Strategic Trade Policy, Competition and Welfare: The Case of Voluntary Export Restraints between Britain and Japan (1971–2002)
We evaluate the voluntary export restraint (VER) placed on Japanese automobile exports from 1977 to 1999 by the UK. We show that the policy failed to assist the British domestic car industry. Instead, UK-based US multinationals and Japanese manufacturers were the primary beneficiaries, at a substantial cost to UK consumers. While there are a number of caveats, the policy was on balance damaging to the UK economy in welfare terms.