Voluntary export restraints have the same effects as import tariffs, except that the positive revenue effects are realized by the exporting country rather than the importing country.

Question

Quizplus · Accepted Answer

Voluntary export restraints (VERs) limit the quantity of goods exported to a particular country, similar to how import tariffs limit goods through higher prices. However, the extra cost paid by consumers due to reduced supply under VERs results in higher revenues for the exporting country's firms, whereas import tariffs generate revenue for the importing country's government.

Voluntary Export Restraints Have the Same Effects as Import Tariffs