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TRIMS
#
INTRODUCTION
• The objective of Trade-related
Investment Measures(TRIMS) is to
prevent member countries from
resorting to measures that violate non-
differential treatment between domestic
and foreign investors and impose
quantitative restrictions on imports and
exports.
#
Towards this end, the WTO provisions
explicitly prohibit the following trade
restrictive and distortive measures:
• LocaL content requirement
Mandatory use of local outputs in
production.
#
• Trade balancing requiremenT
Imports to be maintained at specific
proportion of exports.
• Foreign exchange balancing
requiremenT
Forex made available for imports to
equal a certain proportion of value of
forex from exports.
#
• exchange resTricTions
Free access to forex curbed, resulting in
import restrictions.
• exporT perFormance requiremenT
Certain proportion of production should
be exported.
#
The agreement provides for transitional
period for elimination of prohibited
trims, wef. January 1, 1995
• 2 years For developed
counTries.
• 5 years For developing
counTries, and
• 7 years For TransiTional and
leasT developed counTries.
#
• Before 1991, India is used to have local
content requirements in the form of the
phased manufacturing program(PMP).
This has been scrapped now.
• Export commitments exist in the form of
dividend- balancing requirement that is
imposed for FDI in consumer goods.
#
• Although TRIMS are prohibited under
certain conditions. India had such a
cover till 2005 but later, scraped all
these measures to escape from TRIMS.
#
• According to the agreement,
• The governments cannot impose
measures which require particular
levels of local procurement by an
enterprise.
• It also discourages measures which
limit a company’s imports or set of
targets for the company to export.
#
ALL THE BEST!

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Trims

  • 2. # INTRODUCTION • The objective of Trade-related Investment Measures(TRIMS) is to prevent member countries from resorting to measures that violate non- differential treatment between domestic and foreign investors and impose quantitative restrictions on imports and exports.
  • 3. # Towards this end, the WTO provisions explicitly prohibit the following trade restrictive and distortive measures: • LocaL content requirement Mandatory use of local outputs in production.
  • 4. # • Trade balancing requiremenT Imports to be maintained at specific proportion of exports. • Foreign exchange balancing requiremenT Forex made available for imports to equal a certain proportion of value of forex from exports.
  • 5. # • exchange resTricTions Free access to forex curbed, resulting in import restrictions. • exporT perFormance requiremenT Certain proportion of production should be exported.
  • 6. # The agreement provides for transitional period for elimination of prohibited trims, wef. January 1, 1995 • 2 years For developed counTries. • 5 years For developing counTries, and • 7 years For TransiTional and leasT developed counTries.
  • 7. # • Before 1991, India is used to have local content requirements in the form of the phased manufacturing program(PMP). This has been scrapped now. • Export commitments exist in the form of dividend- balancing requirement that is imposed for FDI in consumer goods.
  • 8. # • Although TRIMS are prohibited under certain conditions. India had such a cover till 2005 but later, scraped all these measures to escape from TRIMS.
  • 9. # • According to the agreement, • The governments cannot impose measures which require particular levels of local procurement by an enterprise. • It also discourages measures which limit a company’s imports or set of targets for the company to export.