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:
Answer:
(c)
CA
The TRIMS Committee monitors the operation and implementation of the Agreement and allows members the opportunity to consult on any relevant matters. Therefore, statement 1 is correct. The objectives of the Agreement, as defined in its preamble, include “the expansion and progressive liberalization of world trade and to facilitate investment across international frontiers so as to increase the economic growth of all trading partners, particularly developing country members, while ensuring free competition”. The coverage of the Agreement is defined in Article 1, which states that the Agreement applies to investment measures related to trade in goods only. Therefore, statement 2 is not correct. As an agreement that is based on existing GATT disciplines on trade in goods, the Agreement is not concerned with the regulation of foreign investment. The disciplines of the TRIMs Agreement focus on investment measures that discriminate between imported and exported products and/or create import or export restrictions. Therefore, statement 3 is correct. Therefore, the correct answer is (c).