A Voluntary Agreement Between An Exporting Country


A VER can also be attractive to the exporting country. As noted above, it proposes rents that, at least in the short term, would win to the extent that demand in the rest of the world is elastic, so that the terms of the exchange loss are minimal or zero. This may be important compared to other trade barriers that the importing country could put in place; Customs revenue, for example, goes to the government that collects it. In addition, ves can be used to ensure that the exporter has access to the market in the importing country, to put an end to the uncertainty of a counter-taxation review, and to give the executive government some degree of control over its domestic industry. These factors indicate that, if it is the probability of protection of the importing country, particularly when it is a major market for other products, the exporter could easily accept a worm. When VERs propagate to cover imports of a product from all sources, the VER system is similar to an import quota. But the process is quite different. A quota is generally applied on a global basis; it is non-discriminatory and is generally allocated either on the basis of «First-come, First-served» or on the basis of quotas corresponding to the previous model of import shares. VERs are negotiated bilaterally, usually with one or a few suppliers. They are therefore discriminatory, since export volumes depend on bargaining power. They can take into account the commercial configuration of VER`s covered product to the importing country vis-à-vis more efficient exporters and create investment signals for third-country producers that may prove to be wrong.

As a result, worms can result in greater efficiency losses than a global quota and an equivalent import reduction volume. There are ways to avoid a VER by a company. For example, the exporting country`s company can still build a production site in the country where exports are directed. In this way the company is no longer obliged to export goods and should not be linked to the country`s VER. The OECD estimates that the annual transfer of OECD countries to textile and clothing exporters in emerging Asian countries, under bilateral export restraint agreements for macro-financial assistance, amounts to at least $2 billion. The above-VER study of Japanese car exports to the United States calculated that Japanese exporters «earned» $1 billion in rents just because of pure price effects in 1984; The total transfer to foreign suppliers amounted to $1.67 billion, indicating that third-country exporters who were not retained by the VER were able to benefit. Mr. Kostecki estimated, using a VER rate equivalency method, that rent transfers resulting from VERs in 1984 could reach $27 billion.

More recently, federal legislators and the U.S. justice system have moved an increasingly large portion of the health insurance market from a private contract system to an unsealed merger between contractual, fiduciary and administrative law.