Civil Services Prep

Prelims 2020 · Economy · Question 86

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:

  1. 1 and 2 only
  2. 2 only
  3. 1 and 3 only
  4. 1, 2 and 3

Answer

1 and 3 only

1. Correct. TRIMS under WTO prohibits investment measures that are inconsistent with GATT, including quantitative restrictions and local content requirements imposed on foreign investors.

2. Incorrect. TRIMS applies to trade in goods only, not services. Services are covered separately under GATS.

3. Correct. TRIMS does not regulate foreign investment as such; it only disciplines investment measures that affect trade in goods.

Therefore, statements 1 and 3 only are correct.

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