Restraint on trade:

Following the principle of open and free competition, the WTO rules prohibit governments  from  imposing any form of restriction on  import or export of goods. (Article XI of the GATT 1994).

Restraint on export is permissible only as a temporary measure applied to prevent or  relieve critical shortages  of food or other essential products. Export duty can also be imposed by government. Such  duty  is  imposed  when government wants to have a general curb on the export of some products, for example, critical industrial raw materials, or when government wants to take away a part of profit from the export of a product.

Restraint on import  is generally allowed only in the form of tariff,  i.e., the customs duty,  imposed at  the time of  import. Any other  form of import restraint, for example by stopping the import of a product or by limiting the import quantity of a product  (Quantitative Restriction, QR  for short)  is prohibited except under very special contingencies or as exceptions, as will be explained later. First, let us understand the disciplines on tariff in some detail as it forms an important part of government trade policy.