Correct Option
Statement 1 is correct. The Agreement on Trade-Related Investment Measures (TRIMS) prohibits certain investment measures that are inconsistent with the provisions of Article III (National Treatment) and Article XI (Elimination of Quantitative Restrictions) of the General Agreement on Tariffs and Trade (GATT 1994). This includes measures such as local content requirements or restrictions on imports by foreign investors, which are considered quantitative restrictions.
Statement 3 is correct. TRIMS primarily focuses on ensuring that investment measures do not distort or restrict international trade in goods. It is not designed to regulate foreign investment policy comprehensively but rather to address specific trade-related aspects of investment measures to maintain a level playing field and prevent protectionist practices.
Incorrect Options
Statement 2 is incorrect. The TRIMS Agreement applies exclusively to investment measures related to trade in goods. Investment measures concerning trade in services are governed by the General Agreement on Trade in Services (GATS), which is a separate WTO agreement.