Highlights

Investment-related trade measures are a diverse array of trade policy instruments that influence the volume, sectoral composition and geographic distribution of foreign direct investment. Some of these measures (such as tariffs, quotas, and export financing programmes) are not principally designed to influence foreign-direct-investment flows but nevertheless can have major consequences on the decisions of international investors. Other devices (such as export processing zones, and co-production or buy-back trade arrangements) are designed with foreign-direct-investment effects more clearly in mind. In either case, the resultant impact of production location decisions and intra-company trade flows exerts an influence on world commerce. Investment-related trade measures are thus relevant to international investment agreements, including discussions about a possible multilateral framework on investment.