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: 

(a) 1 and 2 only 

(b) 2 only 

(c) 1 and 3 only 

(d) 1, 2 and 3 

Answer: c

Explanation:

Trade-Related Investment Measures (TRIMS)

The Agreement on Trade-Related Investment Measures (TRIMS) recognizes that certain investment measures can restrict and distort trade.  It states that WTO members may not apply any measure that discriminates against foreign products or that leads to quantitative restrictions, both of which violate basic WTO principles.  A list of prohibited TRIMS, such as local content requirements, is part of the Agreement.  The TRIMS Committee monitors the operation and implementation of the Agreement.

Hence statement 1 is correct.

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.

Hence statement 2 is incorrect.

The term “trade-related investment measures” (“TRIMs”) is not defined in the Agreement. 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. 

Hence statement 3 is correct.

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