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quota

Translation
quota
/kwoh"teuh/, n.
1. the share or proportional part of a total that is required from, or is due or belongs to, a particular district, state, person, group, etc.
2. a proportional part or share of a fixed total amount or quantity.
3. the number or percentage of persons of a specified kind permitted to enroll in a college, join a club, immigrate to a country, etc.
[1660-70; < ML, short for L quota pars how great a part?]
Syn. 1. allotment, apportionment, allocation.

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In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time.

Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather than simply increasing their price. By limiting foreign goods, a quota aims to allow domestic goods to compete more successfully, though the price of the goods may also rise. Quotas restricting trade were first imposed on a large scale during World War I. In the 1920s, quotas were progressively abolished and replaced by tariffs, but their use was revived in the wave of protectionism set off by the Great Depression. After World War II, the western European countries began a gradual dismantling of quantitative import restrictions, but the U.S. was slower to discard them. See also free trade; GATT.

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      in international trade, government-imposed limit on the quantity, or in exceptional cases the value, of the goods or services that may be exported or imported over a specified period of time. Quotas are more effective in restricting trade than tariffs (tariff), particularly if domestic demand for a commodity is not sensitive to increases in price. Because the effects of quotas cannot be offset by depreciation of the foreign currency or by an export subsidy, quotas may be more disturbing to the international trade mechanism than tariffs. Applied selectively to various countries, quotas can also be a coercive economic weapon.

      Tariff quotas may be distinguished from import quotas. A tariff quota permits the import of a certain quantity of a commodity duty-free or at a lower duty rate, while quantities exceeding the quota are subject to a higher duty rate. An import quota, on the other hand, restricts imports absolutely.

      If the quantity imported under a quota is less than would be imported in the absence of a quota, the domestic price of the commodity in question may rise. Unless the government maintains some system of licensing importers in order to capture as revenue the difference between the higher domestic price and the foreign price, the importing of such commodities can prove a lucrative source of private profit.

      Quantitative trade restrictions were first imposed on a large scale during and immediately after World War I. During the 1920s quotas were progressively abolished and replaced by tariffs. The next great wave of quota protection came during the Great Depression in the early 1930s, with France leading the European countries in introducing a comprehensive quota system in 1931. After World War II, the western European countries began a gradual dismantling of quantitative import restrictions, but the United States tended to make more use of them.

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Universalium. 2010.

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