The Economic Impact of Export Restrictions on Raw Materials

image of The Economic Impact of Export Restrictions on Raw Materials

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.


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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