Official Answer Key & Detailed Solution
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Correct Answer: Option (C) — 1 and 3 only
Concept & Option Breakdown
Standard Reference Verified- Statement 1 is correct: TRIMS prohibits trade-distorting investment measures, including local content requirements and quantitative restrictions on imports.
- Statement 2 is incorrect: TRIMS applies only to investment measures related to trade in goods, not services (trade in services is governed by GATS).
- Statement 3 is correct: TRIMS deals with the trade-restrictive effects of investment measures, not the entry, ownership, or broad regulation of foreign investments.
TRIMS only applies to Goods (Trade in Goods). Services are covered under GATS. Eliminating statement 2 immediately leaves option (c).
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