VERS AND EXPECTATIONS - EXTENSIONS AND EVIDENCE

This paper analyses the effects of an expected future voluntary export restraint on the level of firms' current exports to a market. The tra ditional result that current exports increase is shown to depend on th e degree of collusion in the exporting industry and the anticipated re strictiveness of the VER. The former relationship is tested by referen ce to the effect of EC import surveillance on its imports. Surveillanc e is argued to indicate an increased probability of a VER in the futur e, and it is found that while competitive industries respond to it by increasing exports to the EC, less competitive ones curtail exports. T his constitutes one of the few empirical tests of the strategic part o f strategic trade policy.