322
R. S. Muhongo
10.3.4 International Trade Agreements
Local content design is largely affected by international agreements that
a country ratifies since these agreements affect the structure and design
of other policies such as industrial, procurement and fiscal policies that
change the manner in which local content policies can adopt and be
implemented within a resource-rich country. International agreements
have also been key in discouraging the use of local content policies
in resource-rich countries. International instruments such as the World
Trade Organization (WTO), where the members to the WTO have
ratified certain international agreements such as the agreement on TradeRelated Investment Measures (TRIMs), the General Agreement on Tariff
and Trade (GATT) and the Agreement on Subsidies and Countervailing
Measures (ASCM); all these international agreements place emphasis on
the ‘national treatment’ principle.
38 This principle holds every member
country to treat one another as they would their own nationals.
39 But
for the least developing countries, international agreements have created
some limited exceptions in the application of this principle.
Local content pioneer countries such as Norway and the United
Kingdom dropped these policies after joining the European Union due
to the national treatment principle.
40 Kenya, Tanzania and Uganda have
all ratified the WTO; the ASCM makes an exception for least developed
countries with a GNP per capita of less than US$ 1000 to implement
subsidies that do not have ‘adverse effects’ on international trade.
41 Local
content’s main mechanisms are having a deliberate preference on the
domestic supplier and labour force. With countries like Kenya having a
38 Ramdoo, Isabelle. “Unpacking local content requirements in the extractive sector: What implications for the global trade and investment frameworks.” International Centre for Trade and
Sustainable Development (ICTSD).
39 Ibid.
40 Norway—Local content lessons learned. Willy H Olsen http://www.biee.org/wpcms/wp-con
tent/uploads/Olsen-Norway-local-content-strategy2.pdf.
41 Ramdoo, Isabelle. “Local content policies in mineral-rich countries.” An Overview. Discussion
Paper 193, 2016.
R. S. Muhongo
10.3.4 International Trade Agreements
Local content design is largely affected by international agreements that
a country ratifies since these agreements affect the structure and design
of other policies such as industrial, procurement and fiscal policies that
change the manner in which local content policies can adopt and be
implemented within a resource-rich country. International agreements
have also been key in discouraging the use of local content policies
in resource-rich countries. International instruments such as the World
Trade Organization (WTO), where the members to the WTO have
ratified certain international agreements such as the agreement on TradeRelated Investment Measures (TRIMs), the General Agreement on Tariff
and Trade (GATT) and the Agreement on Subsidies and Countervailing
Measures (ASCM); all these international agreements place emphasis on
the ‘national treatment’ principle.
38 This principle holds every member
country to treat one another as they would their own nationals.
39 But
for the least developing countries, international agreements have created
some limited exceptions in the application of this principle.
Local content pioneer countries such as Norway and the United
Kingdom dropped these policies after joining the European Union due
to the national treatment principle.
40 Kenya, Tanzania and Uganda have
all ratified the WTO; the ASCM makes an exception for least developed
countries with a GNP per capita of less than US$ 1000 to implement
subsidies that do not have ‘adverse effects’ on international trade.
41 Local
content’s main mechanisms are having a deliberate preference on the
domestic supplier and labour force. With countries like Kenya having a
38 Ramdoo, Isabelle. “Unpacking local content requirements in the extractive sector: What implications for the global trade and investment frameworks.” International Centre for Trade and
Sustainable Development (ICTSD).
39 Ibid.
40 Norway—Local content lessons learned. Willy H Olsen http://www.biee.org/wpcms/wp-con
tent/uploads/Olsen-Norway-local-content-strategy2.pdf.
41 Ramdoo, Isabelle. “Local content policies in mineral-rich countries.” An Overview. Discussion
Paper 193, 2016.