Developing
countries are frequent users - but by no means the only - users of
TRIMS. A survey of WTO Trade
Policy Reviews of developing countries
conducted between 1991 and 1994 revealed that more than half of the
countries reviewed used TRIMS of various kinds, although the measures
were already being phased-out in some cases before the
Uruguay Round Agreement was reached.
Data
from GATT Trade Policy Review Mechanism reports illustrates that
19 developing countries (out of 27 for which such reports were analyzed)
maintained local content requirements between 1991 and 1994 in various
sectors of their economies. Several countries (Mexico, Argentina,
India and Brazil) decided to eliminate local content requirements
before the conclusion of the Uruguay Round
Low
and Subramanian (1995)
There
is some evidence, too, that TRIMs in developing economies may
be applied in a discretionary - and negotiable - manner or that they
require a course of action - such as the use of local content - that
firms might have pursued even in the absence of the regulation.
Studies
show that the actual application of TRIMS (in the sense of foreign
firms perceiving themselves to be constrained by them) is less than
the hypothetical or nominal amount of investment covered by TRIMS.
Surveys undertaken by the United States Department of Commerce in
1977 and 1982 indicated that only 6 per cent of all overseas affiliates
of United States corporations considered themselves to be affected
by TRIMS, although a far greater per cent age (45 - 60 per cent )
are nominally affected by TRIMS.
Low
and Subramanian (1995)
