Voluntary Export Restraint - VER

See: Export Restraint - VER.

The neighboring nations of Shmooparoo and West Shmooparoo have always had a great relationship. They trade, they share resources...they even do stuff together on the weekends. But lately, Shmooparoo has been noticing a couple things about West Shmooparoo that it doesn’t like very much. For example, every month, Shmooparoo exports 1,500 high-quality water balloons to West Shmooparoo. And, every month, nearly half of those water balloons are shot back over the border in West Shmooparoo-made water balloon guns, causing much consternation (and many bad hair days) for the Shmooparoans getting beaned.

“This must stop,” said Shmooparoo legislators, and so they imposed a voluntary export restraint, or VER, on their water balloon exports to West Shmooparoo.

A “voluntary export restraint” is basically when a country self-imposes limitations on how much of a good or service it can export. Sometimes, VERs target a specific importer, and sometimes they just cap a country’s exports period, regardless of where they’re going. In this instance, Shmooparoo has decided to implement a VER limiting its water balloon exports to West Shmooparoo to 750 per month. The thought is that the reduced access to the world’s finest water balloons will make West Shmooparoo less likely to use their small stash to make weapons. Plus, limiting specific exports can be a good way for a nation to protect its own domestic industries.

Do VERs work? Yes, sometimes they do, especially if the exporting country is one of the sole producers of that good or service. They’re less effective if the importing country can just turn around and get what they want from somewhere else, but since Shmooparoo is the world’s premiere manufacturer of quality water balloons, they’re hoping it won’t become an issue.