Safeguard Quotas In Developing Countries

Submitted By bibito118
Words: 363
Pages: 2

“Safeguard” quota is a limit on the quantity of a good which can be imported into a country in a given period of time. It is a type of protectionist trade restriction which are used to benefit the producers of a good in a domestic economy at the expense of all consumers of the good in that economy. In this case, the US sets quotas in textile and apparel goods for China and some of other developing countries in order to reduce imports from China, to encourage consumers to purchase more domestic goods and to save employments in this industry.
Tariff, particularly in chapter III, is a tax on imports that the US government applies for listed countries with categories of goods. The domestic goods would have the competitive price with those of cheap-labor-countries.
Meanwhile, free trade or trade liberalization is a policy by which a government does not apply tariffs, subsidizes or quotas. Instead, the economy follows market-oriented rules.
Yarn- forward is requirement for the apparel to duty- free import into the US. The test ensures that each stage of production from spinning yarn, manufacturing fabric, and sewing garment must be performed in one of the member countries including El Salvador, Honduras, Nicaragua, Guatemala and the Dominican Republic or CAFTA.
Fabric- forward is applied for such apparel as brassieres and woven boxer shorts. The yarn could be derived from anywhere but resulting fabric must be sent to a CAFTA country.
Fiber- forward is a rule applied for