Quota

quota

In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time. Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather than simply increasing their price. By limiting foreign goods, a quota aims to allow domestic goods to compete more successfully, though the price of the goods may also rise. Quotas restricting trade were first imposed on a large scale during World War I. In the 1920s, quotas were progressively abolished and replaced by tariffs, but their use was revived in the wave of protectionism set off by the Great Depression. After World War II, the western European countries began a gradual dismantling of quantitative import restrictions, but the U.S. was slower to discard them. See also free trade; GATT.

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Quota 

a share in the production, marketing, export, or import of production established by monopolistic cartel agreements of participating enterprises, companies, or countries. The profit is distributed among the participants according to the size of their quotas. In international and national cartel agreements that limit the sale or the export of production and sometimes also the production itself in order to receive monopoly superprofits, a quota is established for each participant; in case he exceeds it, he has to pay a penalty.

Import quotas (contingency imports) are widely used in foreign trade by capitalist countries as a tool of commercial policy. After World War II quotas became one of the most important tools of the aggressive protectionism that is an expression of the strengthening of state-monopolistic capitalism in foreign trade. Within the monopolistic associations an acute competitive struggle for obtaining quotas is under way, a struggle conditioned by the uneven growth of production capacities of the members and the shifting of the alignment of forces. The struggle often leads to the withdrawal of members from the associations and to the breakdown of the agreements.