Trade restrictions due to voluntary export restraints
Name(s):
Trade restrictions due to intergovernmental arrangements
Discriminatory orderly marketing arrangements
Nature
There is an apparent trend towards greater use of trade restrictions imposed as a result of negotiated 'voluntary export restraints' both between governments and between enterprises. Such restraints on trade frequently involve enterprises in importing and exporting countries agreeing among themselves on future levels of imports and exports from the country whose exports are to be restrained; and the reaching of agreement by enterprises in the latter country on how the quantity agreed upon is to be shared out among them. In certain cases, agreement is also reached on the prices of such exports. Such restraints have continued in 'sensitive' areas such as steel, electronics, machine tools, and canned food, and have increased and strengthened in respect of motor vehicles. The actual extent of such restrictions is unknown because of the secrecy which surrounds them.
Background
Despite agreement in principle, as envisaged in the GATT Tokyo Round declaration of 1979, to provide safeguards for the multilateral trading system, the nature of appropriate escape clauses continues to be debated, thus preventing implementation of an improved system. The issue concerns whether protective measures can be applied on a discriminatory or selective basis. Existing legislation of certain major trading countries permits such action, particularly through the application of voluntary export restraints or orderly marketing arrangements. There is concern that when a safeguard system is negotiated it will serve to legitimize discrimination through such export restraints, now a preferred form of safeguard action, rather than eliminate them.
Incidence
A voluntary export restraint agreement between Japan and the UK limits imports of Japanese cars to 11% (1992) and is considered a serious factor in higher retail car prices in Britain than other EEC/EU countries.
Broader
Aggravated by
Value(s)
Type
(E) Emanations of other problems