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The Difference Explained: Part 2

Quota vs. duty
The words quota and duty are thrown around a lot when we’re talking about a country’s trade, economy and GDP – and the two are related in that they serve to control the impact on a country of importing goods.
…but let’s delve a little deeper.
A quota is a trade policy tool used to protect a domestic industry from competition from imports. Quotas limit the amount or volume of a commodity that can be imported into a country during a specified time period, and Questions_38606954_scan come in two varieties.
  • Absolute quotas set a strict limit on the quantity of a good that may enter a country in a specific period (for example, over one year). Once the quota amount has been reached, no one may import that commodity for the remainder of the designated time period.

  • Tariff-rate quotas permit a specified quantity of a good to be imported at a reduced rate of duty during a specified time period. Once the tariff-rate quota limit is reached, goods may still be imported, but will be subject to a higher rate of duty.

In Canada, most meat, dairy and cereal products are subject to tariff rate quotas.
Duty is a form of tax collected on imports (and sometimes exports) by the customs authority of a country. The amount of duty is usually based on the value of the imported goods – but as explained above, can also vary based on factors such as quotas, timing, quantity, country of origin and so on.
Depending on the context, duty may also be referred to as customs duty, tariff, import tax and import tariff.
(See our related blog comparing duty and tariff
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