Preventing measures
Last week’s discussion of local content around Guyana’s oil industry established two key points based on current talks on the matter. One, that local content is linked to the supply of goods that are directly related to the value-added operations of the oil industry. In other words, these goods are capital goods like drilling rigs, oil platforms and subsea equipment that are critical to the competitive production of oil, none of which Guyana has the capacity to produce nor will do so in the short-run.
As a result of this, local content policies of Guyana ought not to have a direct bearing on the value added or competitive position of any foreign investor in the oil industry.
In addition, last week’s article pointed out that several provisions under the WTO TRIMS Agreement prohibit the use of certain performance requirements. These prohibitions have focused primarily on preventing measures that discriminate against goods providers who are foreign investors from other WTO member states in favour of goods providers who are nationals of the host country.