What does quota mean? What are the benefits?

Quota refers to the restrictions imposed on the quantity of a commodity that can be imported each year.

Quotas can be broadly defined and narrowly defined. Broadly speaking, quota is a kind of management and distribution of limited resources, and it is a kind of balance between unequal supply and demand or different interests of all parties. Narrow quota refers to the definition in the field of international trade, that is, a country (region) actively or passively controls the import and export quantity or price of products in order to protect its industry from excessive import or prevent its products from excessive export.

Within the prescribed time limit, goods within the quota can be imported, goods exceeding the quota are not allowed to be imported, or higher import tariffs are imposed. It is one of the important means for capitalist countries to limit the import quantity.

Take global quotas as an example, it is applicable to goods from any country or region. The competent authority shall grant a certain quota according to the importer's application or the import performance in the past period until the total quota is issued; Adopt country quotas, that is, allocate quotas according to countries and regions in the total quota. If different countries and regions exceed the prescribed quotas, they are not allowed to import. Tariff quotas mean that there is no limit on the absolute quantity of imported goods. In a certain period of time, higher tariffs, additional taxes and fines will be imposed on imported goods that exceed the prescribed tariff quota.

Extended data

The quota system protects domestic industries at the expense of restricting international trade, so it has long been resolutely opposed by trade liberalism advocates. Since GATT 1947, the contracting parties/members of GATT/WTO have made great efforts to reduce and cancel the quota system. In each round of negotiations or when a new country (region) concludes or joins, almost all countries (regions) concerned are required to substantially reduce or cancel quotas.

There are many ways of quota. According to statistics, there are more than 2,500 kinds of quotas in the world. According to different standards, quotas include absolute quotas and relative quotas, tariff quotas and non-tariff quotas, active quotas and passive quotas.

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