What is an Absolute Quota?

An absolute quota is the maximum amount of imports of commodities that is allowed into a country at a particular period of time. The two divisions of import quotas are absolute quotas and tariff quotas. Absolute quotas can further be divided into global quotas and country quotas. Each of these divisions has unique management technique that it adopts.

What is a Global Quota?

Global quotas refer to the specific amount of goods or commodities than an importer can bring into a country at a certain time. It sets a limit on imported merchandise from all countries at a specific time. 

The global quota is not restricted to any country or region. Once the quota is announced, importers from any region can compete for quotas. Once the limit is reached, no imports will be allowed. 

Oftentimes, countries, industries and companies set quotas for the purpose of creating balance between supply and demand at a given time. Quotas also help to adjust the balance of payments and relieve an economy from excessive supplies. 

Internationally, countries announce the expected quotas for imports and exports required at a specific time. This is basically to avoid excessive imports and exports of goods that can damage a country. 

What is a Country Quota?

Country quotas refer to import management technique that allocates fixed quotas (within the total quota) to countries and regions. Countries quotas are otherwise called region quotas. They set a limit to the amount of goods that a country is allowed to import with the total quota. 

Country quotas are in two categories, the independent quotas otherwise called Autonomous Quotas and Agreement Quotas.

What is an Agreement quota?

Under an agreement quota arrangement, two parties consent to the quota of importing and exporting goods between the countries. Agreement quotas are also called bilateral quotas. These quotas can either be reached by government of the countries involved or by civil societies.

If two governments signed the agreement quota, this agreed quota will be announced to exporters and importers in the countries. However, if the agreement quota is signed by a bilateral civil society or two parties, the government must approve of the agreement.

What is an Autonomous quota?

Autonomous Quotas are independent, often unilateral, quotas. These types of quotas often occur in independent preferential trade arrangement between countries. In this situation, an importing country imposes these quotas which stipulates that it can import specific goods from a country at a particular time. 

The exporting country has no say or consent in autonomous quotas. This easily leads to resentments or retaliation from the exporter. In order to avoid resentments and revenge, many countries use the agreement quotas.

Related Topics

• Trade Balance: Surplus and Deficit
• Mercantilism
• J Curve
• National Trade Data Bank
• Capital Account (Economics)
• Merchandise Trade Balance
• Current Account 
• Income Payments
• Unilateral Transfer
• Is it better to have a trade surplus or a trade deficit? 
• Export of Goods and Services and Percentage of GDP
• Heckscher-Ohlin Model 
• Linder Hypothesis
• The Balance of Trade as a Balance of Payments
• National Savings and Investment Identity
• Circular Flow of Money
• Financial Capital
• Supply and Demand Sides for Financial Capital? 
• Flow of Capital
• Domestic Saving and Investment Determine the Trade Balance
• National Savings Identity and Trade Deficits
• How the Business Cycle Affects Trade Balances
• Trade Balance or Trade Surplus
• Level of Trade
• Comparative Advantage
• Absolute Advantage
• Specialization and Gain from Trade
• Absolute Advantage in All Goods
• Production Possibilities Frontier and Comparative Advantage
• Comparative Advantage and Mutually Beneficial Trade
• Gain from Trade
• Opportunity Costs and International Trade
• Intra-Industry Trade
• Splitting Up the Value Chain
• How Economies of Scale Lead to Trading Advantages
• Protectionism
• Closed Economy
• Tariffs 
• Double Column Tariff
• Import Quotas
• Double Column Tariff
• Infant Industry Theory
• National Interest Argument
• Race to the Bottom
• Anti-Dumping Laws
• Dumping
• Trade War
• Race to the Bottom
• Non-Tariff Barriers
• Effects of Trade Barriers
• Who Is Benefited and Who is Harmed by Protectionism?
• Infant Industry Theory for Restricting Imports
• What is the Anti-Dumping Argument for Restricting Imports?

• Anti-Dumping Laws
• Dumping

• What is the Environmental Protection Argument for Restricting Imports?
• Race to the Bottom
• Unsafe Consumer Products Argument for Restricting Imports?
• National Interest Argument for Restricting Imports
• What is the WTO?
• What is the GATT?
• What are Free Trade Agreements?
• North American Free Trade Agreement
• Central European Free Trade Agreement
• General Agreement on Free Tariff and Trade (GATT)
• Common Market
• Common Market for Eastern and Southern Africa
• Central American Common Market
• Caribbean Community and Common Market
• What are Economic Unions?
• WTO
• International Monetary Fund
• World Economic Forum
• Inter-American Development Bank
• Davos World Economic Forum 
• Chamber of Commerce
• Jackson Hole Economic Symposium