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 :
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Answer: C. Statement 1 is correct: TRIMs bans measures like quantitative restrictions on imports linked to foreign investment that break GATT rules. Statement 2 is wrong: TRIMs applies only to trade in goods, not services. Statement 3 is correct: TRIMs does not regulate foreign investment as such; it only covers investment measures that distort trade. So 1 and 3.
Watch for: The word 'Investment' makes students think TRIMs regulates foreign investment and covers services.
Why the other options are wrong
- A. Wrong because TRIMs covers only goods.
- B. Wrong because TRIMs does not cover services.
- D. Wrong because statement 2 is false.
Source to check: WTO Agreement on Trade-Related Investment Measures (wto.org), Articles 1 and 2 and Illustrative List
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.