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12 Int'l L. News [i] (1983)

handle is hein.journals/inrnlwnw12 and id is 1 raw text is: Experts air problems, options
Reduction sought in Trade-Related Requirements

Reducing trade-related requirements on American
investments abroad (i.e.. trade-relatcd performance require-
ments) will be an uphill battle according to three panel
members who participated in a discussion sponsored by
the Section Committee on International Trade. The panel
discussion, attended by more than eighty Section mem-
bers, took place in Washington. D. C. on October 5. The
panelists were Harvey E. Bale, Jr.. Assistant U.S. Trade
Representative for International Investment Policy; Wil-
liam Reinsch. Chief Legislative Assistant for Senator
John Heinz: and S. L.inn Williams, Vice President and
General Counsel of the Overseas Private Investment
Corporation (OPIC).
Trade-related performance requirements. which have
become commonplace in recent years, may take one of
two forms: first, they may require foreign investors to
maintain certain export levels, based either on a fixed
percentage of production or a minimum quantity of
goods produced; second, local content performance require-
ments may be imposed requiring foreign investors to
obtain a certain percentage ofthe value of the final output
from local sources or to produce that level of production
inputs locally.
Over the past year, the U.S. government has under-
taken several initiatives to confront trade-related perform-
ance requirements in other countries. The administration
has concentrated its caforts on the General Agreement on
Tariffs and Trade (GATT). The United States has
initiated GATT dispute settlement proceedings against
trade-related performance requirements imposed under
Canada's Foreign Investment Review Act, while a
broader effort to initiate multilateral negotiations in
GATT appears temporarily stalled.
Pending legislation would require OPIC to consider
trade-related performance requirements in making its
decisions on whether to insure particular investments.
Congress has recently considered two forms of legisla-
tion to address problems stemming from trade-related
requirements. Reciprocity legislation would make expli-
cit the President's authority to retaliate against other
countries' investment practices under Section 301 of the
Trade Act of 1974 and designate as a negotiating objective
of the United States the reduction or elimination of cer-
tain investment-related measures. Second, local content
legislation has been introduced which would require for-
eign automobile firms with major imports to the U.S. to
produce a certain portion of their imports in the United

Mr. Bale stated that there is strong opposition among
many of America's trading partners to the GATT work
program proposed by the United States. The program
proposes a study of trade-related performance require-
ments and their effects, and ultimately, negotiations to
reduce those requirements. The United States was. in fact.
unable to make any headway at the GATT ministerial
meeting in late November. Asa result. Mr. Bale intends to
place a greater emphasis on countering trade-related per-
formance requirements through the negotiation of bilat-
eral investment treaties, a major study and negotiations in
(Please turn to Page 6)
U.N. Mediation Service
Proposal                     -
The Subcommittee on Dispute Resolution of the
U.N. Activities Committee will soon issue its Report
with Recommendations insupport ofa proposed U.N.
Mediation. Service.,.The: Service: would provide a.
mechanism which could respond quickly to mediate,
disputes threatening international peace and security.'
As proposed,. the ,Mediation Service would be a
permanent standinghorgaizatioin'in the Officeof the '
U.N. Secretary-Generaliwith an office in each of the(.,'.
world's major: region:', lt-',would consist 'of a smallI'j,.i
group of.full-time paidj professionals experienced in.',
mediation and respected in the internaiional commun-,
ity. Acting as personalrepr csentativcs of the Secre .-
tary-General, mediat6riwould have the authority to',,-
start the mediation pr  s.on therown initiative by,,i
approaching the dis uting' partiesand asking them totil-,
med iate.-Thii' --ld'rlie tfoftenslow practtceo f
waiting forth; parties smeiation themselves. It:
i      's beleved thitdeliys A   imedtatoncould be eliminatedil, 4
Vor m               fabetatt.he resolutAt.  ofdis#
putes beforeSolit e bteakout or escalate.
j .Tc necryuce.iut imdiate-tnestnctest privacy
and confidence,( iwoul dnol.ve'the power, to rbi-i
: trate. Costs.,wo l, bffmnimiz.d! byusmng the s~~
possible number,.olfn&lmifonaiZ supportstaff' ,
.Comments arie,-inisought.(tm the U*S; ! rpart
iment' ofState, hUS~so iii  the U.N!~n ot~h
'organitiT 0, uFrtht  -frmat ongontat u
.~~~~~~              M i,   i f.,r--     , '  *  -  -*  i .. .a' 

Copyright Q 1982 American Bar Association

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