When is a voluntary export restriction most commonly used?

A voluntary export restriction is most commonly used to maintain market share in the importing country. This trade policy allows exporting countries to limit the quantity of goods sent to a specific market. By doing so, they can mitigate potential market saturation that might undermine prices or harm local industries in the importing country.

When an exporter voluntarily agrees to restrict exports, they can maintain higher prices and protect their market position. This strategy is often a response to competitive pressures where exporters want to ensure they do not lose market share to domestic producers or other international competitors.

In contrast, preventing excess imports would typically involve tariffs or quotas rather than a voluntary restriction by exporting countries. Lowering export prices does not align with the purpose of a voluntary export restriction, since the aim is often to keep prices stable. Tax collection purposes are usually handled through customs duties rather than relying on voluntary trade restrictions.