Temidden van controverses over tarieven en hun effecten, is een bijzonder destructieve barrière voor handel over het hoofd gezien: beperkingen op ‘conflictmineralen’ die armoede verergeren in de ontwikkelingslanden, ondermijnt de toegang tot zeldzame aardmetalen en kritieke mineralen en een concurrentievoordeel van China in de controle van de wereldwijde levering van deze kritieke mineralen.
Ironically, this trade barrier was not built by President Donald Trump. It came from the legislation that has now been critically praised by many Democrats about Trump rates. It also did not come from legislation that was mainly focused on trade. Instead, this obstruction of trade was a last-minute insertion to the Dodd-Frank Financial Regulation Revision, signed by President Barack Obama 15 years ago in July 2010.
Section 1502 of Dodd-Frank focuses on the Democratic Republic of Congo (DRC), which has recently been a focus on the strategic plans of the Trump’s government to gain access to rare earths and other critical minerals to ensure a steadily offered that is not dependent on China. The DRC has one of the richest mineral supplies in the world, but is plagued by violence by warlords and militias, including An attack of July 27 on a Catholic Church That let at least 49 worshipers dead.
The African diplomatic team of the Trump government has made progress when closing a deal with the nation in which the US would offer the DRC government safety aid in its fight against warlords in exchange for access to critical minerals in the country. But every such deal would probably be threatened by Section 1502, effectively a priceless back -dare rate for many American companies trying to gain access to the drugs of the DRC.
This DODD-Frank determination has publicly traded companies in the US to announce whether one of their products contains “conflict minerals” that have been mined in the Democratic Republic of Congo and nine adjacent African countries. According to the law, companies that are mentioned at American stock exchanges must audit and make public or make their products or even contain traces of four designated minerals – gold, tantal, tin and tungsten – that may have been mined in areas that are controlled by warlords.
The provision was sold as a way to protect Congolese residents against warlords who benefited from mining and selling these minerals, with little effect on American consumers and producers. Yet the rule ultimately increased poverty and violence in the DRC, while the American supply chain of access to critical minerals is needed for everything, from smartphones and laptops to medical.
The big problem is that companies are often confronted with insurmountable problems in trying to trace the origin of small components of their products. As the Wall Street Journal reportedManufacturers spent around $ 709 million and more than six million man -hours trying to trace their supply chains for conflict minerals in 2014. After all these costs, 90% of those companies still could not confirm that their products were conflict -free.
As a result of these costs when checking the Supply Chain, many companies simply left the DRC and Congo region completely and produced materials elsewhere. Such as David Aronson, a acclaimed journalist who has written about the region for more than three decades, in it testimony To the congress: “The law has imposed a de facto embargo on the mineral production that impoverished the million traditional miners of the region.”
One of the continuing effects of de facto embargo is reductions in education, healthcare and food supply. This misery stemes from both the strong increase in the unemployment of the miners of the region and – as noted by Aronson in his testimony and in one New York Times on-ed He wrote – the sharp reduction in mining companies that also brought food and medicines to the region that took place after American companies had left. A study in the Journal of Law and Economics In 2016 it appeared that the mandate of the Dodd-Frank determination increased by at least 143 percent in the affected Congo regions.
And the warlord situation has not improved and can in fact be worse because of the Dodd-Frank determination. October report At the Congress of the US Government Accountability Office (GAO) found “no empirical evidence that the rule has reduced the performance or level of violence in the eastern DRC, where many mines and armed groups are located.” The GAO also discovered that “the rule was associated with a spread of violence, in particular around informal, small -scale gold extraction places, … because gold is more bearable and less traceable than the other three minerals.”
The poverty and the violence that rose as a result of the effects of Dodd-Frank also gave China the perfect access point in the Congo region. With limited options, the DRC government voted in the past 15 years of the offers of China in the last 15 years of building infrastructure in exchange for providing access to China to its minerals.
Because China has not been supplied now to deliver promised infrastructure improvements, the DRC is looking for a new deal with the US that will concentrate on increased security and trade instead of help. But such a deal will probably fail as long as the burden of Dodd-Frank for American companies that have access to the minerals continue. As the GAO states, the almost unsovement of the rule-that “many mines are in remote, possibly uncertain areas and teams are coordinating to visit and inspect them, difficult”-as a trade barrier.
Fortunately, the DODD-Frank determination enables the president to abandon his mandate for two years if he regards such a remote statement in the interest of national security. President Trump, as part of his purpose of the revival of the US, must make use of this distance from distance to reduce China’s influence and to increase the access of the US to the minerals of the region. He then has to put the congress to an end to end this trade barrier by withdrawing the 1502 section of Dodd-Frank.
It is time for the president and the congress to remove this backdoor rate from Dodd-Frank that China places for the first time and the US and DRC last.
John Berlau is senior fellow & director of finance policy at the Competitive company Institute and author of the book George Washington, Entrepreneur: How Our Founding Father’s Private Business Areachs changed America and the world.
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