WORLD TRADE
ORGANIZATIONWT/WGTI/5
8 October 2001
(01-4886)
REPORT (2001) OF THE WORKING GR OUP ON THE RELATIONSHIP BETWEEN
TRADE AND INVESTMENT TO THE GENERAL COUNCIL
1. The Working Group on the Relationship between Trade and Investment held three meetings
under the Chairmanship of Ambassador Demiralp (Turkey) in 2001, on 7 and 8 March, 13 and14 June, and 5 October. Minutes of the meetings are contained in documents
WT/WGTI/M/14, 15, and 16, respectively.
 1
2. At the March and June meetings, the Working Group considered all Items of the Checklist of
Issues Suggested for Study.2  At the October meeting, the Working Group adopted its report to the
General Council.3 
                                                     
1 Annex 3 contains a tabular summary of contributions received in the Working Group on the
Relationship between Trade and Investment in 2001.
2  The Checklist of Issues Suggested for Study, which the Working Group took note of at its meeting
on 2 and 3 June 1997 (WT/WTGI/M/1), is reproduced in Annex 2.
3 Reports for previous years are contained in WT/WTGI/1/Rev.1 (1997), WT/WTGI/2 (1998),
WT/WTGI/3 (1999) and WT/WTGI/4 (2000).WT/WGTI/5
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ANNEX 1
TEXT OF THE SINGAPORE MINISTERIAL DECLARATION, PARAGRAPH 20
AND RENEWAL OF THE MANDATE OF THE WORKING GROUP ON THE
RELATIONSHIP BETWEEN TRADE AND INVESTMENT
The Working Group on the Relationship between Trade and Investment was established by a
decision taken at the WTO Ministerial Conference he ld in Singapore in December 1996.  The relevant
paragraph (i.e. paragraph 20) of the Ministeria l Declaration (WT/MIN(96)/DEC) reads as follows:
"20. Having regard to the existing WTO provisions on matters related to
investment and competition policy and the built-in agenda in these areas, includingunder the TRIMs Agreement, and on the understanding that the work undertaken
shall not prejudge whether negotiations will be initiated in the future, we also agree
to:
- establish a working group to examine the relationship between trade and
investment;  and
- establish a working group to study issues raised by Members relating to the
interaction between trade and competition policy, including anti-competitive
practices, in order to identify any areas that may merit further consideration
in the WTO framework.
These groups shall draw upon each other's work if necessary and also draw upon and
be without prejudice to the work in UNCTAD and other appropriate
intergovernmental fora.  As regards UNCTAD, we welcome the work under way as
provided for in the Midrand Declaration and the contribution it can make to the
understanding of issues.  In the conduct of the work of the working groups, we
encourage cooperation with the above organizations to make the best use of availableresources and to ensure that the development dimension is taken fully into account.
The General Council will keep the work of each body under review, and will
determine after two years how the work of each body should proceed.  It is clearly
understood that future negotiations, if any, regarding multilateral disciplines in these
areas, will take place only after an explicit consensus decision is taken among WTO
Members regarding such negotiations."
At its meeting held on 9-11 and 18 December 1998, the General Council took the following
decision with respect to the continuation of the work of the Working Group:
"The General Council decides that the Working Group on the Relationship between
Trade and Investment shall continue the educational work that it has been
undertaking on the basis of the mandate contained in paragraph 20 of the Singapore
Ministerial Declaration. The work of the Working Group, which shall be reviewed bythe General Council, shall continue to be based on issues raised by Members with
respect to the subjects identified in the Checklist of Issues Suggested for Study.  It is
understood that this decision is without prejudice to any future decision that might be
taken by the General Council, including in the context of its existing work
programme."
4
                                                     
4 WT/GC/M/32, p. 52.WT/WGTI/5
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ANNEX 2
CHECKLIST OF ISSUES SUGGESTED FOR STUDY5
Revised Non-Paper by the Chair (4 June 1997)
It was widely recognized that the Workin g Group's work programme should be open, non-
prejudicial and capable of evolution as the work pro ceeds.  It was also emphasized that all elements, not
only category I, should be permeated by the developm ent dimension.  Particular attention should be paid
to the situation of least-developed countries.  In pursuing the items of its work programme, the Working
Group should avoid unnecessary duplication of wo rk done in UNCTAD and other organizations.
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I. Implications of the relationship between tr ade and investment for development and economic
growth, including:
- economic parameters relating to macroeconomic stability, such as domestic savings,
fiscal position and the balance of payments;
- industrialization, privatization, employment, income and wealth distribution,
competitiveness, transfer of technology and managerial skills;
- domestic conditions of competition and market structures.
In this work, the Working Group should seek to benefit from the experience of Members at
different stages of development and take account of recent trends in foreign investment flows
and of the relationship between different kinds of foreign investment.
II. The economic relationship between trade and investment:
- the degree of correlation between trade and investment flows;- the determinants of the relationship between trade and investment;- the impact of business strategies, practices and decision-making on trade and
investment, including through case studies;
- the relationship between the mobility of capital and the mobility of labour;- the impact of trade policies and measures on investment flows, in cluding the effect of
the growing number of bilateral and regional arrangements;
- the impact of investment policies and measures on trade;- country experiences regarding national investment policies, including investment
incentives and disincentives;
- the relationship between foreign investment and competition policy.
                                                     
5 This Checklist was circulated as a revision of a Chairman's Non-Paper (Job 3093) on 4 June 1997.WT/WGTI/5
Page 4
III. Stocktaking and analysis of existing interna tional instruments and activities regarding trade and
investment:
- existing WTO provisions;- bilateral, regional, plurilateral and multilateral agreements and initiatives;- implications for trade and investment fl ows of existing international instruments.
IV. On the basis of the work above:
- identification of common feat ures and differences, incl uding overlaps and possible
conflicts, as well as possible gaps in existing international instruments;
- advantages and disadvantages of entering into bilateral, regional and multilateral rules
on investment, including from a development perspective;
- the rights and obligations of home and host countries and of investors and host
countries;
- the relationship between existing and po ssible future international cooperation on
investment policy and existing and possible future international cooperation on
competition policy.WT/WGTI/5
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ANNEX 3
Summary of contributions received in the Working Group
on the Relationship between Trade and Investment in 2001
Symbol
(WT/WGTI/W/-)Member / Other
SourceWhere introduced
(Reference in Minutes)Topic
W/95 M/14, Para. 2 Foreign Direct Investment and the
Balance-of-Payments – Note bythe Secretariat
W/96 Korea M/14, Para. 64 The General Agreement on Trade
in Services (GATS) and its
Implications for an Investment
Agreement
W/97 Canada M/14, Para. 41 Foreign Investment Barriers:  A
Report by the Canadian Chamberof Commerce in Partnership withIndustry Canada
W/98 Canada M/14, Para. 43 Industry Canada Research
Program on Foreign Direct
Investment
W/99 Singapore M/14, Para. 45 The Economic Relationship
between Trade and Investment:Investment Promotion andIncentives
W/100 OECD M/14, Para. 61 Summary of OECD Work on
Issues Related to Investment
Policy Analysis
W/101 UNCTAD M/14, Para. 62 Recent Work Undertaken within
UNCTAD’s Work Programme onInternational InvestmentAgreements
W/102 European
Community andmember  StatesM/15, Para. 39 Technical Assistance and Capacity
Building Related to Foreign DirectInvestment
W/103 M/15, Para. 2 Merger and Acquisition Activity
and the Balance-of-Payments;
Foreign Portfolio Investment -Note by Secretariat
W/104 Japan M/15, Para. 44 Investment Rules for Developing
Policies
W/105 India M/15, Para. 16 FDI Flows and Technology
Transfer
W/106 UNCTAD M/15, Para. 37 Recent Work Undertaken within
UNCTAD's Work Programme on
International Investment
Agreements
W/107 UNCTAD M/16, Para. 3 Recent Work Undertaken within
UNCTAD's Work Programme onInternational InvestmentAgreements
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