Protectionism (Import Quotas) - 4.1.4

Protectionism - is any attempt by a country, trade bloc or region to impose restrictions on the import of goods and services.
Import Quotas - A type of protectionist measure on trade that sets a restriction on the physical limit on quantity of a good that can be imported into a country in a given period of time. Quotas, like other trade restrictions, are typically used to benefit the producers of a good at the expense of the consumers in that economy.

Import quotas are quantitative limits on the level of imports allowed or a limit to the value of imports permitted into a country in a given period of time. Often licenses are granted to importers to the exclusion of other global businesses. Quotas do not normally bring in any tax revenue for the government.
Benefits of import quotas include;

• Keeping the volume of imports unchanged even when demand for imported products increases
• Local jobs may be created or protected, leading to a greater tax revenue
• More flexible than tariffs

Drawbacks of import quotas include;

• Tend to distort international trade as they restrict the amount of imports
• Restricts competition
• No tax revenue from imports
• In some countries, there is a risk of corruption from bribes by companies wanting to gain access to the market.