RESTRICTED  
  
G/TRIMS/M/43  
 
16 March 2018  
(18-1614) Page: 1/16 
Committee on Trade -Related Investment Measures    
 
MINUTES OF THE MEETI NG HELD ON 6 NOVEMBER 2017  
CHAIR: MR  ALI ALWALEED AL -THANI (QATAR ) 
 
1. The Chair referred to the proposed agenda circul ated in document WTO/AIR/TRIMS/6  dated 
27 October 2017. The Committee adopted the following agenda:  
1   CHINA – PROVISIONS ON INSURA NCE SYSTEM INFORMATI ZATION  ...........................  1 
2   INDONESI A – LOCAL CONTENT REQUIR EMENTS FOR 4G LTE MO BILE DEVICES ...........  3 
3   INDONESIA – CERTAIN LOCAL CONTEN T PROVISIONS IN THE ENERGY 
SECTOR (MINING, OIL AND GAS ) ................................ ................................ .....................  5 
4   INDONESIA – INDUSTRY LAW AND TRA DE LAW  ................................ .........................  6 
5   INDONESIA – MINIMUM LOCAL PRODUC T REQUIREMENT FOR MO DERN 
RETAIL SECTOR  ................................ ................................ ................................ ................  7 
6   INDONESIA – CERTAIN MEASURES ADD RESSING LOCAL CONTEN T IN 
INVESTMENT IN THE TE LECOMMUNICATIONS SEC TOR ................................ ....................  8 
7   INDONESIA – LOCAL CONTENT REQUIR EMENTS FOR DAIRY IMP ORTATION 
AND DISTRIBUTION  ................................ ................................ ................................ .........  9 
8   NIGERIA – GUIDELINES ON NIGERI AN CONTENT IN IN FORMATION 
COMMUNICATIONS TECHN OLOGIES (ICT)  ................................ ................................ ..... 10 
9   RUSSIAN FEDERATION – MEASURES IMPLEMENTIN G RUSSIA'S IMPORT 
SUBSTITUTION POLICY  ................................ ................................ ................................ .. 11 
10   ARGENTINA – ACT 27,263 ON THE DE VELOPMENT AND STRENG THENING 
REGIME OF  THE ARGENTINE AUTOPA RTISM, PUBLISHED IN THE OFFICIA L 
JOURNAL OF 1  AUGUST  2016  ................................ ................................ .........................  13 
11   TURKEY – FORCED LOCALISATION POLICY IN THE PHARMA CEUTICAL 
SECTOR  ................................ ................................ ................................ ..........................  14 
12   NOTIFICATIONS UNDER ARTICLE 6.2 OF THE T RIMS AGREEMENT  ..........................  16 
13   OTHER BUSINESS  ................................ ................................ ................................ .... 16 
14   DATE OF THE NEXT MEE TING  ................................ ................................ ..................  16 
15   ANNUAL REPORT (2017)  ................................ ................................ .........................  16 
 
 
1  CHINA – PROVISIONS ON INSURAN CE SYSTEM INFORMATIZ ATION  
2. The Chair recalled that this item was first discussed at the Committee's June 2016 meeting 
and was on the agenda at the request of the United States. Questions had been posed by the 
United  States in document G/TRIMS/Q/CHN/1. To date no written replies had been rece ived. 
3. The United States  expressed concern about China's measures addressing the use of 
technology by companies in the insurance industry. These measures appear to require local 
content in a manner that raises questions about their consistency with China's obligations under G/TRIMS/M/43  
 
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  the TRIMs  Agreement. The United States' concerns have been heightened by China' s recent work 
to develop implementing measures, including standards, for its Cybersecurity Law.  
4. As one example of the type of measure that is of concern, in th e previous meeting of the  
Committee, the US drew the attention of Members to draft regulations published by the China 
Insurance Regulatory Commission (CIRC) in 2015 suggesting limitations on the use of information 
and communications technology  (ICT) goods,  services and technology by companies in the 
insurance industry in the name of introducing "secure and controllable " products. The US 
highlighted several provisions that raised its concern in relation  to the obligations of the 
TRIMs  Agreement.  
5. The US recalled that a provision of the draft regulations states that "insurance institutions 
shall give first priority to the procurement of secure and controllable hardware equipment and 
software products, steadily introduce the application of secure and  controllable products; actively 
create conditions to raise the indigenous research and development level, and continuously 
enhance insurance institutions’ strength in security and controllability of informatization ". 
6. China has subsequently introduced a nu mber of additional implementing measures for 
comment, which contain a similar mandate. Such measures include a cybersecurity review 
measure, a catalogue of network critical equipment and cybersecurity products, a series of 
cybersecurity -related national st andards, and numerous sector -specific cybersecurity 
requirements.  
7. The US was concerned that the insurance measure originally raised and the other measures 
cited are part of what seems to be a wide -spread effort by China to impose "secure and 
controllable " requirements, largely elaborating on the Ministry of Public Securit y's Multi -Level 
Protection Scheme (MLPS), on ICT products.  
8. In the US's view, this is a major concern for ICT companies around the world , given that the 
"secure and controllable " and other similar standards are often not clearly defined. The US was 
also concerned that , since no further clarity has been provided on the meaning of such standards 
and because it has been known and understood in the past to include references to domestic 
technolo gy requirements, companies sourcing ICT products are already interpreting this language 
conservatively, meaning that they believe they are required t o purchase only domestic goods.  
9. The US understood that related implementing measures, introducing cybersecu rity 
regulations into additional critical sectors of the Chinese economy, would be developed over the 
coming months.  
10. The US would continue to carefully monitor developments with respect to these 
implementing measures , and  in particular on the spread of the  "secure and controllable " and 
similar standard s. The US requested China to refrain from issuing or implementing final measures 
until such concerns are addressed.  
11. The European Union  share d the concern expressed by the United States . The 
European  Union also noted the entering into force of China's Cybersecurity Law in June 2017 and 
the different guidelines and administrative measures designed to implement the law. The EU 
reiterated its concerns that these measures may inadvertently lead to possible discr iminatory 
practices against foreign enterprises.  
12. Japan  shares the concerns raised by the United States  and the European  Union . It pointed 
out that the articles 25, 53 and 56 of the provisions on Insurance System Informatization would be 
inconsistent with A rticles III:4 of GATT and 2 of the TRIMs Agreements,  because, depending on 
the manner in which they are implemented, these provisions could constitute a de facto  
requirement to use products originating from China. In particular, article 56 could oblige to use 
products of domestic origin, by requiring Chinese intellectual property in core technologies or 
requiring  domestic certification in China , according to some level s of security classifications.  
13. Japan recalled China's  expla nation  at the previous meeting of the Committee on the 
meaning of "secure and controllable products ". Japan asked China to clarify whether the meaning 
or definition  of "secure and controllable products " is stipulated in regulations regarding this G/TRIMS/M/43  
 
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  measure  and, if so, to identify the regulations.  Finally, regarding China' s explanation that the 
provisions on Insurance System Informatization would be revised, Japan request ed China to 
provide updates on this review process. Japan hoped that its concerns on these provisions would 
be addressed and eliminated through the process.  
14. Canada  also share d the concerns  expressed by the United States . It strongly encouraged  
China to pursue its cybersecurity regulations in a manner that does not cut out foreign firms – and 
their cutting edge ICT technologi es – from procurement in the Chinese market.  
15. Canada enquired whether China was able to provide an update on recent changes to its 
cybersecurity regulations, both for the insurance sector and acro ss other sectors more generally.  
Canada was also interested i n knowing whether foreign ICT suppliers would be permitted to submit 
their technologies for fair consideration under security assessment rules.  
16. Canada encouraged  China to work closely with foreign ICT suppliers in finding regula tory 
approaches that meet Ch ina's network security expectations without imposing indigenous 
technology requirements.  
17. China  stated that it attached  great importance to the work of cyber and information  security . 
The purpose of drafting Provisions on Insurance System Informatization  is to ensure the 
information security of the insurance industry. China stated that t he drafting process had been 
kept open and transparent, and it had implemented the WTO transparen cy requirement s. The 
Chinese relevant agencies were evaluating the comments raised by WTO members and having 
bilateral exchange s of views and cooperation with other Members. China reiterated  that it will 
continue such exchange of views with relevant Members and stakeholders.  
18. The Committee took note  of the statements made.  
2  INDONESI A – LOCAL CONTENT REQUIREMENTS FOR 4G L TE MOBILE DEVICES  
19. The Chair recalled that this item was first discussed at the Committee's April 2015  meeting 
and was on the agenda at the request of the European Union, Japan, and the United States . 
Questions to Indo nesia had been circulated in document G/TRIMS/W/148, and replies were 
circulated in document G/TRIMS/W/162.  
20. The United States  remained deeply concerned about Indonesia's local content requirements 
for 4G LTE mobile devices and base stations. Indonesia's pr evious responses to questions and 
interventions in the Committee had not resolved these concerns and had raised further uncertainty 
about how these measures were being implemented.  
21. Certain measures put in place by Indonesia appear to require that investors  who wish to 
distribute 4G LTE base stations and subscriber stations, such as smart phones and tablets, must 
meet certain local content requirements: i.e. they must purchase or use products of domestic 
origin or invest in the development of the availabilit y of local content. Local content under this 
measure includes local manufacturing, developmen t, and software, such as apps. Indonesia's 
measures are successfully drawing investment away from other developing countries.  
22. The US noted that t he measure at issue went into place in mid -2015. From 2015 to 2016, 
manufacturing of phones in Indonesia was virtually unchanged. According to Indonesia's Ministry 
of Industry (MOI), the domestic production of cell  phones rose from 24.8 million units in 2015 to 
25 milli on units in 2016. While domestic manufacturing remained stable, imports of affected 
products dropped. The US quoted a recent statement by Indonesia's Ministry of Communication 
and Information Technology, according to which, after two years of implementing the requirement, 
imports of devices dropped from USD3.5 billion to under USD1 billion. According to Indonesia' s 
Ministry of Industry , imports of cell  phones, tablets, and laptops fell from 63.46 million units to 
37.02 million units between 2014 and 2015 . Further, t he total number of cellular customers in 
Indonesia expanded  from 63 million subscribers in 2010 to 2 11 million subscribers in 2015. The US 
suggested that one explanation is that Indonesian consumers may be delaying upgrading their 
phones. However,  a report from Indonesia's  Ministry of Industry estimated that illegal cell  phones 
imports co st Indonesia US$10 million/year  and that 20% of all cell  phones ( approximately G/TRIMS/M/43  
 
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  12 million units) sold in Indonesia are illegal. This would explain the expansion of  cell phone usage 
in Indonesia without a concurrent increase in legal imports or dome stically -manufactured products.  
23. The US concluded that, although the measure in question may have diverted some 
investment from other developing countries into Indonesia, t he main beneficiary of Indonesia' s 4G 
LTE measure is the black market. This would be consistent with the experience of other Members 
who have attempted to impose local content requirements on popular consumer electronics.  
24. The US regretted that , notwithstan ding this experience, Indonesia appears to be considering 
similar local content requirement s on Internet of Things (IoT) devices. The US cited in this regard 
a statement from Indonesia's Ministry of Communication and Information Technology. The US 
noted th at Indonesia had  not imposed such measures and ha d promised to consult with 
stakeholders on any such measure. The US request ed Indonesia to inform this committee of the 
current status of any plans for such a measure, to keep this committee updated on this matter, 
and to conduct an open and transparent process with stakeholders and trading partners in t he 
development of the measure.  
25. Japan  share d the concerns  expressed by the United States . Japan noted the explanations 
provided by Indonesia at the previous meeting  of the Committee regarding the existence of three 
mechanisms to obtain domestic certification for the 4G LTE mobile devices , based on the Ministry 
of Industry 's Regulation 65 of 2016 , namely : to make a  certain investment , to manufacture 
devices in Indonesia using domestically produced parts, and to incorporate software into the 
devices.  
26. Japan was still concern ed that the Regulation , together with other related Regulations , 
requires companies to fulfil a certain level of local content requirement to sell mobile phone s in 
Indonesia. Japan considers  this local content requirement to be by nature discriminatory and 
inconsistent with GATT Article III:4  as stipulated in paragraph 1(a) of the Annex  and Article 2  of 
the TRIM s Agreement . Japan  urged Indonesia  to eliminate the local content requirement for 4G 
LTE mobile devices  and indicated that it would continue to monitor the developments in this 
regard . 
27. The European Union  share d the concerns  expressed by other Members with regard to the 
local content requir ements for 4G LTE mobile devices  containe d in Regulation No.  65/2016. This 
Regulation contains the technical guidelines for the calculation of the local content percentage and 
requires that a certificate verifying the fulfilment of the local content requir ements is issued by the 
Minister of Industry, after having received the report of local content verification conducted by 
surveyors.  
28. In the EU's view, local content requirements could artificially distort trade, restrict market 
access , and hamper the efficiency of investments. The negative impacts of these requirements 
were exacerbated by the uncertainty around them, which affected manufacturers' ability to 
introduce new products in Indonesia.  
29. While Indonesia had expla ined that the purp ose of the measures was to assure consumers 
of device safety , the European Union did not see any reasonable relationship between the 
requirement to use domestic products and product safety . The EU invite d Indonesia to submit 
further  clarifications on this aspect.  
30. The EU would continue monitoring the se measures and call ed on Indonesia to amend its 
legislation in compliance with WTO rules.  
31. Australia  reiterated its interest in this issue. It was monitoring the status and 
implementation of the regulations.  Australia remain ed concerned about how the local content 
requirements contained there in are consistent with the WTO TRIMs  Agreement.  
32. Chinese Taipei  share d the concerns  regarding Indonesia's measures for 4G LTE mobile 
devices . In its view, these measures could  constitute local content requirements , which would 
distort trade . It urged Indonesia to consider eliminating this measure and indicated that it would 
be monitoring the situation.  G/TRIMS/M/43  
 
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  33. Indonesia  referred to the responses provided in earlier meetings as wel l as to the written 
responses on the same matter. Indonesia added that, since the early stage s of the drafting 
process of this regulation, it had been transparent and open  to consultation s with WTO Members 
and that the drafting process also involved a wide range of stakeholders.  
34. Indonesia explained that it provided the scheme for interested parties to gain share and 
benefit in participating from 4G -LTE sector. It stated that there is no pressure to invest in 
Indonesia; th e condition s are merely a reflection  that Indonesia is a potential market for 4G LTE 
investor s. To certain extent, they also provide  an indication that the regulation is consistent with 
the non -discrimination principle of the WTO.  
35. Indonesia emphasized that its view that investment plays a significant role to support global 
economic growth and development and that it must provide equal outcomes to the parties. It 
stated that, a s a developing country, Indonesia needs to manage policy space to channel positive 
outcomes from investment for communities and development in a wider context. Indonesia 
believes that sustainability was a shared goal, and it was important that investment fit within that 
goal. Indonesia reiterated that, a s a Member of the WTO, it is committed to the WT O rules.  
36. The Committee took note  of the statements made.  
3  INDONESIA – CERTAIN LOCAL CONTEN T PROVISIONS IN THE ENERGY SECTOR 
(MINING, OIL AND GAS ) 
37. The Chair recalled that this item had been under consideration by the Committee since 
October  2009. Questions t o Indonesia had been circulated in documents G/TRIMS/W/70, 88, 108 
and 128; to which Indonesia has replied in documents G/TRIMS/W/74, 79, 100, 123, 137 and 
137/Corr.1. This item had been placed on the agenda at the request of Canada, the 
European  Union, Ja pan, and the United  States.  
38. Japan  remain ed concerned about the situation surrounding Indonesia's Mining Law.  
39. Japan was aware of the reforms that partially lift the complete prohibition of nickel ore 
exports previously in place. Japan felt, however, that the permitted exports of nickel are limited  
and far from sufficient for the Japanese industry 's needs.  Tentatively, mining companies would 
only be allowed to export their ores for a period of five years . Also, companies would be required 
to meet certain conditions including build ing their own smelters within five years and supplying at 
least 30% of the smelted ores to Indonesia' s domestic market.  
40. Japan reiterated its request for Indonesia to further revise the measures to prohibit  or 
restrict exportation of mineral ores  including nickel and copper by requiring conditions including a 
certain level of purification. Japan  would continue to closely monitor the situation surrounding the 
exportation of nickel and copper . 
41. The United State s expressed its continue d concerns with inves tment restrictions in 
Indonesia' s energy sector (mining, o il and gas, and more recently renewables). Despite trying to 
find a solution to the questions and concerns that have been raised in this Committee and 
bilaterally, the situation in the energy sector ha d deteriorated.  The US continue d to seek updates 
from Indonesia on developments on revisions to the Oil and Gas Law and on whether any changes 
will be made regarding the elements discussed in this committee . 
42. The US also reiterated concerns  about firms in the mining area  being required to switch from 
contracts of work to special mining licenses, as well as continuing to require companies to build 
smelters and divest 51 % of shares to be able to continue to expor t unprocessed mineral ores.  
Moreover, the US found it deeply concerning that the Indonesian government was applying similar 
requirements in the renewable sect or, such as solar power plants.  
43. The US continue d to have questions about how these requirements work in practice , 
including  the function of local content certificates, rationales for different requirements depending 
on the type of plant, and different weights depending on whether it is a good or service . The US 
underst ood that "prioritizing " domestic content actually meant  "requiring " domestic content . The G/TRIMS/M/43  
 
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  requirement to use a certain amount of domestic content raise d questions about the consistency 
with TRIM s obligations.  
44. Moreover, such policies, while appearing to work in the short term, in the longer -term would 
adversely hinder Indonesia' s power sector development goals by driving up the costs and 
hampering access to the most innovative technologies and companies.  
45. The US would continue to seek resoluti on to these concerns and hope d that Indonesia would 
reconsider these policies.  
46. Canada  continued  to follow developments in Indonesia' s mining regime as Canadian 
companies were directly affected by the new regulations. Canada was concerned  about the 
negative  impact on both current and future foreign mining investments in Indonesia, particularly in 
relation to investment ownership requirements, the export ban , and local processing requirements.  
Investors require d legal certainty and transparency and rules must  be clear and consistent. 
Canada encouraged  Indonesia to abide by its existing contractual commitments and to ensure that 
future revisions to the 2009 Mining L aw be consistent with Indonesia' s WTO obligations.  
47. The European Union  shared the concerns raised by the United States, Japan, and Canada. 
The EU has previously raised its concerns  with regard to the prioritization of local content in 
Indonesia's legislation covering mining products in the mineral and coal sectors.  
48. The EU welcomed  the fact that the new Regulation No 34/2017 of the Ministry of Energy and 
Mineral Resource dropped the express obligation to give preference to local mining service 
companies.  However, a problematic provision on the prioritiz ation of dom estic goods and se rvices 
remained . In particular, according to article 31, license holders were still required to "prioriti ze the 
utilization of local employees and domestic goods and services according to the prevailing laws and 
regulations ". Foreign companies , even if  they are locally incorporated,  were not regarded as 
providing "domest ic services"  in this regulation . 
49. The EU also requested an update on the status  of the revision of Indonesia's Mining Law , 
which  was included in the legislative priorities for 2016 but not ad opted. Instead, some points of 
the revision appeared in a number of government  ministerial regulations issued in early to 
mid-2017. EU asked Indonesia to clarify which points were amended and what their impact was. 
50. Australia  welcomed the opportunity to dis cuss the implementation of Indonesia's mining 
sector regulations. It remained concerned about the uncertainty and effect on investor confidence 
these regulations have. Australia looked forward to further clarification from Indonesia on the WTO 
consistency of these regulations . 
51. Indonesia  indicated that there was no obligation to prioritize the use of domestic over 
foreign goods and services in the energy sector. There were also no barriers to investors importing 
the required products in accordance with Regul ation 23/2010. The purification regulations were 
based on the implementation of the Agreement on Technical Barriers to Trade. There were no 
export prohibitions as long as the materials met the purification levels as required in 
Regulation  5/2017. Recently, the Ministry of Energy and Mineral Resources had issued Government 
Regulation 1/2017 , which provided flexibility to prohibitions on the exportatio n of raw materials. 
Based on this  regulation, the exportation of certain mineral ores is still allow ed until 2021.  
Concerning the issue related to the conversion of contract s of work to special licence s, it is only 
intended for companies which are willing to export ores. The amendments to the Mineral, Coal, Oil, 
and Gas Law were still under consideration  in the Parliament  and Indonesia was not in a position 
to indicate the time frame for the process, but it was taking  into consideration the trade concern s 
raised by WTO Member s and would inform interested Members on development s when they are 
available . 
52. The Committee took note  of the statements made.  
4  INDONESIA – INDUSTRY LAW AND TRA DE LAW  
53. The Chair noted that this item was first discussed at the Committee's meeting in June 2014 
and was on the agenda at the request of the European Union and Japan. Questions to Indonesia G/TRIMS/M/43  
 
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  were circulated in documents G/TRIMS/W/138 and 140, to which Indonesia had responded in 
documents G/TRIMS/W/157 and  158. 
54. The European Union  reiterated its concern with respect to the laws in question as they 
provide d the legal basis f or impos ing local content requirements. At a previous meeting, Indonesia 
had indicated that the two laws were created to support the advancement of its national ec onomy, 
while ensuring Indonesia' s WTO commitments  and obligations . Indonesia had also stated that the 
Trade law would serve as a legal basis for the government to release deregulation packages.  The 
European Union asked Indonesia to clarify which measures have implemented the Trade and 
Industry laws as well as the deregulation packages , taking into consider ation that the Trade and 
Industry Laws were adopted in 2014 and that the first deregulation package was adopted in 2015 . 
It further asked Indonesia to present the most recent developments , and in  particular, to provide a 
list of the measures implementing t he deregulation  reform and explain how these measures would 
affect the current legislatio n on local content requirements and investment related measures . 
55. Japan  shared the concerns raised by the European Union. It was concern ed about the 
consistency of the Trade Law and the Industry Law with WTO rules.  Japan indicated that t hese 
laws should be implemented in compliance with the WTO rules and that Japan was monitoring 
their implementation, including the establishment of implementing regulations.  Regarding 
Indonesia' s explanation at the previous meeting that its government was consulting with 
stakeholders, Japan looked forward to receiving updated information on the situation.  
56. The United States  shared the concerns raised  by the European Union  and Japan about the 
Industry and Trade laws. It continued to seek updates from Indonesia on the implementation of 
these laws, in particular any implementing regulations related to concerns raised in th e 
Committee.  
57. New Zealand  shared  the concerns raised regarding Indonesia's Trade Law and Industry Law . 
It expressed its interest in receiving updates from Indonesia regarding the implemen tation of 
these laws.  
58. Australia  echoed the concerns expressed about Indonesia's import -restricting policies in 
recent years, including the overarching industry and trade laws. Australia asked Indonesia for an 
update on how it intended to go forward in issuing its implementing regulation s. 
59. Chinese Taipei  share d the concerns  raised by other delegations. It asked Indonesia for 
updated information . 
60. Indonesia  stated that the two laws were developed to support job creation, improvement of 
competitiveness, and increasing production capacity. Th ey were adopted to address Indonesia's  
development challenges and support the development of its national economy , while respecting 
Indonesia's WTO commitments.  Regarding requests for updated information on implementing 
regulations of the Trade Law, Indone sia informed that the Ministry of Trade had  issued the 
following Decrees : Decree 32/2016 on Alcohol ; Decree 52/2017 on Importation of Salt ; and 
Decree 74/2017 on Exportation and Importation of Rice. Indonesia was also having internal 
discussion s on the regulation of the importation of tin sampling product s as well as on the 
participation or conduction of trade exhibition s. 
61. The Committee took note  of the statements made.  
5  INDONESIA – MINIMUM LOCAL PRODUC T REQUIREMENT FOR MO DERN RETAIL 
SECTOR  
62. The Chair recalled that this item was first discussed in June 2014 and was on the agenda at 
the request of the European Union and Japan. Questions to Indonesia from the United States and 
the European Union were circulated in documents G/TRIMS/W/139 and  141, and response s were 
provided in documents G/TRIMS/W/159 and 161.  
63. The European Union  regretted  that the legislation on minimum local content requirements 
for the retail sector wa s still in force and reiterated its concerns about the 80% local content 
requirement imposed  by Regulation 70/2013.  At a previous meeting , Indonesia had not been in a G/TRIMS/M/43  
 
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  position to reply to Members' questions regarding recent developments in the regulations and had 
informed Members that discussions were still on -going.  The European Union wished to resubmit 
the question s it had raised and asked  Indonesia about the number of exemptions granted so far 
under the legislation a s well as any updates on any possible new bill o r law in this sector  and how 
the rules may be modified following Indonesia's inter nal discussions . 
64. Japan  shared the concerns raised  by the European Union  about the consistency of 
Indonesia's Trade Ministry Regulations relating to local content requirements for modern retail 
sector with Articles III:4 of GATT and 2 of the TRIMs Agreement . Japan urged  Indonesia to either 
expeditiously eliminate the se regulations or bring them into conform ity with the WTO Agreement . 
65. Japan noted that, a t a previous meeting  of the Committee , Indonesia had explained that the 
scope of the measure was limited as  it applied only to local retails stores which sold basic goods 
such as soap and snacks. Japan also underst ood that there are several exceptions to the measure. 
Japan sought further information on the regulations that provide for these ex ceptions , as well as 
on the provisions that stipulate the scope of the measure and the meaning of  products referred to 
as "premium products ". Japan also request ed an English translation of 
Decision  16/PDK/KEP/3/214. Referring to the US's statement at the previous meeting of the 
Committee that there is a broad range of products between soap and premium products , Japan 
asked for a clarification on the scope of application and ex ceptions to the measure.  
66. Finally, Japan requested confirm ation on  whether the regulations oblige d modern retailers to 
sell a certain percentage of domestic products or merely encourage d them to do so.  
67. The United States  reiterated its concerns  about these measures and asked Indonesia for an 
update on their implementation. The US asked Indonesia to keep th e Committee apprised of 
developments conc erning implementation of the  regulations, including any further amendments.  
68. New Zealand  echoed  the concerns raised regarding  Indonesia's local content requir ements in 
the retail sector.  This type of local content requirements restricted trade across a large range of 
products in a way that undermined core WTO principles, including those in the TRIMs Agreement. 
New Zealand expressed its concern that this type of  rules can open the door to an increase in 
protectionist measures across other sectors. New Zealand asked Indonesia to provide updates on 
the implementation of these regulations as well as any amendments.  
69. Australia  reiterated its concerns about Indonesia's  introduction of local content requirements 
across a range of sectors . Australia asked Indonesia to ensure that these measures were 
implemented in a manner consistent with the TRIMs Agreement.  
70. Indonesia  informed the Committee of new developments regarding its modern retail sector. 
The Indonesian government revoked the Decision of the Director -General of Domestic Trade 
16/PDN/KEP/3/2014. Regulation 70/2013 and Regulation 56/2014  for the m odern retail secto r 
were still in force . Indonesia indicated its intention to take into consideration the concerns raised 
by other M embers and added that further internal discussion s to review this matter  were ongoing . 
Indonesia offered to inform interested Members for any development s in this process.  
71. The Committee took note  of the statements made.  
6  INDONESIA – CERTAIN MEASURES ADD RESSING LOCAL CONTEN T IN INVESTMENT IN 
THE TELECOMMUNICATIO NS SECTOR  
72. The Chair noted that this issue had been under consideration by the Committee  since 
May 2009. It was on the agenda at the request of Japan. Questions had been posed to Indonesia 
in documents G/TRIMS/W/61, 71, 78, 86, 104, and 154, as well as in document 
G/TRIMS/Q/IDN/1. Responses could be found in  documents G/TRIMS/W/63, 75, 80, 96 , 131, and 
160. 
73. Japan  reiterated its concerns about the possibility that local content requirements for 
Indonesia' s telecommunications sector were be ing implemented inconsistently with WTO rules. 
Indonesia's  responses in G/TRIMS/W/160 to Japan's questions had not  provide d answers to G/TRIMS/M/43  
 
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  Japan's questions.  Japan had submitted new questions  on these measures  in G/TRIMS/Q/IDN/1  
and was  looking forward to Indonesia' s response.  
74. Japan noted that at the previous meeting Indonesia had informed that the policy of local 
content requirements at issue had been revoked and amended by Ministerial Decree 25/2015. 
Japan had however not received accurate information  on the new Decree , despite attempts  to get 
the information in Jakarta . Japan requested  Indonesia to provide a copy  of Ministerial 
Decree  25/2015 and any other information necessary to understand the detail s of the amendment.  
75. The United States  reiterated its concern with Indonesia' s use of local content requirements 
in the telecommunications sector , namely that the requirements result in favo urable treatment for 
domestic versus imported products and that investors could be penalized if they do not comply.  
Moreover, instead of curtailing its use of local content  requirements, Indonesia appeared  to be 
expanding their u se to other sectors, as demonstrated by the growing list of concerns expressed in 
this Committee.  The United States was concerned about this expansion and the consequential 
disruption to global value chains.  
76. The European Union  welcomed the fact  that the Ministry of Communication and Information 
Technology Decree 25  of 2015 on the implementation of Telecommunication and Informati cs 
Universal Service Obligation  (Ministerial Decree 25/2015 ) no longer imposed  a local content 
requirement.  Despite this positive a spect, the EU noted that local content provisions in other sub -
sectors of the telecoms sector (mobile devices and Lo ng-Term Evolution (LTE) towers)  were a 
long-standing issue raised by the EU at meetings of this Committee as well as bilateral ly. The 
Europe an Union asked Indonesia to clarify what reforms were planned in this sector.  
77. Indonesia  informed that Ministerial Decree 38/2007,  concerning the Universal Service 
Obligation/USO , had been revoked and amended by Ministerial Decree  25/2015. The new decree 
did not include a local content  requirement . With respect to the concern s expressed by some 
Members on the rules on broadband wireless access systems  (BWA-WIMAX ) contained in 
Ministerial Decree 7/2009 , Indonesia was of the  view that this measure was consistent with the 
WTO principle of non-discrimination  in Article  III:4 of the GATT , as both foreign and domestic 
suppliers  must comply with it without any preferential treatment . Indon esia also emphasized that 
the measure applies  only to BWA and specifically to WIMAX technology and only for the purpose of 
bidding process es in public procurement.  Indonesia further noted that the technology regulated in 
Decree 7/2009  was no longer relevan t with the technology development s in Indonesia and that t he 
use of wireless broadband and the number of operators  for such technology ha d become  very 
limited.  
78. The Committee took note  of the statements made.  
7  INDONESIA – LOCAL CONTENT REQUIREMENTS FOR DAIRY  IMPORTATION AND 
DISTRIBUTION  
79. The Chair  noted that this item was on the agenda at the request of the United States.  
80. The United States  expressed its concern  with recent developments regulating the dairy 
industry in Indonesia. The matter had also been raised  in the committees on agriculture and on 
import licensing, as well as in various bilateral meetings.  
81. The US referred to Indonesia's  Ministry of Agriculture Regulation 26/2017 concernin g Milk 
Supply and Circulation ( MOA 26/2017) , which  calls for issuance of  several additional measures, 
including a dairy import regulation.  This measure would require persons investing  in Indonesia for 
the purpose of importing and distributing dairy products to form partnerships with local producers, 
to invest in local producti on facilities, and to purchase local fresh milk. This measure would restrict 
US dairy exports to Indonesia and create disadvantageous conditions for dairy importers and food 
processing businesses.  The US referred to conversations held with Indonesian offic ials, which 
suggested that the purpose of the  measure is to promote domestic milk production. The US noted, 
however, that this goal must be carried out in compliance with WTO rul es, including those of the 
TRIMs  Agreement.  G/TRIMS/M/43  
 
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  82. The US also noted that, despite In donesia' s development goals, this measure could have a 
negative impact on the wellbeing of its people by shutting down investors who import and 
distribute non -Indonesian dairy products. The US indicated that 80-85% of Indonesia' s domestic 
demand is met by imported dairy products; that nearly all retail cheese in Indonesia is imported; 
and that infant formula manufacturers in Indonesia import dairy powder at specifications that are 
not produced in Indonesia.  
83. The US urged Indonesia  to reconsider MOA 26/2017 and to consult with its trading partners 
prior to the issuance of any subsequent dairy imp ort measures it is considering.  
84. The European Union  expressed its concern about Indonesia's trend to introduce complex 
investment -related me asures. The EU requested Indonesia to clarify Regulation 26/2017, and in 
particular its article 23, which obliges business partners producing processed milk to enter into a 
partnership with local farmers. The EU also referred to a rticle 34, which subjects the partnership s 
and the relevant plan s to the consideration of the Director General of Livestock and Animal Health 
in giving the import  recommendation.  The EU noted that, w hile the nature of the import licensing 
requirement had  been raised at the WTO Import Licensing Committee, in the present Committee it 
was questioning the impact of article 23 on investments. The EU finally indicated that draft 
implementing rules on milk supply and distribution appear ed to be under preparation and 
requested  Indonesia to provide an update on their state of play and content.  
85. Japan  express ed its systemic concern. Japan cautioned against the replication and expansion 
by Indonesia of the use of local content requirements in various economic sectors. Japan indicated 
that it would continue  to follow developments in Indonesia.  
86. New Zealand  shared the concerns raised regarding Indonesia's rules relating to dairy 
importation and distribution.  This type of rules could have a significant impact on trade and placed 
international firms at a disadvantage . New Zealand urged Indonesia to ensure that its measures 
did not undermine core WTO principles including those contai ned in the TRIMs Agreement. 
New Zealand asked Indonesia to provide updates on further measures under preparation . 
87. Indonesia  expressed that the measure in question had not been applied yet. With regard to 
the new questions raised at this meeting, Indonesia requested that they be provide d in writing.  
88. The Committee took note  of the statements made.  
8  NIGERIA – GUIDELINES ON NIGERI AN CONTENT IN INFORM ATION 
COMMUNICATIONS TECHN OLOGIES (ICT)  
89. The Chair noted that this item was first discussed at the Committee's May 2017 meeting and 
was on the agenda at the request of the United States. Questions had been posed to N igeria in 
document G/TRIMS/Q/NGA/1. To date no written replies had been received.  
90. The United States  recalled its concerns about the increasing use of local content measures in 
Nigeria, in areas such as energy , and the information and communications tech nologies (ICT) 
industry . In 2013, Nigeria's National Information Technology Development Agency (NITDA), under 
the auspices of the Federal Ministry of Communication Technology (MCT), issued "Guidelines for 
Nigerian Content Development in Information and Com munications Technology". These Guidelines 
appeared to impose broad requirements on investors to use local content on hardware, software, 
and services in the ICT sector.  For example, article 10.1(3) required original equipment 
manufacturers (OEMs) to mainta in at least 50% local content in any segment of the product value 
chain. In addition, article 12.1(3) required ICT companies to use only locally manufactured SIM 
cards for devices providing telephone and data access. Further, article 12.1(7) required ICT 
companies to use local companies to build out cell sites, towers, and base stations and to ensure 
that at least 50% of the value of such facilities was locally sourced. The US asked whether the 
Guidelines were currently in effect and whether there was any o ngoing process for reviewing or 
modifying them.  The US also asked Nigeria to confirm whether the description accurately 
portray ed the provisions of the Guidelines that relate to requ irements to use local content?  
91. The U S also asked Nigeria to clarify exact ly wh ich products were covered by this measure. It 
further requested Nigeria to whether there were there legal sources , other than article 3.0(v) , that G/TRIMS/M/43  
 
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  elaborate d on the definition of ICT  to help investors determine which products or services were 
covered ? 
92. With respect to implementation, the US asked Nigeria to further clarif y the meaning of "any 
segment of the product value chain", in reference to the requirement for OEMs to maintain at least 
50% local content , whether there were any restrictions on importation of completed ICT products 
that were otherwise lawful for sale in Nigeria, and if so which products.  Finally, the US noted that 
other sections of the measure directed NIDTA to provide incentives. Pursuant to article 12.2 (5), 
had NIDTA taken steps to "provide incentives and motivations for ICT service providers to develop 
their own unique local content offerings"? Had Nigeria provided the incentives mentioned in the 
Guidelines and, if so, could it describe those incentives ? 
93. Canada  reiterated its concern with Nigeria' s move to impose requirements on investors to 
use local content on hardware, software, and services in the ICT sector, including a high threshold 
that broadly applie d to "any segment of the product value chain ". In Canada's view, l ocal content 
requirements c ould artificially distort trade, restrict market access, and hamper the efficiency of 
investments.  Canada was looking forward to hearing Nigeria' s response to the questions posed by 
the U nited States. 
94. The Comm ittee took note  of the statements made.  
9  RUSSIAN FEDERATION – MEASURES IMPLEMENTIN G RUSSIA'S IMPORT 
SUBSTITUTION POLICY  
95. The Chair recalled that this item was first discussed by the Committee in June 2016 and was 
on the agenda at the request of the European Union and the United States. Questions had been 
circulated in documents G/TRIMS/Q/RUS/4, 5, and 6. To date, no written responses  had been 
received.  
96. The United States  recalled that at previous meetings of the Committee it and other Members 
had posed questions to Russia about some measures and policies that could implicate its TRIMs 
obligations.  The US asked Russia when it would be a ble to respond to these questions.  
97. The US shared the concerns raised by the European Union concerning Russia's Law 223, 
which governed purchases by state owned enterprises ( SOEs), and looked forward to Russia's 
responses to those questions as well. SOEs we re of particular interest a s they accounted for nearly 
half of Russia's GDP . Consequently, instructions to those companies to purchase only domestic 
goods, or to apply price preference s to domestic goods, would impact a sign ificant portion of the 
market. M ore recently Russia appeared  to have tightened  the definition of "made in Russia"  to 
further restrict the ability of SO Es to purchase imported goods.  
98. The US understood that Russia was working on amendments to Decree 719 from 2015. 
These amendments would ti ghten the requirements for products to be considered "Made in Russia"  
by significantly increasing the amount of local content required. In addition, the amendments 
would introduce tight deadlines to meet those requirements. Companies that could not meet the 
higher local content requirements in the short timespan provided would lose their "local 
manufacturer status ", thus constraining their abi lity to operate in the market. The US asked Russia  
to provide any information to this Committee about the se proposed tighter restrictions, including a 
timeline for their adoption . 
99. Finally, the US referred to Decree 261, which would provide additional subsidies of up to 
65% for certain large agricultural machinery (on top of the 25% discount on the purchase pr ice of 
domestically -produced agricultural machinery). This program would make  receipt of government 
benefits contingent on the use of local content. Manufacturers would have to meet certain local 
content requirements and production criteria in order for th eir products to qualify for the subsidies. 
Imported machinery would not qualify for the subsidy, n or would domestically manufactured 
machinery that did not meet the minimum local content threshold.  The US request ed Russia  to 
provide the Committee with additional information about the operation of this decree.  
100.  The European Union  reiterated its concerns as to the growing utilisation of requirements for 
SOEs and other entities to source domestic goods and services . The EU had submitted questions to G/TRIMS/M/43  
 
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  Russia rega rding Law 223 -FZ and its implementing measures ; regretfully, no responses have been 
received . 
101.  The EU also reiterated its concern regarding Decree 925, adopted on 16 September 2016 
and in force since 1  January  2017, which introduce d a 15% price preference for goods of Russian 
origin and services provided by Russian suppliers . The EU asked for Russia's views on the 
compatibility of this decree with WTO rules.  
102.  The EU also referred to a subsequent initiative , adopted by the Russian Duma  in first reading 
on 12 October 2017 , to extend the control by the government of SOEs' purchases of planes, ships 
and other machinery. The EU asked Russia  to clarify whether this new initiative follow ed the same 
path, aiming at substituting imports with lo cal production . It also requested Russia  to explain the 
criteria that may guide the government when assessing these SOEs' purchases and allowing or 
preventing them . The EU referred to the negative economic  impact of restricting access to Russian 
SOEs' proc urements , with respect to imports  (for goods) or to foreign companies  (for services). In 
the EU's view, s uch restrictions would induce less bids, less competition, less choice, less quality , 
and higher prices , which would not be in Russia's interest.  
103.  The E U urged Russia to submit detailed replies to all  sets of outstanding questions.  
104.  Canada  shared  some of the same concerns voiced by its trading partners about Russia' s 
import substitution ban. Canada looked forward to receiving more information from Russia o n the 
measures in question and their potential impact on foreign suppliers.  
105.  Japan  express ed its interest from a systemic point of view  and would continue to closely 
monitor the situation surrounding these measures . Japan looked forward to hearing Russia' s 
responses to the questions posed by the U nited States and the E uropean Union. 
106.  The Russian Federation  stated that the objective  of its  import substitution policy was to 
create and develop domestic industrial production. The goal was to increase the share of  Russian 
suppliers in production chains, to strengthen competitiveness, and to increase the overall 
reputation of Russian -made goods. The  policy was not aimed to drive foreign product s out of the 
Russian market . The measures did not require the use of dome stic over imported goods and were 
fully compliant with WTO rules.  
107.  With respect to the questions posed by the United States in document G/TRIMS/Q/RUS/4 , 
Russian noted that it was still collecting the necessary data. Some aspects (namely, in items 1, 2, 
3, and 11) related to decisions that were under consideration by the relevant ministries and to 
date had not yet been implemented. With respect to item 12, the Centre of Import Substitution  in 
the Sphere of Information and Communication Technologies  has been c reated . On item 13, the 
Russian Information Technologies  Development Foundation has been created. Russia would submit 
its complete replies in due course and as soon as it collected all the necessary information, which 
also applied to the questions in docum ent G/TRIMS/Q/RUS/ 6. 
108.  With respect to the questions posed by the European Union in document G/TRIMS/Q/RUS/ 5, 
Russia expressed that it had provided the necessary clarifications in the course of its most recent 
trade policy review. It referred to document WT/ TPR/M/345/Add.1. A response in this regard 
would be submitted on the same day.  
109.  The United States  noted that in its questions some of the items did not identify specific 
measures and that this was precisely the information that the US was seeking. The US looked 
forward to reviewing Russia's written responses.  
110.  The Committee took note  of the statements made.  G/TRIMS/M/43  
 
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  10  ARGENTINA – ACT 27,263 ON THE DE VELOPMENT AND STRENG THENING REGIME 
OF THE ARGENTINE AUTOPA RTISM, PUBLISHED IN THE OFFICIAL JOURNAL  OF 
1 AUGUST  2016  
111.  The Chair noted that this item was first discussed by the Committee in October 2016 and 
was on the agenda at the request of Mexico. Questions had been circulated in documents 
G/TRIMS/Q/ARG/1 and  3. Responses could be found in  document G/TRIMS/Q/ARG/2.  
112.  Mexico  recalled that Argentina's Act 27,263 on the Regime for the Development and 
Strengthening of the Argentine Auto Parts Industry ent ered into force on 2 August 2016. This Act 
created a regime for the development and strengthening of the Argentine  auto parts sy stem 
granting fiscal support to specific auto parts producers who comply with specific minimum local 
content requirements.  The matter had been  discussed in at Mexico's request by the Committee at 
its meeting s since October 2016 , as well as in the Committee  on Market Access at many meetings . 
During the previous meeting of this Committee, Argentina mentioned that the reg ime was 
regulated by Resolution  599 – E/2016 from the Industry and Services Secretariat of Argentina's 
Ministry of Production, which entered into force on the date of its publication 7 December 2016. An 
internet portal had also been set up to explain how to submit the information and documentation 
required to apply for the benefits . This would imply that, notwithstanding the concerns voiced by 
Mexico and other Members, the regime is in operation . 
113.  Mexico recalled that, u nder Act 27,263 a transferable digital tax credit was awarded , which 
may be used for the payment of domestic taxes for an equivalent percentage of the ex-factory  
value of domestic auto parts . This credit varied  from 4 to 15% depending on local content and 
according to a table contained in a rticle 13 of the Act. The benefit was awarded to legal persons 
using auto parts for the production of vehicles and other auto parts and the benefit was also 
extended to the purchase of new machinery made in Argent ina. To benefit from the regime, the 
Act also established  percentages of local content for specific  auto parts which vary from 25 
to 50%.  
114.  Mexico's concerns were confirme d by the internet portal, which lists among the 
requirements to apply for the benefits: 30% minimum local content for automobiles; 25% 
minimum local content for light trucks, trucks, buses, and chassis; and 10% minimum local 
content for engines, which shou ld increase to a minimum 20% from the moment the benefits are 
granted. Exceptionally, a lower local content would be acceptable, subject to local investment in 
the production of machinery not previously manufactured in Argentina. With respect to 
investment , the portal referred to the concession of an 8% digital tax credit on the local purchases 
of moulds and matrixes, as well as the exemption of import duties on moulds and matrixes. In 
particular, for each USD1 of local purchases, USD1.5 is exempted from im port duties, and the 
beneficiaries shall be entitled to request an advance payment of 15% of the benefits foreseen 
during the first five years in order to use it for the development of suppliers. In Mexico's view, 
such legislation might be inconsistent wit h Argentina's obligations under Article 2 and the Annex of 
the TRIMs Agreement, as it made the granting of a fiscal advantage to legal persons conditional on 
the use and production of domestic products. In contrast, the advantage would not be available to 
legal persons that used imported products.  
115.  Mexico recalled that at the previous meeting of this Committee Argentina had replied to 
some of the questions posed by Mexico. However, no explanation had been provided on the 
measure's consistency with the TRIMs Agreement. Mexico had subsequently addressed follow -up 
questions to Argentina requesting more details on the operation of the measure.  
116.  The European Union  supported Mexico's intervention about Law 27,263  and its implementing 
regulations  Resolution 599/2016 of 7 December 2016 and Re solution 811/2017 of 
10 October  2017. Law 27,263  was an investment measure with trade restrictive effects in the form 
of local content requirements.  Therefore, it appear ed to violate Article 2 of the TRIMs  Agreement 
in conjunction with the annexed Illustrative List because it was inconsistent with the non -
discrimination obligation in Article III of GATT 1994.  Following the publication of implementing 
regulations , it appeared that the measure was operational and ready to be used , which the EU 
regret ted. Despite informal indications that Argentina might have been willing to address the 
concerns raised by Members in the process of adopting implementing regulations, the 
European  Union considered that nothing ha d changed regarding the local content requirements or 
the prohibited subsidies that remain ed in place. The European Union called on Argentina to review G/TRIMS/M/43  
 
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  this law and its implementing regulations to remove all local content  requirements that 
discriminated  against imported car par ts and to remove the prohibited subsidies granted to local 
producers in the car sector.  
117.  Korea  shared the concerns raised by Mexico and the European Union regarding Law 27,263 . 
The Korean industry is also concerned about potential effects of the Law. In Kor ea's view, this Law 
is a trade -restrictive investment measure, in the form of local content requirements, that seems to 
violate Article 2 of the TRIMs  Agreement and Article III of GATT 1994 . Korea has systemic 
concerns  with respect to this measure. Korea l ooked forward to responses from Argentina and 
would continue to monitor the measure closely.  
118.  In response to the questions raised by Mexico, Argentina  stated the following. With respect 
to question 1, Argentina recalled that, f ollowing the adoption of Act 27,263 , the regime was 
regulated by Resolution 599 – E/2016 from the Industry and Services Secretariat of Argentina's 
Ministry of Production. The Resolution was published in the Official Bulletin on 7 December 2016, 
and the measure entered into force  on that date. The legislation was complemented by 
Resolution  811 – E/2017 from Argentina's Ministry of Production, published in the Official Bulletin 
on 13 October 2017, which regulates the issuance of electronic tax credit  bonds created by the 
autopartism regime, and by Resolution 4149 -E/2017 from Argentina's Federal Public Revenue 
Administration (AFIP) published in the Official Bulletin on 27 October 2017, which sets out the 
procedure for the use of those electronic tax credit bonds in an informatics platf orm. 
119.  With respect to question 2, Argentina informed that, since Law 27,263  entered into force on 
7 December 2016 , five firms have been enrolled into the regime. Any other firm that complies with 
the requirements in article 3 of Law 27,263 , as well as in Resolution 599 – E/2016 from 
Argentina's Ministry of Production, could likewise apply.  
120.  With respect to question 3, Argentina stated that, at the time of drafting these replies, the 
provisions in Chapter II of Law 27,263  were not in force yet. The implementin g authority would 
determine the date on which the provisions would apply for each requesting company.  
121.  With respect to question 4, Argentina indicated that, as noted for the previous question, the 
provisions in Chapter II of Law 27,263  were not in force yet . This meant that no benefit had been 
granted.  
122.  With respect to question 5, Argentina expressed that Law 27,263  does not contain any 
distinction based on the investor's nationality for purposes of applying and benefitting from the 
regime. At the time, the f irms that had applied originated, not from Argentina, but from France, 
Italy, Japan, and the United States.  
123.  Mexico  thanked  Argentina for its responses. It is evident that the topic has raised the 
concern of Members. While Mexico recognized Argentina's righ t to implement public policies to 
strengthen its automotive sector and promote its insertion in global value chains, this should be 
achieved in a manner consistent with the WTO agreements . Mexico considered that the matter 
should be resolved multilaterally , but thanked Argentina for its willingness to discuss it.  
124.  The Committee took note  of the statements made.  
11  TURKEY – FORCED LOCALISATION POLICY IN THE PHARMA CEUTICAL SECTOR  
125.  The Chair noted that this item was on the agenda at the request of the European Union and 
the United States.  
126.  The United States referred to the publication made o n 8 February 2017  by Turkey's Social 
Security Institution (SGK) on its webpage of a list of me dicines to  be delisted from the SGK' s 
official reimbursement list effective 8 February 2018 . This was pursuant to Turkey's 
10th Development Plan and 64th Government Action Plan. The US understood that the delisted 
medicines are imported products for which there are at least three locally manufactured 
alternatives. Removal from the reimbur sement list effectively deprived the  product of meaningful 
access to the Turkish market, since Turkish patients generally d id not have access to drugs not 
funded by the SGK.  G/TRIMS/M/43  
 
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  127.  It appea red to the US that the Turkish government had not identified any public health need 
that would require local production of the identified medicines. Rather, as indicated in the 
"Objective and Scope " of the Transformation Plan and the associated "Goals " and "Performance 
Indicators ", the measure appeared  to be driven by a number of industrial policy goals including 
enhancing local production capacity, protecting local producers,  and reducing Turkey' s trade 
deficit.  The US wished to stress  that Turkey' s action  did not hinge on pharmaceutical product 
safety, effectiveness, cost s or other similar factors. Rather, the measure was based on the location 
of manufacture. The me asure applied  to foreign generic medicines just as much as to other foreign 
medicines. Locally manufactured medicines we re preferred under the system regardless of the 
cost, and, as the US understoo d it, medicines could continue to be imported if the producer agr eed 
to undertake some manufacturing in Turkey.  
128.  In the US's view, c ompelling loc al manufacturing through Turkey's reimbursement list raised  
questions about a number of Turkey' s existing international obligations, including the 
TRIMs  Agreement, as well as GATT Article III and the TBT Agreement.  
129.  The US request ed Turkey to provide an update  on the status of this measure, and elaborate 
on its justification.  
130.  The US also understood that the government intended  to follow up the initial list of products 
with further lists after an internal review process. The US urged Turkey to consult closely wi th both 
trading partner governments and potentially affected companies and to take their concerns into 
account before making any further decisions in connection with this policy.  
131.  The European Union raised its concerns regarding Turkey's recent policy of lo calisation 
requirements affecting the pharmaceutical sector. The EU indicated that the policy obliges 
producers of pharmaceutical products to submit localisation plans to shift production to Turkey or 
to produce locally via a Turkish manufacturer. Failing to do so or if the submitted plans were 
deemed insufficient, the respective pharmaceutical products were delisted from the reimbursement 
list of the Turkish Social Se curity Institute, which accounted  for approx imately  90% of total sales 
of pharmaceutical p roducts in Turkey.  The policy was being implemented in several steps, each 
time targeting more sophisticated products. Ultimately the measure would also target patented 
produc ts. The first products would effectively stop being  reimbursed as of February 201 8 and 
companies were already adapting to this new rules by shifting production to Turkey. Such 
localisation policy constituted  a systemic c oncern for the EU as in its view this measure was in 
breach of Turkey's WTO obligations, notably as regards GATT Arti cle III:4 and TRIMs Article 2.1 . 
132.  The EU disagreed  with Turkey's claim that the measure would fall within the public 
procurement exemption of GATT Article III:8. The EU acknowledged that direct purchases of 
pharmaceutical products by hospitals could indeed be considered as public procurement, but it did 
not consider the overall reimbursement scheme as public procurement because the social security 
authority was not directly involved in the purchases and patients contribute partially to the cost of 
pharmaceut ical drugs . 
133.  The EU call ed on Turkey to abandon the implementation of this policy . 
134.  Canada  shared the concerns raised by the United States and the European Union. Canada 
posed the following questions for clarification on the measures at issue. First, which Turkish body 
had issued the request for companies to submit plans to localise production of pharmaceutical 
products. Second, what level of localization was requir ed. Third, in what way was localization being 
measured.  
135.  The Committee took note  of the statements made.  
136.  The Chair requested Members that had posed oral questions, or that had provided oral 
responses to oral or written questions on any of the above agenda i tems, to provide their 
questions and responses in writing to the Secretariat for circulation.  G/TRIMS/M/43  
 
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  12  NOTIFICATIONS UNDER ARTICLE 6.2 OF THE T RIMS AGREEMENT  
137.  The Chair recalled that Article 6.2 of the TRIMs Agreement and the 1996 Committee 
Decision contained in G/T RIMS/5 require Members to notify the names of publications in which 
TRIMs might be found, where such publications exist, including those TRIMs applied by regional 
and local governments and authorities within their territories, and the addresses from which copies 
could be obtained, without prejudice to the legal consistency of any TRIM which might be found in 
the publications notified. As agreed by the Committee, the Secretariat circulated a reminder in this 
respect on 18 October 2017 in document G/TRIMS/W/1 66. Since the previous meeting of the 
Committee, no new notification had been submitted under Article  6.2. The latest compilation of 
notifications under this provision had been circulated in document G/TRIMS/N/2/Rev.27. The Chair 
urged Members that had not  yet notified to do so promptly.  
138.  The Committee took note  of the information provided.  
13  OTHER BUSINESS  
139.  No Member raised any items under other business . 
14  DATE OF THE NEXT MEE TING  
140.  The Chair recalled that Article 7.1 of the Agreement provided that the Committee would 
meet not less than once a year, and otherwise at the request of any Member. For some years now, 
the Committee had regularly met twice a year, in the spring and fall, and some Members have 
indicated that they would like to continue in this manner. Thu s, the Chair proposed to schedule the 
next meeting for Friday, 1 June 2018.  
141.  In order to provide Members with ample opportunity to prepare for this meeting, the 
Secretariat would issue the annotated draft agenda three weeks in advance, i.e., Wednes day, 
9 May 2018 . Requests to place items on the annotated draft agenda should be communicated in 
writing to the Secretariat at the latest by close of business on Tuesday, 8 May 2018 . The 
annotated draft agenda would be open to Members' comments until close of busin ess on 
Wednesday, 16 May 2018 . In addition, Members wishing to circulate documents should do so by 
close of business on Wednesday, 16 May 2018 so that they could be reflected on the airgram. The 
airgram convening the meeting would be issued on Tuesday, 2 2 May 2018 . 
142.  The Committee took note  of the information provided.  
15  ANNUAL REPORT (2017 ) 
143.  The Chair recalled that Article  7.3 of the Agreement required the Committee to report 
annually to the Council for Trade in Goods. As a basis for the Committee's consideration of this 
matter, the Secretariat has circulated to Members the draft annual report  for 2017 , via the 
Documents for Meetings link on the  Members' website as RD/TRIMS/14 . The report would be 
updated, if necessary, to take account of today's meeting. The Chair proposed that the Committee 
adopt the annual report ad referendum , request the S ecretariat to complete and update it if 
necessary, and forward it to the Council for Trade in Goods.  
144.  The Committee so decided . 
145.  The meeting was adjourned . 
__________