Ensuring adequate supplies of raw materials – from agricultural commodities to metals, minerals, wood and rubber – is becoming an increasingly fraught issue in international trade. One recent flashpoint over rare earth metals, the little-known elements that are crucial for many hi-tech products, from mobile phones to wind turbines, has exposed Europe’s dependency on its trading partners. China, where 97% of the world’s supply of rare earths are located, caused alarm last year when it announced that it was restricting exports of these metals. According to recent reports, these quotas are likely to continue into the second half of 2011.
Rare earths are just one instance of the difficulties in getting access to raw materials. According to the Organisation for Economic Co-operation and Development, restrictions on raw material exports have grown significantly in recent years, affecting timber from Russia and chromite (used in chrome platings and pigments) from India. Agricultural commodities have also been restricted: during the food-price crisis of 2007-08, more than 40 countries imposed export restrictions.
The European Union is increasingly worried about these trends. In early 2011, the European Commission published a strategy paper outlining how Europe could strengthen its access to minerals, metals, wood and rubber, as well as smoothing out volatility in agricultural commodity prices. One proposal is that countries deemed to be applying unjustified trade restrictions would be excluded from preferential access to the EU market under the General System of Preferences trading arrangements. The Commission also wants to ensure that raw materials are part of any bilateral trade talks.
Critics contend that the EU is too focused on finding new raw materials rather than recycling existing ones or cutting back on resource use altogether. The EU fails to address the problem of rising resource use, concluded a recent paper by Friends of the Earth – a critique echoed by Green MEPs.
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