Agreement On Trade Related Investment Measures Slideshare


Pending the conclusion of the Uruguay Round negotiations, which resulted in a final agreement on trade-related investment measures (`TRIM`), the few international agreements providing disciplines for measures limiting foreign investment offered only limited coverage of content and coverage by country. For example, the OECD Code on Capital Liberalization requires members to liberalize restrictions on direct investment in a number of areas. However, the effectiveness of the OECD Code is limited by the many reservations expressed by each member. [2] India has adopted several foreign investment liberalization measures since the start of the new industrial policy in 1991. The rules on foreign direct investment and foreign direct investment have been simplified and foreign investment is now allowed in almost all sectors. 2 TRIMS The Agreement on Trade-Related Investment Measures (TRIMs) is a rule that applies to domestic rules that a country applies to foreign investors, often as part of an industrial policy. All members of the World Trade Organization have endorsed this agreement. The agreement was concluded in 1994 and entered into force on 1 January 1995 in favour of multinational direct investment, but with restrictions imposed by the single Article II host undertaking”. 2.The conventions and associated legal instruments set out in Annexes 1, 2 and 3 (`multilateral`). Under the TRIMs Agreement, members are required to report to the WTO Council on Trade in Goods their existing TRIM, which is inconsistent with the Agreement. For example, these restrictions are local content requirements (which require the purchase or use of locally produced goods), manufacturing requirements (which require domestic manufacture of certain components), trade compensation requirements, domestic sales requirements, technology transfer requirements, export performance requirements (which require the export of a certain amount of percentage of production volume), local equity, exchange restrictions, restrictions on transfers, licensing requirements and employment restrictions. These measures can also be used as part of tax incentives, contrary to the requirements.

Some of these investment measures distort trade in violation of Articles III and XI of the GATT and are therefore prohibited. [1] 6 Notification Governments of WTO Members or countries authorized to do so within two years of the 1st Becoming a member on 1 January 1995 should make notifications within 90 days from the date of adoption of the WTO Agreement. . . .

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