Question

A market-sharing pact negotiated by trading partners that results in voluntary quotas applied to exports in order to protect the importing country's domestic firms is called a(n):

Answer 1

The market-sharing pact or agreement negotiated by trading partners that give rise to voluntary quotas of exports aimed at protecting the importing country's domestic firms is called a voluntary export restraint (VER).

What is voluntary export restraint (VER)?

Voluntary export restraints (VER) are export arrangements between exporting and importing countries so that the exporter agrees to limit the number of some exports.

VER allows the importing country's domestic firms to survive export dumping.  It is the opposite of voluntary import expansions (VIE).  VIE, which is a part of international trade agreements, allows for more imports by lowering tariffs or dropping quotas.

Thus, the market-sharing pact negotiated by trading partners allowing for voluntary quotas on exports is called voluntary export restraint (VER).

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