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International trade in natural resources: Practice and policy

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  • Ruta, Michele
  • Venables, Anthony J.

Abstract

Natural resources account for 20% of world trade, and dominate the exports of many countries. Policy is used to manipulate both international and domestic prices of resources, yet this policy is largely outside the disciplines of the WTO. The instruments used include export taxes, price controls, production quotas, and domestic producer and consumer taxes (equivalent to trade taxes if no domestic production is possible). We review the literature, and argue that the policy equilibrium is inefficient. This inefficiency is exacerbated by market failure in long run contracts for exploration and development of natural resources. Properly coordinated policy reforms offer an avenue to resource exporting and importing countries to overcome these inefficiencies and obtain mutual gains.

Suggested Citation

  • Ruta, Michele & Venables, Anthony J., 2012. "International trade in natural resources: Practice and policy," WTO Staff Working Papers ERSD-2012-07, World Trade Organization (WTO), Economic Research and Statistics Division.
  • Handle: RePEc:zbw:wtowps:ersd201207
    DOI: 10.30875/5717c8f8-en
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    More about this item

    Keywords

    natural resources; trade; export tax; tariff escalation; OPEC; WTO; terms of trade;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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