With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?
- Quantitative restrictions on imports by foreign investors are prohibited.
- They apply to investment measures related to trade in both goods and services.
- They are not concerned with the regulation of foreign investment.
Select the correct answer using the code given below:
- 1 and 2 only
- 2 only
- 1 and 3 only
- 1, 2 and 3
Explanation
Statement 1 is correct
- Under the Agreement on Trade-Related Investment Measures of the World Trade Organization (WTO), commonly known as the TRIMs Agreement, WTO members have agreed not to apply certain investment measures related to trade in goods that restrict or distort trade. Article 2.1 of the Trade-Related Investment Measures (TRIMS) Agreement stipulates that members must not implement any TRIM that contradicts the provisions outlined in Article III, which pertains to the national treatment of imported products, or Article XI, which addresses the prohibition of quantitative restrictions on imports or exports, as specified in the General Agreement on Tariffs and Trade (GATT) of 1994. This underscores the need for consistency between TRIMS and the principles established in GATT 1994 on the fair treatment of imported products and the avoidance of quantitative restrictions on trade.
Statement 2 is incorrect
- 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. Thus, the TRIMs Agreement does not apply to services.
Statement 3 is correct
- The agreement is not concerned with the regulation of foreign investment.
