How National Considerations Are Re-shaping Critical Mineral Export Policies In The Face Of Constant WTO Rules

Introduction

Critical minerals including lithium, cobalt, nickel, and rare earth elements like Lanthanum, Cerium, Praseodymium, Neodymium are indispensable for clean-energy technologies, defence manufacturing, semi-conductors, telecommunications and advanced industrial systems. As global demand accelerates for such critical minerals, supply-chain vulnerabilities have emerged due to geographic concentration of extraction and processing. This has sharpened policy tensions between resource-rich producer countries focused on retaining materials for domestic beneficiation and consumer countries seeking secured market access. Export restrictions have re-emerged as strategic policy tool, justified by governments on grounds of conservation, environmental protection, or national security.

While the geopolitical considerations increasingly govern the trade in critical minerals, the WTO legal framework governing export controls has remained largely unchanged, anchored around the General Agreement on Tariffs and Trade 1994 ('GATT') Article XI, which prohibits quantitative export restrictions subject to limited exceptions under Article XI: 2(a). The general exception under Article XX (g) on conservation of exhaustible natural resources and national security exception under Article XXI permit countries to derogate from the WTO obligations, these provisions themselves cast boundaries for permissible restrictions. These WTO provisions continue to govern the field of export controls, quotas, licensing regimes, and technology-related restrictions adopted by any WTO member. Against this backdrop, this article examines how contemporary national policies in the critical-minerals sector interact with these enduring trade rules.

Country specific approaches to critical minerals

The global economics of critical minerals today are shaped by resource-rich countries and critical mineral producing nations such as the People's Republic of China ('China'), Democratic Republic of the Congo ('DRC'), Indonesia, Namibia, Zambia, Bolivia and Chile on one hand, and the import dependent economies, including the European Union (EU), the United States (US), Japan, and India on the other hand. The latter countries' dependence on these critical minerals is steadily increasing as investments expand across green-industrial, defence, electronics and high-technology sectors.

The interface between the producer and consumer countries, mediated through export controls, industrial policy, supply-chain agreements and strategic diplomacy, now plays a defining role in critical-mineral governance.

1. China

With over 90% control over the world's production and processing of critical minerals and related technologies, China has adopted a comprehensive export-control regime extending licenses and export controls to minerals such as gallium, germanium, antimony and other rare earth elements and related refining technologies and equipment. Measures increasingly target not only raw materials but also processing capabilities, reinforcing China's strategic position in global value chains. China continues to use these export restrictions as a negotiating tool to secure its supply chains for electronic chips and gain more market access for its manufactured products.

2. European Union (EU)

The EU avoids export prohibitions and instead pursues supply chain security through domestic capacity building, recycling initiatives and regulatory alignment. Instruments like the Critical Raw Materials Act and G7 'de-risking' strategy emphasize diversification of supply chain as opposed to implementing trade restrictions.

3. United States of America (US)

The US has relied primarily on tariffs and technology export controls complemented by restrictions on advanced semiconductor equipment and entity listings. Strategic trade agreements, such as the U.S.-Japan Critical Minerals Agreement, aim to strengthen allied supply chains.

4. India

Being endowed with one of the largest reserves of critical minerals, India has adopted a domestic capacity building strategy, identifying 30 critical minerals and launching National Critical Minerals Mission to coordinate strategies across exploration, processing and recycling. Instruments such as Khanij Bidesh India Ltd. (KABIL) and participation in the Minerals Security Partnership (MSP) are aimed at overseas acquisition and securing supply arrangements. Initiatives like India and Australia Critical Minerals Investment Partnership expand access to upstream resources. The 2023 amendments to the Mines and Minerals (Development and Regulation) Act, 1957, together with enhanced Geological Survey of India (GSI) exploration programmes, aim to unlock new reserves and attract private investments in critical minerals to achieve self-sufficiency, reduce import dependence and promote national security objectives.

5. Africa and Latin America (DRC, Namibia, Zambia, Bolivia, Chile)

In resource-rich countries across Africa and Latin America, including the DRC, Namibia, Zambia, Bolivia and Chile, there is a discernible resurgence of export-restriction-based beneficiation strategies. Governments increasingly rely on export bans, levies, quotas or stringent permit requirements on unprocessed or semi-processed ore, with the stated objective of capturing greater value addition domestically. However, their effectiveness remains constrained by infrastructural deficits, investment uncertainty, and limited refining capacities.

The WTO perspective

1. GATT Article XI: The General Prohibition on Quantitative Restrictions

The foundational rule disciplining export restrictions in the multilateral trading system is found in GATT under Article XI.1, which stipulates that:

'No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.'

Article XI.1 thus prohibits export bans, quotas, licensing requirements, or any measure that effectively restricts or conditions exports regardless of whether the restriction is de jure (under law) or de facto (in practice). Further, GATT also provides a narrow carve-out in Article XI.2(a), which allows temporary export prohibitions or restrictions to prevent critical shortages of food or other essential products. The same has been reproduced below for ready reference:

'2. The provisions of paragraph 1 of this Article shall not extend to the following:

(a) Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party;'

2. Article XX: General Exceptions and their limits

In addition to the obligation under Article XI, GATT provides general exceptions under Article XX ('general exceptions'). A Member may invoke these exceptions including Article XX(g), which allows measures 'relating to the conservation of exhaustible natural resources' provided that the measures are 'made effective in conjunction with restrictions on domestic production or consumption' and comply with the chapeau (i.e., are not arbitrary or discriminatory or a disguised restriction on trade).

Draw-outs from previous WTO disputes involving export restrictions on critical minerals

To assess how the abovementioned legal framework fares in practice, it is instructive to examine some WTO disputes, namely, China - Raw Materials (DS394/395/398, 2012), China - Rare Earths, Tungsten and Molybdenum (DS432, 2014) and Indonesia - Raw Materials (DS592, 2022).

1. China - Raw Materials (DS394/395/398)¹

In China - Raw Materials, both the Panel and the Appellate Body held that China's export quota on refractory-grade bauxite did not satisfy Article XI:2(a), which allows export restrictions only when they are temporarily applied to prevent or relieve a critical shortage of an essential product. Although the Panel accepted that bauxite was essential, it found no evidence of a 'critical' shortage and concluded that a measure maintained for over a decade without a clear endpoint could not be regarded as temporary. Further, China's defence under Article XX(g) was also rejected because the Panel found that the quota neither related to conservation nor was 'made effective in conjunction with' domestic restrictions. In the Panel's view, Article XX(g) required that an export measure (i) operate jointly with domestic production or consumption restrictions and (ii) be aimed at ensuring their effectiveness. China's quota failed this test, as it did not operate alongside any genuine domestic restrictions.

2. China - Rare Earths, Tungsten and Molybdenum (DS432)²

In China - Rare Earths, Tungsten, and Molybdenum, the Panel found that China's export quotas and licensing measures were inconsistent with Article XI:1 of the GATT 1994, as they imposed quantitative restrictions beyond duties, taxes, or other charges, in breach of China's WTO commitments under its Accession Protocol. China invoked Article XX(g) to justify the measures on the basis of conserving exhaustible natural resources, but the Panel rejected this defence, finding that the record did not show that the measures (i) 'relate to the conservation of exhaustible natural resources,' meaning there was no close and genuine connection to conservation objectives, or (ii) were 'made effective in conjunction with restrictions on domestic production or consumption.' Instead, the Panel concluded that the measures were designed to direct supply to domestic downstream industry. On appeal, the Appellate Body affirmed the Panel's findings, confirming that the export quotas could not benefit from the Article XX(g) exception.

3. Indonesia - Raw Materials (DS592, 2022)³

In Indonesia - Raw Materials, the Panel found that Indonesia's export ban and Domestic Processing Requirement (DPR) on nickel ore were inconsistent with Article XI:1 of the GATT 1994, as both measures constituted prohibitions or restrictions on the sale or export of nickel ore beyond duties, taxes, or other charges.

With respect to Article XI:2(a), Indonesia failed to demonstrate that the measures were temporarily applied to prevent or relieve a critical shortage of an essential product. Low-grade nickel ore was not shown to be essential, and high-grade ore was not in critically short supply, with projected future demand too speculative to meet the 'imminent critical shortage' requirement. Furthermore, the export ban and DPR had been in place for seven to nine years with no defined endpoint, meaning the measures were not temporary.

Conclusion

The critical minerals policies today are at the intersection of industrial strategy, national security and geopolitical competition. The national approaches and policy measures like China's export controls, U.S. tariffs, EU's regulatory diversification, and India's domestic capacity building are today shaping geopolitics around critical minerals. Yet, the WTO disciplines under Articles XI on quantitative restrictions and Article XX on general exceptions have been constant.

The WTO law permits legitimate quantitative restrictions built around conservation of natural resources and jurisprudence confirms that such exceptions demand strict evidence, proportionality and non-discriminatory domestic regulations. The core challenge for policymakers today is to secure adequate supplies of critical minerals and maintaining supply-chain resilience for critical industries with national security objectives. In achieving these country specific objectives, the rules-based WTO framework that promotes global trade predictability has visibly taken a backseat. As countries take efforts to promote domestic production and negotiate for securing the supplies of critical minerals, it needs to be seen whether building resilient critical-mineral supply chains without undermining the integrity of the WTO's multilateral trading system can be achieved in times to come.

Footnotes

1. Appellate Body Reports, China – Raw Materials (2012).

2. Appellate Body Reports, China – Rare Earths (2014)

3. Panel Report, Indonesia – Raw Materials (2022).

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