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In economics, a tariff-rate quota (TRQ) (also called a tariff quota) is a two-tiered tariff system that combines import quotas and tariffs to regulate import products.. A TRQ allows a lower tariff rate on imports of a given product within a specified quantity and requires a higher tariff rate on imports exceeding that quantity. [1]
Protective tariffs are among the most widely used instruments of protectionism, along with import quotas and export quotas and other non-tariff barriers to trade. Tariffs can be fixed (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies according to the price).
An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. [1] Quotas, like other trade restrictions, are typically used to benefit the producers of a good in that economy ( protectionism ).
A quota can be a tariff rate quota, global quota, discriminating quota, and export quota. Scarcity of information.
Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and to increase trade of goods and services with each other. North American Free Trade Agreement (NAFTA) South Asia Free Trade Agreement (SAFTA) European Free Trade Association; European Single Market; Union of South American ...
Tariffs have been considered to be less harmful than quotas, although it can be shown that their welfare effects differ only when there are significant upward or downward trends in imports. [35] Governments also impose a wide range of non-tariff barriers [36] that are similar in effect to quotas, some of which are subject to WTO agreements. [37]
It is shown that in all these cases the definition of an appropriate "equivalent tariff" to be used in tariffication is not straightforward, and that in general this equivalent tariff cannot be computed on the basis of only observed price differences between countries. Tariff-rate quotas, which are meant to be the main tool in implement ...
One study found that tariffs imposed on manufactured goods increase economic growth in developing countries, and this growth impact remains even after the tariffs are repealed. [125] According to Dartmouth economist Douglas Irwin, "that there is a correlation between high tariffs and growth in the late nineteenth century cannot be denied. But ...