Reforming WTO Discipline on Export Duties: Sovereignty Over Natural Resources, Economic Development and Environmental Protection

The current WTO regime on export restraints comprises two extremes: at one end is the near complete freedom to levy export duties enjoyed by most Members, which renders the WTO discipline on export restrictions largely ineffective; at the other the rigid obligations imposed on several acceding Members prohibiting the use of export duties for any purpose. The recent WTO ruling in China-Raw Materials has only solidified the latter extreme. This article seeks to expose the irrationality of the current regime, especially the problems created by the rigid obligations of the several acceding Members. It contends that such obligations deprive these Members of their ownership right to claim a larger share of their natural resources for domestic use and of an effective tool for managing environmental externalities associated with the resource products exported. The virtual immutability of such obligations is at odds with the principle of permanent sovereignty over natural resources. To rectify these problems, the article proposes integrating all stand-alone export concessions into GATT schedules, which would provide the acceding Members with the policy space and flexibility available under the GATT. It is also submitted that the key to gaining support from developing countries for the establishment of a system-wide discipline lies in the recognition of legitimate functions of export duties. Rather than pushing for their elimination, the WTO should aim to regulate export duties in the same manner as its regulation of import duties.