Export Quotas

Export quotas in Global Commerce Policy

In this regard, export quotas is: restrictions or ceilings imposed on the total value or volume of certain exports. They are designed to protect domestic producers and consumers from temporary shortages of these products or to improve the prices of specific products on world markets by shortening their supply. The latter is only possible where a country, or a group of countries, is the dominant exporter of a product. The entries on trade policy are here. International commodity agreements with economic provisions can underpin their aim of price stabilization through export quotas, sometimes together with a buffer stock. The entries on trade policy are here. Article XX(h) (General Exceptions) of the GATT specifically allows members to adopt measures in support of obligations they have accepted under any intergovernmental commodity agreements conforming to the 1947 ECOSOC principles. This is also reflected Chapter VI of the Havana Charter. GATT Article XX(i) permits members to maintain “restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan”, but such restrictions must not be used to increase exports of the commodity concerned or to give it greater protection. Reasons adduced at one time or another against export quotas include (a) their tendency to discriminate against low-cost producers and new entrants into the market, (b) their inability to alleviate shortages, (c) they may lead to unreasonable expectations of defensible price levels among producers, (d) they may work against the aim of putting less on the market by guaranteeing less efficient producers a minimum price, (e) artificially high prices encourage consumers to use substitutes, synthetics or new technologies reducing the need for that commodity, (f) the general difficulty of negotiating and policing quotas, especially when there are structural changes in the market brought about, for example, by a shift in consumer preferences or the entry of new producer-based technologies, (g) ensuring that all significant producers are members of an agreement with export quotas is always difficult, and (h) in times of even minor oversupply a small additional exporter can have a disproportionate effect. Some argue that the Integrated Programme for Commodities would offer a defence against most of these perceived difficulties because of the universality of its membership. The entries on trade policy in the Encyclopedia are here. Others believe that the history of commodity negotiations since 1976, when the integrated programme was negotiated, does not support this claim adequately. See also commodity policy.[1]

Export quotasin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Export quotas” entry (OAS)

See Also