Export restriction

Export restriction is a restriction on the quantity of goods that is exported to other countries. A distinction is made between voluntary export restrictions, export restriction and export ban.

Voluntary export restraint

The voluntary export restraint is a non- tariff trade barrier. This limited a country voluntarily the amount of exported goods in another country. The voluntary export restraint is similar in its economic effects of an import quota of the importing country and is also usually initiated at his request down. However, it has political and legal advantages over the import quota. It is always more expensive than an equivalent amount of duty for the importing country, as the customs revenues disappear and instead benefit the exporting country. A large part of the costs attributable to such income transfers, not by efficiency losses.

A well-known example is the commitment of Japan in 1981 to export no more than 1.68 million automobiles in the United States. The quota was increased to 1.85 million in 1984 and 1985 and then ran out. Background were the reorientation of the demand for automobiles in the U.S. away from a worldwide unique large models and toward smaller models in the wake of the second oil crisis and the lower production costs of the Japanese manufacturers. Strong political forces in the United States called for the protection of domestic industry. The U.S. wanted to risk a trade war by unilateral import restrictions. Japan feared this, however, and so it came to the agreement. Result of this voluntary export restraint was due to higher prices of Japanese cars in the U.S. and higher profits for Japanese companies. The U.S. government estimated the total cost of this trade restriction to 3.2 billion U.S. dollars.

Export restriction

Export restrictions include all government measures to restrict or prohibit exports. Examples are embargoes and tariffs.

Export ban

Through an export ban, the state prohibits the export of certain items to certain countries. Export bans often exist for armaments.