Export restrictions and local content quotas in the mining sector are more likely to hamper than spark economic growth in developing countries, according to the Organization for Economic Co-operation and Development.
Jane Korinek, economist and trade policy analyst at the OECD presented findings from a study of 10 resource rich countries with various levels of export regulations, from outright bans on exports such as in Indonesia, to export quotas in place in countries like China, and export taxes as seen in Russia and Argentina.
“There was virtually no benefit and in some cases there were negative impacts,” on economic growth, Korinek said on a panel Wednesday, the final day of the Prospectors and Developers Association of Canada convention.
“In order to invest in a country long term, investors must be able to export the minerals they extract.”
Questions about export taxes and varying levels of tariffs and anti-trade policies have surfaced at this week’s PDAC convention amid an era of what many speakers characterized as “de-globalization” led by developments in advanced countries such as the election of U.S. President Donald Trump, who has taken a stance against free trade agreements and is considering raising tariffs, and Britain’s decision to exit the European Union.
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