6 A quota is a quantitative restriction that is expressed in terms of either physical quantity or value. For example, a quota that states that no more than 50 000 Class A widgets may be imported from Europe each year is a restriction stated in terms of physical quantity. Meanwhile, a quota that restricts the importation of a certain type of Japanese glassware to no more than $ 1 million worth a year is stated in terms of value.

7 A tariff is a duty or fee levied on goods being imported into the country. These tariffs can be of two types: revenue or protective. A revenue tariff is designed to raise money for the government. These tariffs are usually low, often amounting to less than twenty-five cents per item or pound. A protective tariff is designed to discourage foreign businesses from shipping certain goods into the country. The basic reason for a protective tariff is to keep out goods that will undersell products made in the home country. For this reason, protective tariffs are often very high, thus forcing the foreign business to raise its prices to cover the tariff.

8 Tariff duties are of three types: specific, ad valorem, and compound. Specific duties are levied at the rate of so much per unit or pound. For example, the specific duty on one product might be $10 per unit, while on another it might be 25c per pound.

9 Ad valorem duties are levied on the basis of the product's value. For example, an ad valorem duty of 7 percent on a particular product valued at $100 would result in a $7 tariff.

10 Compound duties are a combination of specific and ad valorem duties. One example is suits. In the past the duty on them has been 371/2 c per pound and 21 percent ad valorem.

 

( liyy )29 Sep,2010

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