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Quantitative restrictions are important means of restricting imports and exports. Which of the following is a type of Import Quota? I. Unilateral quota II. Income quota III. Mixing quota IV. Tariff quota

Quantitative restrictions are important means of restricting imports and exports. Which of the following is a type of Import Quota? I. Unilateral quota II. Income quota III. Mixing quota IV. Tariff quota Correct Answer I, III and IV

The term "import quota" refers to a physical limit on the number of various products that can be imported from other nations in a year. Import quotas can be set either in terms of quantity or in terms of product value.

Key Points

  •  There are Five types of Import Quota mentioned under WTO regulation of imports and exports: 
The Tariff Quota
  • The government of the importing country is authorized to import a fixed quantity of an item tax-free or at a reduced rate of duty.
  • The government can impose a higher rate of duty in case imports are in excess of this fixed limit. 
  • Another benefit of this quota is its flexibility.
 The Unilateral Quota
  • A country imposes an absolute restriction on the quantity of a commodity that can be imported in a given time period.
  • imposed without prior negotiation with other governments.
Mixing Quota
  • Domestic producers in the quota-fixing country are required to employ domestic raw materials in a certain proportion alongside imported raw materials.
  • limits the amount of foreign-made raw materials that can be (imported and) utilized in domestic manufacturing.
 Bilateral Quota
  • the import quota is fixed after negotiations between the importing and exporting countries.
  • The bilateral quotas are also known as agreed quotas.
Licensing of Imports
  • Under this quota, importers must have a license from authorities for importing any quantity within the stipulated quotas. 
  • Licenses are dispersed among established importers based on their percentage of the country's import trend.

Therefore, Unilateral quota, Mixing quota, Tariff quota are different types of Import Quota.

Important Points

  • Article XI of the GATT 1994 deals with quantitative restrictions of trade between the nations. 
  • This article covers any prohibitions or limits on the importation or exportation of commodities, other than tariffs or other taxes, that are imposed or maintained by WTO Members countries. 

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