Some reasons not to negotiate export taxes and restrictions in the WTO NAMA negotiations

This brief examines some of the economic and policy reasons behind the application of export taxes and export restrictions in developing countries, and argues why these policy measures should not be curtailed by current WTO Non-Agricultural Market Access (NAMA) negotiations. The article highlights that export taxes are a common policy instrument in many developing countries for fostering industrialisation, diversifying the economy or raising revenues.

The brief points out that:

• while it is true that export taxes are not always the best policy instrument for all policy objectives of developing countries, targeted export restrictions on primary commodities, for instance, by countries which have market power, could desirable and very effective in implementing development and industrial policies
• generally developing countries may find it useful to defend their policy space or policy discretion regarding policy instruments that are available to them, including export restrictions
• the complete prohibition at the multilateral level of export taxes would constitute an additional policy constraint, which should not be seen in isolation of other constraints, such as the removal of tariffs, the prohibition of certain subsidies and the effects of several other WTO rules being negotiated.

The brief concludes that accepting further restrictions on the use of yet another policy instrument like export taxes, as proposed by the EU and Japan, will certainly not assist developing countries in reducing their economic vulnerability and better integrating their economies to the multilateral trading system.