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Trade Related Investment Measures (TRIMS)

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Dr.S.NAGALINGAM,

M.Com., M.Phil., P.G.D.C.A., Ph.D.,

Assistant Professor,

PG & Research Department of Commerce,

Cardamom Planters’ Association College,

Bodinayakanur.

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Trade Related Investment Measures (TRIMS)

It is an agreement on Trade-Related Investment Measures which specifies the rules that are applicable to the domestic regulations a country applies to foreign investors. The agreement is applicable to all members of the World Trade Organization (WTO). The agreement was formalized in 1994 and came into effect in 1995.

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The Agreement on Trade-related Investment Measures (TRIMs) refers to certain conditions or restrictions imposed by a government in respect of foreign investment in the country, especially by developing countries, and calls upon member countries to introduce national treatment of foreign investments and removal of quantitative restrictions. Major highlights about the TRIPS are given below:

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�The Agreement on Trade-Related Investment Measures (TRIMS)�

  • The Agreement on Trade-Related Investment Measures (TRIMS) recognizes that certain investment measures can restrict and distort trade. It states that WTO members may not apply any measure that discriminates against foreign products or that leads to quantitative restrictions, both of which violate basic WTO principles.
  • A breakthrough of the GATT signed in 1994 was that it brought TRIPs as a common standard for the protection of intellectual property globally. Implication of TRIPs is that member countries should design domestic intellectual property legislations on the basis of the TRIPs provisions.

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�Features of TRIMs �

  1. Abolition of restriction imposed on foreign capital
  2. Offering equal rights to the foreign investor on par with the domestic investor
  3. No restrictions on any area of investment
  4. No limitation or ceiling on the quantum of foreign investment
  5. Granting of permission of without restrictions to import raw material and other components

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6. No force on the foreign investors to use the total products and or materials

7. Export of the part of the final product will not be mandatory

8. Restriction on repatriation of dividend interest and royalty will be removed

9. Phased manufacturing programming will be introduced to increase the domestic content of manufacturer.

 

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