A Voluntary Restraint Agreement Definition

A voluntary export restriction (OR) or voluntary export restriction is a limitation imposed by the government on the quantity of a class of goods that can be exported to a given country during a given period of time. They are sometimes referred to as « export visas ». [1] A voluntary export restriction (VER) is a trade restriction for the quantity of a product authorized to export one exporting country to another country. This limit is imposed by the exporting country itself. When the U.S. auto industry was threatened by the popularity of cheaper, less fuel-intensive Japanese cars, a 1981 auto-restraint agreement limited the Japanese to export 1.68 million cars a year to the U.S., as established by the U.S. government. [2] This quota was originally due to expire after three years, in April 1984. Following the GATT Uruguay Round, which ended in 1994, members of the World Trade Organization (WTO) agreed not to introduce new RECs and to abolish existing duties over a period of four years, with exemptions being granted to a sector in each importing country. In the context of the Voluntary Export Restriction (VER), it is a voluntary import expansion (VIE), which is a change in a country`s economic and trade policy to allow more imports by reducing tariffs or dropping quotas. Often, VIPs are part of trade agreements with another country or are the result of international pressure. Voluntary export restrictions (VERs) fall under the broad category of non-tariff barriers that are barriers to trade, such as quotas, sanctions, embargoes and other restrictions.

As a general rule, VER are the result of requests by the importing country to offer a certain degree of protection to its domestic companies producing competing products, although these agreements can also be concluded at the sector level. The Japanese auto industry responded by setting up assembly or « graft » plants in the United States (mainly in the southern United States). States where there are laws on the right to work, unlike Rust Belt states with established unions) to produce mass vehicles. Some Japanese manufacturers that had their transplant assembly plants at the Rust Belt, for example.B. Mazda, Mitsubishi, had to have a joint venture with a Big Three manufacturer (Chrysler/Mitsubishi, which became Diamond Star Motors, Ford/Mazda, which became AutoAlliance International). GM created NUMMI, which was originally a joint venture with Toyota, which was later expanded to a Canadian subsidiary (CAMI) – a GM/Suzuki that was consolidated, which expanded into the geographic division in the United States…