WTO seeks more cooperation in natural resource trade
posted by AJOT | Jul 27 2010 at 08:00 PM | International Trade
Exhaustable Resources
WTO rules allow countries to restrict exports of natural resources to preserve an exhaustible resource. Zhao Hong, a diplomat at China's mission to the WTO, said at the launch of the report in Geneva that WTO members had inalienable rights to the resources on their territory, while WTO rules allowed them to pursue goals such as environmental protection or sustainable development. The United States, European Union and Mexico have complained to the WTO about China's restrictions on raw materials, and the WTO itself has questioned whether these are effective. Such restrictions, as well as measures by importing countries, are open to legal challenge, said Joost Pauwelyn, professor of international law at Geneva's Graduate Institute for International Studies. It was an "urban myth" that natural resources are not covered by the WTO, he said at the launch. For instance a country could not claim to use export restrictions to preserve resources if it did not restrict domestic consumption. Similarly production restrictions by a country that exports almost its entire output of a natural resource could be challenged as an export restraint, while consumption taxes on a country that relies on imports for a product could be seen as tariff open to challenge. Still, trade in natural resources is not the same as other products, as it raises environmental issues and competition is limited as production cannot be switched to other locations. "Natural resources and energy are unevenly distributed between countries as well as fixed. BP will confirm this: you cannot move an oil well," Pauwelyn said. Pauwelyn said he could envisage negotiations where exporters agreed to curb their export restraints in exchange for importers limiting carbon tariffs. The report shows that non-WTO member Russia was the biggest exporter of natural resources in 2008, with a value of $341 billion, while the United States is the biggest importer, taking in $583 billion. (Reuters)