AGREEMENT

ON TRADE-RELATED INVESTMENT
MEASURES (TRIMs)
GROUP 5
 Objective and coverage of
TRIMs
Trade Related Investment Measures TRIM's

-is a World Trade Organization (WTO) agreement that

recognizes that measures and regulations impose on
investments and investors can reduce or distort
international trade, and may function as
disincentives for investor in situations where
investment is needed.
The agreement restricts the use of three TRIMS
requirements: local content requirements, trade
balancing requirement and foreign exchange balancing
requirements.
• WTO prohibit investment restricting measures that
discriminates foreign investment

• The argument of WTO is that such investment

restricting steps are violating trade itself (WTO is
an institution formed to promote trade).

• Under TRIMs, the WTO names the list of investment

measures that discriminates foreign investment and
hence violates the basic WTO principle of National
Treatment.
• These measures include – local content requirement,
domestic employment, technology transfer requirement
etc.

• The objective of TRIMs is to ensure fair treatment of

investment in all member countries.

• As per the TRIMs Agreement, members are required to

notify the WTO Council for Trade in Goods of their
existing TRIMs that are inconsistent with the
agreement.
National Treatment and Quantitative
Restrictions, Inconsistent TRIMs
Trade Related
Investment Measures
(TRIMs)

•Agreement that
recognizes the measures
and regulation impose
on investment and
investors.
National Treatment and Quantitative
Restrictions, Inconsistent TRIMs

Objective of TRIMs

• is to measure fair
treatment of
investment in all
member countries.
National Treatment and Quantitative
Restrictions, Inconsistent TRIMs

Inconsistent TRIMs

• a change from one

state or condition
to another.
National Treatment and Quantitative
Restrictions, Inconsistent TRIMs
National Treatment

• is a principle in
International Law.
Utilized in many treaty
regimes involving trade
and intellectual
property, it requires
equal treatment of
foreigners and locals.
National Treatment and Quantitative
Restrictions, Inconsistent TRIMs
Quantitative Restrictions

• refers to explicit
limits, or quotas on the
physical amounts of
particular commodities
that can be imported or
exported during a
specified time period.
Notifications
and
Transitional
Agreements,
Transparency
 Notifications and Transitional Agreements

To ensure any potential trade barriers are avoided.

Assessing the impact of the measure on exports and
spot any provisions breaching the TBT Agreement.

Members, within 90 days of the date of entry into

force of the WTO Agreement, shall notify the Council
for Trade in Goods of all TRIMs they are applying
that are not in conformity with the provisions of
this Agreement.
Each Member shall eliminate all TRIMs which are
notified under paragraph 1 within two years of the
date of entry into force of the WTO Agreement in the
case of a developed country Member, within five years
in the case of a developing country Member, and
within seven years in the case of a least-developed
country Member.

The Council for Trade in Goods may extend the

transition period for the elimination of TRIMs
notified under paragraph 1 for a developing country
Member, including a least-developed country Member,
which demonstrates particular difficulties in
implementing the provisions of this Agreement.
 During the transition period, a Member shall not
modify the terms of any TRIM which it notifies under
paragraph 1 from those prevailing at the date of entry
into force of the WTO Agreement so as to increase the
degree of inconsistency with the provisions of Article
2. TRIMs introduced less than 180 days before the date
of entry into force of the WTO Agreement shall not
benefit from the transitional arrangements.
Any TRIM so applied to a new investment shall be
notified to the Council for Trade in Goods. The terms
of such a TRIM shall be equivalent in their
competitive effect to those applicable to the
established enterprises, and it shall be terminated at
the same time.
 Transparency

Members reaffirm, with respect to TRIMs, their

commitment to obligations on transparency and
notification in Article X of GATT 1994, in the
undertaking on "Notification" contained in the
Understanding Regarding Notification, Consultation,
Dispute Settlement and Surveillance adopted on 28
November 1979 and in the Ministerial Decision on
Notification Procedures adopted on 15 April 1994.
 Each Member shall notify the Secretariat of the
publications in which TRIMs may be found, including
those applied by regional and local governments and
authorities within their territories.

Each Member shall accord sympathetic consideration to

requests for information, and afford adequate
opportunity for consultation, on any matter arising from
this Agreement raised by another Member. In conformity
with Article X of GATT 1994 no Member is required to
disclose information the disclosure of which would
impede law enforcement or otherwise be contrary to the
public interest or would prejudice the legitimate
commercial interests of particular enterprises, public
or private.
 PROVISION FOR DEVELOPING COUNTRY
MEMBERS
Provisions requiring all WTO members to safeguard the trade
interests of developing countries, support to help
developing countries build the capacity to carry out WTO
work, handle disputes, and implement technical standards,
and. provisions related to least-developed country (LDC)
Members.

•The WTO Agreements contain special provisions which give

developing countries special rights and which give developed
countries the possibility to treat developing countries more
favourably than other WTO Members. These special provisions
include, for example, longer time periods for implementing
Agreements and commitments or measures to increase trading
opportunities for developing countries.
 These provisions are referred to as “special and
differential treatment” (S&D) provisions.

The special provisions include:

 longer time periods for implementing Agreements and

commitments,
 measures to increase trading opportunities for developing
countries,
 provisions requiring all WTO members to safeguard the
trade interests of developing countries,
 support to help developing countries build the capacity
to carry out WTO work, handle disputes, and implement
technical standards, and
 provisions related to least-developed country (LDC)
Members.
 DEVELOPMENT: DEFINITION
Who are the developing countries in the WTO?

Developing countries comprise a majority of the WTO membership.

They are grouped as “developing countries” and “least developed
countries”.

A developing country (or a low and middle income country (LMIC),

less developed country, less economically developed country
(LEDC), or underdeveloped country) is a country with a less
developed industrial base and a low Human Development Index
(HDI) relative to other countries.[2] However, this definition
is not universally agreed upon. There is also no clear agreement
on which countries fit this category.[3] A nation's GDP per
capita compared with other nations can also be a reference
point. In general, the United Nations accepts any county's claim
of itself being "developing".
The term "developing" describes a currently
observed situation and not a changing dynamic or
expected direction of progress. Since the late
1990s, developing countries tended to demonstrate
higher growth rates than developed countries.[4]
Developing countries include, in decreasing order
of economic growth or size of the capital market:
newly industrialized countries, emerging markets,
frontier markets, Least Developed Countries.
Therefore, the least developed countries are the
poorest of the developing countries.
Developing countries tend to have some characteristics in
common. For example, with regards to health risks, they
commonly have: low levels of access to safe drinking water,
sanitation and hygiene; energy poverty; high levels of
pollution (e.g. air pollution, indoor air pollution, water
pollution); high proportion of people with tropical and
infectious diseases (neglected tropical diseases); high
number of road traffic accidents; and generally poor
infrastructure. Often, there is also widespread poverty,
low education levels, inadequate access to family planning
services, corruption at all government levels and a lack of
so-called good governance. Effects of global warming
(climate change) are expected to impact developing
countries more than wealthier countries, as most of them
have a high "climate vulnerability".
 Rights Liabilities of Parties to Contracts

•The doctrine of private of contract is a common law

principle which provides that a contract cannot confer
rights or impose obligations upon any person who is not a
party to the contract.

The premise is that only parties to contracts should be

able to sue to enforce their rights or claim damages as
such. However, the doctrine has proven problematic because
of its implications for contracts made for the benefit of
third parties who are unable to enforce the obligations of
the contracting parties. In England and Wales, the doctrine
has been substantially weakened by the Contracts (Rights of
Third Parties) Act 1999, which created a statutory
exception to private (enforceable third party rights).
Parties to this Agreement (hereinafter referred to
as “Parties”)

Recognizing the need for an effective multilateral framework

of rights and obligations with respect to laws, regulations,
procedures and practices regarding government procurement with
a view to achieving greater liberalization and expansion of
world trade and improving the international framework for the
conduct of world trade;

Recognizing that laws, regulations, procedures and

practices regarding government procurement should not be
prepared, adopted or applied to foreign or domestic products
and services and to foreign or domestic suppliers so as to
afford protection to domestic products or services or domestic
suppliers and should not discriminate among foreign products
or services or among foreign suppliers;
Parties to this Agreement (hereinafter referred to
as “Parties”)

Recognizing that it is desirable to provide transparency of

laws, regulations, procedures and practices regarding
government procurement;

Recognizing the need to establish international

procedures on notification, consultation, surveillance and
dispute settlement with a view to ensuring a fair, prompt and
effective enforcement of the international provisions on
government procurement and to maintain the balance of rights
and obligations at the highest possible level;

Recognizing the need to take into account the

development, financial and trade needs of developing
countries, in particular the least-developed countries;
Parties to this Agreement (hereinafter referred to
as “Parties”)

Desiring, in accordance with paragraph 6(b) of Article IX

of the Agreement on Government Procurement done on 12 April
1979, as amended on 2 February 1987, to broaden and improve
the Agreement on the basis of mutual reciprocity and to
expand the coverage of the Agreement to include service
contracts;

Desiring to encourage acceptance of and accession to this

Agreement by governments not party to it;

Having undertaken further negotiations in pursuance of

these objectives.
TYPES OF INTERNATIONAL CONTRACT
 INTERNATIONAL CONTRACTS
- International contracts refers to a legally
binding agreement between parties, based in
different countries, in which they are obligated
to do or not do certain things.

-It is a primary legal tool put in place for

companies to limit their risk when working in the
global or international market.

-International contracts may be written in a

formal way and to be written in English.
 TYPES OF INTERNATIONAL CONTRACTS

1. INTERNATIONAL DISTRIBUTION AGREEMENTS

- Is designed to be used where a supplier grants

to a distributor the right to promote and
commercialize merchandise under its own name and
on its own account with the intention of
reselling it to end clients or retailers located
in an agreed territory.
 For each party the following must be included:
1. Name of company, full address and nationality.
2. Company type: Public limited company, limited
liability company etc.
3. Name and position of company representative who signs
the agreements
4. Tax ID numbers of both parties

Most Important Clauses in international distribution

contracts
1. Exclusivity
2. Commitment not to compete
3. Minimum Sales Target
4. Conditions of sale
5. Advertising and Publicity
2.INTELLECTUAL PROPERTY LICENSES

- A licensing agreement is a partnership between

an intellectual property rights owner (licensor)
and another who is authorized to use such rights
(licensee) in exchange for an agreed payment (fee
or royalty).

licensing agreements categorized as follows:

1.Technology License Agreement

2.Trademark Licensing and Franchising Agreement
3.Copyright License Agreement
3.INVESTMENT AGREEMENT
- An International Investment Agreement (IIA) is a type
of treaty between countries that addresses issues
relevant to cross-border investments, usually for the
purpose of protection, promotion and liberalization of
such investments.

Common types of IIAs

1.Bilateral Investment Treaties (BITs)
2.Preferential Trade and Investment Agreements (PTIAs)
3.International Taxation Agreements and Double Taxation
Treaties (DTTs)
4. INTERNATIONAL SALES CONTRACT
- Formal contract by which a seller agrees to sell and a
buyer agrees to buy, under certain terms and conditions
spelled out in writing in the document signed by both
parties.
- International sales fall under the United Nation
Conventions on Contract for the International Sale of
Goods (CISG).
Issues to address in International Sales Contract

1. Delivery Terms 5. EEI Filings

2. Currency 6. Payment Terms
3. Insurance 7. Warranty Obligations
4. Export Compliance 8. Export Responsibilities
5. SUPPLY AGREEMENTS

- The International Supply Contract is used to establish

long-term agreements (i.e. over a year) between a
manufacturer (referred to here as the Supplier) and its
client (the Buyer) for the supply of products at
prearranged prices.

Supply Agreement Checklist

1. Price and payment

2. Quantity
3. Duration
4. Warranties, disclaimers and guarantees
6. LETTERS OF CREDIT
- International letters of credit are often called
“commercial letters of credit.” For international trade,
the commercial letter of credit is the primary mechanism
for payment.

the most commonly used type of letter of credit is

called a documentary irrevocable commercial letter of
credit.
-The buyer of goods is called the "applicant" in the
letter of credit.
- The seller is called the "beneficiary".
- A bank that acts on behalf of the buyer is called an
7. FRANCHISE AGREEMENT

- The franchise agreement is essentially a legal

document between the franchisor and you (the
franchisee). It is a legal binding agreement. It
explains in detail what the franchisor expects from you,
as a franchisee, in the way you operate every facet of
the business.
7. FRANCHISE AGREEMENT

10 Fundamental Provisions outlined;

1. Location/territory
2. Operations
3. Training and ongoing support
4. Duration
5. Franchise fee/investment
6. Royalties/ongoing fees
7. Trademark/patent/signage
8. Advertising/marketing
9. Renewal
10. Exit strategies
 8. JOINT VENTURE AGREEMENTS

- The international joint venture agreement represents

the understanding of each partner’s respective rights,
obligations and role within the venture. In addition,
the agreement should address the ownership of
intellectual property – especially if new intellectual
property will be created by the joint venture.
Common types of Joint Venture

1. Limited co-operation
-This is when you agree to collaborate with another
business in a limited and specific way.

2. Separate joint venture business

- This is when you set up a separate joint venture business,
possibly a new company, to handle a particular contract.

3. Business partnerships
- form a business partnership or a limited liability
partnership. You could even merge the two businesses.
9. DEVELOPMENT AGREEMENTS

- A development agreement contains development

obligations. It details the working relationship
between parties such as developers, funds,
tenants and purchasers. In particular it contains
details of the plans and specifications under
which a property is to be delivered from a seller
to a buyer.
Four main types of development agreement

1.Standalone Development Agreement

- A Landowner engages a developer to carry out
works on land owned by the land owner

2.Forward Purchase Agreement

- Agreement is reached by a buyer to purchase a
property once it is built.
Four main types of development agreement

3.Forward Funding Agreement

- Title is transferred to a buyer at a very early
stage.

4. Agreement for Lease with works

- A tenant agrees to take a Lease of a property
once the property is complete
 Standard Trade Terms:

(CIF,FOB AND FAS)

Trade Terms Mean;

Understanding between a buyer and a seller as to
the discount, payment period, delivery expenses,
and time returns, and the standard meaning of
terminology used in transactions and trade
documents. See also trade term.
 Standard Trade Terms:

(CIF,FOB AND FAS)

• Cost, Insurance,
Trade terms of CIF and Freight (CIF) is an expense paid
by a seller to cover the costs, insurance, and freight
against the possibility of loss or damage to a buyer's
order while it is in transit to an export port named in
the sales contract.

•Once the freight loads, the buyer becomes responsible

for all other costs.
 Standard Trade Terms:

(CIF,FOB AND FAS)

Trade terms of FOB

•Free On Board (FOB) is a shipment term used to indicate

whether the seller or the buyer is liable for goods that
are damaged or destroyed during shipping.
•"FOB origin" means the purchaser pays the shipping cost
from the factory or warehouse and gains ownership of the
goods as soon as it leaves its point of origin.
 Standard Trade Terms:

(CIF,FOB AND FAS)

Trade terms of FAS

•Free alongside is one of the trade terms called

INCOTERMS, or International Commercial Terms
•When an international trade contract includes the term
free alongside or FAS, the word "free" means the seller
must deliver the goods to a specific port, while
"alongside" means that the goods will be within reach of
the designated ship's lifting tackle.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS
International business transactions are described in the
form of an international contract, containing the
objectives and commitments of each of the parties
involved and the terms which govern the transaction.

International sales contracts

are governed by the United
Nations Convention on Contracts
for the International Sales of
Good (CISG) from 1980.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS
Contracts for the International Sales of Goods (CISG) -
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Traders wanted to deal despite of differences in

languages, culture and laws developed their own code for
international transactions.

The CISG adopted the "traditional" concept of

contractual obligations, that is similar to Turkish and
Swiss Law of Obligation principles that provide
contracts that shall be formed as a result of two
declarations of intent - offer and acceptance.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Offer
- an offer is an act of law;

Pursuant to CISG, Article 14 "a proposal for

concluding a contract addressed to one or more
specific persons constitutes an offer, if it
sufficiently definite, and indicates the
intention of the offering to be bound in the
event of acceptance."
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Sufficient Definiteness

Article 14 provides that "a proposal is

sufficiently defined if it identifies the goods,
and expressly or implicitly fixes, or makes
provision for, determining the quantity and the
price".
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Intention of the Offeror to be Bound

Offers that are not addressed to one or

more specific persons are considered as
invitations for offers.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Effectiveness of the Offer

An offer will become effective when it reaches

the offeree. Article 24, provides that an offer
will reach the addressee when it is orally made
to the addressee, or delivered in any way
personally to his place of business.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Withdrawal and Revocation of the Offer

In order for an offer to withdrawn, Article 15 states

that the withdrawal should reach the offeree before or
at the same time as the offer.

Revocation of an offer is regulated under Article 16 of

the CISG. An offer is revocable when it reaches the
offeree before the acceptance is dispatched.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Rejection of an Offer

Rejection of an offer is stipulated under Article

17; accordingly, a rejection must reach the
Offeror in order to terminate an offer, even if
the offer is irrevocable.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Acceptance

Acceptance is regulated under Articles 18

to 22 in line with the Turkish and Swiss
laws of obligation provisions.
 FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Effectiveness of the Acceptance

An acceptance is effective when it reaches

the offering. If an oral offer is in
question, it should be accepted
immediately, unless circumstances imply
otherwise.
FORMATION AND ENFORCEMENT OF INTERNATIONAL
CONTRACTS

Counter-offer

A Counter-offer is regarded as a
rejection of the offer when it includes
additions limitations and
modifications.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS

A contract is an agreement between parties which is

binding in law. Furthermore the rights and obligations
of the parties under a contract may be enforced by the
courts. The courts may compel performance of contractual
obligations by the party in default or, more commonly,
may award damages for breach of contract.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS

Law and the rights and protections formed under them are
also created by judges’ decisions in court. This is
known as common law. Common law has its basis in
precedent – this means that judges follow decisions made
in similar cases to create a consistent, just and fair
system.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS

Different type of business agreement: there are three

two of business agreement express term, implied term and
Exemption clauses.

Express terms are terms that have been specifically

mentioned and agreed by both parties at the time the
contract is made. They can either be oral or in writing.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS
Breach of express term: Each time you discuss a product or
service with a customer you become responsible for providing and
agreeing specific information.

Exemption Clauses are a particular type of express term, taking

two basic forms:

• Clauses which exclude liability for the breach of a particular

term or terms. This effectively negates any obligation to
perform those terms. These may be called exclusion clauses.
• Clauses which do not effect the obligation to perform, but
which limit the remedies available for a breach. These may be
called limitation clauses.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS

Terms implied by statute: the Sale of Goods Act 1979.

The key provisions are;

Section 12: the person selling the goods has to have the legal
right to sell them.
Section 13: if you’re selling goods by description, e.g. from a
catalogue or newspaper advert, then the actual goods have to
correspond to that description.
 RIGHTS, LIABILITIES OF PARTIES TO
CONTRACTS

Section 14: the goods must be of “satisfactory quality” – that

is, they should meet the standard that a reasonable person would
regard as “satisfactory”. Also, if the buyer says they’re buying
the goods for a particular purpose, there’s an implied term that
the goods are fit for that purpose.

Section 15: if you’re selling the goods by sample – you show the
customer one bag of flour and they order 50 bags – then the bulk
order has to be of the same quality as the sample.
 GROUP 5
MEMBERS:
JAMIAS, KRISTINA
LOPEZ, KRIZA MAE
OLIVARES, JUSTINE
ONRADA, ROBERT
POLICARPIO, RG
SANDILANTAN, FLORABEL
TORRECAMPO, GHELYN