Trade Related Investment Measures: Political Economy Aspects and Issues for GATT

Tying in International Trade: Evidence on Countertrade

“…This view is partly reflected in the fact that some forms of countertrade are being negotiated under the heading 'trade-related investment measures (TRIMS)' in the Uruguay Round3 (Greenaway , 1990;and Guisinger, 1987). Whether countertrade is indeed an inefficient form of exchange will depend on whether or not any extra benefits from tying trade flows can be identified.…”

“…The growing importance of countertrade in international trade has started to attract the attention of international organisations who view countertrade as a return to bilateralism and reciprocity, and thus as a threat to the multilateral world trading system. This view is partly reflected in the fact that some forms of countertrade are being negotiated under the heading 'trade-related investment measures (TRIMS)' in the Uruguay Round3 (Greenaway , 1990;and Guisinger, 1987). Whether countertrade is indeed an inefficient form of exchange will depend on whether or not any extra benefits from tying trade flows can be identified.…”

Investment Policies in the GATT

“…Moreover, almost all TRIMs are imposed in conjunction with investment incentives. To the extent that incentives are successful in influencing the location of production, they may equally, if not as transparently, be regarded as trade-related measures, (see Greenaway, 1990).…”