ABSTRACT
This chapter describes and discusses existing systems in ASEAN for allocating rights to export clothing commodities, when exports are restricted by a voluntary export restraint (VER). In a country where exports are restricted-i.e., the export volume is lower than exporters would have wished-the right to export carries a value. There are more complex cases, such as those with imperfect competition and the reader is referred to Corden. The most important of these cases is when the VER creates an output restricting monopoly in the exporting country. In the exporting country there must be some sort of mechanism for allocating among potential exporters the valuable export licences. In principle there are two approaches: the market mechanism with market prices for licences, i.e., auctioning off licences and allowing for an ongoing trade in licences or, on the other hand, an administrative decision-making process with civil servants deciding according to some criteria which determine how large an export quota applicants should receive.
