1. • CHAPTER 12
•QUANTITATIVE
RESTRICTIONS
QUOTAS, DEFINED.
QUOTAS ON IMPORTS OR EXPORTS REPRESENT A TYPE
OF QUANTITATIVE OR DIRECT TRADE RESTRICTIONS.
QUOTAS ARE RESTRICTIONS IMPOSED BY ONE
COUNTRY ON THE VOLUME AND KIND OF GOODS THAT
MAY BE ALLOWED TO ENTER OR LEAVE THAT COUNTRY.
WHILE QUOTAS ARE IMPOSED ON EXPORTS, THEIR USE
IS NOT COMMON UNLIKE QUOTAS ON IMPORTS.
QUOTAS ON EXPORTS MAY BE OBSERVED PRACTICED
IN CONNECTION WITH BILATERAL TRADE
AGREEMENTS.
IMPOSITION OF QUOTAS.

2. IN THE 20
TH
CENTURY, QUOTAS WERE FIRST IMPOSED
ON A LARGE SCALE DURING AND IMMEDIATELY AFTER
THE FIRST WORLD WAR. HOWEVER, AFTER THE
SIGNING OF THE ARMISTICE ON NOVEMBER 11, 1918,
QUANTITATIVE RESTRICTION ON TRADE WERE FAIRLY
AND RAPIDLY ABOLISHED IN PRACTICALLY ALL
EUROPEAN COUNTRIES.
WITH THE GREAT DEPRESSION IN EARLY 1930’S THE
ADOPTION OF QUOTAS, WAS AGAIN RESORTED TO AS
A MEASURE OF PROTECTION FOR THE VARIOUS
INDUSTRIES OF DIFFERENT COUNTRIES.
FRANCE WAS THE FIRST COUNTRY TO INTRODUCE A
COMPREHENSIVE SYSTEM OF QUANTITATIVE
RESTRICTIONS WHICH BECAME THE EXAMPLE
FOLLOWED BY ALMOST ALL OTHER EUROPEAN
COUNTRIES. FRANCE HAD IMPOSED QUOTAS ON NO
LESS THAN 3,000 ITEMS SUCH AS COAL, FLAX, WINES,
ANIMALS, MEAT, CHEMICAL FERTILIZERS, FISH,
POULTRY AND EGGS, HAM, MILK, BANANAS, SUGAR,
AND COUNTLESS OTHER.

3. UNDER THE AGRICULTURAL ADJUSTMENT ACT OF
1993, AS AMENDED, THE PRESIDENT OF THE UNITED
STATES IS EMPOWERED TO IMPOSED “SUCH FEES ON,
OR SUCH LIMITATIONS ON THE TOTAL QUANTITIES” ON
CERTAIN IMPORTATION OF COMPETITIVE GOODS.
QUOTAS IN DEVELOPING COUNTRIES.
IN THE DEVELOPING COUNTRIES, APART FROM
FINANCIAL REASONS COMPELLING THEM TO RATION
THEIR IMPORTERS AND TO PLACE SELECTIVE
RESTRICTIONS ON THEIR PURCHASES ABROAD, MOST
OF THEIR GOVERNMENTS MAKE VIRTUALLY
SYSTEMATIC USE OF QUOTAS AND PROHIBITIONS, TO
ISOLATE THEIR MARKET AND SHIELD THEIR INDUSTRIAL
PRODUCTS FROM FOREIGN COMPETITION.
IN ISRAEL, NEARLY HALF OF IMPORTS ARE STILL
SUBJECT TO QUOTA OR LICENSE WHEREAS IN SOUTH
AFRICA AND NEW ZEALAND, LICENSE ARE VIRTUALLY
THE GENERAL RULE.
• ADVANTAGE OF QUOTAS

4. QUOTAS HAVE THE ADVANTAGE OF BEING APPLIED OR
LOWERED MERELY BY ADMINISTRATIVE DEVICE, AND
ARE NOT THEREFORE SUBJECT TO THE FREQUENT
DELAY AND UNCERTAINTY THAT CHARACTERIZE
PARLIAMENTARY DEBATES.
MOREOVER, IT COULD BE FIXED TO ADMIT THE
AMOUNT OF THE COMMODITY THAT THE
GOVERNMENT IS WILLING TO PERMIT TO ENTER INTO
THE COUNTRY AND NO HIGHER, AS IN THE CASE OF
ABSOLUTE IMPORT QUOTAS.
• QUOTAS VERSUS TARIFFS
• AS IS OBSERVED IN COUNTRIES WHERE QUOTAS ARE
IMPOSED, THEY DOUBTLESS REPRESENT A VERY
EFFECTIVE DEVICE IN RESTRICTING THE FLOW OF
GOODS AND AS A CONSEQUENCES, THEY THUS
PRODUCE A VERY DISTURBING EFFECT ON
INTERNATIONAL TRADE.
• CLASSIFICATION OF QUOTAS
• QUOTAS ARE FIXED EITHER BY THE INDEPENDENT
ACTION OF A COUNTRY OR IN AGREEMENT WITH
OTHER COUNTRIES.

5. TYPE OF QUOTA IS DESCRIBED AS:
• UNILATERAL- QUOTA WHILE THE LATTER IS TERMED
AS BILATERAL QUOTA. ANOTHER DISTINCTION IS
BETWEEN IMPORT AND TARIFF QUOTAS. OTHER
TYPES ARE THE MIXING AND MILLING QUOTAS
MORE OR LESS WIDELY USED IN LATIN AMERICAN
AND SOME EUROPEAN COUNTRIES.
• AUTONOMOUS OR UNILATERAL IMPORT QUOTA
• REFERS TO QUANTITATIVE RESTRICTION PLACED BY A
COUNTRY ON THE PRODUCTS THAT COULD ENTER
HER TERRITORY DURING ANY ONE PERIOD.
• GLOBAL QUOTA VERSUS ALLOCATED QUOTA
• THIS STAGE IT MIGHT BE ASKED: WHICH IS
PREFERABLE OF THE TWO
QUOTAS- THE GLOBAL OR THE ALLOCATED QUOTA?
• GLOBAL QUOTA
-IS OFTEN TIMES OBSERVED AS RESPONSIBLE FOR THE
EMERGENCE OF UNSATISFACTORY MARKET CONDITIONS
WHERE DURING A PARTICULAR TIME THE COUNTRY MAY
BE OVER SUPPLIED.
• ALLOCATED QUOTAS

6. • THERE ARE CERTAIN DIFFICULTIES INVOLVING BOTH
ECONOMIC AND ADMINISTRATIVE MATTERS. SINCE
ALLOCATED QUOTAS ARE GENERALLY BASED UPON
SOME PRECEDING PERIOD, IN SOME INSTANCES THE
USE OF A SINGLE YEARS AS A BASED PERIOD MAY
FAVOR SOME IMPORTERS AND DISCRIMINATE
AGAINST OTHERS.
• BILATERAL QUOTAS, BILATERAL QUOTAS OR
CONTRACTUAL QUOTAS
• AS SOMETIMES THEY ARE CALLED, ARE THE RESULT
OF NEGOTIATION AND AGREEMENT BETWEEN TWO
PARTIES, THAT IS, THE GOVERNMENT OF THE
IMPORTING COUNTRY AND THE GOVERNMENT OF
THE EXPORTING COUNTRY.
• TARIFF QUOTA.
• BY TARIFF QUOTA IS MEANT A REGULATION
IMPOSED BY GOVERNMENT WHICH PERMITS THE
ENTRY INTO THE IMPORTING COUNTRY OF A
CERTAIN QUANTITY OF A COMMODITY UNDER
PREFERENTIAL TREATMENT EITHER IN THE FORM OF
DUTY-FREE ENTRY OR OF LOW RATE OF IMPORT
DUTY.

7. • IMPORT QUOTAS.
• NOT ONLY ARE IMPORT QUOTAS THE MOST
OBVIOUS OF ALL NON-TARIFF BARRIERS, BUT
UNDOUBTEDLY THEY REPRESENT THE MOST
RESTRICTIVE SELECTIVE MEASURES USED TO LIMIT
TRADE.
• QUOTAS ON COTTON GARMENTS.
• IN THE YEAR 1963, THE UNITED STATES
GOVERNMENT IMPOSED CEILINGS AND QUOTAS ON
AMERICAN EMBROIDERY IMPORTS, THOSE FROM
THE PHILIPPINES INCLUDED.
• THE RESTRICTIONS WERE IMPOSED ON CERTAIN
PHILIPPINE GARMENT CATEGORIES. THIS IS A
SERIOUS THREAT THAT ENDANGERS THE VERY
EXISTENCE OF THE PHILIPPINE EMBROIDERY
INDUSTRY. EMBROIDERY IN THIS COUNTRY IS A
TIME-HONORED OCCUPATION OF THE FILIPINO
WOMAN.
• MIXING AND MILLING QUOTA
• A VERY SUBTLE METHOD OF RESTRICTION OF
IMPORTING IS THE REQUIREMENT IN SOME
COUNTRIES THAT IN THE MANUFACTURE AND

8. PROCESSING OF CERTAIN PRODUCTS, A SPECIFIED
PROPORTION OF DOMESTICALLY PRODUCED RAW
MATERIALS OR PRODUCTS SHOULD BE USED.
• EXPERT QUOTAS
• EXPORT QUOTAS ARE ESTABLISHED REGARDLESS OF
PRICE AND THE QUANTITY OF CERTAIN EXPORTS
THAT MAY BE ALLOWED TO LEAVE A COUNTRY
DESTINED TO ANY IMPORTING COUNTRY.
EXAMPLES OF EXPORT QUOTAS ARE:
ANGOLA: ON PEANUTS
ARGENTINA: ON PINK GARLIC
EL SALVADOR: ON VEGETABLE OILS AND SESAME SEEDS
• IMPORT LICENSING
• UNDER THIS SYSTEM, IMPORTERS OF PRODUCTS
SUBJECT TO QUOTAS ARE REQUIRED TO SECURE
IMPORT LICENSES FOR EACH SPECIFIC IMPORTATION.
• THE USE OF IMPORT LICENSING OFFERS THE
MARKED ADVANTAGE IN THAT BOTH THE VOLUME
OF IMPORTS AND THE KIND OF GOODS DESIRED
MAY BE PLACED UNDER COMPLETE CONTROL

9. WITHOUT RESORTING TO THE ADOPTION OF THE
QUOTA SYSTEM.
• ONE MAIN DRAWBACK IN THE ADOPTION OF THIS
SYSTEM IS THE PROBLEM RELATING TO THE
SELECTION OF A FAIR PERIOD OF TIME FOR USE AS A
BASIS FOR THE ISSUANCE OF IMPORT LICENSES.
• COUNTRIES ADOPTING A SYSTEM OF LICENSING
• AN IMPORTER IS REQUIRED TO APPLY FOR AN
IMPORT LICENSE TO COVER THE MERCHANDISE HE
INTENDS TO BRING INTO THIS COUNTRY FROM
ABROAD.
• SOME OF THE MANY COUNTRIES THAT ADOPT A
SYSTEM OF IMPORT LICENSING: GREAT BRITAIN,
ITALY, AUSTRALIA, EGYPT BOLIVIA, CHILE, AND
BRAZIL.
• AUTHORITY TO IMPOSE QUOTA
• THE TARIFF AND CUSTOMS CODE OF THE
PHILIPPINES UNDER SECTION 402 VESTS THE
PRESIDENT WITH THE AUTHORITY TO IMPOSE
QUOTA.
• THIS AUTHORITY SHALL BE EXERCISED WHEN THERE
IS BEING IMPORTED INTO THE COUNTRY

10. MERCHANDISE IN SUCH QUANTITIES AS TO CAUSE
OR THREATEN SERIOUS INJURY TO THE DOMESTIC
INDUSTRY PRODUCING LIKE OR DIRECTLY
COMPETITIVE PRODUCTS.
• EFFECTS OF QUOTAS
• THE QUANTITATIVE RESTRICTIONS NOW IN FORCE
ON A NUMBER OF PRODUCTS HAVE A SIGNIFICANT
EFFECT ON THE EFFICIENT USE OF WORLD
RESOURCES. THE MOST INJURIOUS ARE THE
RESTRICTIONS ON COAL, PETROLEUM,
AGRICULTURAL PRODUCTS AND COTTON TEXTILES
BASED ON DOCUMENTS COMPILED BY THE GENERAL
AGREEMENT ON TARIFFS AND TRADE.