Q. Consider the following statements regarding the Agreement on Trade-Related Investment Measures (TRIMs):
1.It applicable to both goods and services.
2.Local content requirement is part of TRIMS.
Which of the above given statement is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B
Notes:

Explanation: Agreement, negotiated during the Uruguay Round, applies only to measures that affect trade in goods. Recognizing that certain investment measures can have trade-restrictive and distorting effects; it states that no Member shall apply a measure that is prohibited by the provisions of GATT Article III (national treatment) or Article XI (quantitative restrictions).

  • 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 and allows members the opportunity to consult on any relevant matters.

Source: https://www.wto.org/english/tratop_e/invest_e/invest_info_e.htm

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