Import quota

Trade barrier

An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.^[1] Quotas, like other trade restrictions, are typically used to benefit the producers of a good in that economy (protectionism).

Quota share

The quota share is a specified number or percentage of the allotment as a whole quota, that is prescribed to each individual entity.

For example, the United States imposes an import quota on cars from Japan. The Japanese government may see fit to impose a quota share program to determine the number of cars each Japanese car manufacturer may export to the United States. Any extra number that a manufacturer wishes to export must be negotiated with another manufacturer that did not or cannot maximize its share of the quota.

There are also quota share insurance programs, where the liability and the premiums are divided proportionally among the insurers. For example, three companies take out a $1,000,000 fire insurance policy on a quota share basis with company A assuming 50% ($500,000), company B 30% ($300,000), and company C 20% ($200,000). If the annual premium was $5,000, company A would receive $2,500 in premium, B would receive $1,500, and C would receive $1,000. Company A would pay 50% of any one claim, Company B would pay 30% of any one claim, and Company C would pay 20% of any one claim.

References

^ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Pearson Prentice Hall. pp. 449. ISBN 0-13-063085-3.

International trade

Terminology

Absolute advantage
Balance of payments
Balance of trade
Capital account
Comparative advantage
Current account
Export-oriented industrialization
Fair trade
Foreign exchange reserves
Globalization
Import substitution industrialization
Net capital outflow
Outsourcing
Tariff
Trade justice
Trade war
Trading nation

Organizations
and policies

Political economy

Regional organizations

Americas	Andean Community of Nations Caribbean Community Central American Integration System Mercosur
Asia-Pacific	Association of Southeast Asian Nations Regional Comprehensive Economic Partnership South Asian Association for Regional Cooperation
Europe, Central Asia, and North Asia	Customs Union of Belarus, Kazakhstan, and Russia Eurasian Economic Union European Union Customs Union
Middle East and North Africa	Arab Customs Union Cooperation Council for the Arab States of the Gulf
Subsaharan Africa	East African Community Economic and Monetary Community of Central Africa Southern African Customs Union West African Economic and Monetary Union

Exports by product

Category
Commons

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