Tariff-rate quota
Encyclopedia
A tariff-rate quota is a trade policy tool used to protect a domestically-produced commodity or product from competitive imports.
A TRQ combines two policy instruments that nations historically have used to restrict such imports: quotas and tariffs. In a TRQ, the quota component works together with a specified tariff level to provide the desired degree of import protection. Imports entering during a specific time period under the quota portion of a TRQ are usually subject to a lower, or sometimes a zero, tariff rate. Imports above the quota’s quantitative threshold face a much higher (usually prohibitive) tariff.
As part of the 1995 Uruguay Round Agreement on Agriculture, the World Trade Organization
prohibited agricultural trade quotas among its member nations. TRQs, however, were permitted as a form of transition to simple tariffs.
, TRQs apply to U.S. imports of certain dairy products, beef, cotton, green olives, peanuts, peanut butter, sugar, certain sugar-containing products, and tobacco. A TRQ was applied to US steel
imports in 2002.
A TRQ combines two policy instruments that nations historically have used to restrict such imports: quotas and tariffs. In a TRQ, the quota component works together with a specified tariff level to provide the desired degree of import protection. Imports entering during a specific time period under the quota portion of a TRQ are usually subject to a lower, or sometimes a zero, tariff rate. Imports above the quota’s quantitative threshold face a much higher (usually prohibitive) tariff.
As part of the 1995 Uruguay Round Agreement on Agriculture, the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
prohibited agricultural trade quotas among its member nations. TRQs, however, were permitted as a form of transition to simple tariffs.
, TRQs apply to U.S. imports of certain dairy products, beef, cotton, green olives, peanuts, peanut butter, sugar, certain sugar-containing products, and tobacco. A TRQ was applied to US steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
imports in 2002.