RESTRICTED
WORLD TRADE G/TRIMS/N/1/COL/2
21September 1995
ORGANIZATION(95-2733)
Original: Spanish Committee onTrade-Related Investment Measures
NOTIFICATION UNDER ARTICLE 5.1OFTHE AGREEMENT
ONTRADE-RELATED INVESTMENT MEASURES
Colombia
Thefollowingcommunication,dated31July1995,hasbeenreceivedfromthePermanentMission
ofColombia.1
_______________
PursuanttoArticle5.1oftheAgreementonTrade-RelatedInvestmentMeasures,theGovernment
ofColombia hereby notifies itsdomestic production absorption policy.
(I) DESCRIPTION OFTHE MEASURE AND OFITSMAIN FEATURES
Undercompensation/countertrademechanismsandthepolicytoensuretheabsorptionofdomestic
agricultural production, imports ofagricultural products aresubject totherequirement thattheagro-
industrial enterprises importing andprocessing suchproducts orlikeproducts must show thatthey
haveacquired localproducts.
1. Category intheIllustrative Listunder which themeasure falls:
Thismeasure corresponds toparagraph 1(a)and2(a)oftheIllustrative Listannexed tothe
TRIMs Agreement.
2. IstheTRIM applied bytheGovernment under discretionary authority ormandatory
legislation?
TheTRIM isapplied under legalprovisions ofgeneral application:
- Law101,Article 3,of23December 1994;
- Decree 1279, Article 4(ñ), of22June1994.
However, agricultural policy criteria areapplied todetermine theproducts concerned.
1Thereplies inthisnotification follow theorder oftheagreed format fornotifications under Article 5.1
contained indocument G/TRIMS/1.G/TRIMS/N/1/COL/2
Page2
3. Where theTRIM isgeneral innature, what arethecriteria fordetermining towhich
enterprises itapplies?
Themeasure applies toanydomestic orforeign enterprise processing agricultural products
inColombia which needs agricultural rawmaterials foritsproduction. Import authorization isgranted
oncetheenterprise hasshown thatithasacquired localproducts.
4. Where theTRIM isapplied pursuant tomandatory legislation, doesthelegislation require
themeasure tobeapplied tonewenterprises ornewinvestments ofexisting enterprises?
TheTRIM covered bythisnotification applies toallexisting domestic orforeign enterprises
processing agricultural products aswellastoanynewenterprises thatmaybeestablished.
5. Iscompliance withthemeasure bytheenterprise (a)mandatory orenforceable under
domestic laworadministrative rulings or(b)necessary toobtain anadvantage?
Theacquisition ofdomestic rawmaterials is:
(a) Mandatory andenforceable under domestic lawofgeneral application asspecified in
point 2above. Insome cases, suchacquisition gives risetoaspecific tariffdiscount.
(b) Compliance withtheTRIM isnecessary toobtain theimport licence.
6. When theTRIM relates tospecific products, givesufficient detail onthese products to
define thescope ofthemeasure.
Theprovisions ofLaw101andparagraph 4(ñ)ofDecree 1279of1994apply toanyagricultural,
livestock andfisheries product.
7. Thedateofimplementation oftheTRIM andthenature ofanymodification oftheTRIM
effected within 180daysprior totheentry intoforce oftheWTO Agreement.
While Law101of1993andDecree 1279of1994reflect themandates laiddown inthePolitical
Constitution of1991, priortotheenactment ofthese legislative provisions thecompulsory acquisition
oflocalproducts asarequirement forthegrant ofanimport licence wasprovided forinLaw81of
1988 andDecree 501of1989. Law101of1993 andDecree 1279 of1994 takeupthose provisions
andconstitute theframework within which Colombia 'sagricultural production absorption policy is
applied.
Itistherefore clear thatthelegal basis oftheTRIMs covered bythisnotification predates
30June1994 andisinconformity withtheprovisions ofArticle 5.4oftheAgreement onTRIMs.
8. Does theTRIM, asapplied under domestic law,include provision foritsphasing-down
and/or elimination?
There isnoprovision forthephasing-down orelimination oftheTRIM.
9. Thedomestic law,regulation oradministrative guideline under which theTRIM isapplied;
acopyshould besubmitted totheSecretariat tobeavailable forinspection byinterested members.
AcopyofthetextofLaw101of1993 andDecree 1279 of1994 isattached.G/TRIMS/N/1/COL/2
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10. ThelevelofGovernment applying theTRIM, thename oftheimplementing agency and
anyinformation ontheprocedures governing itsapplication necessary toenable itsnature and
scope tobeunderstood.
TheMinistry ofAgriculture andRural Development istheentity responsible forapplying and
ensuring compliance withthemeasure.
(II) GENERAL INFORMATION ONTHE PROGRAMME INQUESTION
Thedomestic production absorption policy implements Articles 64,65and66ofColombia 's
Political Constitution, withthegoalofprotecting thedevelopment ofagricultural andfishery activities
andpromoting theimprovement offarmers 'incomes andliving standards, aswellasthecompetitiveness
ofthesector, within theframework ofthepolicy ofgradual andselective liberalization ofsuchproducts
andinconformity withinternational treaties.
Specifically, inorder toprovide security forfarmers andcontrol excess supply ofsome
agricultural products, theMinistries ofAgricultural andRural Development andofEconomic
Development,withthecooperationoftheMinistryofForeignTrade,encouragethesigningofagreements
between producers andagro-industrial processors toensure theabsorption oflocalharvests andpromote
enhanced sectoral competitiveness.
Inthecaseofproducts forwhich suchagreements aresigned andabetter price isestablished
fortheagricultural producer, thenational government grants atariffreduction which compensates for
theagreed price increase. Compliance withsuchagreements must beverified asaprerequisite for
thegrant ofimport licences.
Inthecaseofproducts forwhich agreements arenotsigned, thenational government hasthe
responsibilitytoensureadequateabsorptionofdomesticproduction,andthereforeimportsareauthorized
oncethishasbeenverified.