Agreement on Trade-Related Investment Measures

Agreement on Trade-Related Investment Measures
The Agreement on Trade-Related Investment Measures (TRIMs) are rules that are applicable to the domestic regulations a country applies to foreign investors, often as part of an industrial policy. The agreement, concluded in 1994, was negotiated under the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), and came into force in 1995. The agreement was agreed upon by all members of the World Trade Organization. Trade-Related Investment Measures is one of the four principal legal agreements of the WTO trade treaty.
TRIMs are rules that restrict preference of domestic firms and thereby enable international firms to operate more easily within foreign markets. Policies such as local content requirements and trade balancing rules that have traditionally been used to both promote the interests of domestic industries and combat restrictive business practices are now banned.
Origin
In the late 1980s, there was a significant increase in foreign direct investment across the world. However, some of the countries receiving foreign investment imposed numerous restrictions on that investment designed to protect and foster domestic industries, and to prevent the outflow of foreign exchange reserves.
Examples of these restrictions include local content requirements (which require that locally produced goods be purchased or used), manufacturing requirements (which require the domestic manufacturing of certain components), trade balancing requirements, domestic sales requirements, technology transfer requirements, export performance requirements (which require the export of a specified percentage of production volume), local equity restrictions, foreign exchange restrictions, remittance restrictions, licensing requirements, and employment restrictions. These measures can also be used in connection with fiscal incentives as opposed to requirement. Some of these investment measures distort trade in violation of GATT Articles III and XI, and are therefore prohibited.
Until the completion of the Uruguay Round negotiations, which produced a well-rounded Agreement on Trade-Related Investment Measures (hereinafter the "TRIMs Agreement"), the few international agreements providing disciplines for measures restricting foreign investment provided only limited guidance in terms of content and country coverage. The OECD Code on Liberalization of Capital Movements, for example, requires members to liberalize restrictions on direct investment in a range of areas. The OECD Code's efficacy, however, is limited by the numerous reservations made by each of the members.
In addition, there are other international treaties, bilateral and multilateral, under which signatories extend most-favored-nation treatment to direct investment. Only a few such treaties, however, provide national treatment for direct investment. The Asia-Pacific Economic Cooperation Investment Principles adopted in November 1994 are general rules for investment but they are non- binding.
See also
Bilateral Investment Treaty
References
World Trade Organization agreements
Foreign direct investment
Industrial policy
Treaties concluded in 1994
Treaties entered into force in 1995
Treaties of Albania
Treaties of Angola
Treaties of Antigua and Barbuda
Treaties of Argentina
Treaties of Armenia
Treaties of Australia
Treaties of Austria
Treaties of Bahrain
Treaties of Bangladesh
Treaties of Barbados
Treaties of Belgium
Treaties of Belize
Treaties of Benin
Treaties of Bolivia
Treaties of Botswana
Treaties of Brazil
Treaties of Brunei
Treaties of Bulgaria
Treaties of Burkina Faso
Treaties of Burundi
Treaties of Cambodia
Treaties of Cameroon
Treaties of Canada
Treaties of Cape Verde
Treaties of the Central African Republic
Treaties of Chad
Treaties of Chile
Treaties of the People's Republic of China
Treaties of Taiwan
Treaties of Colombia
Treaties of the Republic of the Congo
Treaties of Costa Rica
Treaties of Ivory Coast
Treaties of Croatia
Treaties of Cuba
Treaties of Cyprus
Treaties of the Czech Republic
Treaties of the Democratic Republic of the Congo
Treaties of Denmark
Treaties of Djibouti
Treaties of Dominica
Treaties of the Dominican Republic
Treaties of Ecuador
Treaties of Egypt
Treaties of El Salvador
Treaties of Estonia
Treaties entered into by the European Union
Treaties of Fiji
Treaties of Finland
Treaties of France
Treaties of Gabon
Treaties of the Gambia
Treaties of Georgia (country)
Treaties of Germany
Treaties of Ghana
Treaties of Greece
Treaties of Grenada
Treaties of Guatemala
Treaties of Guinea
Treaties of Guinea-Bissau
Treaties of Guyana
Treaties of Haiti
Treaties of Honduras
Treaties of Hong Kong
Treaties of Hungary
Treaties of Iceland
Treaties of India
Treaties of Indonesia
Treaties of Ireland
Treaties of Israel
Treaties of Italy
Treaties of Jamaica
Treaties of Japan
Treaties of Jordan
Treaties of Kazakhstan
Treaties of Kenya
Treaties of Kuwait
Treaties of Kyrgyzstan
Treaties of Laos
Treaties of Latvia
Treaties of Lesotho
Treaties of Liechtenstein
Treaties of Lithuania
Treaties of Luxembourg
Treaties of Macau
Treaties of Madagascar
Treaties of Malawi
Treaties of Malaysia
Treaties of the Maldives
Treaties of Mali
Treaties of Malta
Treaties of Mauritania
Treaties of Mauritius
Treaties of Mexico
Treaties of Mongolia
Treaties of Montenegro
Treaties of Morocco
Treaties of Mozambique
Treaties of Myanmar
Treaties of Namibia
Treaties of Nepal
Treaties of the Netherlands
Treaties of New Zealand
Treaties of Nicaragua
Treaties of Niger
Treaties of Nigeria
Treaties of Norway
Treaties of Oman
Treaties of Pakistan
Treaties of Panama
Treaties of Papua New Guinea
Treaties of Paraguay
Treaties of Peru
Treaties of the Philippines
Treaties of Poland
Treaties of Portugal
Treaties of Qatar
Treaties of South Korea
Treaties of Moldova
Treaties of Romania
Treaties of Russia
Treaties of Rwanda
Treaties of Samoa
Treaties of Saudi Arabia
Treaties of Senegal
Treaties of Seychelles
Treaties of Sierra Leone
Treaties of Singapore
Treaties of Slovakia
Treaties of Slovenia
Treaties of the Solomon Islands
Treaties of South Africa
Treaties of Spain
Treaties of Sri Lanka
Treaties of Saint Kitts and Nevis
Treaties of Saint Lucia
Treaties of Saint Vincent and the Grenadines
Treaties of Suriname
Treaties of Eswatini
Treaties of Sweden
Treaties of Switzerland
Treaties of Tajikistan
Treaties of Thailand
Treaties of North Macedonia
Treaties of Togo
Treaties of Tonga
Treaties of Trinidad and Tobago
Treaties of Tunisia
Treaties of Turkey
Treaties of Uganda
Treaties of Ukraine
Treaties of the United Arab Emirates
Treaties of the United Kingdom
Treaties of Tanzania
Treaties of the United States
Treaties of Uruguay
Treaties of Vanuatu
Treaties of Venezuela
Treaties of Vietnam
Treaties of Yemen
Treaties of Zambia
Treaties of Zimbabwe
Treaties of Liberia