WORLD TRADE
ORGANIZATIONWT/WGTI/W/109
27 March 2002
(02-1561)
Working Group on the Relationship
between Trade and Investment
TRANSPARENCY
Note by the Secretariat
EXECUTIVE SUMMARY
Ensuring "transparency" in international commercial treaties typically involves three core
requirements:  (1) to make information on relevant laws, regulations, and other policies publiclyavailable;  (2) to notify interested parties of relevant laws and regulations and changes to them;  and
(3) to ensure that laws and regulations are administered in a uniform, impartial, and reasonable
manner.
Transparency is important for two reasons in particular.  First, it provides vital information to
market participants about the conditions under which commercial transactions can take place, and in
this respect it makes markets function more efficiently.  Second, it underwrites the effectiveness and
integrity of a treaty's policy rules and disciplines, by allowing a treaty participant to monitor whether
other participants are meeting their legal obligations .  Effective transparency typically requires that
information be provided both on laws and regulations, and on procedures for their administration.
The underlying premise is that the way rules are applied can be as significant as the substance  of the
rules themselves.
Transparency obligations in the WTO are generally more important – and more detailed – in
areas where the rules of general application are weakest and where the scope for discretionary
government action is greatest.  In government procurement, import licensing, technical barriers to
trade, and many other areas, WTO agreements lay out detailed procedural obligations to ensure thatMember governments conform to accepted norms of transparency.  These norms often involve
concepts such as "uniform", "impartial", "reasonable" and "independent" administration, and require
governments to treat all parties to the agreement in a fair and non-discriminatory way.
Transparency provisions in existing bilateral and regional investment treaties – where they
exist – are generally less detailed and prescriptive than similar requirements in the WTO.  A number
of bilateral investment treaties (BITs) contain an obligation to make all investment-related laws
publicly available – both to ensure that investment regimes are understandable and to prevent hidden
or unknown laws from being used subsequently to justify discriminatory or arbitrary treatment.
Certain rules of general application – such as "fair and equitable treatment" – often found in BITshave also been interpreted as requiring parties to adhere to basic norms of transparency.
This Note suggests that the policy questions that arise in the context of international
investment agreements (IIAs) are less about the principle of transparency – on which all Members
appear to be in agreement – than about its scope and application.  The scope for "transparency" in an
IIA depends not just on obligations on publication, notification and administrative procedures, but on
the ambition and breadth of the IIA's substantive commitments – i.e. it's scope and definition, itsWT/WGTI/W/109
Page 2
general obligations and exemptions, and a Member's specific commitments or reservations listed in its
schedule of commitments.
A number of developing countries – and least-developed countries in particular – have faced
technical and capacity constraints in complyin g with the transparency requirements in WTO
agreements.  The question arises as to the appropriate balance that should be struck between pursuing
transparency in a possible multilateral investment agreement and avoiding the imposition of
burdensome obligations.  A related question concerns the kind of technical assistance that developing
and least-developed countries would need to help them comply with information and notification
requirements.
_______________
I. INTRODUCTION
1. This Note examines the principle of "transparency" in the context of Paragraph 22 of the
Doha Ministerial Declaration.  "Transparency" refers to both general and specific requirements in
international trade and investment agreements to make their relevant rules and procedures clear and
predictable.  Transparency is important for the simple reason that, without it, it is difficult to
determine what the rules are and whether they are being applied in an appropriate manner.
2. The Note is divided into five sections:  (1) a summary of the main points of discussion on
transparency in the Working Group;  (2) an over view of transparency provisions in the WTO
agreements;  (3) an examination of the factors that have influenced the evolution of these provisions;
(4) some examples of the way "transparency" is treated in existing international investment
agreements (IIAs);  and (5) an examination of outstanding issues.
3. The underlying purpose of transparency requirements can be summarized as follows:
(i) to underwrite and promote a rules-based approach to policy-making at the national
and international level;
(ii) to provide information to market part icipants so that they can take maximum
advantage of the opportunities created by rules and commitments;
(iii) to facilitate monitoring of compliance with international obligations, and through this
the avoidance of disputes;  and
(iv) to facilitate future multilateral negotiations with a view to building upon existing
commitments and disciplines.1
4. Clear and predictable rules and procedures – "due process" – are minimum conditions that
need to be met in a rules-based system.  A prerequisite for the rule of law is that all relevant rules can
be understood by the parties affected by them, and that the procedures for administering the rules are
uniform, reasonable, and non-discriminatory.  Legal rights and obligations should be publiclyavailable and, ideally, not enforceable until the persons subject to them have had a chance to become
                                                     
1 For example, the basic GATT principle that, if prot ection is to be accorded, it should take the form of
a customs tariff can be understood to have an important transparency function.  It makes clear and quantifies themargin of protection given to domestic products.  This not only provides valuable information to actors in the
market but also facilitates negotiations on the reduction of such duties on the basis of reciprocity.WT/WGTI/W/109
Page 3
acquainted with them.  The same function is served by provisions on the impartial administration of
these legal requirements and the scope for review, by an independent body, of decisions concerning
their application.
5. By and large, transparency has a precise and limited meaning in the WTO agreements.
Standard provisions on transparency involve three core obligations:  (1) to make information on laws,regulations, and other policies related to trade publicly available;  (2) to provide notice of (notify) the
laws and regulations and changes to them;  and (3) to ensure that laws and regulations are
administered in a uniform, impartial and reasonable manner.  WTO requirements to be "transparent"
do not, strictly speaking, address the question of whether or not a governments has fulfilled its
obligations under the agreements (although, of course, transparency is itself an obligation).  Rather,
transparency is a requirement to provide sufficient  information  so that other Members can determine
whether or not obligations are in fact being met.  It is also a requirement that the  administration  of
rules be reasonable and non-discriminatory.  In this respect, the WTO's use of the term "transparency"
is generally less broad and normative than is sometimes found in public policy discourse, where
transparency has come to be synonymous with the "openness" and "fairness" of a regime.
6. It should be noted that transparency obligations generally become more important, and more
detailed, in areas where the role of WTO rules of general application is limited – i.e. where the scopefor discretionary government measures, within the framework of rules, is relatively wider.  For
example, the WTO agreements on Import Licensing, Technical Barriers to Trade, Sanitary and
Phytosanitary Measures, and the plurilateral agreement on Government Procurement lay out detailed
procedural obligations to ensure that Members conform to accepted norms of transparency.  These
norms often involve concepts such as "uniform", "impartial", "reasonable" and "independent"administration, and require governments to treat all parties to the agreement in a fair and non-
discriminatory way.  Transparency obligations therefore pertain to both substance and procedures.
The underlying premise is that the way rules are applied can be as significant as the substance of the
rules themselves.
7. Transparency requirements are arguably as relevant to IIAs as they are to international trade
agreements.  Yet most existing IIAs have little to say on the subject.
2  One reason may be that, unlike
most WTO agreements, much investment regulation frequently falls within the remit of sub-federal or
local authorities, and the BIT negotiations are unwilling or unable to easily improve transparency
requirements at these levels of government.  Transparency provisions are not standard components of
model bilateral investment agreements, but they are included in some international investment
instruments.  The fullest reference to transparency is found in the North American Free Trade
Agreement (NAFTA).
8. These existing transparency provisions in IIAs are also generally less detailed and
prescriptive than similar requirements in the WTO. A number of bilateral investment treaties (BITs)
contain an obligation to make all investment-related laws publicly available – both to ensure that
investment regimes are understandable to and prevent hidden or unknown laws to be subsequently
used to justify discriminatory or arbitrary treatment.  Certain rules of general application – such as"fair and equitable treatment" – often found in BITs have also been interpreted as requiring parties to
adhere to basic norms of transparency.
                                                     
2 UNCTAD, Bilateral Investment Treaties in the Mid-1990s, (1998), pp. 85-86.WT/WGTI/W/109
Page 4
II. THE MAIN POINTS OF DISCUSSION ON TRANSPARENCY IN THE WORKING
GROUP
9. The Working Group received four written contributions from Members on the subject of
transparency.3  Discussions in the Working Group centred on three themes:  the purpose of
transparency;  the possible relevance of WTO transparency provisions to the area of investment;  andthe technical and resource requirements for meeting different levels of transparency.
10. There was broad agreement that transparency is important for creating a predictable, stable
and secure climate for foreign investment, although differences were expressed as to whether
multilateral rules would advance significantly these objectives.  Some Members suggested that
improving transparency of legal systems should be regarded as one of the core objectives of possible
multilateral rules on investment.  One contribution identified a range of problems experienced by
firms that were said to be caused by non-transparency of the regulatory environment in host countries.This lack of transparency reduced the ability of foreign investors to develop their business operations
based on long-term plans, increased the costs of their investments, and distorted the conditions of
competition in favour of domestic firms.
4  It was suggested that negotiating multilateral investment
rules could in itself lead to increased transparency , by drawing attention to potentially non-transparent
policies and procedures, and by providing a benchmark for countries desiring to enhance the overalllevel of transparency of their investment regimes.  The point was also made that multilateral rules on
transparency were desirable from a systemic, as well as a national perspective, since the complexity of
administering a growing number of bilateral and regional IIAs had reduced the transparency of the
global investment climate for businesses and governments alike.  Compared with bilateral investment
treaties, which by and large had been ineffective in dealing with the transparency issue, multilateralrules could provide a unified set of regulations regarding the transparency of investment regimes.
11. Others expressed the view that, given the importance of transparency to the promotion of
FDI, governments acting in their own self-interest would take the necessary steps to enhance the
transparency of their investment regimes.  It was also suggested that problems of lack of transparency
might be addressed more effectively through appropriate representation with individual governmentsdirectly, including in the context of bilateral in vestment treaties.  Therefore, the benefits of
multilateral rules on transparency were questionable.
12. Some considered that existing transparency provisions in the WTO offered a useful starting-
point for the discussion of rules to promote transparency of the investment environment.  Since GATS
Article III applied to all measures of general application pertaining to GATS rules – including
measures relating to the establishment of a commercial presence – the WTO already contained
transparency obligations in regard to foreign direct investment in the services sector.  It was felt that
GATS Article III provided a useful model that should be examined when considering transparency
provision for foreign direct investment more generally.  It was also felt that the Working Group
should also take into account existing work on transparency issues in the GATS Working Party on
Domestic Regulation.  Attention was also drawn to the role of the Trade Policy Review Mechanism in
contributing to transparency in the area of investment.
13. One contribution presented the advantages of the WTO as an institutional framework to
promote the transparency of investment laws and regulations, and made concrete suggestions on
                                                     
3 Accounts of the Working Group's principal discussions on the topic of Transparency can be found in
the following meeting Reports:  WT/WGTI/M/5, para. 29;  M/8, para. 72;  M/11, paras. 40-50;  M/12, paras. 53-69;  M/14, paras. 77-79;  and M/15, para. 52  The main references to this topic in Members' submissions can befound in WT/WGTI/W/70, W/75, W/87, W/90 and W/104.
4 WT/WGTI/W/75.WT/WGTI/W/109
Page 5
specific transparency provisions that could be included in a possible multilateral framework.5
Another contribution outlined some of the potential policy and legal questions that might arise in the
framing of transparency provisions in a possible multilateral investment agreement.6  It was suggested
that, based on existing international agreements, certain provisions which were essential to enhancing
transparency of investment rules and regulations could be identified, including:  rules on thepublication of laws and regulations;  the availability of enquiry points;  due process requirements with
regard to authorization and licensing procedures;  non-discrimination requirements;  standstill
requirements;  and dispute settlement procedures.
14. Many concerns were raised about the technical and resource capacity of developing countries
to meet new transparency requirements in the area of investment, given the difficulties they already
faced in complying with existing WTO publication and notification requirements.  Some felt that
developing countries would benefit significantly from  enhanced transparency provisions, and that the
administrative costs of transparency obligations would be easily outweighed by the positive climate
created for both foreign and domestic investors.  Others said that care should be taken to avoid
transparency requirements that could prove too onerous for developing countries.  An example cited
was the proposal that transparency requirements should encompass prior notification requirements
and the right to comment.  It was stated that the question of developing-country capacity was an areawhere the Working Group could benefit from the experience of the Working Group on Transparency
in Government Procurement.  It was also suggested  that any possible multilateral rules should include
provisions on technical assistance to assist countries to publish comprehensive, focused lists of all
regulations and rules governing foreign investment, and to assist countries in implementing necessary
procedural reforms.
III. THE THREE BASIC TRANSPARENCY REQUIREMENTS IN THE WTO
15. The provisions of the three main WTO Agreements containing transparency obligations are:
GATT Article X;  GATS Article III;  and TRI PS Article 63 (see Annex I).  The concept of
transparency as reflected in these agreements can be understood as having three broad aspects:
(i) the obligation to publish, or at least make publicly available, all relevant regulations,
and, as a general rule, not to apply or enforce them until this has been done;
(ii) provisions on the notification of various forms of governmental action to the WTO
and other Members;  and
(iii) obligations relating to the consistent, uniform, impartial and reasonable
administration of regulations, and the right of review of decisions taken under them.
A. P
UBLICATION REQUIREMENTS
16. The core obligation to publish – or make publicly available – all relevant laws, regulations,
judicial decisions and administrative rulings is in GATT Article X.  Article X:1 requires each
government to promptly publish trade regulations "to enable governments and traders to become
acquainted with them".  Article X:2 adds that trad e regulations cannot be enforced before they have
been officially published, and requires the publication of agreements reached with other governments.
Although panels have ruled in support of the notion that a trade regulation cannot be applied unless ithas been published, Article X has not been interpreted to require publication of trade regulations in
advance  of their entry into force or to require that the information be made available to domestic and
                                                     
5 WT/WGTI/W/87.
6 WT/WGTI/W/90.WT/WGTI/W/109
Page 6
foreign suppliers at the same time.  This question of prior notification, as will be discussed below, is
the subject of other WTO obligations.
17. General publication requirements are equally central to the GATS and the TRIPS Agreement.
GATS Articles III.1 and 2 require Members to publish all relevant measures of general application
which pertain to or affect the operation of the Agr eement, together with any international agreements
pertaining to or affecting trade in services to which a Member is a signatory.  It states that "where
publication ... is not practicable, such information should be made otherwise publicly available".
Article 63.1 of the TRIPS Agreement says that all "laws and regulations, and final judicial decisions
and administrative rulings of general application … shall be made publicly available, in a national
language, in such a manner as to enable governments and rights holders to become acquainted with
them".  Furthermore, Article 63.3 states that each Member should be prepared to supply, in response
to a written request from another Member, all information of the sort referred to in Article 63.1.
B. NOTIFICATION REQUIREMENTS
18. The obligation to notify the WTO and other Members of changes to laws and regulations is
present throughout most WTO agreements, and is generally more detailed and complex than the
publication requirement.  As noted, GATT Article X has not been interpreted as requiring publication
in advance of trade regulations, and this remains true under the WTO for virtually all covered areas.However, the "Understanding Regarding Notification, Consultation, Dispute Settlement and
Surveillance" which was adopted at the close of the Tokyo Round, underlined the desirability of
"advance notice" as a generalized principle in transparency, and introduced a rudimentary version of
trade policy surveillance.
7
19. This general notification obligation was reinforced and clarified in the Marrakesh Ministerial
"Decision on Notification Procedures".  Its objective was to "improve upon the operation of
notification procedures under the Agreement Establishing the WTO, and thereby to contribute to the
transparency of Members' trade policies and to the effectiveness of surveillance arrangements
established to this end".  This Decision established a general obligation to notify, backed up by a
central registry of notifications in the WTO; it also provided for a review to rationalize existingnotification obligations, which were believed in some cases to involve unnecessary requirements and
some duplication.  The general obligation, although stated in terms of the WTO agreements as a
whole, focuses on measures affecting trade in  goods and reinforces the earlier Tokyo Round
understanding.
20. Many of the agreements that make up Annex IA of the WTO Agreement, relating to trade in
goods, also contain a specific notification obligation.  A Secretariat note prepared for the Working
Group on Notification Obligations and Procedures lists 165 different notification obligations andprocedures in the area of trade in goods.
8  Some of these are of broad application;  for example, most
WTO agreements require the notification of implementing legislation and any changes to such
legislation.  Some call for notifications on a periodic basis, such as biannual reports on countervailing
and anti-dumping actions.  Some notifications only ha ve to be made when a particular trade action is
                                                     
7 "Contracting Parties moreover undertake, to the maximum extent possible, to notify the
CONTRACTING PARTIES of their adoption of trade measures affecting the operation of the General
Agreement, it being understood that such notification would be without prejudice to views on the consistency of
measures with or their relevance to obligations under the General Agreement.  Contracting Parties should
endeavour to notify such measures in advance of impl ementation.  In other cases, where prior notification has
not been possible, such measures should be notified promptly ex post facto .  Contracting Parties which have
reason to believe that such trade measures have been adopted by another Contracting Party may seekinformation on such measures bilaterally, from the Contracting Party concerned."  (BISD 26S/210).
8 G/NOP/W/2.  The most recent paper setting out information on compliance with these procedures is
G/L/223/Rev.1 dated 27 January 1999.WT/WGTI/W/109
Page 7
taken or contemplated, such as a safeguard action, an anti-dumping investigation, or a countervailing
investigation.  Still others have to be made only on a "one-time" basis, for example at the time of the
coming into force of the WTO Agreement.  These notifications are reported through specialized
committees which act in a de facto  surveillance role.
21. The general GATS and TRIPS provisions regarding notification are those contained in the
Articles referred to above,9 although there are other provisions calling for notifications in particular
instances.  Since the conclusion of the Uruguay Round negotiations, Members have expanded some of
the sectoral GATS transparency provisions.  For instance, both the Reference Paper on Basic
Telecommunications (BTRP) and the Provisional Disciplines on Domestic Regulation in the
Accountancy Sector  contain provisions which require Members to ensure that their service suppliers
and relevant non-governmental entities release information crucial to the industry.  Specifically, the
BTRP states that "it is ensured that a major service supplier will make publicly available either itsinterconnection agreements or a reference interconnection offer".  The Accountancy Disciplines
require,  inter alia, that Members or their competent authorities provide "information describing,
where applicable, the activities and professional titles which are regulated or which must comply with
specific technical standards; ... requirements and procedures to obtain, renew or retain any licences
and professional qualifications; ... the rationale behind the measures".
C. P
RIOR NOTIFICATION AND COMMENT
22. Several notification requirements, specific to certain agreements, are worth noting.  Both the
Agreement on the Application on Sanitary and Phytosanitary Measures (SPS) and the Agreement on
Technical Barriers to Trade (TBT) lay out detailed requirements for prior notification and comment.
In instances where an international standard does not exist or where a domestic standard departs fromthe international standard, both agreements require that an opportunity for advance comment on
proposed regulations be provided to other Members.  For instance, if a Member has reason to believe
that a measure introduced or maintained by another Member is trade-restricting, an explanation of the
reason for such a measure may be requested "and shall be provided by the Member maintaining the
measure".  The TBT Agreement extends the reach of its transparency provisions to covergovernmental and non-governmental standard setting bodies through its Code of Good Practice for
the Preparation, Adoption and Application of Standards .  Compliance with the Code is obligatory for
central government standardizing bodies, and encouraged for other standardizing bodies. The Code
requires advance publication and a 60-day comment period during which all "interested parties within
the territory of a Member of the WTO" may submit comments, and request a reply from the body.
D. R
EVERSE NOTIFICATIONS
23. Several WTO agreements allow for the possibility of "reverse" notifications to be made – i.e.
notifications made by an affected Member about another Member's practices.  GATS Article III.5, for
example, states that "any Member may notify to th e Council for Trade in Services any measure, taken
by any other Member, which it considers affects the operation of this Agreement".
E. REQUEST FOR INFORMATION /ENQUIRY POINTS
24. Many of the agreements that make up Annex IA of the WTO Agreement, relating to trade in
goods, contain a specific publication and information obligation.  Members are required to respond to
requests for information – and to establish enquiry points to make access to such information easier.
                                                     
9 Article III:3 of the GATS  states that Members "shall promptly and at least annually inform the
Council for Trade in Services of the introduction of any new, or any changes to existing laws, regulations oradministrative guidelines which significantly affect trade in services covered by its specific commitments under
this Agreement".WT/WGTI/W/109
Page 8
For example, the SPS Agreement contains detailed provisions for assessing whether an exporting
Member's health or sanitary measures meet an "equivalence" test – i.e. that the Member can
objectively show that its measures, even if they differ from those used by other Members, achieve the
importing Members appropriate level of technical or sanitary protection.  To verify this undertaking,
Article 4 states that "reasonable access shall be given, upon request, to the importing Member forinspection, testing and other relevant procedures".
25. These more detailed "access to information" requirements are also found in both the GATS
and the TRIPS Agreement.  GATS Article III:4 prescribes that "each Member shall respond promptly
to all requests by any other Member for specific information on any of its measures of general
application".  It also obliges each Member to establish within two years of the entry into force of the
Agreement one or more "enquiry points" to provide specific information to other Members upon
request.
26. Article 63:3 of the TRIPS Agreement states that "each Member must be prepared to supply, in
response to a written request from a Member, all relevant information pertaining to the subject-matter
of the Agreement".  Moreover, if a Member has reason to believe that a specific judicial decision or
administrative ruling or bilateral agreement affects its rights under the Agreement, it "may also
request in writing to be given access to or be inform ed in sufficient detail of such specific judicial
decisions or administrative rulings or bilateral agreements".
F. A
DMINISTRATIVE PROCEEDINGS
27. The notion of procedural transparency is embodied in GATT Article X which contains
provisions on the administration of trade measures and on the right of review of action taken pursuant
to them. Article X:3 obliges Members to administer rules and regulations in a "uniform, impartial andreasonable manner".  The terms "uniform", "impartial" and "reasonable" have not been the subject of
legal interpretation.
28. More detailed provisions spelling out procedural rules that must be followed in order to fulfill
the obligation of "due process" can be found in many other WTO agreements.  GATS (in particular
Article VI:2), the TRIPS Agreement (in particular Articles 41-42 and 62) and in various Annex IAAgreements, such as those on Subsidies and Countervailing Measures, Anti-Dumping Measures,
Customs Valuation, Import Licensing Procedures and Pre-Shipment Inspection, incorporate a range of
procedural "rights" aimed at enhancing the transparency and fairness of administrative processes,
including the right to prior notification and consultation.
29. GATS Article VI provides an illustration of the kind of detailed procedural requirements that
Members must meet to ensure transparency.  Article VI:3 provides that "where authorization is
required for the supply of service on which a specific commitment has been made, the competentauthorities of a Member shall, within a reasonable period of time after the submission of an
application considered complete under domestic laws and regulations, inform the applicant of the
decision concerning the application".  Moreover, at the request of the applicant, "the competent
authorities of the Member shall provide, without undue delay, information concerning the status of the
application".
30. GATS Article VI:3 further tasked the Council for Trade in Services to develop requirements
and disciplines with a view to ensuring that measures relating to qualification requirements and
procedures, technical standards and licencing requirements do not constitute unnecessary barriers to
trade in services.WT/WGTI/W/109
Page 9
G. REVIEW AND APPEAL
31. The notion of the right of appeal and review by an "independent" body is also embodied in
GATT Article X which contains detailed provisions on the review of action taken pursuant to the
administration of trade measures.  Article X:3 obliges Members to maintain "judicial, arbitral or
administrative tribunals or procedures for the purpose, inter alia , of the prompt review and correction
of administrative action relating to customs matters" which are to be "independent of the agencies
entrusted with administrative enforcement".
32. Detailed provisions outlining the procedural rules that must be followed in order to fulfill the
right of appeal and review can be found in other WTO agreements.  As noted above, the GATS (in
particular Article VI:2), the TRIPS Agreement (in particular Articles 41-42 and 62) and various
Annex IA Agreements, such as those on Subsidies and Countervailing Measures, Anti-Dumping
Measures, Customs Valuation, Import Licensin g Procedures and Pre-Shipment Inspection,
incorporate a range of procedural "rights" - including the right to file a complaint, and the right of
appeal.
33. For example, GATS Article VI:2 states that "each Member shall maintain or institute as soon
as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request
of an affected service supplier, for the prompt review of, and where justified, appropriate remediesfor, administrative decisions affecting trade in services.  Where such procedures are not independent
of the agency entrusted with the administrative decision concerned, the Member shall provide,
without undue delay, information concerning the status of the application".
H. T
RADE POLICY REVIEWS
34. The important role of information-sharing, su rveillance, and policy transparency in the WTO
system is perhaps most clearly expressed in the objectives of the Trade Policy Review Mechanism
(TPRM).  The objectives of the TPRM are codified in Annex 3 of the Agreement Establishing the
WTO:  "to provide greater transparency of national laws and practices, to contribute to improved
adherence by all Members to [WTO] rules, discip lines and commitments, and to examine the impact
of a Member's trade policies and practices on the multilateral trading system".  Although the TPRMencourages greater transparency in national trade policies, it is not intended "to serve as a basis for the
enforcement of specific obligations under the Agreements or for dispute settlement procedures, or to
impose new policy commitments on Members".
10  The TPRB is also the repository of all notifications
that countries are obliged to make under the various WTO agreements.
IV. SOME IMPLICATIONS OF THE TRANSPARENCY PRINCIPLE
35. Transparency has been a core principle of the multilateral trading system from the outset.
The publication and notification obligations in the WTO Agreements are broad, covering "laws,regulations, judicial decisions and administrative rulings of general application" pertaining, in each
area, to the full range of issues covered by the agre ement in question.  They also include an obligation
to publish relevant international agreements.  Moreover, they contain detailed provisions for
procedural or administrative transparency, including requirements for review of decisions and
comment.
36. The function of transparency obligations is relatively more important in areas where the role
of WTO rules of general application is limited.  One example is areas where the scope for
discretionary government measures is large, either because of their actual or potential direct control
over specific economic transactions affecting trade, such as in the areas of government procurement
                                                     
10 Paragraph A.i-iii.WT/WGTI/W/109
Page 10
and state trading, or because national laws of general application allow for considerable executive
discretion in establishing trade measures.
37. The plurilateral Agreement on Government Procurement contains detailed provisions for both
ex ante  transparency in regard to procurement opportunities and ex post  transparency in regard to
decisions taken to award procurement contracts, as well as provisions for possible subsequent reviewat the domestic level.  It also contains significant notification procedures, for example of a statistical
nature.  The important role that transparency can play in this area has also been recognized through
the establishment of a multilateral work programme on transparency in government procurement at
the 1996 Singapore WTO Ministerial Conference.  This  work programme is still under way.  The area
of state trading is another where transparency is the focus of multilateral efforts, notably through the
establishment of a Working Party to review notifications and counter-notifications and make
recommendations regarding the adequacy of the notification obligations.
38. An example of where national laws of general application allow for considerable executive
discretion in establishing trade measures is the area of import licensing.  The WTO Agreement on
Importing Licensing Procedures has, as one of its principal aims, to ensure that import licensing,
particularly non-automatic import licensing, is implemented in a transparent and predictable manner,
and that the rules "shall be neutral in application and administered in a fair and equitable manner".Article 1:4-7 lays out detailed procedural obligati ons to ensure that the administration of important
licencing regimes conform to accepted norms of transparency.
39. The second area where transparency obligations figure prominently concerns those aspects of
essentially internal governmental regulation that have as their principal objects the promotion of
legitimate public policy objectives, such as public health or protection of the environment, but wherethe regulations in question can have an important impact on the conditions of international
competition.  The challenge in this area is how to find a proper balance between, on the one hand, the
need to ensure that such policy instruments are not used as disguised restrictions on trade and, on the
other hand, the need for the WTO not to be overly intrusive in areas where trade considerations are
not paramount, nor to overload the process of increasing transparency to the point where it becomesimpossible for Members to see the wood for the trees.
40. The WTO SPS and TBT agreements approach this issue by first providing for some broad
rules of general application, revolving around the concept that regulations should be drawn up and
applied on a national treatment basis and should be no more trade-restrictive than necessary to fulfill
their legitimate objectives, and then putting a great deal of emphasis on transparency, especially in
situations where Members deviate from international standards or where international standards are
not available.  In such situations, as a general rule, Members are required to provide opportunities forother Members and interested parties to express their views in advance, notably by prior publication
and notification to the WTO of proposals to introduce regulation.
41. Panels and the Appellate Body have generally emphasized the duty to provide information in
a comprehensive, timely and non-discriminatory manner.
11  T h e  Japan – Film  case dealt with an
alleged violation of Article X of the GATT relating to a purported failure to publish certainenforcement actions taken by the Japan Fair Trade Commission and local fair trade councils as well as
administrative "guidance" given by regional offices of the Ministry of Trade and Industry, prefectural
governmental and local authorities concerning the Large Stores Law and relevant local regulations.  In
reviewing the complaint, the Panel noted that, on the plain meaning of Article X:1 of the GATT, the
requirement of publication does not extend to administrative rulings addressed to specific individualsor entities.  It noted further that "inasmuch as the Article X:1 requirement applies to all administrative
                                                     
11 Japan – Trade in Semiconductors,  BISD 35S/116 and L/6309, and European Communities –
Measures Affecting the Importation of Certain Poultry Products,  WT/DS69/AB/R.WT/WGTI/W/109
Page 11
rulings of general application, it should also extend to administrative rulings in individual cases where
such rulings establish or revise principles or criteria applicable in future cases".12
42. The importance of transparency and procedural fairness was underscored in the US – Shrimp
case, which dealt with an alleged violation of Article X relating to the failure of the United States to
respect due process in developing and applying its law prescribing the shrimp import ban.  Inupholding the findings of the original dispute settlement panel, the Appellate Body observed that
Article X:3 of the GATT 1994 establishes certain minimum standards for transparency and procedural
fairness in the administration of trade regulations.  It further noted that "insomuch as there are due
process requirements generally for measures that are otherwise imposed in compliance with WTO
obligations, it is only reasonable that rigorous compliance with the fundamental requirements of due
process should be required in the application and administration of a measure which purports to be an
exception to the treaty obligations of the Member imposing the measure and which effectively resultsin a suspension pro hac vice  of the treaty rights of other Members".
13
V. KEY EXCEPTIONS TO THE PRINCIPLE
43. The main transparency provisions of the GATT, GATS and TRIPS Agreement contain
exceptions making it clear that Members are not required to disclose confidential information which
would impede law enforcement or otherwise be co ntrary to the public interest, or which would
prejudice legitimate commercial interests of particular enterprises, public or private.14  Similar clauses
are to be found in many of the other Annex IA WTO agreements.
VI. TRANSPARENCY PROVISIONS IN EXISTING INVESTMENT AGREEMENTS
44. Model bilateral investment treaties are largely silent on the question of transparency.15  One
notable exception is the United States' prototype bilateral treaty concerning the encouragement andreciprocal protection of investment.  Article II:5 states that each party "shall ensure that its laws,
regulations, administrative practices and procedures of general application, and adjudicatory
decisions, that pertain to or affect covered investments are promptly published or otherwise made
publicly available".
16  Another example is China's Model Agreement Concerning the Encouragement
and Reciprocal Protection of Investments, which contains the following provision:
Article 12
The representatives of the two Contracting Parties shall hold meetings from time to time for
the purpose of:
(a)  reviewing the implementation of this Agreement;
(b)  exchanging legal information and investment opportunities; ….17
45. The 1961 OECD Code of Liberalisation of Capital Movements, Articles 11 to 15, contain
provisions requiring members to notify the OECD " … of measures of liberalisation which they have
taken and of any other measures which have a bearing on this Code, as well as of any modifications
of such measures. ", along with more detailed information on restrictions imposed "… on specific
                                                     
12 Japan – Measures Affecting Consumer Photographic Film & Paper , WT//DS44/R.
13 United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R.
14 GATT Article X:1, GATS Article III bis and TRIPS Article 63:4.
15 See UNCTAD, International Investment Instruments:  A Compendium, 5 volumes (1996 – 2000).
16 See UNCTAD, International Investment Instruments:  A Compendium, Vol.III, p. 198.
17 Ibid, Volume III, p. 156.WT/WGTI/W/109
Page 12
transactions or transfers relating to direct investments …" , and on reservations or derogations made
under the Code.18
46. The 1976 OECD Declaration on International Investment and Multinational Enterprises
contains several transparency provisions.19  With regard to "Conflicting Requirements" imposed on
multinational enterprises " Member countries should endeavour to promote co-operation as an
alternative to unilateral action to avoid or minimize conflicting requirements and problems arising
therefrom. ".  In the context of this cooperation, the Declaration recommends that " Member countries
should be prepared to:  (a) Develop mutually beneficial, practical and appropriately safeguarded
bilateral arrangements, formal or informal, for notification to and consultation with other Member
countries;  (b) Give prompt and sympathetic consideration to requests for notification and bilateral
consultation on an ad hoc basis …;  (c) Inform the other concerned Member countries as soon as
practicable of new legislation or regulations proposed by their Governments for adoption which havesignificant potential for conflict with the legal requirements or established policies of other member
countries and for giving rise to conflicting requirements being imposed on multinational enterprises;
(d) Give prompt and sympathetic consideration to requests by other Member countries for
consultation in the Committee on International Investment and Multinational Enterprises or through
other mutually acceptable arrangements. "  With regard to "International Investment Incentives and
Disincentives", " … Member countries will endeavour to make such measures as transparent as
possible, so that their importance and purpose can be  ascertained and that information on them can
be readily available. ".  The Declaration also contains detailed recommendations to enterprises on the
disclosure of information.
47. The North American Free Trade Agreement (NAFTA), which contains rules of foreign
investment as well as trade, includes general tran sparency requirements that are similar to the core
requirements in the WTO – i.e. the requirement to  publish, to notify and to conform to accepted
norms of procedural transparency.
48. Publication requirement.   The NAFTA contains a number of transparency provisions which
pertain to the entire agreement, including its investment provisions.  Article 1802 requires Parties toensure that "its laws, regulations, procedures and administrative rulings of general application
respecting any matter covered by [the] Agreement are promptly published or otherwise made
available in such a manner as to enable interested persons or parties to become acquainted".  It also
requires Parties, to the extent possible, to publish all such measures "in advance" and to "provide
interested persons or Parties a reasonable opportunity to comment".
49. Notification and Provision of Information.   Article 1803 requires, to the maximum extent
possible, that Parties "notify any other Party with an  interest in the matter of any proposed or actual
measure that the Party considers might materially affect the operation of [the] Agreement or otherwise
substantially affect that other Party's interests under [the] Agreement".  This Article also obliges
Parties, on the request of another Party, to "promptly provide information and respond to questions
pertaining to any actual or proposed measure, whether or not that other Party has been previously
notified of that measure".
50. Contact Points.   Article 1801 requires Parties to "designate a contact point to facilitate
communications between the Parties on any matter covered by [the] Agreement.  On the request of
another Party, the contact point shall identify the office or official responsible for the matter and
assist, as necessary, in facilitating communication with the requesting Party".
                                                     
18 Ibid, Volume II, p. 9.
19 Ibid, Volume II, pp. 185-194.WT/WGTI/W/109
Page 13
51. Administrative Proceedings.   With a view to "administering in a consistent, impartial and
reasonable manner" all measures of general application affecting matters covered by the Agreement,
Article 1804 requires Parties to ensure that, in their administrative proceedings20, persons of another
Party that are directly affected by a proceeding "are provided with reasonable notice, in accordance
with domestic procedures, when a proceeding is initiated, including a description of the nature of theproceeding, a statement of the legal authority under which the proceeding is initiated and a general
description of any issues in controversy".  Article 1804 also states that persons affected by these
proceedings are to be "afforded a reasonable opportunity to present facts and arguments in support of
their positions prior to any final administrative action, when time, the nature of the proceedings and
the public interest permit".  Finally Article 1804 stipulates that these proceedings must be in
accordance with domestic law.
52. Review and appeal .  Article 1805 requires Parties to establish or maintain judicial, quasi-
judicial or administrative tribunals or procedures  "or the purpose of the prompt review, and where
warranted, correction of final administrative actions regarding matters covered by [the] Agreement".
It stipulates that such tribunals "shall be impartial and independent of the office or authority entrusted
with administrative enforcement and shall not have any substantial interest in the outcome of the
matter".  Article 1805 states that Parties to the proceeding have the right to "a reasonable opportunityto support or defend their respective positions".  Parties also have a right of access to "a decision
based on the evidence and submissions of record or, where required by domestic law, the record
compiled by the administrative authority".  Lastly, Article 1805 states that Parties will ensure that,
subject to appeal or further review as provided in domestic law, "decision shall be implemented by,
and shall govern the practice of, the office or authorities with respect to the administrative action atissue".
53. Confidentiality.   Article 1111, a requirement to share confidential investment-related
information with the host country, is the only transparency requirement in the NAFTA which is
specific to its investment chapter (chapter 11).  It states that a Party may require an investor of another
Party, or its investment in its territory, to provide routine information concerning that investmentsolely for information or statistical purposes.  Howe ver, it also states that the Party is obliged to
"protect such business information that is confid ential from any disclosure that would prejudice the
competitive position of the investor or the investment".
VII. TRANSPARENCY ISSUES AND INVESTMENT
54. The WTO's general transparency provisions – the obligation to publish, to notify, and to
impartially administer all relevant rules and regulations – already apply to investment-related trade
issues insofar as they are key provisions of the GATS (specifically mode 3), the TRIPS Agreement,and the TRIMs Agreement.  For example, Article 6.1 of the TRIMs Agreement, through making a
reference to GATT Article X, the 1979 "Understanding Regarding Notification, Consultation, Dispute
Settlement and Surveillance", and the 1994 "Ministerial Decision on Notification Procedures",
requires Members to notify all publications in which a TRIM may be found, including "those applied
by regional and local governments and authorities within their territories".  It also states that Membersshall accord "sympathetic consideration to requests  for information, and afford adequate opportunity
for consultation, on any matter arising from this agreement raised by another Member.
55. The question that arises in the context of multilateral investment relations is less about the
principle of transparency, than about its scope and application.  Here it is important to note that the
scope for "transparency" depends not just on obligations regarding publication, notification andadministrative procedures, but on the ambition and breadth of an agreement's substantive
                                                     
20 When "applying measures referred to in Article 1802 (i.e. the publication requirement) to particular
persons, goods or services of another Party in specific cases".WT/WGTI/W/109
Page 14
commitments – i.e., it's scope and definition;  its general obligations and exemptions;  and a Member's
specific commitments or reservations as listed in its schedule of commitments.  For example,
regarding the schedule of commitments, the use of a "positive list" approach to reservations would in
principle result in a less "transparent" investment regime, insomuch as it would not oblige parties to
list all the non-conforming measures that they wish to exclude from certain obligations.  However, theimportance of the principle of transparency has generally been seen from the WTO's perspective in
the context of its operational role in underwriting WTO rules and disciplines, rather than from the
perspective of transparency for transparency's sake.
56. Transparency is essentially about the requirements to publish, notify and administer fairly and
predictably an agreement's rules and regulations.  In the WTO agreements, these requirements can
vary widely in specificity and detail.  Several points may warrant further discussion and elaboration:
(a) Publication requirements.   The obligations to publish or make publicly available all
relevant rules, regulations, judicial decisions, and administrative actions of general
application is the most basic transparency requirement in the WTO.  Is there value in
extending these basic publication requirements to more detailed "access to
information" obligations – such as provisions regarding the right to request
information or a requirement to establish enquiry points?
(b) Notification.  Most notification obligations in the GATT, GATS and the TRIPS
Agreement come into play only after a measure has been formally adopted.  But there
are a also a variety of prior notification requirements scattered throughout the WTO
agreements – ranging from the simple obligation to notify the WTO and other
Members of proposed changes to laws and regulations, to more complex obligationsto allow other Member the opportunity to comment on proposed regulatory changes
and even to submit "reverse notifications".  The expectation is that prior comment
reduces uncertainty and discriminatory treatment in a given market, as all parties are
better informed through the ability to par ticipate in the development of regulations.
What kind of prior consultation requirement is most desirable?
(c) Procedural transparency .  The WTO's transparency provisions apply not only to the
substantive rules, but also to the procedures for administering the rules.  Procedural
transparency in the WTO is particularly important in areas where the rules of general
application are weakest and where the scope for discretionary government action is
greatest.  General and specific obligations relating to the "uniform, reasonable and
impartial" administration of rules and regulations, including, in many instances, the
right of appeal and review, can be found throughout the WTO agreements. Forexample, transparency issues arise in procedures for the administration of rules
governing authorization or licencing to invest or operate in a host country (GATS
Article VI), professional accreditation, and changes to domestic regulations.  Is it
desirable to incorporate a right to appeal and review in the discussion of procedural
transparency?
(d) Development dimension.   Developing countries, and least-developed countries in
particular, face technical and capacity constraints in complying with the transparency
requirements in WTO agreements.  Where should the balance be struck between
pursuing more transparency and avoiding the imposition of burdensome obligations?
What kind of technical assistance is needed to assist developing and least-developedcountries to comply with information and notification requirements?
(e) Confidentiality exemptions.  The general and specific transparency provisions of the
WTO agreements often contain exceptions making it clear that Members are notWT/WGTI/W/109
Page 15
required to disclose confidential information which would impede law enforcement
or otherwise be contrary to the public interest, or which would prejudice legitimate
commercial interests of particular enterprises, public or private.
(f) Binding versus non-binding undertakings.   WTO rules on transparency are binding on
Members and subject to dispute settlement.  Another possible approach is voluntaryundertakings.  APEC's Non-Binding Invest ment Principles encourage Members to
"make all laws, regulations, administrative guidelines and policies pertaining to
investment in their economies publicly available in a prompt, transparent and readily
accessible manner".WT/WGTI/W/109
Page 16
ANNEX I
Main Provisions Relevant to the Principle of Transparency
GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)
Article X
Publication and Administra tion of Trade Regulations
1. Laws, regulations, judicial decisions and admi nistrative rulings of general application, made
effective by any contracting party, pertaining to the classification or the valuation of products for
customs purposes, or to rates of duty, taxes or ot her charges, or to requirements, restrictions or
prohibitions on imports or exports or  on the transfer of payments therefor, or affecting their sale,
distribution, transportation, insurance, warehousing in spection, exhibition, proce ssing, mixing or other
use, shall be published promptly in such a manner as to enable governments and traders to become
acquainted with them.  Agreements affecting intern ational trade policy which are in force between the
government or a governmental agency of any contracting party and the government or governmental
agency of any other contracting party shall also be published.  The provisions of this paragraph shall not
require any contracting party to disclose confiden tial information which would impede law enforcement
or otherwise be contrary to the public interest or  would prejudice the legitimate commercial interests of
particular enterprises, public or private.
2. No measure of general application taken by any contracting party effecting an advance in a rate
of duty or other charge on imports under an establ ished and uniform practice, or imposing a new or
more burdensome requirement, restriction or prohib ition on imports, or on the transfer of payments
therefor, shall be enforced before such measure has been officially published.
3. ( a) Each contracting party shall administer in a uniform, impartial and reasonable manner
all its laws, regulations, decisions and rulings of the kind described in paragraph 1 of this Article.
(b) Each contracting party shall maintain, or institute as soon as practicable, judicial,
arbitral or administrative tribunals  or procedures for the purpose, inter alia , of the prompt review and
correction of administrative action relating to custom s matters.  Such tribunals or procedures shall be
independent of the agencies entrusted with admi nistrative enforcement and their decisions shall be
implemented by, and shall govern the practice of, such agencies unless an appeal is lodged with a court
or tribunal of superior jurisdiction within the time prescribed for appeals to be lodged by importers;
Provided  that the central administration of such agency may take steps to obtain a review of the matter
in another proceeding if there is good cause to believ e that the decision is inconsistent with established
principles of law or the actual facts.
(c) The provisions of sub-paragraph ( b) of this paragraph shall not require the elimination
or substitution of procedures in force in the territory  of a contracting party on the date of this Agreement
which in fact provide for an objective and impar tial review of administrative action even though such
procedures are not fully or formally independent  of the agencies entrusted with administrative
enforcement.  Any contracting party employing such procedures shall, upon request, furnish the
CONTRACTING PARTIES  with full information thereon in orde r that they may determine whether such
procedures conform to the requirements of this sub-paragraph.WT/WGTI/W/109
Page 17
GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)
Article III
Transparency
1. Each Member shall publish promptly and, except in  emergency situations, at the latest by the
time of their entry into force, all relevant measures of general application which pertain to or affect the
operation of this Agreement.  International agreements  pertaining to or affecting trade in services to
which a Member is a signatory shall also be published.
2. Where publication as referred to in paragraph 1 is not practicable, such information shall be
made otherwise publicly available.
3. Each Member shall promptly and at least annua lly inform the Council for Trade in Services of
the introduction of any new, or any changes to exis ting, laws, regulations or administrative guidelines
which significantly affect trade in services cove red by its specific commitments under this Agreement.
4. Each Member shall respond promptly to all requests by any other Member for specific
information on any of its measures of general app lication or international agreements within the
meaning of paragraph 1.  Each Member shall also establish one or more enquiry points to provide
specific information to other Members, upon request, on a ll such matters as well as those subject to the
notification requirement in paragraph 3.  Such enquiry  points shall be establis hed within two years from
the date of entry into force of the Agreement Establis hing the WTO (referred to in this Agreement as the
"WTO Agreement").  Appropriate flexibility with respect  to the time-limit with in which such enquiry
points are to be established may be agreed upon fo r individual developing country Members.  Enquiry
points need not be depositories of laws and regulations.
5. Any Member may notify to the Council for Trade in Services any measure, taken by any other
Member, which it considers affects the operation of this Agreement.
AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS (TRIPS)
Article 63
Transparency
1. Laws and regulations, and final judicial deci sions and administrative rulings of general
application, made effective by a Member pertaini ng to the subject matter of this Agreement (the
availability, scope, acquisition, enforcement and preven tion of the abuse of intellectual property rights)
shall be published, or where such publication is not practicable made publicly available, in a national
language, in such a manner as to enable governments and right holders to become acquainted with them.Agreements concerning the subject matter of this Agreement which are in force between the government
or a governmental agency of a Member and the go vernment or a governmental agency of another
Member shall also be published.
2. Members shall notify the laws and regulations referred to in paragraph 1 to the Council for
TRIPS in order to assist that Counc il in its review of the operation of this Agreement.  The Council shall
attempt to minimize the burden on Members in carryin g out this obligation and may decide to waive the
obligation to notify such laws and regulations directly  to the Council if consulta tions with WIPO on the
establishment of a common register containing these laws and regulations are successful.  The CouncilWT/WGTI/W/109
Page 18
shall also consider in this connection any acti on required regarding notifications pursuant to the
obligations under this Agreement stemming from the provisions of Article 6 ter of the Paris
Convention (1967).
3. Each Member shall be prepared to supply, in response to a written request from another
Member, information of the sort referred to in paragraph 1.  A Member, having reason to believe that a
specific judicial decision or administrative ruling or bilateral agreement in the area of intellectual
property rights affects its rights under this Agreemen t, may also request in writing to be given access to
or be informed in sufficient detail of such specific j udicial decisions or administrative rulings or bilateral
agreements.
4. Nothing in paragraphs 1, 2 and 3 shall require  Members to disclose confidential information
which would impede law enforcement or otherwise be contrary to the public interest or would prejudice
the legitimate commercial interests of particular enterprises, public or private.
__________