To determine which option would have a similar effect on the quantity imported and the price paid for Canadian steel by Japanese producers, we should analyze the effects of each option:
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Japan implements a voluntary export restraint on Japanese steel.
- A voluntary export restraint (VER) would limit the amount of Japanese steel exported to other countries but would not directly affect the import of Canadian steel. Therefore, it would not have a similar effect on Canadian steel imports or prices.
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Japan implements an import quota on Canadian steel.
- An import quota would directly limit the quantity of Canadian steel that can be imported into Japan. This would reduce the supply of Canadian steel in the Japanese market, likely increasing the price paid by Japanese producers, which aligns with the reduction of exports from Canada. This option has a similar effect.
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Canada implements an export subsidy on Canadian steel.
- An export subsidy would lower the effective price of Canadian steel for foreign buyers, including Japan. This would likely increase the quantity of Canadian steel imported by Japan, not reduce it, making this option not similar in effect.
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Canada implements a tariff on Japanese steel.
- A tariff on Japanese steel would increase the price of Japanese steel in Canada, potentially leading to a shift towards more Canadian steel in Japan. This would likely not replicate the effects of Canada reducing its own exports.
Based on this analysis, the correct choice that has a similar effect on the quantity imported and the price paid for Canadian steel by Japanese producers is:
Japan implements an import quota on Canadian steel.