What are quotas?

Question 1: What is a quota?

Question 2: What does quota mean?

Quotas can be divided into broad and narrow senses. In a broad sense, quotas are a management and allocation of limited resources, a balance between supply and demand or the different interests of all parties. For example, when the demand for tourism or immigration in a certain place is excessive, the quota system can alleviate this pressure; when the supply of a certain product exceeds demand, the quota system can adjust the imbalance; and so on.

Quotas in a narrow sense refer to the definition within the scope of international trade, that is, a country (region) imposes quotas in order to protect its own industry from being damaged by excessive imports of products, or to prevent the over-export of its own products (region). Actively or passively control the quantity or value of product imports and exports. There are many different ways of quotas. According to some statistics, there are more than 2,500 kinds of quotas implemented around the world. Quotas can be divided into two categories: import quotas and export quotas.

Import quotas can be divided into absolute quotas and tariff quotas according to management methods. Absolute quotas refer to setting a maximum import quantity or amount for certain commodities within a certain period of time. No imports are allowed once this maximum amount is reached. Absolute quotas come in two forms. One is to adopt "global quotas", which apply to goods from any country or region. The competent authority will grant a certain quota based on the importer's application sequence or based on the import performance in a certain period in the past, until the total quota is released; secondly, adopt "country-specific quotas", which is based on the country and the total quota. Regional allocation quotas. Different countries and regions are not allowed to import if they exceed the prescribed quotas.

Tariff quotas do not absolutely limit the quantity of imported goods, but provide low tax, tax reduction or exemption treatment to a certain number of imported goods within a certain period. For imported goods exceeding this quota, Higher duties or additional taxes and penalties are imposed.

my country currently has dozens of types of mechanical and electrical products and general commodities subject to import quota management.

Export quotas can be divided into "automatic" export quotas (passive quotas) and active quotas. Among them, "automatic" export quotas refer to the exporting country or region that "automatically" stipulates the export restrictions of certain commodities to the country within a certain period of time (usually 3 years) under the requirements or pressure of the importing country. Control your exports within the restricted quota. If you exceed the restricted quota, you will not be allowed to export. In essence, this is a passive quota that has to be implemented, so the word "automatic" is put in quotation marks.

Active quotas refer to export quotas implemented by exporting countries or regions on some export commodities based on capacity in domestic and overseas markets and other circumstances.

A considerable part of the commodities that my country now implements active quota management are advantageous export commodities or monopoly commodities in the international market, with large profit margins, and most of them involve export-led industries. The commodities subject to passive quota management are mainly textiles. my country currently implements quota export license management for 343 commodity codes of 68 categories in 54 categories.

The quota system protects domestic industries at the expense of restricting international trade, so it has long been firmly opposed by advocates of trade liberalism. Since the General Agreement on Tariffs and Trade in 1947, GATT/WTO contracting parties/members have made tremendous efforts to reduce and eliminate the quota system. In every round of negotiations or every time a new country (region) concludes or joins, the relevant countries (regions) are almost always required to significantly reduce or cancel quotas.

According to the results of China's "WTO accession" negotiations, China has the right to continue to maintain the tariff quota management system for some products within 3-5 years after "accession", which mainly includes: some agricultural products (wheat, corn , rice, soybean oil, rapeseed oil, palm oil, cotton, sugar, etc.); wool and tops; some textiles (passive distribution); other chemical or electromechanical products (refined oil, sodium cyanide, fertilizers, natural rubber, automobiles and Motorcycles and their parts, etc.). Generally speaking, these products subject to quota management should be canceled before 2005 or 2006. During this period, the annual quota amount will increase at a certain rate every year.