Detailed Explanation:

Answer: Option 3 — 1 and 3 only

The Trade-Related Investment Measures (TRIMS) agreement under WTO prohibits investment measures that restrict and distort trade in goods. It addresses measures like quantitative restrictions on imports and local content requirements but does not regulate foreign investment per se or extend to services.

✅ Statement 1 – Correct: TRIMS prohibits quantitative restrictions on imports by foreign investors, such as mandatory local sourcing requirements that distort free trade in goods.

❌ Statement 2 – Incorrect: TRIMS applies only to investment measures related to trade in goods, not services. Trade in services is governed by the General Agreement on Trade in Services (GATS).

✅ Statement 3 – Correct: TRIMS is not concerned with regulating foreign investment itself; it focuses on investment measures that affect trade in goods, ensuring they do not create trade barriers.

📝 Short Notes: TRIMS Agreement

• Full Form: Trade-Related Investment Measures
• Part of: World Trade Organization (WTO) framework, came into effect in 1995
• Scope: Applies only to investment measures affecting trade in goods, not services
• Prohibited Measures: Local content requirements, trade-balancing requirements, foreign exchange restrictions related to imports, and export restrictions
• Objective: To eliminate investment measures that cause trade-distorting effects inconsistent with GATT Articles III (National Treatment) and XI (Prohibition of Quantitative Restrictions)
• Not Covered: Does not regulate foreign investment policies directly; does not cover performance requirements unrelated to trade
• Relation to Services: GATS (General Agreement on Trade in Services) governs trade in services, not TRIMS