UPSC Prelims 2020·GS1·economy·open economy

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:

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  1. A1 and 2 only
  2. B2 only
  3. C1 and 3 onlyCorrect
  4. D1, 2 and 3

Explanation

Statement 1 is correct. TRIMS prohibit quantitative restrictions on imports by foreign investors that are inconsistent with GATT obligations. Statement 2 is incorrect. TRIMS apply only to trade in goods, not to trade in services. Trade in services is governed by the General Agreement on Trade in Services (GATS). Statement 3 is correct. TRIMS are not concerned with the regulation of foreign investment per se, but only with investment measures that have trade-restrictive and distorting effects on trade in goods. Therefore, only statements 1 and 3 are correct.
economy: With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1. Quanti

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