Critical minerals as an observatory for evolving forms of trade cooperation

This research paper examines the evolving landscape of critical minerals diplomacy, arguing that current multilateral trade rules are insufficient to balance the economic security needs of consuming nations with the industrialization goals of resource-rich developing countries. The author analyzes the rise of non-binding sectoral partnerships and plurilateral initiatives led by developed nations, warning that these may reinforce power asymmetries. The paper proposes utilizing the World Trade Organization (WTO) or regional groupings as more neutral platforms to establish a rules-based system that supports sustainable sourcing and domestic value addition in producer economies.

• Critical minerals are essential for energy transition, technology, and defense, leading to a divide in priorities: resource-hungry economies (such as the US, EU, Japan, South Korea, and UK) focus on supply chain resilience and national security to counter perceived Chinese weaponization, while resource-rich developing countries in Asia, Africa, and South America seek fair prices and domestic industrialization to end primary commodity dependence.
• Existing World Trade Organization (WTO) rules often conflict with the development goals of resource-rich nations. For example, a WTO panel rejected Indonesia's use of export bans and domestic processing requirements for nickel ore, ruling that these measures violated prohibitions on export restrictions and did not meet enumerated policy objectives.
• Current critical minerals diplomacy is characterized by a proliferation of non-binding sectoral partnerships and Memoranda of Understanding among developed nations (including the US, EU, Japan, Canada, Australia, and UK). These instruments often lack enforceability and use vague language regarding value addition for developing countries, creating a 'selective delegalization' that favors consumer nations.
• Developed countries are using 'serial bilateralism' and network effects to establish new norms and demand-side measures, such as green premiums and standards-based markets, to compete with cheap Chinese exports and coordinate against third-country practices.
• The United States has initiated several plurilateral efforts, including the Forum on Resource Geostrategic Engagement (FORGE) and a proposed trade initiative involving variable tariffs to ensure minimum import prices. Other proposed measures in a US-EU-Japan trilateral context include border-adjusted price floors, price gap subsidies, and offtake-agreements.
• The author suggests that the WTO could serve as a neutral platform for critical minerals cooperation due to its 166 members, transparency mechanisms, and experience in monitoring trade flows. A potential WTO-based plurilateral initiative could include a 'code of best practices' for technical assistance, geological mapping, and time-bound restrictions to support industrialization.
• Beyond the WTO, the paper identifies alternative cooperation strategies for producer countries, including binding agreements on sustainability, regional groupings (such as ASEAN or African battery value chain cooperation) to increase negotiating power, and the creation of a 'minerals trust' to manage trade and ensure fair prices.

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} }