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:
Explanation
Statement 1 is correct: Under the WTO Agreement on Trade-Related Investment Measures (TRIMS), members cannot enforce investment policies that restrict imports or tie foreign access to foreign exchange quotas, as these constitute prohibited quantitative trade restrictions violating Article XI of GATT.
Statement 2 is incorrect: Article 1 of TRIMS explicitly stipulates that the agreement applies solely to investment measures related to trade in goods. It does not govern investment measures related to trade in services, which are addressed under the General Agreement on Trade in Services (GATS).
Statement 3 is correct: TRIMS is rooted in GATT disciplines and focuses on eliminating trade distortion (national treatment and quantitative restrictions) rather than establishing rules to regulate, register, or admit foreign direct investment itself.
Hence, statements 1 and 3 are correct — Option C.