Tariff-rate quota

In one line: A tariff-rate quota lets a fixed volume of imports enter at a lower tariff, while imports above that volume pay a higher tariff.

How it works

A TRQ is not a ban. It has three parts: the quota volume, the in-quota tariff and the out-of-quota tariff. Once the quota for the period is used up, further imports are still allowed but at the higher rate. Governments use TRQs to open a sensitive market in a controlled way.

In the India-EU deal

India's tariff of up to 110% on EU cars falls to 10% within a quota of 2,50,000 vehicles, with a first-year quota reported at 1,00,000 cars priced above €15,000. In the other direction, India gets a reported annual steel quota of 1.64 million tonnes in the EU. The published FTA texts include an annex on steel TRQs (Annex 2-B).

Where to go next

• Most Favoured Nation treatment
• Carbon Border Adjustment Mechanism