Posted on 06/11/2014 in category Legislation

BIR voices its export restriction concerns at major OECD conference

The growing global demand for primary and secondary raw materials has led to an increase in export restrictions on those raw materials. Indeed, up to one-third of World Trade Organization (WTO) members have restrictions in place, it emerges in a new OECD publication entitled “Export Restrictions in Raw Materials Trade: Facts, fallacies and better practices” (login details will be required).

Of interest to those BIR members concerned with export restrictions, the OECD book has chapters covering the following areas: recent developments in the use of export restrictions in raw materials trade; economics of export restrictions as applied to industrial raw materials; effects of removing export taxes on steel and steel-related raw materials; disciplines on export restrictions in regional trade agreements; increasing the transparency of export restrictions; and mineral resource policies for growth and development.
 
The publication was launched during the early-November OECD Conference on Trade in Raw Materials, held in Paris and attended by the following: Australia, Canada, Chile, the Czech Republic, France, Germany, Hungary, Israel, Italy, Japan, Mexico, New Zealand, Portugal, South Korea, Spain, Sweden, Switzerland, Turkey, the UK, the USA and the EU. Also present were Colombia, the Russian Federation, Brazil, India, China, Argentina, Chinese Taipei, Lao People’s Democratic Republic, Mongolia, Mozambique, Peru, the Philippines and Thailand.

Governments give many reasons for imposing such export restrictions, including: to increase their tax revenues; to support domestic industries’ “value added”; to stabilise prices; to improve income redistribution; and to protect resources and the environment. This increased use of export restrictions on raw materials over the last decade has forced other governments and stakeholders to look closely at their raw materials supply in order to determine the adverse effects of export restrictions and to propose alternative policies to governments, as well as to seek greater controls on the use of such restrictions.

Among those stakeholders to speak at the conference, BIR Environmental & Technical Director Ross Bartley explained the key concerns of the scrap community, encompassing scrap collectors, sorters and processors. In contrast to mineral resources that other speakers explained were owned by countries, Mr Bartley pointed out that scrap was commonly owned by companies (in the case of new scrap) or individuals (in the case of post-consumer scrap). He used an example from South Africa to show that the intention when placing export restrictions on waste and scrap was to provide downstream industries such as metal works with cheap infeed. He also explained the harm inflicted on environmental policies by export restrictions on processed scrap.
 
Those attending the conference heard arguments for and against export restrictions, including alternatives to them. One expert observed that, while the WTO rule book provides a framework for dealing with raw materials, regional trade agreements, WTO+ and WTO- can address restrictions directly. Others observed that more immediate benefits would come from a strengthened co-operation between governments.

A number of intergovernmental bodies explained that they host multi-stakeholder platforms to identify and collate information on export restrictions. One also promotes a new commodity trading architecture in which all participants could receive equitable value, while another proposed to bring transparency to pricing and improve policy co-ordination so as to move away from export restrictions to solve price fluctuations.

BIR believes dissuading governments from imposing or keeping their export restrictions on waste and scrap may take some time if direct economic pressure is not applied by their trading partners.