Voluntary export restraint
Also called: VER, Voluntary restraint agreement · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
A voluntary export restraint (VER) is when an exporting country "agrees" to limit how much of a good it sells to an importing country. It is rarely truly voluntary. The exporter usually accepts it under pressure, often to avoid harsher trade action. VERs work like an import quota, but the exporter enforces them. The WTO Safeguards Agreement (Art. 11) now prohibits VERs.
Example
From 1981, Japan limited its car exports to the US under US pressure. This is the classic VER case. American buyers faced fewer Japanese cars and higher prices.
Don't confuse with
- Import quota: the importing country sets and enforces a quota. The exporting country administers a VER.
- Safeguard duty: a safeguard is a legal, temporary WTO measure against an import surge. VERs are banned.
Related concepts
- Non-tariff barriers
- Import quota
- Quantitative restrictions
- Import licensing
- Sanitary and phytosanitary measures
- Technical barriers to trade
- Quality control order
- Trade facilitation
- Authorised economic operator