Quantitative restrictions
Also called: Import quota · Topic: International Trade: Patterns, Ports and the WTO · NCERT: Class 12, Ch 8 "International Trade"
Meaning
Quantitative restrictions are limits on how much of a good, by quantity or by value, may be imported or exported. They are a non-tariff barrier: they block trade with a fixed cap instead of a tax. An import quota is the most common kind. Countries imposed them widely during the World Wars. GATT and WTO rules generally ban them and allow only some exceptions, because a fixed cap distorts trade more than a tax does.
Example
For many years India kept quantity limits on imports of many consumer goods to protect its foreign-exchange reserves. After a dispute at the WTO, India removed these limits.
Don't confuse with
- Tariff: a tariff is a tax on traded goods. Goods can still come in if buyers pay the higher price. A quantitative restriction caps the amount, however much buyers are ready to pay.