Counting the Cost of Voluntary Export Restrictions in the European Car Market
The effects of `voluntary' export restrictions (VERs) on sales of Japanese cars to some European markets are studied in this paper, using a numerically calibrated model of quantitative trade restrictions in a market with imperfect competition and economies of scale. In this framework, the VER has an anti-competitive effect. On the basis of 1985 data we estimate the costs to the UK of the restriction to be between 95m and 130m pounds sterling per year. Since the welfare cost of a tariff which would have the same effect on UK production would be less than half of the cost of the voluntary export restraint, it follows that the VER is a very inefficient policy instrument. The Italian and French markets have tighter VERs than the UK, with correspondingly higher costs; but replacement of individual European VERs with Community-wide restrictions on imports from Japan would impose costs on member countries that currently do not have such restrictions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Jun 1988|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |