Global business & National regulation
WORLD TRADE ORGANISATIONS <ul><li>TRIPs &  TRIMs </li></ul>
Trade related investment measures(TRIMs)
<ul><li>THE FEAR OF THE LORD IS BEGINNING OF KNOWLDGE </li></ul>
What is TRIMs <ul><li>Governments often impose conditions on foreign investors to encourage investment in accordance with ...
An illustrative list of TRIMs <ul><li>1.Local content requirements (LCRs).  </li></ul><ul><li>2.Trade-balancing requiremen...
Uruguay Round <ul><li>Before the Uruguay round, the link between trade and investment has been </li></ul><ul><li>overlooke...
GATT Articles <ul><ul><li>Article III (GATT) </li></ul></ul><ul><ul><ul><li>National treatment of imported product, unless...
Aims of the Agreement <ul><li>Desiring </li></ul><ul><ul><li>to promote the expansion and progressive liberalisaiton of wo...
Examples of TRIMS <ul><li>Market access </li></ul><ul><ul><li>Ownership or equity restrictions </li></ul></ul><ul><ul><li>...
Transition periods <ul><li>Members are obliged to eliminate TRIMs which have been notified.  Such elimination is to take p...
Standstill  <ul><li>TRIMS introduced less than 180 days before the agreement do not benefit from transition period. </li><...
Development Dimension of the TRIMS agreement <ul><li>Only developing countries notified TRIMS </li></ul><ul><li>Most frequ...
Development effects <ul><li>I Identify and define TRIMs </li></ul><ul><li>II Historical experience with TRIMS </li></ul><u...
Real examples
ANNEX 1   Trade & Trade related measures September 2009-februrary2010 Country/member state measure Source and date status ...
THANK YOU HAVE A GREAT DAY
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International business

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Trade related investment measures(TRIMs),

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  1. 1. Global business & National regulation
  2. 2. WORLD TRADE ORGANISATIONS <ul><li>TRIPs & TRIMs </li></ul>
  3. 3. Trade related investment measures(TRIMs)
  4. 4. <ul><li>THE FEAR OF THE LORD IS BEGINNING OF KNOWLDGE </li></ul>
  5. 5. What is TRIMs <ul><li>Governments often impose conditions on foreign investors to encourage investment in accordance with certain national priorities. Conditions that can affect trade are known as trade-related investment measures or TRIMs . </li></ul><ul><li>The measures adopted by governments to attract and regulate foreign investment </li></ul><ul><li>include fiscal incentives, tax rebates and the provision of land and other services </li></ul><ul><li>on preferential terms. In addition, governments impose conditions to encourage </li></ul><ul><li>or compel the use of investment according to certain national priorities. Local </li></ul><ul><li>content requirements, which require the investor to undertake to utilize a certain </li></ul><ul><li>amount of local inputs in production, are an example of such conditions. Export </li></ul><ul><li>performance requirements are another example; they compel the investor to </li></ul><ul><li>undertake to export a certain proportion of its output. Such conditions, which </li></ul><ul><li>can have adverse effects on trade, are known as trade-related investment </li></ul><ul><li>measures or TRIMs. An illustrative list of TRIMs is presented are… </li></ul>
  6. 6. An illustrative list of TRIMs <ul><li>1.Local content requirements (LCRs). </li></ul><ul><li>2.Trade-balancing requirements. </li></ul><ul><li>3.Foreign exchange balancing requirements. </li></ul><ul><li>4.Exchange restrictions. </li></ul><ul><li>5.Domestic sales requirements. . </li></ul><ul><li>6.Manufacturing requirements. </li></ul><ul><li>7.Export performance requirements (EPRs). </li></ul><ul><li>8.Product mandating requirements. </li></ul><ul><li>9.Manufacturing limitations. </li></ul><ul><li>10.Technology transfer requirements. </li></ul><ul><li>11.Licensing requirements. </li></ul><ul><li>12.Remittance restrictions. </li></ul><ul><li>13.Local equity requirements . </li></ul>
  7. 7. Uruguay Round <ul><li>Before the Uruguay round, the link between trade and investment has been </li></ul><ul><li>overlooked and not much attention has been paid to this effect. Nevertheless, it is </li></ul><ul><li>acknowledgeable that trade is one such avenue that aids development in developing </li></ul><ul><li>and developed countries alike. On the 1st of January 1995 the Trade-Related </li></ul><ul><li>Investment Measures (TRIMs) Agreement came into effect as part of the Uruguay </li></ul><ul><li>round of negotiations. </li></ul><ul><li>This agreement was meant to address investment measures that were trade related </li></ul><ul><li>and violated Article III ( National Treatment) or Article XI ( general elimination of </li></ul><ul><li>quantitative restrictions ). Notably, this agreement is biased in favour of developed </li></ul><ul><li>countries so much that it is the developing countries that have to make policy </li></ul><ul><li>changes that are in compliance to it. </li></ul>
  8. 8. GATT Articles <ul><ul><li>Article III (GATT) </li></ul></ul><ul><ul><ul><li>National treatment of imported product, unless specified in other agreements </li></ul></ul></ul><ul><ul><ul><li>Subjects the purchase or use by an enterprise of imported products to less favourable conditions than the purchase or use of domestic products </li></ul></ul></ul><ul><ul><li>Article XI (GATT) </li></ul></ul><ul><ul><ul><li>Prohibition of quantitative restrictions on imports and exports </li></ul></ul></ul><ul><ul><ul><li>Part of the general trend in textiles and agriculture to phase out the use of quantitative restrictions </li></ul></ul></ul>
  9. 9. Aims of the Agreement <ul><li>Desiring </li></ul><ul><ul><li>to promote the expansion and progressive liberalisaiton of world trade and to facilitate investment, while ensuring competition </li></ul></ul><ul><li>Take into account </li></ul><ul><ul><li>trade, development and financial needs of developing countries, particularly least developed countries </li></ul></ul><ul><li>Recognising </li></ul><ul><ul><li>certain investment measures can cause trade-restrictive and distorting effects </li></ul></ul>
  10. 10. Examples of TRIMS <ul><li>Market access </li></ul><ul><ul><li>Ownership or equity restrictions </li></ul></ul><ul><ul><li>Joint venture requirements </li></ul></ul><ul><li>Performance Requirements </li></ul><ul><ul><li>Local content schemes </li></ul></ul><ul><ul><li>Export performance requirements </li></ul></ul><ul><ul><li>Foreign Exchange balancing </li></ul></ul>
  11. 11. Transition periods <ul><li>Members are obliged to eliminate TRIMs which have been notified. Such elimination is to take place within two years after the date of entry into force of the agreement for developed countries </li></ul><ul><ul><li>five years for developing countries </li></ul></ul><ul><ul><li>seven years for less developing countries </li></ul></ul>
  12. 12. Standstill <ul><li>TRIMS introduced less than 180 days before the agreement do not benefit from transition period. </li></ul><ul><li>Members are also not allowed to change measures that have been notified if these changes are inconsistent with the agreement. </li></ul><ul><li>The same TRIM can be applied to a new investment. </li></ul>
  13. 13. Development Dimension of the TRIMS agreement <ul><li>Only developing countries notified TRIMS </li></ul><ul><li>Most frequent sector was the automotive industry </li></ul><ul><li>The most frequent policy was local content schemes </li></ul>
  14. 14. Development effects <ul><li>I Identify and define TRIMs </li></ul><ul><li>II Historical experience with TRIMS </li></ul><ul><li>III What is ‘development’? </li></ul><ul><ul><li>Include employment </li></ul></ul><ul><ul><li>Technology transfer </li></ul></ul><ul><ul><li>Establishment and development of industry </li></ul></ul><ul><ul><li>Growth </li></ul></ul><ul><li>Neutrality of the study. </li></ul>
  15. 15. Real examples
  16. 16. ANNEX 1 Trade & Trade related measures September 2009-februrary2010 Country/member state measure Source and date status 1.Argentina Initiation of anti-dumping investigation on imports of electric pumps (NCM 8413.70.80; 8413.70.90) from China. Resolución SICPME No. 295/2009 (15 September 2009). 2.india Extension of the export ban on edible oils until 30 September 2010. Permanent Delegation of India to the WTO (4 September 2009).
  17. 17. THANK YOU HAVE A GREAT DAY
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