Final answer:
An import quota protects domestic industries by imposing numerical limitations on imported goods, such as automobiles and textiles, thereby helping these industries to retain a certain percentage of their domestic market.
D. will pay lower taxes than their foreign counterparts
Step-by-step explanation:
An import quota is a trade policy tool that countries use to control the volume of goods coming into their markets from abroad. By imposing numerical limitations on the quantity of products a nation can import, import quotas aim to protect domestic industries. For example, in the 1970s and 1980s, developed countries including the United States faced challenges in their textile and automotive industries due to competition from lower-cost production in developing countries. Import quotas were established for products like Japanese automobiles and textiles under international agreements such as the Multifiber Agreement to help these domestic industries retain a certain percentage of their domestic market.
The primary goal of an import quota is not to provide access to experts for dispute resolution, enhance free trade access, or lower taxes for domestic industries compared to their foreign counterparts. Rather, it is to ensure that domestic producers maintain a market share in the face of international competition. This is done partially to save jobs and prevent the local industry from being undercut by cheaper imports, which could happen if, for instance, foreign governments subsidized their exports, leading to increased imports and creating an unbalanced competition. The imposition of import quotas and tariffs by the United States, as overseen by the Department of Commerce and the International Trade Commission, illustrates how trade policies can be utilized to safeguard the interests of domestic industries.