FIRA panel
FIRA panel: formed in 1982 in the GATT to consider a complaint by the United States concerning the Canadian Foreign Investment Review Act (FIRA) of 1973. Under this Act foreign investors had to enter into agreements with the Canadian authorities requiring them to give preference to the purchase of Canadian goods over imported goods and to meet certain export performance requirements. Undertakings to purchase goods were in many cases conditional on goods being available, reasonably available or competitively available in Canada with respect to price, quality, delivery or other factors. None of the agreements had been enforced through the court system. Both parties agreed that FIRA itself was not an issue, nor was Canada's right to regulate the entry and expansion of foreign direct investment. The panel found that mandatory undertakings to purchase goods of Canadian origin in preference to imported goods where imported goods are clearly treated less favourably than domestic products were not consistent with GATT Article III:4 (National Treatment). It found that this applied also when the undertakings were informal, i.e. conditional on goods being available, because this would entail giving preference to the domestic product. It considered that the sole purpose of Article III:4 was to ensure the treatment of domestic and imported products on equivalent terms. The panel also found that undertakings to buy from Canadian suppliers were equally inconsistent with Article III:4.
Source: http://ctrc.sice.oas.org/trc/WTO/Documents/Dictionary%20of%20trade%20%20policy%20terms.pdf
Web site to visit: http://ctrc.sice.oas.org
Author of the text: W. Goode
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