Tariff-Rate Quota (TRQ) as a Trade Policy Instrument
A tariff-rate quota is a two-tier import mechanism that applies a lower "in-quota" tariff to a fixed volume of imports and a higher "out-of-quota" tariff beyond that volume, without imposing an absolute cap on quantity. TRQs became widespread after the WTO's Uruguay Round Agreement on Agriculture (1995), which required converting non-tariff barriers into tariff-based systems while preserving minimum market access.
- Under the new US regime, Bangladesh, Indonesia, Cambodia, and Malaysia received TRQ relief allowing specified volumes of textile and apparel exports made with US-origin cotton and fibre to enter at reduced or preferential rates
- India was not extended this TRQ carve-out, so Indian textile and apparel exports face the full 10% forced-labour tariff on all volumes, with no preferential quota tier
- TRQs are commonly used in agriculture and textiles/apparel, sectors where importing countries seek to balance market access commitments against domestic-industry protection
● Tracked since July 20, 2026 · last seen August 20, 2026 · updates as the daily brief publishes
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