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Unit 2: World Trade Organization

TRIMS Inconsistent Notes

1. TRIMS that are inconsistent with the obligation of national treatment provided for in
Paragraph 4 of Article III 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 require

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 (“Local Content Requirements”); or

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:

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”);
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
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:

Developed country member: within two years of the date of entry into force of the WTO
Agreement, that is within January 1997.

Developing country member: within five years of the date of entry into force of the WTO
Agreement, that is within January 2000.

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.

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