHIP BETWEEN TRADE AND INVESTMENT
20. Recognizing the case for a multilateral fram ework to secure transparent, stable and
predictable conditions for long-term cross-border inve stment, particularly foreign direct investment,
that will contribute to the expansion of trade, and the need for enhanced technical assistance and
capacity-building in this area as referred to in paragraph 21, we agree that negotiations will take place
after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicitconsensus, at that Session on modalities of negotiations.
21. We recognize the needs of developing and least-developed countries for enhanced support for
technical assistance and capacity building in this area, including policy analysis and development so
that they may better evaluate the implications of closer multilateral  cooperation for their developmentpolicies and objectives, and human and institutional development.  To this end, we shall work in
cooperation with other relevant intergovernmental organizations, including UNCTAD, and through
appropriate regional and bilateral channels, to provide strengthened and adequately resourced
assistance to respond to these needs.
22. In the period until the Fifth Session, further work in the Working Group on the Relationship
Between Trade and Investment will focus on the clarification of:  scope and definition;  transparency;
non-discrimination;  modalities for pre-establishment commitments based on a GATS-type, positive
list approach;  development provisions;  exceptions and balance-of-payments safeguards; consultation
and the settlement of disputes between Members.  Any framework should reflect in a balancedmanner the interests of home and host countries, and take due account of the development policies
and objectives of host governments as well as their right to regulate in the public interest.  The special
development, trade and financial needs of developing and least-developed countries should be taken
into account as an integral part of any framework, which should enable Members to undertake
obligations and commitments commensurate with their individual needs and circumstances.  Due
regard should be paid to other relevant WTO provisions.  Account should be taken, as appropriate, of
existing bilateral and regional arrangements on investment.
                                                     
4 WT/MIN(01)/DEC/1.WT/WGTI/7
Page 11
Annex 2
Summary of contributions received in the Working Group
on the Relationship between Trade and Investment in 2002-2003
Symbol
(WT/WGTI/W/-)Member / Other
sourceTitle or Topic
W/108 Secretariat Scope and Definitions:  "Investment" and "Investor"
W/109 Secretariat Transparency
W/110 European
Community andmember StatesConcept Paper on Transparency
W/111 Japan Scope and Definition
W/112 Japan Transparency
W/113 Canada Scope and Definition
W/114 Korea Scope and Definitions of "Investment"
W/115 European
Community and
member StatesConcept Paper on the Definition of Investment
W/116 OECD OECD Activities in the Field of Investment Capacity Building
W/117 MexicoCommunication regarding APEC Seminar on Bilateral and Regional
Investment Rules and Agreements – Mérida, Mexico,17-18 June 2002
W/118 Secretariat Non-Discrimination – Most-Favoured-Nation Treatment and
National Treatment
W/119 Secretariat Development Provisions
W/120 Secretariat Modalities for Pre-Establishment Commitments based on a GATS-
Type, Positive List Approach
W/121 European
Community and
member StatesConcept Paper on Modalities of Pre-Establishment
W/122 European
Community andmember StatesConcept Paper on Non-Discrimination
W/123 Korea Non-Discrimination and GATS-Type Approach for Investment
W/124 Japan Non-Discrimination
W/125 Japan Modalities for Pre-Establishment Commitments
W/126 Separate Customs
Territory ofTaiwan, Penghu,
Kinmen and MatsuDevelopment Provisions
W/127 Separate Customs
Territory ofTaiwan, Penghu,Kinmen and MatsuNon-Discrimination and Pre-Establishment CommitmentWT/WGTI/7
Page 12
Symbol
(WT/WGTI/W/-)Member / Other
sourceTitle or Topic
W/128 Separate Customs
Territory of
Taiwan, Penghu,
Kinmen and MatsuScope and Definition of "Investment"
W/129 Separate Customs
Territory ofTaiwan, Penghu,Kinmen and MatsuEnsuring Transparency
W/130 Canada Modalities for Pre-Establishment Commitments Based on a GATS-
Type, Positive List Approach
W/131 Canada Development Provisions
W/132 Mexico Non-Discrimination
W/133 Switzerland Multilateral Framework for Investment:  An Approach to
Development Provisions
W/134 Secretariat Consultation and the Settlement of Disputes between Members
W/135 Secretariat Technical Assistance Activities Pursuant to Paragraph 21 of the Doha
Ministerial Declaration
W/136 Secretariat Key Issues Concerning Foreign Direct Investment and the Transfer
and Diffusion of Technology to Developing Countries
W/137 Secretariat Exceptions and Balance-of-Payments Safeguards
W/138 Japan Exceptions and Balance-of-Payments Safeguards
W/139 Japan Consultation and the Settlement of Disputes between Members
W/140 European
Community and
member StatesConcept Paper on Development Provisions
W/141 European
Community andmember StatesConcept Paper on Consultation and the Settlement
of Disputes between Members
W/142 United StatesCovering FDI and Portfolio Investment in a WTO Investment
Agreement
W/143 KoreaBalance-of-payment Safeguard Provisions in Investment Agreements
W/144 Separate Customs
Territory ofTaiwan, Penghu,
Kinmen and MatsuExceptions and Balance-of-Payments Safeguards
W/145 Separate Customs
Territory ofTaiwan, Penghu,Kinmen and MatsuDispute Settlement Mechanism
W/146 Canada Exceptions and Balance-of-Payments Safeguards
W/147 Canada Consultation and Dispute Settlement
W/148 India Development Provisions
W/149 India Non-DiscriminationWT/WGTI/7
Page 13
Symbol
(WT/WGTI/W/-)Member / Other
sourceTitle or Topic
W/150 India Views on Modalities for Pre-establishment Commitments based on a
GATS-type, Positive List Approach
W/151 SecretariatTechnical Assistance Activities in 2002 Pursuant to Paragraph 21
of the Doha Ministerial Declaration
W/152 China, Cuba, India,
Kenya, Pakistanand ZimbabweInvestors' and Home Governments' Obligations
W/153 European
Community andmember StatesConcept Paper on Balance-of-Payments Safeguards
W/154 European
Community and
member StatesConcept Paper on Policy Space for Development
W/155 CanadaTransparency
W/156 JapanThe Relationship between the Future
Multilateral Investment Rules and the GATS
W/157 CanadaThe Interrelationship and Emerging Infrastructure of a Prospective
WTO Multilateral Framework for Investment Based on ElementsIdentified in Paragraph 22 of the Doha Declaration
W/158 JapanConsideration of the Necessity of Multilateral
Investment Rules from Diversified Viewpoints
W/159 ChinaScope and Definition
W/160 ChinaTransparency
W/161 WTO and
UNCTAD
SecretariatsFuture WTO-UNCTAD Secretariat Collaboration in the Area of
Investment on Technical Assistance and Capacity-Building for
Developing and Least-Developed Countries
W/162 Canada, Costa Rica
and KoreaNegotiating a Multilateral Framework on Investment in the WTO
W/163 European
Community andmember StatesOverview of Technical Assistance and Capacity-Building Activities
in the WTO
W/164 OECDRecent Work in the OECD Committee on International Investment
and Multinational EnterprisesWT/WGTI/7
Page 14Annex 3
Technical Assistance and Capacity-Building Activities held in 2002-2003
TopicsDoha TC/CB
MandateActivity Cooperation with Dates Venue
Intensive Training Course for English-
speaking Africa21, 22 Training Course UNCTAD 18-29 March 2002 South Africa (Pretoria)
Regional Seminar for Asia 21, 22 Regional Seminar UNCTAD/Singapore 6-8 May 2002 Singapore
Trade and Investment 21, 22 National Workshop UNCTAD 13-14 May 2002 China (Beijing)
OECD Technical Workshop 21, 22 Technical Workshop OECD 15-20 May 2002 Hong Kong, China
Trade and Investment 21, 22 National Seminar UNCTAD 16 May 2002 Indonesia (Jakarta)
APEC Workshop on Regional and
Bilateral Investment Rules/Agreements21, 22 Technical Workshop APEC 17-18 May 2002 Mexico (Mérida)
Intensive Training Course for French-
speaking Africa21, 22 Training Course UNCTAD/Agence de
la Francophonie27 May-6 June
2002Egypt (Alexandria)
Regional Seminar for French-speaking
Africa21, 22 Regional Seminar UNCTAD 19-21 June 2002 Gabon (Libreville)
Regional Policy Seminar 21, 22 Regional Seminar Thailand 27 June 2002 Thailand (Bangkok)
Trade and Investment 21, 22 National Seminar Thailand 28 June 2002 Thailand (Bangkok)
Training for Geneva
Delegations/Officials visiting fromcapitals, coinciding with WGTImeeting21, 22 Technical Workshop
(English)UNCTAD 2 July 2002 Switzerland (Geneva)
Regional Seminar for Central America 21, 22 Regional Seminar UNCTAD / IADB-
INTAL12-13 August 2002 Costa Rica (San José)WT/WGTI/7
Page 15TopicsDoha TC/CB
MandateActivity Cooperation with Dates Venue
Training for Geneva
Delegations/Officials visiting fromcapitals, coinciding with WGTImeeting21, 22 Technical Workshop
(French)UNCTAD 13 September 2002 Switzerland (Geneva)
Regional seminar for South America
and Intensive Training Course for LatinAmerica21, 22 Regional Seminar
andTraining CourseUNCTAD / IADB-
INTAL7-8 October 2002
and9-18 October 2002Peru (Lima)
Trade and Investment 21, 22 National Seminar UNCTAD 24-25 October
2002Venezuela (Caracas)
Trade and Investment 21, 22 National Seminar UNCTAD 28-29 October
2002Guatemala (Ciudad de
Guatemala)
Trade and Investment 21, 22 National Seminar UNCTAD 21-22 November
2002Sri Lanka (Colombo)
Intensive Training Course for Asia and
the Pacific21, 22 Training Course UNCTAD 23 November –
4 December 2002India (New Delhi)
Training for Geneva
Delegations/Officials visiting from
capitals, coinciding with WGTImeeting21, 22 Technical Workshop
(Spanish)UNCTAD 29 November 2002 Switzerland (Geneva)
Workshop on the Relationship between
Trade and Investment for English-speaking African countries21, 22 Technical Workshop UNCTAD / JICA 1-2 December 2002 Switzerland (Geneva)
Trade and Investment 21, 22 National Seminar UNCTAD 19-20 December
2002Tunisia (Tunis)
Regional Seminar for French-speaking
Africa21, 22 Regional Seminar UNCTAD 27-28 January 2003 Djibouti
Capacity Building Seminar for African
Countries21, 22, 24 Seminar EFTCA/JICA 1-5 February 2003 Egypt (Cairo)
Regional Seminar for English-speaking
African countries21, 22 Regional Seminar UNCTAD 4-5 February 2003 Botswana (Gaborone)
Trade and Investment 21, 22 National Seminar UNCTAD 19-20 March 2003 Morocco (Rabat)WT/WGTI/7
Page 16TopicsDoha TC/CB
MandateActivity Cooperation with Dates Venue
Intensive Training Course for English-
speaking Africa21, 22 Training Course UNCTAD 24 March-4 April
2003South Africa (Pretoria)
Training for Geneva
Delegations/Officials visiting fromcapitals21, 22 Technical Workshop
(English)UNCTAD 2 April 2003 Switzerland (Geneva)
Trade and Investment 21, 22 National Seminar UNCTAD 7-8 April 2003 Colombia (Bogota)
WTO 2nd Trade Policy Course 21, 22, 36 Trade Policy Course 7 April-27 June Kenya (Nairobi)
Trade and Investment 21, 22 National Seminar UNCTAD 10-11 April 2003 Argentina (Buenos
Aires)
Regional Seminar for CaribbeanCountries21, 22 Regional Seminar IADB-INTAL,
UNCTAD28-29 April 2003 Jamaica (Kingston)
Trade and Investment 21, 22 National Seminar UNCTAD 4-5 May 2003 Mauritania (Nouakchott)
Intensive Training Course for French-
speaking Africa21, 22 Training Course UNCTAD 12-23 May 2003 Egypt (Alexandria)
Trade and Investment 21, 22 National Seminar UNCTAD 20-21 May 2003 Malaysia (Kuala
Lumpur)
Expert Meeting for Middle-East andMaghreb Countries21, 22 Sub-Regional
SeminarFES 24-25 May 2003 Egypt (Cairo)
Workshop on the Relationship between
Trade and Investment for French-speaking African countries21, 22 Technical Workshop UNCTAD / JICA 13-14 June 2003 Switzerland (Geneva)
Regional Seminar for Central and
Western Asia21, 22 Regional Seminar UNCTAD 18-19 June 2003 Pakistan (Islamabad)
Regional Seminar for Central and
Eastern Europe21, 22 Regional Seminar UNCTAD 18-19 June 2003 Czech Republic (Prague)
Advanced Training Course for African
Senior Government Officials21, 22 Training Course UNCTAD 16-27 June South Africa
(Johannesburg)
Trade and Investment 21, 22 National Seminar UNCTAD 10-11 July 2003 Cuba (Havana)WT/WGTI/7
Page 17TopicsDoha TC/CB
MandateActivity Cooperation with Dates Venue
Regional Seminar for Latin American
Countries21, 22 Regional Seminar UNCTAD 14-15 July 2003 Mexico (Mexico City)
Trade and Investment 21, 22 Regional Seminar UNCTAD [July/August] Qatar
__________