ENTR100 Lecture Notes - Lecture 2: Voluntary Export Restraints, Import Quota, Countervailing Duties
Document Summary
Dumping may enables firms to unload excess production in foreign markets or may be may be predatory behavior. Countervailing duties may also be imposed by an importing country in response to an initial subsidy in the exporting country. Import quotas (importkvoter): restrict the quantity of some good that may be imported into a country. Tariff rate quotas - a hybrid of a quota and a tariff where a lower tariff is applied to imports within the quota than to those over the quota. A quota rent - the extra profit that producers make when supply is artificially limited by an import quota. Voluntary export restraints: quotas on trade imposed by the exporting country, typically at the request of the importing country"s government benefit domestic producers raise the prices of imported goods. Local content requirements: demand that some specific fraction of a good be produced domestically benefit domestic producers consumers face higher prices.
