./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/175
11 January 2000
(00-0104)
Council for Trade in Goods
REQUEST BY ROMANIA FOR AN EXTENSION OF THE TRANSITION PERIOD
UNDER THE PROVISIONS OF ARTICLE 5.3 OF THE AGREEMENT
ON TRADE-RELATED INVESTMENT MEASURES
The following communication, dated 27 December 1999, has been received from the
Permanent Mission of Romania.
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The Government of Romania, pursuant to Article 5.3 of the Agreement on Trade-Related
Investment Measures (TRIMs Agreement), requests the extension of the five year transition period for
its measures notified under Article 5.2 of the TRIMs Agreement.
Notified TRIMs:
In its communication dated 31 March 1995 (d ocument G/TRIMS/N/1/ROM/1), addressed to
the Council for Trade in Goods, Romania notified measures applied by the Romanian Government
according to Law 71/1994, falling under category 1(a) of the illustrative list annexed to the TRIMs
Agreement.
The TRIMs are applied to newly established companies in industry, having a foreign capital
participation, to which foreign investors share represents at least US$ 50 million.  The facilities are
subject to an integration value degree in Romania of minimum 60 per cent and an export of minimum
50 per cent of the annual value of the production.
Request for extension:
These facilities were granted to two industrial units:  one in the field of the automobile
industry and one in the shipbuilding industry, both under the same Law 71/1994.
Period of extension requested:
Up to 31 December 2004.
Basis:
Romania will have particular difficulties in phasing out the notified measures, taking into
account its development, financial and trade needs.
Within the context of insufficient internal s ources of investment and relatively low rate of
foreign investment it is important to the two industrial sectors to maintain the activity of the two
companies created on the basis of Law 71/1994.G/C/W/175
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Romania is facing a period of important changes in the structure of its industry and the two
investments are materialized in modern industrial units, with high performing technologies,
employing more than 10,000 workers.  The activ ity in the two industrial units is based on
international standards.
At the same time, the automobile unit is placed  in an area with a high unemployment rate.  As
a result of the activity in the new unit, this rate went down by one per cent.  For the same industrial
unit, it is worth mentioning that maintaining the automobile company in Craiova means preserving the
competitive conditions for the branch, as there is another company producing automobiles in Pitesti.
The applied TRIMs did not affect the liberalizing process in Romania:  there are no import
restrictions and the only instrument of protection is the customs tariff.
It is emphasized that, fully committed to the mu ltilateral trading system and rules, Romania
modified its legislation related to facilities offe red to investors, eliminating the TRIMs measures by
the Government Ordinance 67/1999.  Under the new legislation the incentives for investments are not
any more subject to a local content or to compulsory export requirements.
Thus, the requested extension concerns only the facilities already given to investors who
decided to make their investments under Law 71/1994.  Maintaining the regime allowed represents, in
fact, stability for the economic environment.
This extension would provide the industry the indispensable adjustment period to institute
progressive structural reforms and to enhance capab ility programmes in preparation for even further
trade regime liberalization.
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