Critical Minerals in Trade: Policy Choices and Pathways for Sustainable Growth

The question of critical minerals has emerged as a hot topic in modern trade policy

Amar Breckenridge: Hello everyone, and welcome to this edition of the Trade Knowledge Matters podcast, our, regular podcast on all things connected to trade policy. And in this episode we will look at the question of critical minerals, which has emerged as one of the heated areas of modern trade policy. Now, what are critical minerals? Well, critical minerals are commodities, usually chemical elements that are found in naturally occurring deposits and which, once they are processed, play a crucial function in modern industrial and economic applications. Now, there is no single definition of what constitutes a critical mineral. And that’s partly because the notion of criticality is contingent on the economic structure of a country concerned and its perception of risk. The United States, for example, has identified 50 critical minerals, while the EU’s Critical Minerals act identifies 34. That’s up from 14 in 2011. India has identified 30, China has identified 26 and the UK has identified 18. The ones that are most likely to recur on list are the likes of chromium, cobalt, copper, graphite, lithium, manganese, nickel, platinum, silicon and zinc, and a cluster of 17 elements known collectively as rare earths. Now, several factors have made critical minerals a, ah, hot topic in trade and economic policy and has led trade nerds to reacquaint themselves with the periodic table of elements they might have studied at chemistry in school. So the first of these factors is the importance of critical minerals in key aspects of modern economic activity. They play a vital role in low carbon technologies. But the most visible and well known aspect of this being batteries for energy transport, energy storage and transport functions. critical minerals are also very important digital infrastructure and equipment. The second factor is that many of these industrial applications have multiple functions, civil, economic and military. And that makes access to critical minerals all the more important. That brings me to the third factor, which is that the distribution of these resources and to the location of their processing is geographically concentrated. China, for example, holds dominant positions in the refining of cobalt copper, lithium nickel and rare earths, even though of this list its dominant position in terms of resource deposits is in rare earths. now this pattern of concentration has raised worries about exposure to geopolitical effects and security of access. A, fourth factor, and perhaps the most important one and the most neglected one in current discourse, is that the demand for minerals creates significant opportunity and challenges for developing countries where many of these resources are found. And the opportunities for developing countries comes from the effects demand growth can have on the terms of trade and through that on their real incomes. The challenges come in various forms. How do developing countries move up the value chain and deal with commodity price, volatility and how do developing countries ensure diversification in order to avoid the resource curse? The economic finding that in the long run, countries that tend to be rich in resources also tend to suffer a growth penalty linked to the quality of their institutions. I’ve also been a long standing source of conflict in certain parts of the world and the most visible example of that these days is in the Democratic Republic of Congo. And finally, while critical minerals are important to clean technology transitions, they also raise multiple environmental and sustainable issues all along their value chains. So there are a number of complex and interacting questions and in order to address these, I’m delighted to welcome to our podcast, two eminent experts in the area to, help us navigate through the issues. Kimberly Botwright is the head of Sustainable Trade at the World Economic Forum and has been working on these issues for several years. Prior to joining the World Trade Economic Forum, she worked for the International Centre for Trade and Sustainable Development and the Organization for Economic Cooperation and Development. Also joining me in this podcast is Sunayana Sasmal. And Sunayana is a Research Fellow in International Trade Law at the UK Trade Policy Observatory at the University of Sussex and she focuses the research on the interlinkages of trade and investment law and policy with climate action and sustainability. And prior to being at the UKTPO, she’s also worked with the WTO, the World bank, the Columbia Centre for Sustainable Development, Tulip Consulting and the Centre for WTO Studies with the Government of India. Kimberly, Sunayana, welcome to this podcast.

Kimberly, Sunayana discuss the critical minerals challenge

To kick things off, let’s start by looking at two aspects of the critical minerals challenge. On one hand you have countries, mainly industrialized ones, want security of access. And on the other hand you have resource rich countries that want to move up the value chain. So a potential win win approach could therefore be to find a way of restructuring value chains to ensure that processing is more widely distributed. That helps developing countries move up the value chain and it also helps resource hungry countries to reduce exposure to supply shocks. What might be some of the instruments that can be used to achieve this and the challenges that we face in implementing these. I might start with you Kimberly, to kick things off.

Kimberley Botwright: Thanks. So I think in part of what you highlighted and I think what’s really key right now with global metals markets is the concentration of processing capacity. So we often talk about, and I think the discussion is on either the very upstream of the value chain, the pulling the metal out of the ground, or the downstream, which is then often completely different sectors, so ev, solar, et cetera. But where a lot of the geopolitical tension sits and where really the big need is for diversification around processing. And so if I was, a developing country looking to make the most out of my raw materials, I would think that a lot of investment facilitation efforts, and that’s connecting through to the investment promotion agency, needs to be concentrated on what, what is it going to take to improve processing within my economy? so that, that would be my opening, thought. But I would love to hear from Sunayana as well because she’ll probably go then into more detail, particular on some trade policies around this space. Thank you.

Amar Breckenridge: Sunayana.

Sunayana: Export bans can be relatively blunt as an instrument

Sunayana Sasmal: Hi. Thank you. Thank you so much for having me and for inviting me here. Yes, I wanted to get into the trade policy aspect of this, which is what are the tools that are available to countries both from an access perspective and from a down-streaming perspective. So from an access perspective, you actually have the rules that are based on free market principles that ensure that you can get access if you want them. And if you want to challenge any kind of restrictions that have been put in place. Now from a resource rich country perspective, if you want to ensure that you move down the value chain and ensure that you have down-streaming at home, you often impose different kinds of restrictions which have to do with restrictions on your exports. So these could be very blunt instruments like export bans, which we saw happening in the case of Indonesia’s nickel industry. These could also take the shape of licensing requirements which are on the rise for the OECD report last year, and also export taxes. We can get into, the legality of all of this, but these are a number of policy tools that countries often use. Some are legal, some are not legal. And that’s where the challenge lies. How do you actually frame trade policy that can support your developmental agenda or the access agenda as well?

Amar Breckenridge: Okay, thank you.

Kimberley Botwright: I can build on, one of the points. So you can do investment facilitation, but you often then countries we’re seeing there want to pursue an export ban which should hopefully be complemented by investment facilitation. But I think one of the key things that Sunayana mentioned is that export bans can be relatively blunt as an instrument. So what we’re seeing and what we saw in Indonesia was they imposed the export ban and then they effectively delayed it and then changed it and then delayed it again because industry said we do not have the processing capacity. As I was indicating, a lot of the processing is where things are most concentrated, particularly in China. And it’s going to take time to then build at that processing facility. So I’m not going to weigh in on whether I think export bans are a good idea or not. I’m just going to say they’re a very blunt instrument and it would be wise to think rather holistically about this. So not only to look at the export ban, but to then also look at what are the inputs that are required to actually build your processing facilities. Let’s make sure that all of those inputs are easily able to come into the country. So review your tariff schedules and NTMs around all of that stuff. Look at the energy mix, what are your energy costs? And it’s not a trade policy issue, but it absolutely is going to affect competitiveness in terms of the return on investment for that processing. That also needs to be considered. And then think about the phasing in of the export ban with all of that combined. Because if you send a very clear signal to industry that you are going to restrict the export of that material, but over X timeframe and then you’re taking all of these measures to make it very, very appetizing, and lower the costs of processing within your economy, actually investors might think, well, this is wonderful. This is now a competitive area to process. But so far with the export restrictions that we’ve seen not only in Indonesia, but also in some resource rich countries across Africa, it has been a very blunt, very quick approach which doesn’t actually achieve the goal of increasing processing now, only now in Indonesia has have they achieved some more processing. But let’s also bear in mind Indonesia controls 70% of nickel production. So they are in a very unique position. There are

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Kimberley Botwright: few other economies with few other energy transition metals that have such a high, proportion. The DRC is perhaps one of them. Let’s also not forget that if you create scarcity, the other thing that industry will do is look for alternatives. And we do also know that that is happening a lot in terms of the way that the product is going to function, maybe with a different type or with less of the metal. Thank you.

Amar Breckenridge: Sunayana, anything to add to Kimberly’s remarks?

Sunayana Sasmal: I completely agree with everything she said. I think there are all these kinds of tools that we see in play right now. A lot of the trade policy tools are inefficient, including all these different kinds of export restrictions. Export taxes might be legal under WTO law and a lot of FTAs, but they don’t necessarily translate into efficient economic tools or policy tools to actually induce downstreaming. And even if it did. We know that there are a lot of governance challenges in play and a lot of these resource riches countries, which means that the rents are going into the wrong hands, are not going to be redistributed properly. So there’s a whole host of different policy measures that are being used. But I think we haven’t arrived at the optimum combination yet. And that’s where the real challenge lies.

Amar Breckenridge: We heard the expression blunt instrument coming up quite a lot. And I suppose you referred to some of those export restrictions and other sort of trade restrictions. Kimberly also pointed out to the role that trade liberalization measures or trade reform measures can play in enhancing the enabling framework for investment. Another standard issue in these sorts of scenarios is that the hurdle rate for investment is often quite high. And that probably invites, the consideration how, development finance can play a role. And that’s also subject to constraints. Do you want to expand maybe on how, say, financial support and other such measures might complement trade policy action? Again, Kimberly, starting with you.

Kimberley Botwright: Yeah, happy to do so. I think one of the major issues right now as well with investment in mines and to a lesser extent investment in processing by at least the major players is that frankly they’re being rewarded by their shareholders. Well, their shareholders want dividends and they don’t necessarily want them going off and investing in very risky projects in very risky countries. So that when a CEO of a major mining company says, we’re going to go and invest in this quite risky country in a mine and we will see return in maybe 15 years time. And by the way, we’re still not 100% sure where the metals market will be then, because all of this metals demand is conditioned on governments continuing to pursue their climate policies. Some of the demand for these metals is also going to come now through artificial intelligence and the build out of data centers. So you have that element too. But a lot of this is really conditional on that market demand coming through. And I hope, I hope it does because I’m the first to advocate for strong climate action. But hope is not what you build business strategies on. So that is why we’re also seeing a reluctance for the mining majors to go to markets and seek funding for some of these projects because they’re not necessarily being incentivized to do so. But I think then if we were to look beyond the majors and look at some of the smaller players and some of the more interesting, newer players that are coming into these spaces and are looking to develop mines, and then also, I hope also we, we place Much more emphasis on developing processing capacity, which I don’t think we’ve seen as much to date. But that is indeed where development finance institutions can play a big role and can come in and de risk some of some of that risk that it takes. And so this is what we’ve seen with for example the US led Securing Minerals for the Energy Transition. I forget the exact acronym. It has about 17 different projects that are mainly focused on mining, a little bit less on processing and recycling. And I think that’s where there’s gap. But they have been using public funds to de risk some of some of those investments and some. And they have also. What I think is while there are some flaws with their approach, what I think has been commendable is they’ve really been trying to pursue and encourage projects that are the highest environment and social standards, which I think is also really important because that’s actually where some of the risk and Sunayana highlighted it, that’s where some of the risk really sits is that there isn’t great governance sometimes on either in the environment or the social in countries where these minds might be. And if that risk then falls solely back onto the company, it totally detracts from the value proposition.

Question highlights tensions between China and Western countries ability to enter resource rich countries

Amar Breckenridge: Thanks. Sunayana, would you like to add to that?

Sunayana Sasmal: Yeah, I think on the finance, it’s also a question that highlights the tensions between China de risking from China and the Western countries ability to actually enter into resource rich countries and set up their business. Because what we have heard so far is how China has been able to finance their operations whether in the form of straight state agencies or whatever way the subsidization works cross borders. This is my view. I think that the west is trying to play a bit of catch up with that. And we see a lot more focus on state led investments in resource rich countries. And I think it’s a matter of really de risking your investments. As Kimberly highlighted these countries the private sector often doesn’t want to invest and therefore you see a lot more

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Sunayana Sasmal: of public sector investors investment, state led funding. And this raises the question from a trade law perspective this raises the question of whether these amount of subsidies and what kinds of implications these would these would raise under the ascm, the Subsidies and Countervailing Measures Agreement. And I think we are still in the gray area over there. There’s been some academic writing and thinking and yes, it’s become a real issue really with the transnational subsidies dispute ongoing right now. And I think it’s going to be very much in focus in this critical Mineral space going forward.

Trade is meant to match markets with, uh, sources of supply

Amar Breckenridge: Okay, so let’s back up a bit now. You know, a world where you have an uneven distribution of resources and other areas of demand, that’s where trade comes into play. That’s what trade is meant to do, right? It’s meant to match markets with, sources of supply. So we’ve touched on trade rules and a number of the previous points we made. And you just mentioned the agreement on subsidies. We also talked about export restrictions. There’s also trade related investment measures and so forth.

Sunayana: I think the WTO has a very important role on critical minerals

So all this brings us to the framework for trade rules and the wto. And allowing for the various challenges the WTO currently faces to its operation, what role do you think the different functions of the wto, be it negotiations, dispute resolution, surveillance and transparency can play in the current context to help secure some of the gains from trade in the context of critical minerals? And I might start with you, Sunayana.

Sunayana Sasmal: Yes, I think the WTO has a very important role to play in this, in this matter across everything that you just mentioned. It could be negotiations, it’s transparency, it’s disputes, and it’s really just the ongoing discussions between members. It need not be negotiations, it just needs to be a form of monitoring. Now on transparency, it’s very important what the WTO already does, which is it keeps track of all the different kinds of export restrictions that are in place, different kinds of investment related trade restrictions that are in place. It’s important to keep track of how, of what kind of measures are being introduced and what the effects are. I don’t know if there’s a good enough job of that yet whether we actually trace and trace the effects of these measures. But again, once the information is out there and is available, publicly available, that leads to more analysis, second negotiations. I think this is an area which is rife for negotiations. Especially if you look at, I think earlier this year there was, there were two papers by the African group to do with industrialization and industrial policy, space green industrial policy actually. And there they had some recommendations on how we could go about amending the ASCM and the TRIMS agreement to allow for policy space to pursue certain kinds of actions. Now all of this especially becomes very important critical minerals. Because here you’re talking about industrial policy of resource rich countries and how they can utilize their mineral wealth, leverage their mineral wealth to climb up the value chain.

Now on disputes, unfortunately. Disputes, fortunately has a good role to play

Sunayana Sasmal: now on disputes, unfortunately. Disputes. Disputes, fortunately has a good role to play. Unfortunately for the appellate body crisis, we saw what happened with the Indonesia panel ruling. It got appealed into the void Now I don’t want to comment on the merits of the ruling or the merits of the law that were invoked in that dispute. However, what’s necessary is to understand the systemic and the institutional relevance of having a dispute, a working dispute settlement mechanism in place and the kind of unpredictability that this then festers. The fact that you had a ruling and now you don’t. Now what does this mean for investments and investors expectations? I think that’s why it’s really very important to get the WTO’s dispute settlement function going, across the board, not just for this issue, but that’s, that’s more crosscutting. I will restrict my comments on the WTO and that for now.

Amar Breckenridge: Kimberly would like to add anything to that.

Kimberley Botwright: Yes, thanks.

Kimberley: There is a gap in terms of green metals on Earth

I will pick up again with Sunayana left off and I’m going to take a like 100,000ft level. So imagine we’re an alien and we arrived to planet Earth, and we heard the situation diagnosed as follows. We really need a bunch of metals that are in the ground to be dug up sustainably and with social responsibility to get into technologies that can allow this planet to continue to function within its planetary boundaries. And the good news is this planet that the alien has arrived on has those metals. Great news. In addition, doing so could bring jobs and employment if done so sustainably. So the alien might say, well, why is the population of this planet not doing that? You have the tools to do so. And yet you’re telling me that at least according to the current forecast, the way that your technologies that you’re going to install to make sure your economy doesn’t surpass planetary boundaries, ah, you’re going to have a gap in terms of those green metals that you need. The alien would say, but why aren’t you using this thing that you call

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Kimberley Botwright: this big World Trade Organization to sort that out? And so I do, I say that all to kind of like come back to what are our interests? Our interests are ah, that we have a functioning global market for these commodities and yet somehow we are so far away from that. And so I just wanted to sort of have that reality check also to note that we cannot end up actually like, realistically we will not end up with a raw materials debt. Like we talk about it as we talk about this gap as if it’s, you know, a financial metric, but it’s not like it’s, it’s a real thing. So what will happen of is when stockpiles are exhausted or once we’re starting to get really towards that gap, there will be all kinds of measures taken by industry, you know, thrifting, reduction alternatives found. So it’s a bit tricky because we talk about a gap, but I don’t know whether we will really end up with one or not. Or do we then miss our climate goals? And that takes me back to the big picture. Thanks.

Amar Breckenridge: Thanks Kimberly. That reference to aliens reminds me of a presentation I once made which bore the title trade economists are from Mars, development economists are from Venus. And it’s about the confrontational approach by trade negotiators that has led to where we are building up on that. So the WTO has its role to play, probably not fulfilling it in the absence. And because nature absorbs a vacuum, what we have seen is a proliferation of bilateral, regional club based arrangements to this problem. So critical mineral partnerships, FTAs, other bilateral initiatives, I think, Kimberly, you mentioned the US initiative. So could this mosaic of initiatives actually add up to something that looks like a platform for international cooperation that responds to the point you made earlier? Or is this going to be a, ah, recipe for fragmentation and the scramble for resources? I might start with you again, Sunayana.

Sunayana Sasmal: So a lot of my research focuses on these different instruments. At one point I call them non-binding instruments, then I call them strategic partnerships, then MoU. So as you can see, there’s no really one phrase for them and it’s really confusing. They take the form of strategic partnership agreements, critical minerals agreements, joint statements of intent, et cetera, et cetera. But all of this is to say that a lot of countries, primarily the major buyer countries and the major developed selling countries, which are Australia and Canada here, they have signed a number of bilateral instruments between themselves and the EU has a lot with other countries as well in Africa. But there are a few characteristics that I’d like to highlight here, which is that they are non-binding. Typically they are non-binding. They are say that they want to add to value addition and down-streaming abilities and value chain integration in the resource rich countries. They say they want to. Well, some agreements say that they want to promote compliance with ESG standards, while some others say that they want to develop ESG standards. My takeaway from all of these different instruments is that, well, they look very benign at the outset, but you have to dig a little deeper. And the reason for that is right now most of the commentary that exists around these partnership agreements, whatever you call them, is the fact that, okay, they’re non-binding and that’s where the analysis pretty much stops, that okay, if the EU for example has promised something, there’s no guarantee that it’s going to hold up its end of the bargain. But I think we have to look a little deeper than that because if they are just non-binding it means we’re at status score. But the question is whether they’re actually actively good or whether they’re actively bad. And I think it’s, my research is kind of in the middle of that which is whether it’s status score or whether they’re actively not good. because I find certain things about them which are a little concerning, which is they promote something called what I termed it at least as something called selective dejudicialization which is in these different partnership instruments you say that you want to do value addition, you want to have resource rich countries do value addition condition on your terms, which is non-binding, which these resource rich countries have no way to actually enforce. But at the same time if you had other kinds, if these resource rich countries had other kinds of restrictions in place to pursue down-streaming, then those would get affected by the default rules that are already in play whether at the WTO or under FTAs. Now here what I see is it creates a kind of an unlevel playing field. Then you also have certain, the whole standards creation and the standard setting versus standards making debate is also very key here because some instruments very clearly state, especially those with Australia and Canada will state something like cooperation to set standards. Whereas those with the African countries would say something like promote compliance with the standards. Which means that they’re not really foreseeing a nobility of certain resource rich countries to help set, which is very important because ESG as we have discussed

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Sunayana Sasmal: is an important puzzle of this entire equation. And I think it’s necessary to have all these voices at the table and to also actually acknowledge that there is a voice to play. And this might come from a very academic point of view, but I think the way these instruments are phrased, if we just look at the text, and this is me looking at their text, it’s important because it shows a kind of mindset that’s at play and which is really important in this, in this geopolitical situation. I’ve already talked about the dangers of subsidization of cross border subsidies. Well, not the dangers but it’s something to bear in mind because some countries are more able to pursue, to have subsidies in place and some others are not. So the balance between that we see a lot. So I’ve been through the strategies of Australia And Canada and a lot of other resource rich countries. It seems that Australia and Canada are really able to facilitate inward investments because they’re also able to create that business environment by making through incentives because they have the fiscal space. Do all other countries have that ability to do that? Possibly not. So what does that mean and where should global cooperation be headed? And I think that goes back to an earlier question of the importance of the WTO in this. I definitely see a role over them. So just, just to put some points out there.

Amar Breckenridge: Kimberley, would you like to respond or add to any of that?

Kimberley Botwright: Yes, as usual I will build on some great comments. So I see particularly the EU’s efforts and then the US Mineral Security Partnership they are about securing the upstream at least where I’ve seen the push and it’s not necessarily a bad thing. But ultimately I think where we see the most concentration again is on the processing and so much more emphasis needs to be placed there and all the points that Sunayana made about needing to actually work with the country on what it’s going to take for processing industry to come in, and then for there to be sufficient interconnections with the subsequent value chain. Because if you’re going to move the processing from where it is now, which is mainly China, you’re then going to need to make, also make those links in terms of the onward links to the industry like is it easy to get the processed metal out of the middle of a continent to wherever it needs to be. So that, and, and there has been, to be fair there’s been some thought on that particularly we as we know through the Lobito Corridor. But again it’s very much the emphasis is on the raw commodity being got out of the, of the middle of a continent. So I would like to see much more emphasis on processing and I would also very much agree that there actually needs to be some more. You know I, I don’t think that just writing these MOUs and then doing what the Minister Mineral Security Partnership was done is going around and talking to individual very interesting and commendable companies that are doing sustainable mining is going to solve this bigger macro problem. I think to add we also often hear from industry like they don’t really know what half of these MOUs are about. They’re not having a market signal. So something needs to change. Further to point out the obvious but these MOUs if the EU does an MoU with an emerging economy or developing economy, at least for now, we’re not necessarily Seeing that the German car industry then goes oh wonderful, we’re going to go and build EV factories there. I mean we’re so far away from that. So I think there’s quite a few steps that need to happen in between and what I would say. So then to be constructive I really a lot of attention could go into building up greater consensus on what is the, at least a baseline for the ESG, for ESG standards and the subsequent due diligence that is expected to be done around them. Because right now there is quite a proliferation of understanding. We’re also now seeing particularly from the EU side much more and much more regulation on due diligence. And that’s fine, it’s just that it is creating quite some industry concerns and anxiety that they might not measure up and who knows what the right standard is, etc. And so that will lead to them potentially people pulling out of markets because if they’re not sure that they can meet standards, they will shift suppliers. The problem is here is we’re often in situations where you can’t necessarily shift so easily. So I do think that that is where governments could play really have some intergovernmental collaboration around and again always emphasize, do not reinvent the wheel. There are already some very good industry international standards in some of this space. The reason why they haven’t been pushed forward more and there are some efforts for example to get the London Metals Exchange to adopt. To kind of really say that to trade a metal on the London Metal Exchange you have to be adhering to XYZ standard. The reason they’re not doing that is because not everyone in the market is yet demanding that. So if we could then have governments push this from their side and to make that more mandatory. Actually I think a lot of industry would very much welcome that because it levels the playing field for the good actors.

There is a lack of transparency in MOUs agreements because they are non-binding

Amar Breckenridge: Sunayana, did you want to add anything to that?

Sunayana Sasmal: Just one very important point on the MOUs that I forgot to mention the first time around which is the lack of transparency. Because they are non-binding, because they’re the way they are, countries, governments don’t take them as seriously in with regards to not just publishing them but with regards to the way they are

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Sunayana Sasmal: also frame. So we don’t see that level of specificity that we see in normal conventional trade agreements, free trade agreements. And because there’s no centralized body that oversees these critical minerals arrangements, there is no requirement to publish. Actually there are a lot of them out there which you see in the media maybe okay, the President of this country has gone to another country and signed this joint statement of intent. And then if you hunt for it online, you don’t see any text. The EU partnership agreements are supposed to be followed by strategic roadmaps, which is to try to outline how these MOUs, ah, are to be implemented. The strategic roadmaps are nowhere to be found because they’re not published. So I think a huge problem that is also plaguing these bilateral instruments is also of transparency. Again, a place where an institution would have a strong role.

Environmental impacts across the value chain are of key policy concern

Amar Breckenridge: Okay, so you mentioned ESG a few times, you’ve mentioned value chains and so forth. So that brings us back to this observation I made earlier on that environmental impacts across the value chain are, ones of key policy concern and key challenge. There’s also a role that developing greater circularity can play both in managing these environmental impacts, but also managing demand, and reducing, supply shortages. So what might be some of the trade policy instruments that can be used to develop things like circularity? And coming back to ESG and building on some of our earlier discussions, how can the implementation of ESG standards be done in a way that also avoids imposing a green squeeze, as it’s come to be called on developing economies? I’ll start with you again, Kimberly. Maybe.

Kimberley Botwright: Great. Yes. So avoiding the green squeeze. I think that’s why all the points that we’ve been making about bring this conversation to the wto. I do not think it is helpful for a bilateral or a club of countries to decide this is the ESG standard. Even if they take on my advice of using the, kind of good international industry standards, that’s fine. But ultimately what’s needed is for that to be socialized and discussed with developing countries and then for us to take a TFA type approach to this and say, if you are not there yet, what do you need to get there? Because that goes back to our interest. Our interest is that we have green metals coming out of the ground, environmentally, friendly and socially responsible, responsible manner that generates jobs, and that we save the planet like that. That’s ultimately our goal. So that’s why that conversation multilaterally is important. That can also be tied to capacity building because we don’t also want to lower the standards, we want to lift them up. But we need to understand what it takes to get there. And some of that’s going to be around governance as well. Now, it’s not like we’re inexperienced with this. Obviously, in certain metals, like the famous three T’s, there’s been ongoing OECD processes for a long time. But I think perhaps there, there’s a need to learn from those. And it’s difficult in terms of the type of capacity building that is needed and the type of good governance that’s required in these spaces. Let’s not kid ourselves. These are some very difficult, topics.

The Basel Convention addresses circularity, but there needs to be good trade controls

So that addresses that question very briefly on circularity. Obviously the key with circularity is reduction to respect the waste hierarchy. But we will need more of these, we will need more solar panels, we’re going to need more EVs. So I think we need to start thinking now, what, what are we going to do with these solar panels when they start to reach end of life? Some of them are already, EVs will increasingly start to reach end of life in 10, 10, 15 years. And I think we must create reversed, supply chains. Those aren’t necessarily going to span across continents. EVs. Batteries are quite heavy, but they will probably span in some cases across several countries. These items at the end of their life are hazardous. They contain materials that are toxic for the environment and for human health. But there needs to be good trade controls. The Basel Convention will come into play here, but we need to make sure that those trade controls deliver their job in terms of giving sovereigns oversight on where that waste is going, but also, efficient for the sake of the circular economy. And that’s a balance and we need to make sure that we get that balance right. For now, I think the Basel Convention achieves a balance of like giving kind of the trade control to the sovereign, but not necessarily in a way that thinks about the efficiency or the value of the material in that product. And that’s fine because when we did Basel in the 1980s, it was to stop commodity companies again from dumping or chemical companies from dumping waste on developing countries. And so that was the objective. We weren’t necessarily thinking about material circularity.

Amar Breckenridge: Thank you. Sunayana..

Sunayana Sasmal: I won’t comment on circularity. I must admit that’s not something I have done much research on. But on the green squeeze bit of it, I cure it. Also very important to keep in mind the role of investment agreements, bilateral investment treaties and how they might interact with the trade agreements. So just on the trade policy bit of it, I think standards is obviously a very big part of this and ensuring the developing countries, developing resource rich countries are a part of the conversation in standard setting processes is if there are new standards to be formed, is an important bit of it. If there are existing standards, then how do you ensure that they have the capability to meet those standards. It’s

00:35:00

Sunayana Sasmal: here there’s also a distinction between big companies or foreign companies that are operating in, let’s say, resource rich markets, and also the smaller companies from these resource rich markets, and how they can compete with. How they compete not only with each other, but also how these smaller companies are able to comply with those taxes, standards or not is a big question. Because you don’t want to see a situation where these foreign, big foreign companies that have the capability to comply kind of crowd out the smaller ones. On the investment side of it, it’s a little different because what we often see is that if a country wants to raise the standards or implement any regulations, environmental regulations, social regulations, often they get challenged. And that’s something you want to see, you don’t want to see, you want to see less of. So I think this is also going to be an area of monitoring in the future how these investment treaties allow for policy space to, or not allow for policy space actually to implement these kinds of regulations. It’s been a concern of the past, a long standing concern. We see a backlash against these treaties. But to me it’s always been very interesting how the trade side of things and the investment side of things, often they seem a little contradictory, the objectives that you have. So, yeah, that, that’s all for me.

00:36:57

Amar Breckenridge: Thank you. I think we’ve reached the, end of our time together. So I’d just like to thank you very much for your participation and for helping us to at least talk around some of these, questions. No doubt there’s further food for thought, reflection, research. So thank you again. Thank you to those of you listening to this podcast. And if you are listening, remember to review rate like share podcast through your preferred platforms. And we invite you to join us again for our next episode. So thank you once again to Sunayana. and Kimberly.

Sunayana Sasmal: Thank you. Pleasure to be here.

Kimberley Botwright: Thank you so much for the great questions.