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With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?

  1. 1.Quantitative restrictions on imports by foreign investors are prohibited.
  2. 2.They apply to investment measures related to trade in both goods and services.
  3. 3.They are not concerned with the regulation of foreign investment.

Select the correct answer using the code given below:

  1. A.1 and 2 only
  2. B.2 only
  3. C.1 and 3 only
  4. D.1, 2 and 3
▶ Answer & Explanation

Correct answer: C. 1 and 3 only

Trade-Related Investment Measures (TRIMS) are WTO rules that apply to investment measures related to merchandise trade. They aim to eliminate investment restrictions that distort trade. Specifically, TRIMS prohibit certain trade-restrictive and distorting investment measures, such as quantitative restrictions on imports that are linked to investment. While TRIMS do regulate certain aspects of foreign investment to ensure fair trade practices, they primarily focus on their impact on trade rather than the broader regulation of investment itself.

Source: UPSC gs1 2020

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