Governments may impose a carbon emission charge to address environmental externalities. If implemented, this will drive up the cost of energy-intensive production. To level the playing field, domestic carbon pricing can be extended to carbon-embedding imports. The recent legislative movements in the EU and elsewhere show that the issue of adjusting carbon prices at the border is entering the mainstream of climate policymaking. At the same time, carbon is not the only target of energy-affecting trade control measures. Other typical examples of such measures include air quality regulations with import-restrictive impacts and the localization of clean energy production, which some States may portray as environmentally necessary. Products with health-threatening content associated with unsafe energy use can face market access barriers as well. When energy production causes ecological or public health problems at home or depletes natural resources, export restrictions are usually among candidate measures that governments consider for mitigating such adverse effects. Therefore, it is imperative to examine trade rules and case law to check the legality of these energy–environment measures.

Article 34 of the Treaty on the Functioning of the European Union (TFEU) provides that measures equivalent to a quantitative restriction shall be prohibited. The case law of the European Court of Justice interpreting this has addressed product standards, selling arrangements and all other kinds of national measures that might tend to hinder trade or affect consumer behaviour and thereby restrict imports. Relying on judge-made ideas such as mutual recognition and mandatory requirements, the Court has put the informed consumer at the heart of the market, at the expense of the paternalistic state. On the other hand, it recognises the need to restrict free movement where legitimate public interests are at stake, with the proportionality of such restrictive measures being the main question in most cases.

The US-China trade war and looming ‘technological de-coupling’ instigated major revisions of Chinese laws and regulations. These recent amendments represent a major shift in the role assigned to export restrictions. In particular, China is more willing than before to use export restrictions as a geopolitical tool. To test the veracity of this assertion, this chapter analyses China’s use of export restrictions in the period from 2001 to 2021. It suggests that three distinct phases can be discerned: (i) the elimination of export restrictions before and after joining the WTO; (ii) the selective use of export restrictions for domestic policy reasons; and (iii) a shift toward strategic use of export restrictions as an instrument of geopolitical competition. Several implications flow from this new development: it endangers existing supply chains, may bifurcate the global economy by sapping its growth potential and contributes to the erosion of the multilateral trading system.

After several years of negotiations, twelve Pacific Rim countries signed, in February 2016, the Trans-Pacific Partnership (TPP), which is one of the highest profile Preferential Trade Agreements (PTAs) of the last decade. After US withdrawal in January 2017, a revised “Comprehensive and Progressive TPP” was signed by the other eleven negotiating Parties in March 2018. The CPTPP makes no modifications to the original Chapter 2 so the chapter remains in its entirety applicable to relations among the Parties. References in the chapter are to the original TPP unless context requires otherwise. Annex 2-D of the TPP is comprised of hundreds of pages of carefully negotiated tariff commitments that are accompanied by many chapters that seek to regulate measures such as trade remedies, sanitary and phytosanitary measures, technical barriers to trade, competition policy, state-owned enterprises and electronic commerce. Together, these provisions were part of a complex framework that sought to ensure that the agreed tariff elimination would not be undermined or nullified by other measures. However, the TPP was designed to be more than just a traditional trade deal.

The COVID-19 pandemic is broadly impacting global supply chains with enterprises being prevented from producing and shipping raw inputs, semi-finished articles and end products, and governments adopting and maintain exporting restrictions on ventilators, masks, gloves, personal protective equipment and relevant inputs. The pandemic amplifies and accelerates the decoupling of US–China economic relations, reflecting US President Trump’s maxim 'economic security is national security' and delivered by a US–China trade war with numerous trade measures, including sanctions against Huawei.The attachment to economic security reflects a reversal of economic globalisation which used to posit economic interdependence as a safeguard for national security, but there is now a theory that overdependence is a threat to national security. In this context, there is a need for fresh look at the law and politics on export restrictions and sombre thought on the restructure of the global supply chain. Three key elements will be of critical importance in the post-COVID-19 world: ‘beggar-thy-neighbour’, economic security and the decoupling of the US–China economy.

This chapter is devoted to protectionism in raw materials and considers first the national policies that affect commodity production and trade, and explores the causes for their establishment. Then a discussion of the increase in trade-restricting measures in recent years is provided, both regarding export restrictions and import tariffs, followed by a quantitative assessment of the extent of trade barriers affecting commodities in general and agricultural goods in particular. A final section looks more closely at commodity processing and explores how the location of this activity has been distorted.