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An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. [1] An import embargo or import ban is essentially a zero-level import quota. [2] [3] Quotas, like other trade restrictions, are typically used to benefit the producers of a good in ...
In economics, a tariff-rate quota (TRQ) (also called a tariff quota) is a two-tiered tariff system that combines import quotas and tariffs to regulate import products. A TRQ allows a lower tariff rate on imports of a given product within a specified quantity and requires a higher tariff rate on imports exceeding that quantity. [ 1 ]
Barriers take the form of tariffs (which impose a financial burden on imports) and non-tariff barriers to trade (which uses other overt and covert means to restrict imports and occasionally exports). In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security.
Import quotas can be unilateral, levied by the country without negotiations with exporting country; or bilateral or multilateral, when they are imposed after negotiations and agreements. An export quota is a limit on the amount of goods that can be exported from a country.
Two simple ways to understand the proposed benefits of free trade are through David Ricardo's theory of comparative advantage and by analyzing the impact of a tariff or import quota. An economic analysis using the law of supply and demand and the economic effects of a tax can be used to show the theoretical benefits and disadvantages of free trade.
Generally, an import quota is set for a specific period of time with one year being the most common metric. Some versions of the quotas limits the quantity of specific goods being imported into a country while other versions place the limit on the value of those goods.
"A duty on imports," then, is not merely a duty on the act of importation, but is a duty on the thing imported. It is not, taken in its literal sense, confined to a duty levied while the article is entering the country, but extends to a duty levied after it has entered the country. The Import-Export Clause has an exception for state inspection ...
Additionally, import quotas and tariffs, when imposed, affect all imports into the domestic market, regardless of country or supplier. Voluntary Export Restraints are able to be negotiated to exclude certain exporting countries or suppliers, based on factors such as supplier share of the good or refutation of export limitations. [ 6 ]