TRIMs

1. TRIMs

2. Topics • How to define TRIMs? • What are TRIMs? • What is the significance of TRIMs?

3. History of the agreement on TRIMs • a great development in Uruguay round • In 1986, ministerial declaration of GATT mandated a special negotiating group on TRIMS, the focus issue was the sphere of the agreement • In 1991, the group adopted the present agreement. The agreement expressly limits the scope of agreement to investment measures related to trade in goods, and confines it within the framework of GATT. • Thus, TRIMs are incorporated into the multilateral agreements on trade in goods rather than being treated as a quite distinct area

4. Framework of WTO • There are four annexes to Marrakesh declaration • Annex 1 Annex 1A: Multilateral Agreements on Trade in Goods GATT 1994 Agreement on Agriculture… Agreement on TRIMS Annex 1B: General Agreement on Trade in Services Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights • Annex 2: Understanding on Rules and Procedures Governing the Settlement of Disputes • Annex 3: Trade Policy Review Mechanism • Annex 4:Plurilateral Trade Agreement

5. Introduction of TRIMs • The Agreement on TRIMs is a fairly short agreement, containing only 9 articles and an annex which contains an illustrative list indicating what are regarded as TRIMs.

6. Framework of TRIMs Article 1 sets out the scope of operation. Article 2 states the principle of national treatment and the principle prohibiting the use of quantitative restrictions. Article 3 makes the relevant GATT exceptions applicable under the Agreement on TRIMs. Article 4 provides rules for developing countries. Article 5 regulates notification and transitional arrangements. Article 6 requires transparency of law and policies. Article 7 establishes the Committee on Trade-Related Investment Measures. Article 8 deals with consultation and dispute settlement. Article 9 sets out rules for review of the operation of the Agreement on TRIMs by the Council for Trade in Goods.

7. Q: How to identify TRIMs? • From Article 1, it has 2 meanings: first, the Agreement covers those investment measures which are directly applicable to trade in goods taken by host states; and second, the Agreement governs the measures which have distorting and adverse effects on trade in goods.“effects” • It seems that the Agreement on TRIMs has adopted the effects test and the Agreement applies to all investment measures which have restrictive nd distorting effects to trade in goods.

8. Principles of Agreement on TRIMs • national treatment (article 3(4) of GATT) • general elimination of quantitative restrictions (article 11(1) of GATT) • Transparency (article 10 of GATT) • Take the interest of developing country members into consideration (part 4 of GATT)

9. Other rules in agreement on TRIMs • Exceptions • Notification and transnational arrangements • Committee on Trade-Related Investment Measures • Consultation and Dispute Settlement • Review by the Council for Trade in Goods

10. Article 2 of TRIMs GATT&TRIMs • The TRIMs are meant to be those investment measures which against the principles of arts 3 and 6 of GATT 1994. • Article 3 of GATT 1994 deals with national treatment on internal taxation and regulation. This one is directly and expressly related to imported products or domestic products. • Article 6 of GATT 1994 deals with general elimination of quantitative restrictions.This eliminates the use of any quantitative restrictions, which are barriers to the development of international trade. • Q: What is the definition of “quantitative restrictions”? • It defines the quantitative measures as quotas, import or export licences or other measures.

11. TRIMs in illustrative list 1 • TRIMs inconsistent with the obligation of national treatment are those require 1、the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of a proportion of volume or value of its local production; or 2、that an enterprise's purchases or use of imported products be limited to an amount related to the volume or value of local products that it exports

12. TRIMs in illustrative list 2 • TRIMs inconsistent with the obligation of general elimination of quantitative restrictions are those restrict (a) the importation by an enterprise of products used in or related to its local production, generally or to an amount related to the volume or value of local production that it exports; (b) the importation by an enterprise of products used in or related to its local production by restricting its access to foreign exchange to an amount related to the foreign exchange inflows attributable to the enterprise; or (c) the exportation or sale for export by an enterprise of products, whether specified in terms of particular products, in terms of volume or value of products, or in terms of a proportion of volume or value of its local production.

13. Q: What are the TRIMs? • TRIMs include performance requirments,such as • (1) minimum domestic content, • (2) imports limited or linked to exports, • (3) restrictions on access to foreign exchange to limit imports for use in the investment.

14. 国民待遇义务不一致的TRIMs • (a) 要求企业购买或使用国产品或自任何国内来源的产品，无论按照特定产品、产品数量或价值规定，还是按照其当地生产在数量或价值上所占比例规定；或 • (b) 要求企业购买或使用的进口产品限制在与其出口的当地产品的数量或价值相关的水平。

15. 普遍取消数量限制义务不一致的TRIMs • (a) 普遍限制企业对用于当地生产或与当地生产相关产品的进口，或将进口限制在与其出口的当地产品的数量或价值相关的水平； • (b) 通过将企业可使用的外汇限制在与可归因于该企业外汇流入相关的水平，从而限制该企业对用于当地生产或与当地生产相关产品的进口； • (c) 限制企业产品出口或供出口产品的销售，无论是按照特定产品、产品数量或价值规定，还是按照当地产品在数量或价值上所占比例规定。