Import Quota

Import Quota

Puts limits on the quantity of certain products that can be legally imported into a particular country during a particular time frame. There is a Fixed quota, which is a maximum quantity not to be exceeded, and tariff rate surcharge, which permits additional quantities but at much higher duty.

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Import Quota

A protectionist regulation setting a maximum number of imports for a certain good over a given period of time, usually a year. For example, if a country wants to encourage domestic production of automobiles, it might set a limit on how many foreign cars may be brought into the country each year. While import quotas were once a relatively common form of protectionism, the 1995 renegotiation of the General Agreement on Tariffs and Trade put tougher international restrictions on them. Critics allege that import quotas, in addition to depriving the state of tariff revenue, lead to corruption (in the form of bribing customs agents) and smuggling. Many economists therefore believe that import quotas are less efficient than tariffs.