Non tariff barriers

Non tariff barriers

1. Import quota

   • Is a direct restriction on the quantity of some good that may be imported
   • Enforced by
     • Issuing licenses to some group of individuals or firms.
   • Variant of import quota
     • Voluntary Export Restraint (VER)
       • known as a
         • Voluntary Restraint Agreement (VRA)
       • Is a quota on trade imposed from the exporting country’s side instead of the importer’s.
       • More costly to the importing country than a tariff
   • Disadvantages
     • Less exporting opportunity for all producers and higher prices for all consumers.
     • It is also difficult to measure the precise degree of protection quotas offer.
   • Advantages
     • Is an efficient system of providing protection to domestic industry.
     • Quotas are designed to bring about a time-bound success.