Recent Trends in Export Restrictions

Abstract

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 business people to address free trade of raw materials. This paper provides information on the present situation regarding the use of export restrictions and international disciplines on these measures. Export restrictions are maintained to achieve diverse policy objectives, including environmental protection or conservation of natural resources, promotion of downstream processing industries, controlling inflationary pressures, and for fiscal receipts reasons. Export restrictions take various forms such as export duties, quantitative restrictions, and licensing requirements. The number of countries applying export duties over the period 2003-2009 was higher than in previous years and that such duties were introduced primarily by developing and least developed countries. Under the current WTO rules, unlike quantitative export restrictions which are in principle prohibited, there is no substantive discipline on export duties, although there have been efforts to revise this at the multilateral and bilateral levels. The WTO accession process imposes several disciplines. Export restrictions have also been discussed during the DDA negotiations in both NAMA (Non-Agricultural Market Access) and agriculture negotiations. Several regional trade agreements (RTAs) went beyond the WTO by including prohibition of export duties. Export restrictions, by creating a differential between the price available to domestic processors and the price charged to foreign processors, provide domestic processing industries with an advantage. Although several governments apply export restrictions to achieve diverse policy objectives, not all rely on such restrictions. Alternative policy options with different trade impacts are used. In view of the significant impacts of export restrictions on global supply chains, transparency on the use and implementation of such measures should be substantially improved.