Disputes
Canada Vs. Japan and European Union
Indonesia vs EU, Japan and US over the issue of
Contents
India's Solar Power Mission
- Introduction
- Main Features of TRIMs Agreement
- Kinds of TRIMs
- Exceptions
- Examples/Disputes
- Developed vs Developing Countries divide
- Conclusion
Introduction to TRIMs
- Trade related investment measures employed by governments to promote the development of domestic industries.
- The agreement prohibits the use of TRIMs that are inconsistent with:
- Article III of GATT 1994 (National Treatment), or
- Article XI of GATT 1994 (General Elimination of Quantitative Restrictions).
Main Features (Article 2)
- Applies only to investment measures related to trade in goods.
- Focuses on the discriminatory treatment of products (imported/exported).
- Does not regulate the entry of foreign investment or investors
- Concerns measures applied to both foreign and local firms
Exceptions to TRIMs (Article 3)
Article 5
Notification of inconsistent TRIMs within 90 days of the entry into force of the WTO.
Transition period for elimination of notified TRIMs
- Developed countries - 2 years
- Developing countries - 5 years
- Least developed countries - 7 years
Possible Extension of the transition period for developing countries demonstrating particular difficulties in implementing the agreement.
Article 4
Developing countries are permitted to retain TRIMs that constitute a violation of GATT article III or XI, provided the measures meet all the conditions of GATT article XVIII.
- Article XVIII : allows specified derogation from the GATT provisions by virtue of the economic development needs of developing countries.
Transitional Period.
Exceptions for developing countries.
Equitable provisions.
To avoid damaging the competitiveness of companies already subject to TRIMs, governments are allowed to apply the same TRIMs to new foreign direct investment during the transitional period.
Other Provisions
- Transparency - Article 6
- TRIMs Committee - Article 7
- Consultation and Dispute Settlement - Article 8
Kinds of Restrictions
A. Performance Restrictions
B. Market Access Restrictions
Most Frequented Policies
- Local content schemes
- Foreign Exchange Balancing
Capital Structure and Management
- Local Equity Requirements
- Foreign exchange restrictions
- Repatriation of funds and profits
- Licensing requirements
- Local hiring targets
- Export restrictions/Domestic sales requirements
- Technology transfer requirement
- Nationality of Management
Major Disputes
- Developed vs. Developing Countries.
- Structural Adjustment
Trade and Local Production
- Local content schemes
- Manufacturing requirements
- Trade balancing requirements
- Domestic sales requirements
- Export performance requirements
Market Access Requirements
- Ownership or equity restrictions
- Joint Venture requirements
Agreement on Trade Related Investment Measures (TRIMs)
Zainab Mahmood