Import quota

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import quotas, as well as export, belongs to one of the methods of non-tariff restrictions on imports and is widely used in economic practice.This indicator shows the extent the importance of the import goods for the entire national economy of the country and to any particular industry.At its core, the import quota - the maximum amount or value of the goods, which are allowed to bring into the country for a specific period of time.

When calculating the amount of the restrictive measures comply with certain standards.Thus, the value of annual import quota shall not be less than the annual average volume of imported goods during the previous period.Restrictions on the import of a smaller size can be set only when such a volume is needed in order to prevent or eliminate damage to the national economy with too many imported goods.

import quota can be set in relation to a separate state.However, the sum of all these protective measures shall not exceed the annual limit value of this protective measure.

Quotas are mainly carried out through the issuance of licenses.Those firms that have received a license to import a specific type of goods for a certain period, are free to import.The rest enterprises unlicensed trade is prohibited.

license allocation mechanism can be of three types:

  • clear preference.In this case, the license provides the most authoritative in terms of government enterprises.
  • tenders.With this distribution of state receives revenue from the sale.
  • cost method.Licences are issued to those firms that have the best manufacturing facilities and more qualified staff and other resources.

import quota acts as a customs tariff.The difference is that the latter brings additional resources to the state, and the quota partially or completely directs extra income into the pockets of the importers.Why did the government then uses import quotas?The fact that it is more flexible and operational policy tool, as tariffs are regulated by the various national laws and international agreements.In addition, the import quota guarantees as import suppliers can get around duties by falling commodity prices.Another plus is it that it is selective, that is it allows you to maintain certain specific enterprises.

Since the import quota limits the supply of goods, the adoption of such measures leads to higher prices for domestic products.This, in turn, will encourage local entrepreneurs to develop their business and enhance the competitiveness of manufactured goods.In the short term residents suffer damage, when the government decides to introduce any import quotas.After all, they now have to buy more expensive and often lower-quality domestic products.But in the medium and long term they will win, because the protection of domestic producers will benefit the balance of payments, and hence, allow the government to make social payments to carry out the necessary expenses, not to mention the fact that increasing the competitiveness of goods and protectionism is one of the most effectivefunds to stimulate the economy to grow.

However, we note that the import quota could lead to negative consequences such as the monopolization of the economy and the increase in corruption in government, since the issue of licenses and the criteria by which they are issued, are not always clear and clear.