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Unit 8: World Trade Organization

(a) the purchase or use by an enterprise of products of domestic origin, or from any notes
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 (“Local Content Requirements”); or
(b) 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.
2. TRIMs that are inconsistent with the obligation of general elimination of quantitative
restrictions provided for in Paragraph I of Article XI of GATT 1994 include those which
are mandatory or enforceable under domestic law or under administrative rulings, or
compliance with which is necessary to obtain an advantage and which 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 (“Trade Balancing Requirements”);
(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 (“Foreign Exchange Balancing
Requirements”); 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 (“Export Performance
Requirements”).
Developing Country Members: Members categorized as developing countries are given special
concessions. A developing country members facing balance of payment problems can deviate,
temporarily though from the provisions of Articles III and XI of the GATT 1994.
Withdrawal of Measure: Members were required to follow a specified timetable for withdrawal
of measures that were not compatible with TRIMS:

1. Developed country member: Within two years of the date of entry into force of the WTO
Agreement, that is within January 1997.
2. Developing country member: Within five years of the date of entry into force of the WTO
Agreement, that is within January 2000.
3. Least-developed country member: Within seven years of the date of entry into force of the
WTO Agreement, that is within January 2002.
However the Council for Trade in Goods (CTG) was given the option to extend the transition
period for the elimination of TRIMs for developing country and least-developed country members
demonstrating particular difficulties in implementing the provisions of the Agreement. The CTG
when considering such a request was required to take into account the individual development,
financial and trade needs of the members making the request.

Apart from the above allowance given to developing country and LCD members, the Agreement
took into consideration situations where an established enterprise subject to a TRIM notification
had to meet new competition during the transition period.
Given such a condition, any member, developed or developing, could apply the same TRIM
to the new investment (i) where the products of such investment were like products to those
of the established enterprises and (ii) where necessary to avoid distorting the conditions of
competition between the new investment and the established enterprises. Such a new measure
had to be notified to the CTG with the date of termination being the same for both the old and
new members.

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