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Export Restrictions on Strategic Raw Materials and Their Impact on Trade

Author

Listed:
  • Jane Korinek
  • Jeonghoi Kim

    (OECD)

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.

Suggested Citation

  • Jane Korinek & Jeonghoi Kim, 2010. "Export Restrictions on Strategic Raw Materials and Their Impact on Trade," OECD Trade Policy Papers 95, OECD Publishing.
  • Handle: RePEc:oec:traaab:95-en
    as

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    File URL: http://dx.doi.org/10.1787/5kmh8pk441g8-en
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    Citations

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    Cited by:

    1. Pothen, Frank, 2013. "The metal resources (METRO) model: A dynamic partial equilibrium model for metal markets applied to rare earth elements," ZEW Discussion Papers 13-112, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Jolejole-Foreman, Maria Christina & Mallory, Mindy L. & Baylis, Katherine R., 2013. "Impact of Wheat and Rice Export Ban on Indian Market Integration," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150595, Agricultural and Applied Economics Association.
    3. Pierre-Louis Vézina, 2015. "Illegal trade in natural resources: Evidence from missing exports," International Economics, CEPII research center, issue 142, pages 152-160.
    4. Liefert, William M. & Westcott, Paul C. & Wainio, John, 2013. "Modifying Export Taxes and Quotas To Make Them Less Market-Distorting," Working Papers 155284, International Agricultural Trade Research Consortium.
    5. Machacek, Erika & Fold, Niels, 2014. "Alternative value chains for rare earths: The Anglo-deposit developers," Resources Policy, Elsevier, vol. 42(C), pages 53-64.
    6. Nathalie Sick & Matthias Blug & Jens Leker, 2014. "The Influence of Raw Material Prices on the Development of Hydrogen Storage Materials: The Case of Metal Hydrides," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(4), pages 735-760, December.
    7. Charlier, Christophe & Guillou, Sarah, 2014. "Distortion effects of export quota policy: an analysis of the China-Raw Materials dispute," China Economic Review, Elsevier, vol. 31(C), pages 320-338.
    8. Hayes-Labruto, Leslie & Schillebeeckx, Simon J.D. & Workman, Mark & Shah, Nilay, 2013. "Contrasting perspectives on China's rare earths policies: Reframing the debate through a stakeholder lens," Energy Policy, Elsevier, vol. 63(C), pages 55-68.
    9. Holzer, Kateryna & Karapinar, Baris, 2012. "Legal Implications of the Use of Export Taxes in Addressing Carbon Leakage: Competing Border Adjustment Measures," Papers 215, World Trade Institute.
    10. Myers, Rodd, 2015. "What the Indonesian rattan export ban means for domestic and international markets, forests, and the livelihoods of rattan collectors," Forest Policy and Economics, Elsevier, vol. 50(C), pages 210-219.
    11. Han, Aiping & Ge, Jianping & Lei, Yalin, 2015. "An adjustment in regulation policies and its effects on market supply: Game analysis for China’s rare earths," Resources Policy, Elsevier, vol. 46(P2), pages 30-42.
    12. Pothen, Frank & Fink, Kilian, 2015. "A political economy of China's export restrictions on rare earth elements," ZEW Discussion Papers 15-025, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. repec:oxf:wpaper:oxcarre-research-paper-139 is not listed on IDEAS
    14. Bürgi Bonanomi, Elisabeth & Elsig, Manfred & Espa, Ilaria, 2015. "The Commodity Sector and Related Governance Challenges from a Sustainable Development Perspective: The Example of Switzerland Current Research Gaps," Papers 865, World Trade Institute.
    15. Pothen, Frank, 2014. "Dynamic market power in an exhaustible resource industry: The case of rare earth elements," ZEW Discussion Papers 14-005, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.

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