# preferential quota

*Last updated: 2026-06-26*

> A preferential quota defines the volume or value of goods that may be imported at a reduced tariff rate under a trade preference arrangement before the standard Most Favoured Nation (MFN) rate takes over.

A preferential quota defines the volume or value of goods that may be imported at a reduced tariff rate under a trade preference arrangement before the standard Most Favoured Nation (MFN) rate takes over. Once the quota is exhausted, the duty saving disappears entirely, making quota utilisation a direct cost variable for importers. Quotas are expressed in physical units such as tonnes or pieces, or as a monetary threshold, and are allocated through administrative procedures – most commonly on a first-come, first-served basis or according to historical import shares. Importers and exporters therefore plan shipment timing and order volumes carefully to ensure goods are cleared while the quota remains open. Preferential quotas differ from unconditional preferential schemes such as the Generalised System of Preferences (GSP), which grants duty reductions without a fixed quantity ceiling.

**Source:** [https://www.wto.org/english/tratop_e/tariffs_e/tariff_rate_quotas_e.htm](https://www.wto.org/english/tratop_e/tariffs_e/tariff_rate_quotas_e.htm)

## Quick Facts

| Property | Value |
|---|---|
| Term | preferential quota |
| Language | EN |
| Word count | 134 |
| Last updated | 2026-06-26 |
| Source | https://www.wto.org/english/tratop_e/tariffs_e/tariff_rate_quotas_e.htm |

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