The impact of export restrictions on raw materials on trade and global supply

Export restrictions on raw materials accentuate the challenge of supplying raw materials in a world market context of sharply rising commodity prices. The economic effects of export restrictions are overwhelmingly negative. By diverting exports to domestic markets, export restrictions raise prices for foreign consumers and importers while increasing global uncertainty and negatively affecting investment in extraction and production. Timely and accurate information about government policy is a necessary condition for predictability of supply and risk management in production. This paper presents preliminary findings from an ongoing OECD initiative attempts to contribute to improved transparency by constructing an inventory of export restrictions on critical raw materials.