OECD Trade Policy Studies

1990-1534 (online)
1990-1542 (print)
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A series of OECD reports on various aspects of trade policy. Recent reports have covered such topics as universal access to basic services offered internationally, the role of non-tariff barriers, and environmental requirements and market access.

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The Economic Impact of Export Restrictions on Raw Materials

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17 Nov 2010
9789264096448 (PDF) ;9789264084285(print)

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Export restrictions on raw materials are applied to achieve a number of policy objectives. However, they can have a significant and negative impact on the efficient allocation of resources, international trade, and the competitiveness and development of industries in both exporting and importing countries.  

By diverting exports to domestic markets, export restrictions raise prices for foreign consumers and importers. At the same time, by reducing domestic prices in the applying countries and increasing global uncertainty concerning future prices, export restrictions negatively affect investment, thus potentially reducing the overall supply of raw materials in the long term. In view of existing alternative policy tools that have a different impact on trade, the effectiveness of export restrictions to achieve stated policy objectives should be carefully reviewed.  

This publication presents a selection of papers discussed at the OECD Workshop on Raw Materials, held in Paris in October 2009. This workshop was organised in response to the growing concern on the use of export restrictions on raw materials, particularly by emerging economies.

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  • Foreword
    The last few years have witnessed a sharp increase in prices for commodities such as minerals, metals and agricultural products. At the same time, export restrictions on raw materials have been used more frequently. This includes several emerging economies which have applied export taxes in response to high prices for agricultural products. Among industrial products, export restrictions on metals and mineral products have been broadly applied by many countries in response to the metals boom, with a view to securing domestic supply and to addressing the problem of resource depletion.
  • Acronyms
  • Executive Summary
    The papers presented here are a selection of those discussed at the OECD Workshop on Raw Materials, held in October 2009. This workshop was organised in response to growing concerns about the use of export restrictions on raw materials.
  • Recent Trends in Export Restrictions on Raw Materials
    Prices for commodities such as minerals and metals have increased significantly over the past few years. At the same time, there has also been an increase in restrictions on the export of raw materials which has led policy makers and the business community to address the free trade of raw materials. This chapter provides information on the present situation regarding the use of export restrictions on raw materials. The chapter then examines the policy objectives of export restrictions and their effectiveness to achieve their stated goal. Finally, current disciplines on restrictions as well as multilateral and bilateral efforts to enhance disciplines are examined.
  • The Economics of Export Taxes in the Context of Food Security
    Rising global food prices during 2006-08 contributed to high food price inflation in many countries with the consequent distributional impact of rising food prices that created serious concern in several countries. In response, several governments applied export taxes to limit exports and thereby increase domestic supplies at low prices. This chapter provides a theoretical and empirical background to better understand the use of export taxes when these are applied towards maintaining food security. The analysis emphasizes the negative impact of such measures on the welfare of trade partners and the effects of non-cooperative trade policies.
  • Export Barriers and the Steel Industry
    A healthy world steel industry depends on the free trade of the raw materials used to make steel. At present, trade in these raw materials is not free, as major producing countries impose a variety of restrictions on exports. These measures distort international competition by providing domestic companies with an advantage. In this way, export restrictions distort not only the world markets for these raw materials, but the broader world markets for steel and products made from steel. This chapter describes the export restrictions that a number of producing countries have imposed on raw materials which are used to produce steel. It aims to identify the impact such restrictions have had on international prices and on the availability of raw materials. Three raw materials are used as the basis for this analysis: iron ore, coke and steel scrap.
  • Export Restrictions on Strategic Raw Materials and Their Impact on Trade and Global Supply
    This chapter examines how export restrictions impact on trade and the global supply of selected strategic metals and minerals. The metals and minerals examined 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. Case studies of export restrictions concerning three raw materials — molybdenum, chromite and rare earths — shed some light on the potential global effects of export restrictions on strategic raw materials.
  • The Economic Impact of Export Restraints on Russian Natural Gas and Raw Timber
    Export restraints by the Russian Federation (Russia) on natural gas and timber have created concerns in European importing countries. The analysis in this chapter focuses on development perspective of export restrictions in that the restrictions are applied to improve the exporter’s terms of trade. The analysis focuses on Russian policies concerning natural gas and timber, which share the dual effect of decreasing domestic prices while increasing export prices.
  • Increasing Demand For and Restricted Supply of Raw Materials
    Metals and minerals account for a relatively small share of world industrial output, but their supply is essential for economic development. As a greater number of countries emerge as strong economic forces on the world stage, the demand for raw materials has been accentuated. Uneven distribution across countries of metals and minerals reserves emphasizes the importance of free trade. This chapter provides the economic context of export restrictions with particular focus on the metal and mineral sector. The chapter also describes the potential role of asset acquisitions in restricting international trade in raw materials. Finally, it proposes three key areas that would benefit from further study.
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