ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The most notable example is when Japan imposed a VER on its auto exports into the U.S. as a result of American pressure in the 1980s. The VER subsequently gave the U.S. auto industry some protection against a flood of foreign competition.

Detailed explanation-2: -In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to limit exports of passenger cars to the United States. This “voluntary export restraint” (VER) program, initially supported by the Reagan administration, allowed only 1.68 million Japanese cars into the U.S. each year.

Detailed explanation-3: -Quantitative restrictions have been defined as measures which amount to a total or partial restraint on imports or goods in transit (48). Examples of such measures include an outright ban on imports or a quota system (49).

Detailed explanation-4: -A voluntary export restraint (VER) is a self-imposed trade restriction whereby an exporting country limits the number of goods of a particular nature that it can export to a specific country or region. VERs are imposed by the exporting country at the request of the importing country.

Detailed explanation-5: -Why would a country impose a voluntary export restraint on products? To reduce the chances that the importing country will set up trade barriers. How do tariffs work to protect infant industries? They shield new industries in the early stages of their development from the competition of more mature rivals.