Trade in Natural Resources and the Business Community: What Is at Stake?

(WTO – Adrian van den Hoven, and Anka Schild)

Trade in natural resources (e.g. energy, minerals, plants, animals and forestry) is an important and growing share of world trade; in value terms its share increased by 20% annually in the past ten years. Although the overheated situation on raw materials market of 2008 has disappeared, pressures will mount as economic activity starts up again, but also as a result of an expected 20% increase in the world population by 2025.

Although access to raw materials is crucial for the sound functioning of the world economy, the number of restrictions imposed on the export of natural resources has increased significantly over the past few years. An OECD Workshop on Raw Materials in October 2009 demonstrated that these restrictions distort the global market and have a negative impact on both developed and developing countries. The WTO is well placed to endorse a global response to this issue. It should promote free trade in natural resources by removing existing distortions and developing and administering rules and disciplines in support of open markets.

For industrial consumers, access to raw materials under non-discriminatory and market-based conditions is crucial for their competitiveness. Increasingly however, countries are pursuing strategic policies to secure access to raw material deposits worldwide, while at the same time restricting access to their domestic raw material markets at the expense of raw materials importers. This is for instance the case for highly specialised metals and minerals, such as rare earths, lithium and platinum group metals (platinum, palladium and rhodium). These materials are needed for the development of technologically sophisticated products, which are critical for low-carbon/‘green’ technologies. Read more here.