To product quality and safety, or simply unnecessary bureaucratic red tape in customs procedures

To illustrate: Japan and the European countries frequently require their domestic importers

Of foreign goods to obtain licenses. By restricting the issuance of licenses, imports can be effectively

Restricted. Great Britain bars the importation of coal in this way.

— Voluntary export restrictions (VERs) are a relatively new trade barrier by which foreign firms!

“voluntarily” limit the amount of their exports to a particular country. VERs, which have the effect

Of import quotas, are agreed to by exporters in the hope of avoiding more stringent trade barriers o r

A decline in prices. Thus Japanese auto manufacturers agreed to a VER on exports to the United

States under the threat of higher US tariffs or the imposition of low import quotas. The same is true

Concerning oil products export by the OPEC and some other countries.

B) Economic consequences of trade restrictions

If tariffs and quotas impede free trade and thereby diminish economic efficiency, why do we have

them? While nations as a whole gain from free international trade, particular industries and groups of

Resource suppliers can be hurt. In our comparative advantage example (Unit 1), specialization and

Trade adversely affected the American coffee industry and the Brazilian wheat industry. It is easy to