Export Restraints: Proliferation and Options for Retariffication

Abstract

The decade of the 1980s witnessed an unprecedented expansion of discriminatory export restraints imposed by exporting countries but designed to protect specific trading partners’ import-competing industries. These export restraints are often referred to as ‘grey area measures’, barriers to trade or distortions of trade that are neither clearly banned nor expressly allowed under the General Agreement on Tariffs and Trade (GATT). None the less, they are contrary to the fundamental GATT principles of no restrictions on either exports or imports other than duties or taxes, except for specified exceptions, and non-discriminatory application of quotas in those exceptional cases where they are allowed. Grey area measures include both minimum price and maximum quantity limitations. This paper focuses on those quantitative export restrictions alternatively referred to as Voluntary Export Restraints (VERs), Voluntary Restraint Arrangements (VRAs) or Orderly Marketing Arrangements (OMAs).²

The author would like to thank Sam Laird for providing data on the trade coverage of VERs, and Jaime de Melo and Charles Pearson for helpful comments on a previous draft.