With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?1. Quantitative restrictions on imports by foreign investors are prohibited.2. They apply to investment measures related to trade in both goods and services.3. They are not concerned with the regulation of foreign investment.Select the correct answer using the code given below:
✓ Correct answer: c) 1 and 3 only
ExplanationTRIMs (Trade-Related Investment Measures) are WTO rules governing investment measures that impact trade in goods.They aim to eliminate trade distortions by pro- hibiting practices like local content requirements, trade bal- ancing, and quantitative restrictions.TRIMs promote free and non-discriminatory trade, ensuring compliance with GATT prin- ciples.Its focus on trade-related regulations rather than directly regulating foreign investments, fostering a fair and open interna- tional trading environment.Statement 1 is correct: The Trade-Related Investment Mea- sures (TRIMS) Agreement of the World Trade Organization (WTO) explicitly prohibits measures that require foreign investors to meet certain performance requirements, such as quantitative restrictions on imports.These restrictions are considered trade-distorting and are not allowed under the TRIMS Agreement.Statement 2 is incorrect : The TRIMS Agreement only applies to investment measures related to trade in goods, not ser- vices.It focuses on ensuring that investment measures do not distort or restrict trade in goods.Trad
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