Raw material in international trade

Raw material in international trade

Raw material in international trade

Other primary materials 

This group of products includes the world’s most valuable trade –

energy products like oil, gas, electricity and coal. It also includes

mineral ores and timber. These products are highly traded because

their availability is unevenly distributed around the world and they

are very important in the manufacture of high demand products.

We use huge amounts of energy. Computers, other information

technology products, automobiles and aircraft use small but

critically important amounts of various precious metals. Steel and

aluminium products are deeply embedded in our everyday lives.

44 OECD Insights: International Trade

A distinguishing characteristic of this group of products is the

level of import protection they face. Exporters of mineral products

face very low and very often zero tariffs in importing countries. In

many cases the total supply to a country is provided by imports

so there is no import-competing industry to lobby for tariffs.

Furthermore, the price of these products has pervasive effects on

the cost structure of importing countries, including on the cost

of living. In a sense, they are too important to tax at the border.

However, there is concern that some industries assume they will

have reliable supplies of strategic minerals and metals that may

be found in only a few countries, such as the columbite-tantalite

(coltan) used in electronic products.