WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/TRIMS/M/32 
14 June 2012  
 
(12-3120) 
Committee on Trade-Related Investment Measures  
  
 
MINUTES OF THE SPECIAL MEETING HELD 
ON 4 MAY 2012 
 
Chairperson:  Mr. Patrick Van Gheel (Belgium) 
 
Note by the Secretariat 
 
 1. The Committee on Trade-Related Investment Me asures (the "Committee") held a special 
meeting on 4 May 2012 at the request of a number of Members.
1  The airgram which convened the 
meeting was contained in document WTO/AIR/3933. 
2. Prior to the adoption of the proposed agenda, th ree Members made statements for the record. 
3. Argentina expressed willingness to listen to the Members that had requested agenda item A, 
pertaining to Argentina, although it did not share th e terms in which this topic had been raised by 
those Members, and questioned whether the issues raised fell under the manda te of the Committee. 
4. Nigeria recalled that as the next meeting of the Committee had been previously announced for 
1 October 2012, not May, a revised airgram should reflect that this was a special meeting.  The 
Secretariat confirmed that this would be reflected in the minutes of the meeting (see the title of the 
document, paragraph 1 above and footnote 1 below). 
5. India noted that the airgram had been issued on 20 April 2012, i.e., giving 14 calendar days' 
notice for the meeting. Although the Rules of Procedures did allow for convening meetings on a 
minimum of 10 calendar days' notice, the footnote to Rules 2, 3 and 4 indicated at least three weeks 
advance notice was desirable.   
6. The Committee adopted the proposed agenda contained in document WTO/AIR/3933. 
A. ARGENTINA – OBLIGATION TO COMPENSATE IMPORTS -EXPORTS AND /OR TO DEVELOP LOCAL 
FACILITIES IN RELATION WITH IMPORTS AND REPATRIATION OF PROFITS ABROAD – REQUEST 
BY THE EUROPEAN UNION , JAPAN AND THE UNITED STATES  
7. The EU expressed concern over Argentina's info rmal "trade balancing" policy, whereby 
companies seeking to import products should agree to export goods of an equal or greater value, or to 
establish production facilities in Argentina (informal "dollar for dollar" requirements by Argentine 
Authorities).  Those policies had a direct bearing on imports and repatriation of profits abroad.  Many 
EU operators had reported having to undertake su ch trade balancing commitments and to present 
import balancing plans prior to receiving authorization to import certain goods.  Despite the lack of 
official directives or resolutions, the governme nt had publicly supported these import-restrictive 
measures in the name of improving its trade balance, with significant trade distortive effects.  The EU requested Argentina to justify those practices in  light of its political commitments, undertaken in 
                                                      
1 This language was added at the request of Nigeria. G/TRIMS/M/32 
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  the G-20 context, not to introduce new trade restrict ive measures, and inquired as to the consistency 
of the measures and policies with Article 2 of the TR IMs Agreement in the light of paragraph 2 of the 
Illustrative List, and with Articles X, XI, and III:4 of GATT 1994.    
8. Japan indicated that following recent expressions of concern by a number of Members in the 
Council for Trade in Goods ("CTG") and the Committee on Import Licensing ("IL"), it strongly hoped 
that Argentina would introduce improvements regard ing a series of trade restrictive measures which 
were inconsistent with the TRIMs Agreement.  Japan was concerned over the statement made by 
Argentina's Minister of Industry, published in a press release on 27 January 2012, restricting the 
importation of automobile parts in favour of domesti cally produced parts, and inquired whether that 
was compatible with obligations under Article 2 of  the TRIMs Agreement and paragraph (1)(a) of its 
Annex.  Argentina also had made public governme nt statements concerning its informal "trade 
balancing" policy, whereby companies seeking to im port products should agree to export, dollar for 
dollar, goods of an equal or greater value.  It ur ged Argentina to provide explanation as to how these 
requirements can be implemented in conformity  with the TRIMs Agreement.        
9. The US expressed concern regarding the natu re and application of Argentina's import 
licensing regime, including trade balancing requirement s, which had significantly restricted imports 
into Argentina from the US and other Members.  This regime, inter alia, conditioned import licensing 
and customs clearance on commitments from importers to export goods or invest domestically.  Many 
companies had reported that in order to import in to Argentina, they had to set up local production 
facilities or export dollar for dollar the value of th eir imports.  Some companies reported that import 
licenses were approved more quickly in cases where th e company had made such investments, or had 
commitments to export a certain amount from Argentina.  The Ministry of Industry had even 
highlighted trade balancing success stories of compani es that had agreed to this policy.  Since 2008, 
the number of products subject to non-automatic licensing proce dures had progressively expanded.  
Although these concerns were raised by twenty-two  Members in the CTG and the IL Committee, the 
problem was unresolved, as Argentina continued to de ny its existence.  These procedures, including 
discretionary and non-transparent approval of li cense applications, would raise serious questions 
regarding Argentina's compliance with the TRIMs Agreement, and with the principles of GATT and 
Article XI on import restrictions.  The US asked Argentina how it would address these concerns, including how and when it would ensure that its  import licenses and other mechanisms would be 
issued in a timely manner, be transparently applie d and properly notified, would not act as disguised 
trade-balancing measures, and w ould not have an import-restrictive effect.         
10. Canada encouraged Argentina to notify its m easures and engage with the WTO community to 
address these concerns in a manner consistent with  its obligations under the WTO Agreement.   
11. Australia expressed deepening systemic concer n regarding Argentina's trade restrictive 
measures.  It referred to its statement to the IL Committee, and its joint statement to the CTG with 
Canada, China, Costa Rica, the EU, Israel, Japan, Korea, New Zealand, Norway, Panama, 
Switzerland, Chinese Taipei, Thailand, Turkey, and the US.  The new import requirements introduced 
on 1 February 2012 would require every product imported into Arge ntina to be personally approved 
by the Commerce Secretariat, which would act as a de facto  import restriction on all products.  
Australia also raised the informal trade balancing scheme referred to by other Members, and requested 
Argentina to confirm that it would not be operating import balancing or local content schemes as part 
of its import approval measures, with a written cl arification of how in Argentina's view these 
measures were consistent with its  WTO obligations, especially Article 2 of the TRIMs Agreement and 
paragraph 2 of its annexed Illustrative List.   
12. Argentina noted that not only had the bilateral note it informally received from the EU been 
delivered after the ten-day deadlin e set in the Rules of Procedur es of the Committee, but it also 
included general claims that lacked detail and thus were difficult to understand and respond to.  The  G/TRIMS/M/32 
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  information submitted by the EU was brief, confus ing and legally inaccurate , referring to general 
WTO obligations and other matters not covered by the TRIMs Agreement, such as repatriation of 
profits.  The note mentioned paragraph 2 of the Illu strative List of the TRIMs Agreement and in that 
context referred to GATT Article XI:1, X and III:4, although that paragraph only addressed the first of 
these.  In addition, the EU's note had not linked each  of the alleged practices that it criticized to the 
legal obligations that were mentioned later, whic h made it impossible to understand the exact scope of 
the issues raised.  Argentina considered that the information provided by the Members raising these 
issues was insufficient to demonstrate that the allege d actions or practices we re covered by the TRIMs 
Agreement and its specific obligations.  Thus, none of the alleged policies, practices or measures cited 
could be considered trade-related investment measures. 
13. Argentina disagreed that its trade policy had unreasonably restricted imports.  It also 
disagreed with what was repeatedly mentioned in other WTO bodies that the current system in 
Argentina was hindering imports and having trade di storting effects.  This was contradicted by 
information in document G/C/W/668 that Argentin a had increased its imports in 2011 by 24% from 
most of the Members raising this issue.  In the period March 2011 – March 2012, Argentina's imports 
were 79% higher than during March 2009 – March 2010 and by 22% over the same period of 2010 – 
2011.  The exports of the EU, Japan and the US to Argentina had increased by 60%, from 14 billion 
dollars over the period March 200 9 – March 2010 to 23 billion doll ars over the period March 2011 – 
March 2012.  The EU had increased its exports to Ar gentina in the course of two years (March 2009 – 
March 2012) by 72%, compared with 58% for Japan  and 43% for the US.  However, Argentina's 
exports, as a developing country, to these three Me mbers had only increased by 32% in that period as 
it was faced with tariff peaks and escalations and quotas in these markets.    
14. Argentina also rejected the reference to its obligations and commitments in the context of 
other fora and organizations and emphasized that the only obligations that should be monitored in 
WTO bodies were WTO obligations, not those undert aken in other fora such as the G-20.  The 
allegations raised by the other Members seemed to  be a political strategy to publicly condemn 
legitimate policies and practices of one of the WTO' s developing Members, through raising systemic 
concerns.  This might pre-judge and condemn alleged breaches by other Members without any 
judgement being rendered by the competent bodies of the WTO.  The WTO was not a pyramid;  all of its Members were the guardians of the system.  In this respect, the proponents were seeking to 
undermine the WTO compatible political space that wa s available to developing countries to achieve 
their legitimate objectives of growth, development an d fairness.  Argentina emphasized that its trade 
policy has always been transparent and consistent  with the WTO rules and commitments, including 
those in the context of the TRIMs Agreement. 
15. The Committee took note of the statements, questions and answers.   
B. BRAZIL – CERTAIN LOCAL CONTENT PROVISIONS IN THE TELECOMMUNICATIONS SECTOR – 
REQUEST BY THE EUROPEAN UNION AND THE UNITED STATES  
16. The Chairperson drew Members' attention to  document G/TRIMS/W/93 containing questions 
posed by the US to Brazil in connection with this agenda item.   
17. The US referred to the draft document released by Brazilian telecom regulator "ANATEL"  
for bidding on rights to use specific radio frequencies to provide commercial mobile radio services.  
The draft appeared to include a legal requirement fo r applicants to give preference to locally-produced 
equipment in building out a network to use th ese frequencies, as well as a requirement to meet 
specific milestones over time for local content of th e infrastructure (including software) deployed.  
The milestones appeared to include a requirement that the winning bidders should commit to purchase 
goods, products, equipment and systems for teleco mmunications and data ne tworks with national 
technology, and should ensure a 70% local content ratio  in its infrastructure deployment after 5 years.  G/TRIMS/M/32 
Page 4  
 
  The US sought clarification of whether its interp retation was correct, what the purpose of the policy 
was, what was meant by "national technology", and whether ANATEL would require a company not 
to use a foreign technology which could be optimal in favour of an arguably inferior technology that 
was produced locally.  The US also inquired abou t the enforcement mechanism if a winning bidder 
was unavailable or unwilling to meet the local content provision and whether this apparent 
requirement to use local content comported with th e obligations in Article 2 of the TRIMs Agreement 
and the Illustrative List thereto.  The US also soug ht clarification as to when the bid document would 
be finalized, applications processed and winning bids announced. 
18. The EU expressed strong concern with respect to the new local content provisions contained 
in the proposed auctioning of the radio spectrum in the 2.5 GHz band issued by ANATEL.  
Implementing such measures would not only potentially  harm the EU and its ICT industry, but could 
also be detrimental to Brazil's own interests.  Brazil had attracted high foreign direct investments, including in that sector, as it offered opportunities in a fast growing market and a predictable political and regulatory framework.  The current proposals faile d to appreciate the importance of international 
supply chains and could risk sending negative signa ls to the international business community.  The 
EU questioned the compatibility of the proposed  measures with Brazil's WTO commitments, 
including the principles of national treatment in  GATT Article III and the TRIMs Agreement.   
19. Japan stated its understanding that the document on bidding conditions for the radio spectrum 
for the 4th generation mobile phones was formally publis hed in April 2012, and that bidding was 
scheduled to close on 5 June 2012, with the result to be made public on 12 June 2012.  Given the urgency, Japan requested prompt replies in order to dispel any doubts as to the conformity of the 
bidding with the TRIMs Agreement.   
20. Brazil replied that the partial concession of th e radio electric spectrum to the private sector 
was part of a broader policy geared toward incr easing competition in the telecommunications sector.  
Brazil stressed that its telecom sector was already characterized by a considerable degree of openness 
and competition, although Brazil was not bound by  any market access commitment in this specific 
services sector.  On the US questions, Brazil indicated that all its answers were extracted from the 
bidding document itself.  Brazil's answers to the US written questions were circulated in document 
G/TRIMS/W/99. 
21. The Committee took note of the statements, questions and answers.   
C. INDIA – CERTAIN PREFERENCES TO DOMESTIC ALLY MANUFACTURED ELECTRONIC GOODS – 
REQUEST BY THE EUROPEAN UNION AND THE UNITED STATES  
22. The Chairperson drew Members' attention to document G/TRIMS/W/94 containing the 
questions posed by the US to India in connection with this agenda item. 
23. The US submitted that on 10 February 2012, In dia's Department of Information Technology 
had issued a notice of policy requiring at least 30% of all government procurement of electronic 
products to be manufactured domestically.  The US was pleased that langua ge in earlier drafts 
imposing requirements on purchases by private sector companies had been removed, but under a close 
reading the policy appeared to apply to purchases by private companies in addition to government 
procurement, as Article 2.1 stated that the me asure was a policy "for providing preferences to 
domestically manufactured electronic products" that applied to both "procurement" and "government 
procurement".  In giving examples as to how the policy would apply, the measure gave an example of purchases by telecom licensees without regard to government or private ownership.  The US 
requested clarification on this point, and as to whether the implementation guidelines for the policy 
would be released for public comment.     G/TRIMS/M/32 
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  24. The EU requested an explanation of the scope of  this policy, in particular whether it could 
affect private operators as well as purely govern ment entities.  If so, the EU inquired about the 
purpose for such requirements and how India believe d them to be consistent with its WTO and 
TRIMs commitments.  The EU asked India to define  "security implications" and how it would plan to 
ensure consistent and coherent a pplication of the measures.  The EU  understood that India intended to 
issue implementation guidelines, but had not yet done so.  Given that the new policy had been in force 
since February 2012, these guidelines should be issued  urgently.  The EU also inquired whether India 
intended to adopt similar preferences in other products or sectors.   
25. Japan indicated that the notice No. 8 (78) /2010-IPHW, on preferences to domestically 
manufactured electronic goods in procurements due to security considerations, and in government 
procurement, published on 15 February 2012, re quired local content not only in government 
procurement, but also in "procurement by Government Licensees" which could be private 
telecommunications operators of electronic products which had security implications for the country.  
Japan understood that the details would be specified in  the notifications of related Ministries and were 
under consideration within each Ministry.  However,  since these measures could have implications 
under GATT Article III:4 and Article 2 of the TRIMs Agreement, India was asked to provide a clear 
explanation of the notice prior to its full implementation.   
26. India indicated that in recent years, it had su ffered attacks on its critical infrastructure from 
agencies opposed to India.  As use of electronics a nd IT became more prevalent, the ability to use 
these devices to disrupt and threaten normal human life and property by an inimical interest was becoming increasingly common.  It was in this cont ext that the notification dated 10 February 2012 
was issued.  India added that the security issues were sacrosanct not only for India, but for all 
Members and had been discussed in general terms in  the preamble of the policy.  It would not be 
possible to discuss these issues in detail as they we re dealt with on the basis of advice from the 
security agencies due to their sensitiv e and confidential nature.  On the issue of the guidelines, India 
indicated that these were still under preparation and that there was no timeline for their release.  
India's answers to the US written questions were circulated in document G/TRIMS/W/97.  
27. The Committee took note of the statements, questions and answers.   
D. INDIA - MANDATORY LOCAL CONTENT REQUIREMENTS IN PROJECT GUIDELINES FOR PHASE 1 
(BATCH 1 AND BATCH 2) OF THE JAWAHARLAL NEHRU NATIONAL SOLAR MISSION - REQUEST 
BY THE EUROPEAN UNION , JAPAN AND THE UNITED STATES  
28. The Chairperson recalled that this item had been previously discussed at the Committee's 
meeting of 3 October 2011.2  The US had posed follow-up questions to India in document 
G/TRIMS/W/95.   
29. The US referred to India's replies to qu estions 1 and 2 in document G/TRIMS/W/91 and 
requested India to clarify how Jawaharlal Nehru National Solar Mission (" JNNSM") domestic content 
requirements constituted government  procurement within the meaning of the exemption in 
GATT Article III.8(a), including:  the governmental agency whose procurement would be subject to 
the local content requirements under the JNNSM, wh at products would be subject to procurement 
under the JNNSM rules, the governmental purpose fo r which these products were procured, whether 
the products subject to government procuremen t under India's understanding of the JNNSM were 
ultimately re-sold and if so whether they were re-sold on a commercial basi s, and what incentives 
were provided to project developers for participation in the JNNSM.  On India's replies to question 3, 
the US inquired about the type of fiscal incentives (e.g. customs and excise duty 
exemptions/concessions) that would be available to JNNSM projects, whether CERC determined 
                                                      
2 G/TRIMS/M/31. G/TRIMS/M/32 
Page 6  
 
  solar tariffs applied to all JNNSM projects, and wh ether CERC had also set solar tariffs for solar 
projects that were not under JNNSM.  
30. The EU remained concerned by the local content requirements set out for solar power plants.  
As this project was a three-phase initiative, the EU requested an update on the project as to how the 
local content requirements, which were supposed to  be reviewed ahead of phase 2 in light of the 
experience in phase 1, were addressed.   
31. Japan continued to be concerned mainly about the introduction of the local content 
requirements.  It had raised this issue in  the context of the Committee on Subsidies and 
Countervailing Measures and in India's Trade Policy Re view the previous year.  Japan requested a full 
description, and transparent explanation of related sub-projects.  
32. India indicated that the JNNSM was a major initiative of India to promote ecologically 
sustainable growth.  It constituted a major contribu tion by India to the global effort to meet the 
challenge of climate change.  India referred to its previous written replies.3  India's written replies to 
the new written questions were circulated in document G/TRIMS/W/98.   
33. The Committee took note of the statements, questions and answers.   
E. INDONESIA - CERTAIN MEASURES ADDRESSING LOCA L CONTENT IN INVESTMENT IN THE 
TELECOMMUNICATIONS SECTOR – REQUEST BY JAPAN  
34. The Chairperson recalled that this issue had been previously discussed, at the Committee's 
meetings of 20 May and 16 October 20 09, 1 October 2010, and 3 October 2011.4  He referred to the 
document containing Japan's follow-up questions5 and the document submitted by Indonesia 
containing the replies.6     
35. As a preliminary comment to th e replies by Indonesia which were received on the day of the 
meeting, Japan indicated that it was not fully c onvinced that all measures had been conducted as 
"government procurement", based on the defi nition contained in Indonesia's replies.7  Japan 
understood the Rules of Using Radio Freque ncy Band 2.1 GHZ for Mobile Networks 
(07/PER/M.KOMINFO/2/2006) to include similar requi rements that licensees spend a percentage of 
expenditures on domestic products and services.  Japan reserved the right to submit follow-up 
questions.  
36. The US reiterated that development of Indonesia's telecommunications sector contained 
tremendous opportunities for Indonesia and for the par ticipating companies.  The US was concerned 
over the local content requirements in recent tele communications decrees and the fact that foreign 
investors could be penalized if they would not co mply.  These measures were implemented at the time 
that Indonesia needed to attract billions of do llars to further develop its telecommunications 
infrastructure, which lagged many countries, including Indonesia's ASEAN partners.   
37. The EU was concerned that the evolution of the regulatory framework was not going in the 
right direction, notably in light of the recent update  of the legislation on government procurement and 
the provision of local content requirements that we re to be applied also to tenders by private 
companies in telecom and electricity sectors.  The EU sought an update on the latest developments in 
                                                      
3 G/TRIMS/W/91. 
4 G/TRIMS/M/28, G/TRIMS/M/29, G/TRIMS/M/30 & G/TRIMS/M/30/Corr.1 and G/TRIMS/M/31. 
5 G/TRIMS/W/86. 
6 G/TRIMS/W/96. 
7 G/TRIMS/W/80 & G/TRIMS/W/96.  G/TRIMS/M/32 
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  the regulatory framework a nd Indonesia's intentions to address the concerns that were regularly 
expressed in the Committee.  The EU companies had expressed an interest in expanding investments 
in Indonesia, if Indonesia was ab le to address these issues.    
38. Canada echoed the concerns of other Members and strongly encouraged Indonesia to see the 
impact of such provisions on investment and inno vation.  It emphasized its interest in ensuring 
non-discriminatory treatment in the Indonesian telecommunications sector.   
39. Indonesia's written answers to Japan's written questions were circ ulated in document 
G/TRIMS/W/96.  
40. The Committee took note of the statements, questions and answers.   
F. INDONESIA – CERTAIN LOCAL CONTENT PROVISIONS IN THE ENERGY SECTOR (MINING , OIL 
AND GAS ) – REQUEST BY CANADA , THE EUROPEAN UNION , JAPAN AND THE UNITED  STATES    
41. The Chairperson recalled that this issue had been previously discussed, at the Committee's 
meetings of 16 October 2009, 1 Oc tober 2010 and 3 October 2011, as reflected in the minutes of these 
meetings.8  He referred to the questions previously s ubmitted by the US to Indonesia in this respect 
and contained in document G/TRIMS/W/88.   
42. The US reminded Members that it had been ra ising this issue since 2009, but unfortunately 
there had been no clear understating of Indonesia's view as to how this measure would comport with 
the obligations in Article 2 of the TRIMs Agre ement and its Illustrative List.  Meanwhile, the 
investment climate in this sector had continued to erode.  The newest regulation implementing the 
Mining Law – Government Regulation 24 of 2012 – re quired mining companies to divest a majority 
ownership in the company by the 10th year of operation.  This regulation represented a dramatic 
increase in local ownership requirements over the 20%  divestment requirement issued in 2010.  The 
law stated that operators should "prioritize" the utilization of local manpower and domestic goods and 
services, "increase the value added of mineral and/or coal resources in carrying out mining, processing, and refining and utilization of the mate rials and coal", and " carry out processing and 
refining of the mining process inside the country."   
43. The US also referred to similar regulations in the oil and gas sector.  Article 79 of the 
Presidential Regulation No. 35/2004 indicated that "contractors should prioritize the use of domestic 
goods, services, technologies and engineering and d esign capabilities." In addition, the procurement 
guidelines issued by the regulator, referred to as guidelines PTK007rev.2, clearly provided 
preferential treatment to oil and gas companies w ith majority Indonesian ownership, by making it 
harder for companies with minority Indonesian owne rship to meet Indonesia's increasingly strict local 
content requirements.  Indonesia's preliminary an swers seemed to indicate that it viewed these 
measures as having some connection to government pr ocurement, but did not explain what products 
were being procured through these measures, by wh at agency and for what governmental purpose.  
Indonesia also seemed to indicate that the measures were  subject to availability of local content.  Such 
an escape clause was not an exclusion to Article 2 of  the TRIMs Agreement and its Illustrative List.  
44. The US asked Indonesia to provide the Committe e with a deadline by which it could provide 
the written responses to the US' questions, and inquire d if there was any high-level guidance from any 
Indonesian Ministry, including the Ministry of Industry, encouraging or requiring other Ministries to implement these kinds of regulations.  The US also requested Indonesia to identify any similar measures implemented in respect of other sectors, including the criteria and the authority responsible 
                                                      
8 G/TRIMS/M/29, G/TRIMS/M/30 & G/TRIMS/M/30/Corr.1 and G/TRIMS/M/31. G/TRIMS/M/32 
Page 8  
 
  for implementing such measures.  The US also inquired about any existing mandatory or voluntary 
requirements. 
45. Japan submitted that the Mining Law required investors to establish processing and refinery 
facilities in Indonesia and to allocate mining produc ts to domestic smelters in Indonesia.  These 
measures would constitute de facto  export restrictions, and therefore could be inconsis tent with GATT 
Article XI:1 as well as Article 2 of the TRIMs Agreem ent and paragraph 2(c) of its Illustrative List.  
The Law stipulated that the Indonesian Governme nt could decide on the annual production volumes 
and control the exports of raw mate rials, and could use discretionary measures to regulate exports.  In 
addition, the Mining Law included provisions pertai ning to local content requirements which could be 
inconsistent with GATT Article III. 4 as well as paragraph 1(a) of the Illustrative List of the TRIMs 
Agreement.  Furthermore, the Minister of En ergy and Mineral Resources Decree No. 7 for the 
year 2012 would prohibit, under Article 21, the export of raw materials by certain investors who had a 
particular permit from 6 May 2012.  Japan was se riously concerned about this measure and had 
approached Indonesia bilaterally.  Japan requested Indonesia to withdraw the measures inconsistent 
with GATT 1994 and the TRIMs Agreement, or explain why it did not consider the measures to be 
thus inconsistent.   
46. Canada continued to be concerned about the potential negative impact on both current and 
future foreign investments in this sector.  It also expressed concern that the new mining regime 
appeared to discriminate against foreign suppliers and restrict exports.   
47. The EU indicated that it had followed closely the new implementing regulation for the 
Law No. 4/2009 that had been released recently.  The regulation, No. 24 of 2012, made it more 
difficult for existing and new investors to operate in  Indonesia.  The EU requested Indonesia to ensure 
that measures taken were in line with interna tional agreements and would not cause unnecessary 
unpredictability to investors.  It inquired if more regulations were due to be released and what they 
would contain.   
48. Indonesia provided additional preliminary answers.  It stated that the Regulation on Coal and 
Mining No. 23/2010 would only encourage the mining investors to use or give preference to domestic 
goods and services as long as they were available in te rms of quantity, quality and price, but it was not 
mandatory and if such domestic products were not available, the investors would be free to import 
them.  The domestic products c ould be defined as goods or services including designing, building and 
engineering thereof carried out by a company investing and producing in Indonesia and which might, in the process, use imported basic material/com ponents.  Concerning the questions on export 
restrictions on raw materials, Indonesia stated that it had no such restrictions.  The regulation only 
required a minimum percentage of mining and coal for domestic use at the domestic price which was 
also the same as the international price;  i.e. no negative impact on investors.  The Regulation aimed 
to prevent the possible shortage of these products in the domestic market.  On gas, since the issuance 
of the Regulation No. 79/2010, operating costs as we ll as the income tax of the upstream of oil and 
gas business sector could be recovered.  The Gove rnment would reimburse all operating costs of 
investors in accordance with the Government Proc urement Regulation No. 54/2010 and the Decree of 
the Ministry of Industry No. 15/2011, which stipulated that any procurement in the oil and gas sector would be considered as government procurement as long as the Joint Operation Contract was financed 
by patterns of joint operation between the Governme nt and business entities.  Any such procurement 
made by a Government Agency or Ministry or tackled through the Government's budget would fall in 
the realm of government procurement and would thus benefit from an exemption pursuant to 
Article III:8 of GATT.        
49. The Committee took note of the statements, questions and answers.    G/TRIMS/M/32 
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  G. NIGERIA - CERTAIN MEASURES TAKEN BY NIGERIA AND CONTAINED IN THE "ACT TO PROVIDE 
FOR THE DEVELOPMENT OF NIGERIAN CONTENT IN THE NIGERIA OIL AND GAS INDUSTRY " OF 
APRIL 2010  - REQUEST BY THE EUROPEAN UNION AND THE UNITED STATES   
50. The Chairperson stated that this item was placed  on the agenda of the last Committee meeting 
held on 3 October 2011.  Discussions pertaining to th is issue could be found in the minutes of that 
meeting.9  It was placed on the agenda of the meeting at the request of the EU and the US.  He made 
reference to the questions posed by the US to Nigeria in this respect.10 
51. The US recalled its statement at the previous meeting regarding certain measures that 
appeared to require the use of local content in Nige ria's oil and gas industry.  In addition to general 
requirements to give "first consideration" to goods manufactured in Nigeria, the law established 
minimum local content requirements for specific g oods such as steel plates and pipes, cables, and 
valves.  The Law also required mandatory use of  locally-manufactured welded and fabricated 
products.  The Local Content Act also directed th e Minister of Petroleum Resources to develop a 
"fiscal framework and tax incentives"  for companies that established facilities or operations in Nigeria 
"for purposes of carrying out production, ma nufacturing or providing any services and goods 
otherwise imported into Nigeria." The Local Conten t Act also included a provision that required the 
Local Content Board to conduct a review of the Schedule to the Act at such intervals as it might determine but not later than every two years with a view to ensuring a measurable and continuous 
growth in Nigerian content in all projects, opera tions, activities and transactions in the Nigerian oil 
and gas industry for onward transmission to the Nati onal Assembly.  As the law had gone into effect 
in 2010, it seemed that the conclusion of the two year review might be imminent.  
52. The US requested Nigeria to provide informati on on the status of this review, and sought 
greater transparency and a better understanding of th is process, its participants, the standards by 
which findings were measured, the method of applic ation of any outcomes, and expected timeframes 
of implementation.  It reiterated its question on how such incentives conditioned on purchase or use of 
products of domestic origin or from a domestic s ource would comport with Article 2 of the TRIMs 
Agreement and its Illustrative List.  It appreciated  developing countries' capacity constraints, but 
failed to see how it would take over a year to get an swers pertaining to a simple obligation such as 
that of national treatment.      
53. The EU referred to the review of schedule A,  the list of detailed local content requirements 
per good or service, foreseen by the applicable legi slation for spring 2012.  Th e EU requested Nigeria 
to specify the date of this review and clarify th e manner in which this was to be carried out.  The 
review of this schedule could address issues beyo nd WTO compatibility, but could also provide a 
closer look at whether the legislative scheme at st ake, especially its local content requirements, could 
provide the appropriate tool to achieve the stated  goal of enhancing domestic capacity in the oil and 
gas industry.  Issues related to the productive capacity and supply possibilities of the relevant 
Nigerian sectors ought to be addressed in this framework.  
54. Canada expressed concern that the measures and their implementation could impede bilateral 
investments between Canada and Nigeria.  It looked forward to learning more about the status of the 
review.   
55. Japan hoped to hear replies on these issues, esp ecially with respect to the local content 
requirements which seemed to be prominent in this respect.   
                                                      
9 G/TRIMS/M/31. 
10 G/TRIMS/W/89. G/TRIMS/M/32 
Page 10  
 
  56. Nigeria believed that the Nigerian Local Content Act was consistent with its WTO 
obligations.  It confirmed that it had received the questions in October 2011 and that it was working 
with Capital on the answers to be provided by the next meeting in October 2012.  Nigeria emphasized 
that surprises should be avoided and that Members should be given time to provide answers, instead 
of providing assumptions which would not be he lpful for the multilateral trading system.   
57. The Committee took note of the statements, questions and answers.   
H. OTHER BUSINESS  
58. No Member raised any issues under this agenda item.   
I. DATE OF THE NEXT MEETING  
59. It was agreed that the Committee would next meet on Monday, 1 October 2012.  The airgram 
convening the meeting would be issued on 10 Septem ber 2012.  Requests for items to be placed on 
the agenda of the next meeting should be communicated  to the Secretariat in writing, together with the 
accompanying documentation to be issued in connection with that item.  The last date for Members to 
place items on the agenda of that meeting would be  Tuesday, 4 September 2012, by close of business.  
Documentation for consideration at that meeting shoul d be circulated not later than ten calendar days 
prior to the meeting date.    
J. ELECTION OF THE CHAIRPERSON  
60. The Committee elected Mr. José ESTANISLAU DO AMARAL (BRAZIL) to hold office 
until the end of the first meeting of 2013.  
 
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