Understanding TRIMs- Trade Related Investment Measures Agreement With Ari Afilalo

Trade Related Investment Measures Agreement

Trade-Related Investment Measures is the name of one of the four major legal agreements of the World Trade Organization (WTO), trade treaty. It is ruled to limit decision of domestic firms and thereby allow international firms to operate more efficiently within foreign markets. Through this article Ari Afilalo aims to educate the readers about the intricacies of this foreign trade agreement.

The TRIMs Agreement halts several measures that break the national treaty and quantitative restrictions needed for the General Agreement on Tariffs and Trade (GATT).

The major requirements of Trade Related Investment Measures include:

  • Get a certain level of local content
  • Produce locally
  • Export a given level/percentage of goods
  • Balance the amount/percentage of imports to the amount/percentage of exports
  • Transfer of technology or proprietary business information to local persons

These requirements may be compulsory situations for investment or can be connected to fiscal or other incentives. The TRIMs Agreement does not include services. All WTO member countries are parties to this Agreement. This Agreement came into being on January 1, 1995 and has no expiration date.

The Agreement needs all WTO Members to inform the TRIMs that are incompatible with the terms of the Agreement and to cancel them after the expiry of the transition period presented in the Agreement.

Transition periods of 2 years in the case of well-developed nations, five years in the case of developing countries and 7 years in the case of LDCs.

Who can utilize the benefits of this agreement?

Any U.S. company involved in conducting international trade or investment activities in any WTO member country can utilize the profit from this Agreement.

How can this Agreement help any firm?

When the TRIMs Agreement came into action in 1995, all WTO member countries were expected to report their nonconforming trade-related investment measures and then take those measures into an alliance with the Agreement following a transition period.

The length of the transition period diversified as per on the Member’s individual level of development. At this time, all transition periods have lapsed, though a limited number of countries were given extensions for particular programs. These expansions generally cancelled on or before December 2003.

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