What are voluntary export restraints?

What are voluntary export restraints?

• A. Government-imposed tariffs on all goods
• B. Restrictions on the exports that countries agree upon voluntarily
• C. Mandated import quotas for each country
• D. Administrative procedures for the import of goods

Answer: (B)

Voluntary export restraints (VERs) refer to agreements between exporting and importing countries where the exporter limits the quantity of goods exported to the importing country. This is typically done at the request of the importing country to avoid larger trade restrictions that might be imposed by that country, such as tariffs or quotas. Option B accurately describes this practice, highlighting the voluntary nature of the agreement and the limitation on exports. These arrangements are often aimed at avoiding trade disputes and improving relations between trading partners while allowing the exporting country to maintain more control over its market access to the importing nation. The other options do not align with the definition of voluntary export restraints; thus, they are not applicable. For instance, government-imposed tariffs on goods represent taxes on imports, not voluntary limitations on exports. Mandated import quotas refer to restrictions imposed by a government on the quantity of products that can enter the country, which is not the same as an export restraint. Lastly, administrative procedures for the import of goods involve the processes and regulations related to importing rather than agreements on limiting exports. Therefore, the emphasis on voluntary agreements in option B is what makes this the correct answer.

Voluntary export restraints (VERs) refer to agreements between exporting and importing countries where the exporter limits the quantity of goods exported to the importing country. This is typically done at the request of the importing country to avoid larger trade restrictions that might be imposed by that country, such as tariffs or quotas.

Option B accurately describes this practice, highlighting the voluntary nature of the agreement and the limitation on exports. These arrangements are often aimed at avoiding trade disputes and improving relations between trading partners while allowing the exporting country to maintain more control over its market access to the importing nation.

The other options do not align with the definition of voluntary export restraints; thus, they are not applicable. For instance, government-imposed tariffs on goods represent taxes on imports, not voluntary limitations on exports. Mandated import quotas refer to restrictions imposed by a government on the quantity of products that can enter the country, which is not the same as an export restraint. Lastly, administrative procedures for the import of goods involve the processes and regulations related to importing rather than agreements on limiting exports. Therefore, the emphasis on voluntary agreements in option B is what makes this the correct answer.