Which of the following is true about international agreements and voluntary export restraints?

Which of the following is true about international agreements and voluntary export restraints?

• A. They are enforced by any government agency
• B. They require binding contracts between nations
• C. They allow exporting countries to restrict exports voluntarily
• D. They are mandatory for all exporting countries

Answer: (C)

International agreements and voluntary export restraints (VERs) are mechanisms that allow exporting countries to restrict their exports that occur voluntarily as a part of trade negotiations or to avoid more stringent trade measures like tariffs or quotas. This practice benefits both exporting and importing countries by fostering better trade relations and creating a more manageable trade environment. When an exporting country agrees to limit the quantity of goods exported to another country, it does so with the intent of preventing potential trade disputes and protecting domestic industries in the importing country. This voluntary nature is essential as it distinguishes VERs from other trade practices, which are often legally binding. The other options suggest that there are specific legal obligations, enforcement requirements, or assumptions about mandatory compliance that do not align with how VERs operate. For instance, VERs are non-binding agreements that countries can choose to enter into but are not compelled to do so by any overarching regulatory body. This flexibility is a key aspect that makes option C the accurate and appropriate choice in this context.

International agreements and voluntary export restraints (VERs) are mechanisms that allow exporting countries to restrict their exports that occur voluntarily as a part of trade negotiations or to avoid more stringent trade measures like tariffs or quotas. This practice benefits both exporting and importing countries by fostering better trade relations and creating a more manageable trade environment.

When an exporting country agrees to limit the quantity of goods exported to another country, it does so with the intent of preventing potential trade disputes and protecting domestic industries in the importing country. This voluntary nature is essential as it distinguishes VERs from other trade practices, which are often legally binding.

The other options suggest that there are specific legal obligations, enforcement requirements, or assumptions about mandatory compliance that do not align with how VERs operate. For instance, VERs are non-binding agreements that countries can choose to enter into but are not compelled to do so by any overarching regulatory body. This flexibility is a key aspect that makes option C the accurate and appropriate choice in this context.