Voluntary Export Restraint (VER)

A voluntary export restraint (VER) is an agreement between a country and its trading partners to limit the volume of exports of a particular product. VERs are typically used to protect domestic industries from foreign competition.

The country that agrees to the VER is called the exporting country, and the countries that are the target of the VER are called the importing countries. The exporting country agrees to limit its exports of the product to a certain level, and the importing countries agree not to impose any additional trade restrictions on the product.

VERs are often used in the context of trade disputes. For example, if an importing country believes that an exporting country is dumping its products on the world market, it may threaten to impose tariffs on the products. The exporting country may then agree to a VER in order to avoid the tariffs.

VERs can be beneficial to both the exporting and importing countries. The exporting country can protect its domestic industry from foreign competition, and the importing country can avoid the need to impose tariffs. However, VERs can also have negative consequences. For example, they can lead to higher prices for consumers in the importing countries.

VERs are controversial because they are considered to be a form of protectionism. Critics argue that VERs are unfair because they give the exporting country an advantage over its competitors. However, supporters of VERs argue that they are necessary to protect domestic industries from foreign competition.

The World Trade Organization (WTO) does not allow VERs. However, VERs are still used by some countries, and they are often difficult to detect.