What Is An Export Restraint Agreement

The application of a voluntary export restriction allows the exporting country to exercise some degree of control over the restriction that would otherwise be lost if it were subject to trade restrictions from the importing country. Therefore, despite what its name indicates, VERs are rarely voluntary. In addition to the fact that it is imposed by the exporting country and not by the importing country, a VER essentially acts as an import quota or a tariff on import tariffs is a form of tax levied on imported goods or services. Tariffs are a common element of international trade. The main objectives of taxation. Voluntary export restrictions have been used in the past for a large number of commercial products and have been used since the 1930s. The popularity of this particular trade restriction increased in the 1980s, as it complied with the terms agreed under the GATT (General Agreement on Trade and Customs). However, in 1994, WTO members agreed not to impose new voluntary export restrictions and gradually ended the use of existing export restrictions. A voluntary export restriction (VT) is a trade restriction on the amount of a product that an exporting country is allowed to export to another country.

This limit is set by the exporting country itself. When the U.S. auto industry was threatened by the popularity of cheaper, less fuel-intensive Japanese cars, a 1981 voluntary restraint agreement limited the Japanese to export 1.68 million cars a year to the United States, as planned by the U.S. government. [2] Initially, this quota was to expire after three years, in April 1984. However, in the face of a growing trade deficit with Japan and pressure from domestic producers, the U.S. government extended quotas for an additional year. [3] The ceiling was increased to 1.85 million cars for this additional year and to 2.3 million in 1985. Voluntary deduction was lifted in 1994. [4] VERs are generally used for exports from one country to another.

VERs have been in use at least since the 1930s and are used on products ranging from textiles and footwear to steel, machine tools and automobiles. In the 1980s, they became a popular form of protection; they did not violate the provisions of the countries in force under the General Agreement on Tariffs and Trade (GATT).

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