. /.WORLD TRADE
ORGANIZATIONG/C/W/459
18 March 2003
(03-1587)
Council for Trade in Goods Original:  English
PROGRESS REPORT BY THAILAND ON THE PHASING-OUT
OF THE REMAINING TRIM NOTIFIED UNDER
ARTICLE 5.1 OF THE TRIMS AGREEMENT
The following communication, dated 12 March 2003, has been received from the Permanent
Mission of Thailand.
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Pursuant to the Decision G/L/5041 of the Council for Trade in Good (CTG) on 5 November
2001, extending the transition period for Thailand to eliminate its remaining Trade-Related Investment
Measure (TRIM) notified under Article 5.1 of the TRIMs Agreement no later than 31 December 2003
and requiring Thailand to submit a report on the progress made in the phasing-out of this TRIM.
Thailand hereby reports that the strategic phase-out plan for the elimination of local content
requirement (LCR) for the manufacturing of ready-to-drink milk by 31 December 2003, as provided in
Thailand’s communication G/C/W/2922, has gained the consent of the Thai Government and is now in
the implementation process.
Under the strategic phase-out plan, the following actions are being implemented:a) The abolition of the Notification of the Ministry of Industry with regard to the
manufacturing of milk and dairy products which requires manufacturers of ready-to-drink milk topurchase 10 units of domestic raw milk to every 1 unit of imported skimmed milk powder for the
manufacturing of ready-to-drink milk with a successi ve increase in the purchase of domestic raw milk
of at least 20 per cent per year.
b) The enactment of a new Notification of the Ministry of Industry with regard to the
manufacturing of milk and dairy products which will require manufacturers of ready-to-drink milk to
purchase 5 units of domestic raw milk to every 1 unit of imported skimmed milk powder for the
manufacturing of ready-to-drink milk.  This Noti fication will be in effect until 31 December 2003.
Moreover, the Thai Government has devised a comprehensive dairy development plan to raise
the productive efficiency and achieve cost effectiveness in the production and manufacturing of Thai
milk and dairy products so as to prepare for the complete removal of the remaining TRIM and greater
market opening.  Among others, the measures under  the development plan include the improvement of
livestock raising and farming techniques, quality assessment and control, human and resource
                                                     
1 Extension of the Transition Period for the Elimination of Trade-Related Investment   Measures
Notified under Article 5.1 of the Agreement on Trade-Related Investment Measures, THAILAND, Decision of 5
November 2001.
2 THAILAND – Request for Extension of the Transition Period under the Agreement on Trade-Related
Investment Measures.G/C/W/459
Page 2
management, and the establishment of credit agencies, more efficient collection and distribution
centres, and transportation facilities and networks, as well as research and development on farm and
animal health, small-scale farming, and animal feeds and herd fertility.
Finally, it needs to be emphasized that the Thai market has generally been opened to the
importation of skimmed milk powder.  As is demonstrated in Table 1, the
actual import levels of skimmed milk powder into the Thai market under tariff quota have exceeded the
levels that Thailand has bound under the WTO in 6 out of 8 years from 1995 to 2002, and only in 1998
and 1999, when the Thai economy experienced an abrupt downturn, were the actual imports fell slightly
below the bound levels.
Table 1
Thailand’s Import of Skimmed Milk Powder under Tariff Quota
1995-2002
(tons)
Year               Bound Level                Actual Level
1995     45,000.0      53,495.0
1996     46,111.0      67,638.01997     47,222.2      55,838.0
1998     48,333.0     44,214.0
1999     49,444.4     48,087.7
2000     50,555.5     54,440.6
2001     51,666.6     54,847.92002     57,777.8     61,572.5
Source:  Department of Foreign Trade, Ministry of Commerce, Thailand.
To conclude, the Thai Government has proceeded forward with the phase-out plan for the
elimination of local content requirement (LCR) for the manufacturing of ready-to-drink milk through
the reduction in the level of local content requirement and has put in place a comprehensive national
dairy development plan to prepare for further market liberalization.  In addition, Thailand hascontinued to open its market to the importation of skimmed milk powder in excess of the bound levels
under the WTO.  Accordingly, these measures toge ther with Thailand’s firm commitment to the
TRIMs Agreement and the WTO multilateral rules-based trading system will ensure that Thailand
fulfils its obligation to abolish LCR for the manufacturing of ready-to-drink milk no later than 31
December 2003 as scheduled.
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