Securing Access to Critical Raw Materials: What Role for the WTO in Tackling Export Restrictions? Four Proposals for a Transatlantic Agenda
Export restrictions (foremost tariffs and quotas) on critical raw materials are on the rise. Both United States Trade Representative Ron Kirk and his European colleague, EU Trade Commissioner Karel de Gucht, therefore welcomed the World Trade Organization (WTO) dispute settlement panel’s finding on “China — Measures Related to the Exportation of Various Raw Materials” earlier this year. But how well is the WTO really equipped to discipline the use of export barriers to trade — in particular in the light of an increasing number of such measures? And what options do the United States and the European Union have to address limitations in WTO rules? After a short introduction of U.S. and EU critical material strategies and the role of trade policy instruments therein, this paper will give a brief overview of WTO rules on export restrictions and their limitations before turning to the dispute over Chinese export restrictions on certain raw materials. The last section will outline a four-track approach for the transatlantic partners to address the aforementioned challenges.
The paper proposes the following: First, the United States and EU should join forces in lobbying for a revision of WTO rules on export restriction. Second, the transatlantic partners should push for rules on export restriction within their current negotiations on free trade agreements, while agreeing on a common legal language for these rules. Third, the United States and the EU need to keep in mind that trade policy alone will not suffice to address the issue. Thus, they should step up assistance to poorer countries in their efforts to reform public finance and design sustainable mineral policies in order to reduce the incentive for erecting trade barriers. And fourth, the transatlantic partners should join efforts in designing comprehensive resource strategies in which trade policy is an important but certainly not the only instrument to secure the supply of critical materials. One forum to coordinate and further a transatlantic agenda on critical raw materials is the Transatlantic Innovation Action Partnership under the Transatlantic Economic Council (TEC). At the last meeting of the TEC in Washington D.C. on November 28, 2011, the United States and the EU restated their commitment to working together on trade policies to ensure access to critical raw materials. This is a good start. Now concrete actions must follow.