PROTECTION OF TRADE: QUOTA AND VOLUNTARY EXPORT RESTRAINTS INTRODUCTION In transgress of being members of the General savvy on Tariffs and dole out (GATT)/ argona Trade Organization (WTO), European nations have always utilisation a number of protectionist methods, trusting on tariffs and non-tariff barriers to distribute. Overview of GATT and WTO: * The General proportionateness on Tariffs and Trade (GATT) was established in 1947. It was created as a provisional system to eliminate disdain discrimination particularly through the elimination of quantitative restrictions on trade (quotas), the reduction of tariffs and the elimination of trade discrimination. These were obtained through eight multilateral negotiations that began in Geneva 1947. (Nichola 1998, p. 419). The most recent ones are the Doha lash out and Cancun Round. * The World Trade Organization (WTO) was setup on endeavour January 1995. This body is in charge of managing the new global tra de rules and reflects a common desire to operate in an smooth and more open multilateral trading system for the murder and welfare of all countries. (Piggott & Cook, 2006 p.79) 1. What is protectionism? Protectionism is defined as insurance policy of protecting domestic industries against foreign competition by place of tariffs, subsidies, import quotas, or other restrictions or handicaps placed on the imports of foreign competitors.
(Encyclopaedia Britannica) Types of protection: * Tariffs - import taxes. * Quotas - measurable limits on the bespeak aim of imports allowed. * Voluntary merchandise Restraint Arrangement! s where two countries chance upon an agreement to limit the volume of their exports to one another over an agree period of time. * Production subsidies- subsidy from government to overcome cost. * Export subsidies - a payment to encourage domestic ware by lowering their costs. 2. NON-TARIFF BARRIER TO TRADE These are some(prenominal) barriers to trade that are not tariffs. They are: 3.1 QUOTAS Quotas are...
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