The Punta del Este Ministerial Declaration, which launched the Uruguay Round, included the issue of trade-related investment measures as the theme of the new round through a carefully drafted compromise: after examining the functioning of the GATT articles on the restrictive and trade-distorting effects of investment measures, the negotiations should, if necessary, develop other provisions that may be necessary to address these negative effects. Avoid the impact on trade. The focus on trade effects in this mandate made it clear that the negotiations were not intended to address investment regulation as such. The Uruguay Round negotiations on trade-related investment measures were marked by strong disagreements among participants on the scope and nature of possible new disciplines. While some developed countries have proposed provisions that would prohibit a wide range of measures in addition to local requirements deemed inconsistent with Article III in the case of the FIRA group, many developing countries have rejected this proposal. The compromise that ultimately emerged from the negotiations is essentially limited to the interpretation and clarification of the application of GATT provisions on national treatment of imported products (Article III) and quantitative restrictions on imports or exports (Article XI) to trade-related investment measures. For example, the TRIMs Agreement does not cover many of the measures discussed in the Uruguay Round negotiations, such as export performance and technology transfer. The Agreement on Trade-Related Investment Measures (TRIMS) calls for the introduction of national treatment of foreign investment and the removal of quantitative restrictions. It identifies five investment measures inconsistent with the General Agreement on Trade and Customs (GATT) on the granting of national treatment and the general abolition of quantitative restrictions. These are measures imposed on foreign investors, namely the obligation to use local inputs, to produce for export as a condition for the purchase of imported goods as intermediate consumption, to balance foreign exchange earnings from the import of intermediate consumption with foreign exchange earnings from exports, and not to export more than a certain part of local production. Until the conclusion of the Uruguay Round negotiations, which resulted in a comprehensive agreement on trade-related investment measures (“Reduction Agreement”), the few international agreements that provided disciplines for measures to restrict foreign investment contained only limited guidelines in terms of content and coverage by country. The OECD Code on the Liberalization of Capital Movements, for example, 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 of the various members. [2] These notified TRIMs should be eliminated by 31 December 1999 at the latest. None of these measures are currently in force. Therefore, India has no outstanding obligations under the TRIMs Agreement with respect to notified TRIMs. In addition to the TRIMs agreement, there are other investment agreements that can help your company compete in the international market. The United States has bilateral investment treaties in place with 40 countries. These agreements typically offer comprehensive investment protection, including disciplines for local content and business accounting. The full texts of bilateral investment treaties are available on the website of the Office for Negotiations and Compliance of Trade Agreements of the Ministry of Commerce. Similar provisions have also been included in the investment chapters of some U.S.
free trade agreements, such as NAFTA, and those with Korea, Panama and others. The Agreement on Trade-Related Investment Measures (TRIMs) are rules applicable to domestic regulations that a country applies to foreign investors, often as part of an industrial policy. The agreement, concluded in 1994, was negotiated under the WTO`s predecessor, the General Agreement on Tariffs and Trade (GATT), and entered into force in 1995. The agreement was approved by all members of the World Trade Organization. Trade-related investment measures are one of the four main legal arrangements of the WTO Trade Agreement. .
