Export Restrictions on Strategic Raw Materials and Their Impact on Trade

Jane Korinek () and Jeonghoi Kim
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Jeonghoi Kim: OECD

No 95, OECD Trade Policy Papers from OECD Publishing

Abstract: Barriers to trade come in a variety of forms. This paper examines one such barrier, export restrictions, and how it impacts trade and global supply in selected strategic metals and minerals. The metals and minerals examined in the paper are of particular interest for a number of reasons: they are generally geographically concentrated in a few countries, many are used in the production of high-technology goods in strategic sectors and there are few substitutes for these raw materials given the present state of technology. For all these reasons, importing countries are dependent on a reliable supply of these raw materials. Export restrictions may be applied for a number of reasons: protection of the environment, preservation of natural resources, protection of downstream industries, or as a response to a number of different market imperfections. This paper examines the motivations for using export restrictions and finds varying impacts on trade and global supply. In one case, the export restrictions put into place did not fulfill their objective of environmental protection. In another, the presence of export restrictions in one country put pressure on other exporters to apply restrictions suggesting the potential for competitive policy practices in restricting exports. In a third case study, export restrictions were seen to impact investment decisions by potential suppliers worldwide by introducing an added element of risk in the industry. The impact of export restrictions on strategic metals and minerals are exacerbated in many cases because producing countries have a quasi-monopoly on supply. Since these metals and minerals are essential in the production of some high-technology products and are not easily replaceable in the medium term, industry participants in some importing countries are concerned about future access at sustainable prices.

Keywords: Chromite; Chromium; environmental technologies; export duties; export licensing; export quotas; export restrictions; export taxes; geographical concentration; mineral reserves; minerals trade; Molybdenum; natural resource preservation; quantitative restrictions; Rare Earths; raw materials; strategic metals; trade; trade policy; Trade policy instruments; VAT Rebates (search for similar items in EconPapers)
Date: 2010-03-29
New Economics Papers: this item is included in nep-env
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Citations: View citations in EconPapers (23)

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