What are the preferences of foreign apparel exporters regarding trade policies when it comes to the quantity of exported apparels and export prices?
Foreign apparel exporters would prefer a production subsidy to a tariff when considering the quantity of apparel exports and voluntary export restraint to a production subsidy when considering the quantity of exported apparels. They would prefer a tariff to voluntary export restraint when considering export price of apparels.
Preference for Quantity of Apparel Exports
Foreign Apparel Exporters Preference: The preference for a production subsidy over a tariff when considering the quantity of apparel exports is based on the impact each policy has on the cost of production. A production subsidy would decrease the cost of production of apparel goods, making it more attractive for foreign apparel exporters to export more apparels. On the other hand, a tariff would increase the cost of imported goods, which could potentially reduce the quantity of apparel exports.
Preference for Export Prices of Apparels
Foreign Apparel Exporters Preference: When it comes to export prices of apparels, foreign apparel exporters would prefer a tariff to voluntary export restraint. This preference is rooted in the fact that a tariff would increase the price of imported apparels, making domestically produced apparel more competitive in the market. On the other hand, voluntary export restraint would limit the quantity of exported apparels, but not necessarily impact the export prices significantly.
In conclusion, understanding the preferences of foreign apparel exporters on trade policies is crucial for apparel-importing countries looking to expand their domestic production of apparels. By aligning policies with the preferences of foreign apparel exporters, these countries can create a conducive environment for trade that benefits both domestic and foreign apparel businesses.