What are voluntary export restrictions?

Voluntary export limitation is the decision of one nation to reduce the export of product to another nation. The emergence of a voluntary export limitation came after World War II to avert international economic tensions and possibly equalize the conditions. A somewhat newer example is the voluntary limitation of Japanese exports to the United States at the beginning of the 80s. The nation, which starts voluntary export limitation, does so in the hope that it avoids economic retaliation of the import nation. Export nations can bypass these restrictions by investing in foreign factories and/or finding new markets.

nations increased tariffs and banned foreign imports as a way to strengthen its own domestic industry before 1945. Hard plans for repayment and lending set by the Allied nations after the First World War and contributed according to some historians to the beginning of World War II. The end of World War II encouraged the world leaders to encourage worldwide decz to secure formal economic barriers. This supportThe market would come from voluntary agreements between nations to minimize the effect of foreign competition. These agreements would then allow nations to develop their own industries without intervention from similar imported products that could undermine the domestic industry.

Example for voluntary export limitation is the one that appeared between the Japanese and the United States in the age of 80. Japanese car manufacturers exported cars and trucks to the United States that were cheaper and more popular than American vehicles. The executives from the American automotive industry lobbied for President Ronald Reagan to create import quotas on Japanese cars. These American car manufacturers feared that Japanese cars permanently withdraw consumers from vehicles made in the US. Reagan's administration has been successful in the persuasion of the car's persuasion temporarily stop the export of car to the USin 1981.

In general, the export nation in this situation could agree to voluntary compliance, as may want to avoid damaging its relationship with the foreign government and consumers of the country. For example, imported goods could significantly cost jobs and damage the economy of the country of the recipient; As a practical matter, people outside the work have less money to spend on cars or other imported goods. Another reason why the nation could limit itself is that exports are that applications for nations can promote retribution from increased tariffs, taxes or quotas for imported goods to a direct ban on foreign products.

The export nation could avoid voluntary export limitation by the production of goods on the foreign market itself. This approach would require the purchase of factories, hiring local workers and moving machines from home to overseas facilities. For example, some car manufacturers are now producing cars at the United States. Each product of these factories would be supplied directly with a spoTerris, not through a more complicated import process. Another option for voluntary export limitation is to find another foreign market that compensates for potential losses on the current market.

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