Voluntary Export Restraints, Administrative Policy, Anti-dumping Policy
A voluntary export restraint (VER) is a trade restriction on the quantity of a good that an exporting country is allowed to export to another country. This limit is self-imposed by the exporting country.
Voluntary export restraints (VERs) fall under the broad category of non-tariff barriers, which are restrictive trade barriers, like quotas, embargoes, sanctions levies, and other restrictions. Typically, VERs are a result of requests made by the importing country to provide a measure of protection for its domestic businesses that produce competing goods, though these agreements can be reached at the industry level, as well.
- A voluntary export restraint (VER) is a self-imposed limit on the quantity of a good that an exporting country is allowed to export.
- VERs are considered non-tariff barriers, which are restrictive trade barriers—such as quotas and embargoes.
- Related to a voluntary import expansion, which is meant to allow for more imports, and can include lowering tariffs or dropping quotas.
Countries are sometimes accused of using their various administrative rules (e.g. regarding food safety, environmental standards, electrical safety, etc.) as a way to introduce barriers to imports.
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market. For protection, many countries impose stiff duties on products they believe are being dumped in their national market, undercutting local businesses and markets.
The World Trade Organization (WTO) operates a set of international trade rules. Part of the organization’s mandate is the international regulation of anti-dumping measures. The WTO does not regulate the actions of companies engaged in dumping. Instead, it focuses on how governments can—or cannot—react to dumping. In general, the WTO agreement allows governments to “act against dumping where there is genuine (material) injury to the competing domestic industry.” In other cases, the WTO intervenes to prevent anti-dumping measures.