What is a voluntary export restraint?

A voluntary export restraint is best understood as an agreement made by an exporting country to limit the quantity of goods exported to another country, typically to avoid more severe trade barriers such as tariffs or quotas that could be imposed by the importing nation. This practice helps to maintain market stability and avoid tensions that can arise from an overwhelming influx of imports.

Such agreements are often a way for exporting countries to maintain a favorable trading relationship without facing punitive measures. By voluntarily restraining exports, the exporting nation can ensure that its goods do not saturate the market of the importing country, which could lead to price drops and economic challenges for domestic producers.

While other options touch upon various trade concepts, they do not accurately capture the essence of what a voluntary export restraint entails.