Complementation Agreement

Summary of Complementation Agreement

An agreement between a commercial entity and two or more governments to reduce or eliminate duties among themselves on specific products produced by the firm in one or more of the signatory states. The object of such an arrangement is to induce a manufacturer to establish a plant in one of the signatory countries to supply that country and others with the output of the factory.

(Main Author: William J. Miller)

Complementation Agreement and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Complementation Agreement: An agreement between a manufacturing firm and two or more governments to reduce or eliminate duties on specified items produced by the firm in one of the signatory countries. Complementation agreements are usually granted to induce a firm to establish manufacturing facilities in one of the signatory countries, by ensuring access to all of the signatories' markets for its output.