{"id":136,"date":"2016-06-09T10:28:54","date_gmt":"2016-06-09T14:28:54","guid":{"rendered":"http:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/?page_id=136"},"modified":"2016-09-01T19:05:59","modified_gmt":"2016-09-01T23:05:59","slug":"5-4-3-performance-requirement-prohibitions","status":"publish","type":"page","link":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/5-investment-provisions\/5-4-safeguarding-policy-space\/5-4-3-performance-requirement-prohibitions\/","title":{"rendered":"5.4.3 Performance Requirement Prohibitions"},"content":{"rendered":"<p>Performance requirements are demands by governments for such things as technology transfer, training of local workers or local purchasing, in return for the right to invest, or for some preferential treatment of the investment (for example, tax preferences). Most older international investment agreements do not prohibit performance requirements, but WTO members are bound by the TRIMS Agreement not to condition advantages on two types of performance requirements: local content requirement and various types of export performance. Outside the WTO, the new trend in IIAs, influenced by the NAFTA, is to prohibit performance requirements more broadly.<\/p>\n<p>From a sustainable development perspective, this can be problematic because, if well designed and applied, performance requirements can be effective tools to maximize the economic, environmental and social benefits of foreign investment in the host state. It is consequently important for states, particularly developing countries, to retain the possibility of using them when circumstances so warrant.<\/p>\n<p>One option is to not go beyond the performance requirements prohibitions already existing under TRIMs, which only prohibit trade-related local content requirements and requirements linked to export performance. This can be done through a simple re-affirmation of WTO commitments, or by simply not dealing with performance requirements in the RTIA.<\/p>\n<p>If performance requirements are prohibited, there are options for limiting the effects of the prohibition:<\/p>\n<ul>\n<li>Explicitly state that certain types of performance requirements will be permitted<\/li>\n<li>Specify a list of sectors in which performance requirements may be used and\/or may not be used<\/li>\n<li>Include a specific exception to performance requirement prohibitions<\/li>\n<li>Grandfather existing performance requirements<\/li>\n<li>Carve out non-mandatory performance requirements<\/li>\n<li>Place performance requirement obligations outside the coverage of investor\u2013state dispute settlement (ISDS)<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Performance requirements are demands by governments for such things as technology transfer, training of local workers or local purchasing, in return for the right to invest, or for some preferential treatment of the investment (for example, tax preferences). Most older international investment agreements do not prohibit performance requirements, but WTO members are bound by the<a class=\"excerpt-read-more\" href=\"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/5-investment-provisions\/5-4-safeguarding-policy-space\/5-4-3-performance-requirement-prohibitions\/\" title=\"Read5.4.3 Performance Requirement Prohibitions\">&#8230; Read more &raquo;<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"parent":130,"menu_order":3,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":"0"},"class_list":["post-136","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/comments?post=136"}],"version-history":[{"count":0,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/136\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/130"}],"wp:attachment":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/media?parent=136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}