Author Question: What are voluntary export restraints and how are they used? What will be an ideal ... (Read 58 times)

newbem · **on:** Jul 7, 2018

What are voluntary export restraints and how are they used?

What will be an ideal response?

Question 2

Which of the following steps of the market screening process involves examining the cost of transporting goods?

A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site

Jordin Calloway · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

A unique version of the export quota is called a voluntary export restraint (VER)a quota that a nation imposes on its own exports, usually at the request of another nation. Countries normally self-impose a voluntary export restraint in response to the threat of an import quota or total ban on the product by an importing nation. The classic example of the use of a voluntary export restraint is from the 1980s when Japanese carmakers were making significant market share gains in the United States. The closing of U.S. carmakers' production facilities in the United States was creating a volatile anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive legislation if Japan did not limit its automobile exports to the United States, the Japanese government and its carmakers self-imposed a voluntary export restraint on cars headed for the United States.
Consumers in the country that imposes an export quota benefit from lower-priced products (due to their greater supply) as long as domestic producers do not curtail production. Producers in an importing country benefit because the goods of producers from the exporting country are restrained, which may allow them to increase prices. Export quotas hurt consumers in the importing nation because of reduced selection and perhaps higher prices. Yet export quotas might allow these same consumers to retain their jobs if imports were threatening to put domestic producers out of business. Again, detailed economic studies are needed to determine the winners and losers in any particular export quota case.

Answer to Question 2

B