A tariff-rate quota (TRQ) is a trade policy tool used to protect a domestically-produced commodity or product from competitive imports.
A TRQ combines two policy instruments that nations historically have used to restrict such imports: quotas and tariffs. In a TRQ, the quota component works together with a specified tariff level to provide the desired degree of import protection. Imports entering during a specific time period under the quota portion of a TRQ are usually subject to a lower, or sometimes a zero, tariff rate. Imports above the quota’s quantitative threshold face a much higher (usually prohibitive) tariff.
As part of the 1995 Uruguay Round Agreement on Agriculture, the World Trade Organization prohibited agricultural trade quotas among its member nations. TRQs, however, were permitted as a form of transition to simple tariffs.
As of 2005[update], TRQs apply to U.S. imports of certain dairy products, beef, cotton, green olives, peanuts, peanut butter, sugar, certain sugar-containing products, and tobacco. A TRQ was applied to US steel imports in 2002.
- Jasper Womach. "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition". Congressional Research Service. Retrieved 2009-07-26.
- "AoA Issues Series: Tariff-Rate Quota Administration". USDA. Retrieved 2009-07-22.
- "Tariff Rate Quotas on U.S. Steel Imports: The Implications on Global Trade and Relative Competitiveness of Industries". Purdue University. Retrieved 2009-07-26.
- This article incorporates public domain material from the Congressional Research Service document "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" by Jasper Womach.