Critical minerals as an observatory for evolving forms of trade cooperation

The document analyzes the tension between existing WTO trade rules and the needs of countries to secure critical minerals for the energy transition. It argues that current 'critical minerals diplomacy'—characterized by non-binding sectoral partnerships among developed nations—creates power asymmetries and 'selective delegalization' that disadvantage producer economies. The author suggests that the WTO could serve as a more neutral platform for a plurilateral critical minerals initiative or a code of best practices to balance supply-side industrialization goals with demand-side security needs.

• Existing multilateral trade rules, specifically those under the GATT and WTO, often conflict with the industrialization and economic security goals of resource-rich developing countries. This is exemplified by a WTO panel rejecting Indonesia's arguments that export bans and domestic processing requirements for nickel ore were necessary to build a domestic electric vehicle industry.
• Current critical minerals diplomacy is dominated by non-binding sectoral partnerships among developed nations (including the US, EU, Japan, Canada, Australia, and UK). These agreements often use vague language regarding value addition for developing countries, creating a state of 'selective delegalization' where producer economies remain subject to enforceable WTO rules while consumer nations avoid binding commitments.
• Developed countries are using 'serial bilateralism' and 'norm-entrepreneurship' to shape the future of critical minerals cooperation, focusing on demand-side measures like green premiums and standards-based markets to compete with Chinese exports.
• The United States has initiated plurilateral efforts, such as the Forum on Resource Geostrategic Engagement (FORGE) and a proposed trade initiative involving variable tariffs to ensure minimum import prices. While these may secure fair prices for raw commodities, they do not address supply diversification or the industrialization objectives of producer countries.
• The WTO is identified as a potentially neutral and effective platform for critical minerals cooperation due to its 166 members, transparency mechanisms, and experience in monitoring trade flows. A plurilateral initiative or a 'code of best practices' at the WTO could provide technical assistance and allow for time-bound restrictions on local content policies to support industrialization.
• Alternative strategies for resource-rich countries include forming regional groupings—such as in the ASEAN region or among African countries for battery value chains—to increase negotiating power, or establishing a 'minerals trust' to manage trade and ensure fair pricing.

APA

Sasmal, S. (2026). Critical minerals as an observatory for evolving forms of trade cooperation. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/critical-minerals-as-an-observatory-for-evolving-forms-of-trade-cooperation

Chicago

Sasmal, Sunayana. Critical minerals as an observatory for evolving forms of trade cooperation. Forum on Trade, Environment, & the SDGs, 2026. https://tessforum.org/latest/critical-minerals-as-an-observatory-for-evolving-forms-of-trade-cooperation.

Wikipedia

{{cite report |last1=Sasmal |first1=Sunayana |title=Critical minerals as an observatory for evolving forms of trade cooperation |publisher=Forum on Trade, Environment, & the SDGs |date=24 February 2026 |url=https://tessforum.org/latest/critical-minerals-as-an-observatory-for-evolving-forms-of-trade-cooperation |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sasmal2026critical, author = {Sasmal, Sunayana}, title = {{Critical minerals as an observatory for evolving forms of trade cooperation}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2026}, month = feb, url = {https://tessforum.org/latest/critical-minerals-as-an-observatory-for-evolving-forms-of-trade-cooperation}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }