The deep seabed has become the newest frontier in the global scramble for rare earth minerals, essential for everything from electric vehicles to advanced weapon systems. The international body designed to govern that competition, the International Seabed Authority, has spent three decades failing to produce workable rules, and major powers are now moving without it. On March 19, on the sidelines of a bilateral summit between President Donald Trump and Japanese Prime Minister Sanae Takaichi, the U.S. Department of Commerce and Japan’s Ministry of Economy, Trade, and Industry signed a Memorandum of Cooperation (MOC) on deep-sea mineral resource development. This memorandum was signed the same week the International Seabed Authority (ISA) convened its 31st Council session in Kingston, Jamaica, where Japan’s delegation simultaneously reaffirmed its commitment to the ISA process.
The ISA governs the deep seabed beyond national jurisdiction (known legally as “the Area”) in accordance with Part XI of the United Nations Convention on the Law of the Sea (UNCLOS). Under the UNCLOS framework, the mineral resources of the deep-sea are the “common heritage of mankind,” and all activities relating to those resources must be conducted under the authority of the ISA. This restriction applies even to non-signatories to the UNCLOS Treaty, in the ISA’s view, because UNCLOS has become part of customary international law. The United States is not a party to UNCLOS, and it is the only permanent member of the U.N. Security Council never to have ratified it. U.S. domestic legal authority for seabed mining derives instead from the Deep Seabed Hard Mineral Resources Act of 1980, a pre-UNCLOS statute adopted as an interim measure pending an international settlement that, from Washington’s perspective, never satisfactorily materialized. UNCLOS’ deep-sea mining provisions and benefit sharing requirements are frequently cited as the reason the United States has not ratified the treaty.
How could a country like Japan simultaneously affirm its commitment to the treaty and in the same week sign an MOC that seems to directly contravene the treaty’s purpose? And what does that mean for the viability of UNCLOS going forward with respect to deep sea mining? We argue that the MOC is not an anomaly but is instead a carefully constructed instrument that allows a treaty party (like Japan) to capture the benefits of defecting from the UNCLOS treaty without paying the diplomatic costs.
Resources Within Reach
Until recently, questions surrounding countries’ rights to the resources at the bottom of the ocean would have been purely academic, as deep-sea mining was neither economically nor technologically viable. Now, that has started to change. The polymetallic nodules scattered across the Clarion-Clipperton Zone—potato-sized deposits containing manganese, cobalt, nickel, and copper—have been known since the 1970s, but the economics of exploiting them never made sense. Extraction at depths of four to five kilometers, processing at the surface, and transport across the Pacific were too expensive when compared with terrestrial mines.
Recently, however, the clean energy transition and the expansion of advanced defense systems have driven explosive growth in demand for precisely the minerals concentrated in seabed deposits. Electric vehicle batteries require cobalt and nickel. Wind turbines and precision-guided munitions require rare earth elements, including neodymium (an essential element in industrial magnets), dysprosium (similarly essential in preventing magnets from demagnetizing at high temperatures—and 99 percent mined by China), and terbium (used in sonar and other industrial applications). Global demand projections for these materials have outpaced what known terrestrial deposits can reliably supply, and the timeline for new land-based mines—typically a decade or more from discovery to production—creates a structural supply gap that is already visible in commodity markets.
At the same time, technology for deep-sea mining has advanced quickly. In January, near Minamitorishima Island in Japan’s Southeast, Japan performed the world’s first continuous lift of rare-earth mud from a depth of 6,000 meters, demonstrating that extraction from abyssal depths is technically feasible at scale. Previously, the American-based Metals Company conducted a nodule collection trial in the Clarion-Clipperton Zone in 2022, which similarly demonstrated that commercial-scale polymetallic nodule harvesting is technologically feasible. As remotely operated systems improve metallurgical processing the economics of higher mineral prices have moved seabed mining from concept to threshold industry.
Recent strategic changes have also begun to change the viability of deep-sea mining. China controls roughly 60 percent of global rare earth mining and, more critically, around 90 percent of rare earth processing and refining capacity. It has used that dominance to its advantage, imposing export controls on select rare earths in response to Western technology restrictions. For Japan, the vulnerability is acute and concrete: despite diversification efforts, Japan remains roughly 70 percent dependent on Chinese rare earth imports, and Chinese naval vessels entered Japan’s exclusive economic zone near Minamitorishima while Japanese research ships were conducting surveys there.
This convergence of demand, supply insecurity, and technological maturity has made some of the underlying diplomatic and strategic questions at issue in UNCLOS less theoretical and more urgent. The common heritage doctrine, which forms the legal foundation of the ISA regime and holds that all proceeds of deep-sea mining will be jointly shared among all nations, was conceived when deep-sea mining was a distant prospect. This doctrine was intended as an equitable proposition: that the mineral wealth of the deep seabed, lying beyond any nation’s jurisdiction, should benefit humanity as a whole, rather than accrue to whichever State had the technology to extract first. The principle was powerful in the abstract, but it never made much economic sense.
A Disincentive to Develop
The economics of resource development turn on a straightforward proposition: investment follows secure returns. Exploration is expensive, extraction technology at abyssal depths is more expensive still, and the capital required to bring a deep-sea mining operation to commercial scale runs into the billions. No rational actor commits that capital without reasonable confidence that the returns will flow to the investor rather than be diluted, redirected, or appropriated by a governance structure over which the investor has limited control. This is the basic logic underlying every functioning resource-development regime, from oil and gas concessions to terrestrial mining licenses. Clearly defined and enforceable property rights are the precondition for the investment that development requires.
By vesting the mineral resources of the seafloor in humanity as a whole—and placing their administration in an international body representing 170 States with sharply divergent interests—UNCLOS created a governance structure in which the parties bearing the costs and risks of development are systematically different from the parties entitled to share in the proceeds. The original Part XI of the treaty was explicit about this imbalance: revenues were to be distributed equitably among member States, with particular attention to developing nations and landlocked countries that would contribute nothing to the extraction enterprise. The 1994 Implementation Agreement softened the redistributive machinery considerably but did not resolve the fundamental misalignment. A State or company that spends a decade and several billion dollars developing the technology to extract polymetallic nodules from five kilometers below the surface still faces the prospect of operating under regulations developed by consensus among States whose primary interest is in maximizing the revenue share flowing to non-developing parties.
The predictable result—anticipated by property rights scholars from Harold Demsetz onward—is underinvestment. When returns cannot be securely appropriated by those who generate them, the incentive to seek them diminishes. The ISA’s 30-year history illustrates this well: despite extensive geological surveying confirming that the Clarion-Clipperton Zone alone contains more cobalt, nickel, and manganese than all known terrestrial reserves combined, not a single ton of polymetallic nodules has been commercially extracted. Part of the reason the resource sits undeveloped is not because the technology is unavailable—it is now demonstrably feasible—but because no governance framework has emerged that gives commercial actors sufficient certainty about the rules under which they would operate and the security of the returns they would earn.
Finding a Loophole
The Japan-U.S. Memorandum of Cooperation emerged against this backdrop.
The ISA has repeatedly failed to meet deadlines to develop regulations for resource development. Its March session in Kingston—held the same week the Japan MOC was signed—ended without agreement, with a directive to its technical commission to revise draft standards before a July meeting. The ISA’s own secretary-general has described the situation as “absolutely existential.” That characterization is accurate, but it also obscures a more fundamental point: the ISA has not failed because its members lack goodwill. It has failed because the interests of its 170 member States are genuinely irreconcilable on the terms the common heritage doctrine requires.
Into that vacuum, States have moved. The United States, not a party to UNCLOS and long skeptical of the competence of international treaties it has not signed to bind it, was first and most explicit: the Trump administration’s April 2025 executive order directed the National Oceanic and Atmospheric Administration to expedite permitting under the Deep Seabed Hard Mineral Resources Act. Applications are now under active review, some covering areas that overlap with existing ISA exploration contracts. The ISA has declared such unilateral action a violation of international law, but the United States does not agree and even skeptics of the administration’s foreign policy agree that the United States has consistently voiced skepticism about UNCLOS’ approach to deep sea mining from its inception.
Unlike the United States, Japan is a full party to UNCLOS and an ISA member in good standing. It cannot simply invoke a domestic statute and proceed with deep sea mining. What it can do—and what the MOC represents—is align itself operationally with a State that can. The new MOC is carefully constructed to avoid creating any legal obligations that would directly conflict with UNCLOS, but it offers an important path for Japanese corporations to pursue deep-sea mining by partnering with a country that is not a party to the treaty.
The ISA should be worried that the MOC provides a template for other States seeking to circumvent UNCLOS. A State party to UNCLOS that grows frustrated with the ISA’s pace cannot formally opt out without withdrawing from the convention—a drastic step with wide diplomatic consequences. But it can partner with a State that never opted in, sharing the benefits of that State’s regulatory freedom without formally abandoning its own treaty commitments. The bilateral instrument becomes a way of contracting around the multilateral regime while maintaining the appearance of adherence to it. Japan gets access to U.S. research, technology, and regulatory experience in an area where the ISA has provided none. The United States gets the diplomatic legitimacy of allied support from a major UNCLOS party.
The strategic importance of critical mineral supply chains in addition to economic pressures render the MOC a rational response by two States to a real problem that the multilateral governance framework has been unable to address. That is precisely what makes it significant as a precedent: it demonstrates that the gap between formal treaty adherence and operational alignment with a non-party is not merely theoretical, and that a carefully drafted non-binding instrument is sufficient to exploit it.
A common account of how multilateral treaty regimes fail focuses on defection: a State calculates that the benefits of breaking a treaty’s diplomatic commitments exceed the costs, exits the treaty, and suffers whatever diplomatic and economic consequences follow. The MOC strategy at play here potentially represents a more sophisticated form of regime erosion, one that captures most of the benefits of defection while avoiding many of the costs.
Game theory offers one way to visualize this. In a standard collective action problem, a multilateral resource regime functions as a cooperative equilibrium: all parties agree to constrain their individual exploitation of a shared resource in exchange for the stability and legitimacy that collective governance provides. Defection is costly because it triggers retaliation—diplomatic isolation, loss of market access, and exclusion from the regime’s benefits. The threat of those costs is what holds the cooperative equilibrium together. But what happens when a State can achieve the operational benefits of defection—access to the resource, coordination with the most technologically advanced extractor, regulatory alignment outside the multilateral framework—without formally defecting? The punishment mechanism breaks down. The defecting State’s partner absorbs the diplomatic cost; the party-State retains its seat at the table while quietly moving its operations to a different table entirely.
The seabed is a clean case, but it is not unique. The structural conditions that made this option available to Japan—a multilateral regime governing a strategically valuable resource, institutional failure to produce workable rules, a non-party with a functioning domestic alternative, and a party-State with strong incentives to align with that non-party—recur across the landscape of international resource governance.
For instance, the regional fisheries management organizations that govern high-seas fish stocks outside national jurisdiction operate on a consensus model not unlike the ISA’s. Non-member vessels—flagged to States outside the relevant Regional Fisheries Management Organization (RFMO)—have long exploited this structure by fishing without restriction in regulated areas. Less examined is the bilateral dimension: major fishing States have entered into access agreements with small flag-of-convenience registries that effectively create a parallel governance track. A State party to an RFMO that finds its catch quota insufficient can redirect its fishing fleet through a bilateral arrangement with a non-party flag State, capturing additional take without formally violating its own quota commitments. The RFMO’s enforcement mechanism—which depends on member-State compliance and has no authority over non-members—cannot reach the arrangement. The cooperative equilibrium erodes catch by catch.
Likewise, the Antarctic Treaty System, including the Convention on the Conservation of Antarctic Marine Living Resources and the Protocol on Environmental Protection, represents one of the more robust multilateral governance regimes for a common resource. However, as climate change opens new areas of the Southern Ocean and as demand for krill-derived products, rare earth deposits in Antarctic waters, and hydrocarbon resources intensifies, the conditions for defection-by-proxy will materialize. A bilateral arrangement between a consultative party and a non-consultative State—or between two consultative parties operating outside the Protocol’s framework—would be difficult to prevent under the current treaty architecture and impossible to punish through the consensus-dependent Antarctic Treaty Consultative Meeting.
Similarly, the Outer Space Treaty of 1967 declares that outer space, including the Moon and other celestial bodies, is the “province of all mankind”—language that deliberately echoes UNCLOS’ common heritage doctrine. The Outer Space Treaty prohibits national appropriation of celestial bodies. The United States resolved this ambiguity domestically through the 2015 Commercial Space Launch Competitiveness Act, which asserts that American citizens may own resources they extract from space. It then began building a network of bilateral Artemis Accords with allied and partner States—now numbering over 60—that institutionalizes a U.S.-centered resource governance framework outside the U.N. Committee on the Peaceful Uses of Outer Space, where Russia and China have blocked consensus on any framework that validates national resource rights. The Artemis Accords are not binding treaties. They are, structurally, a scaled-up version of what the Japan seabed MOC does in a single bilateral relationship: a non-binding coordination mechanism that creates operational alignment around a governance approach that the formal multilateral body has failed to endorse. China and Russia have declined to join — Russia objecting that the Accords represent a U.S.-led framework outside U.N. processes — and have instead anchored a competing framework through their own bilateral MOU, the International Lunar Research Station, which has since attracted partners of its own.
What makes defection-by-proxy particularly difficult to counter is that it does not obviously violate anything. The party-State has not withdrawn from the multilateral regime. It has not breached its treaty obligations in any directly demonstrable way. It has signed a non-binding document with a non-party. International law has limited purchase on non-binding instruments by design—that is precisely why they are used. The multilateral body can object, as the ISA has objected to U.S. unilateralism, but its enforcement mechanisms are designed to address party-State violations, not the operational consequences of a party-State’s bilateral relationships with non-parties. The punishment mechanism that holds cooperative equilibria together simply does not reach this structure.
The conventional prescription for this problem is to strengthen multilateral institutions—to give the ISA real enforcement authority, to expand RFMO membership, to negotiate a binding space resources treaty. These are not wrong recommendations, but they mistake the symptom for the disease. The deeper problem is that multilateral resource regimes have consistently been designed to serve redistributive political goals rather than to create the institutional conditions that make resource development viable for the States capable of undertaking it. Until that design failure is addressed—until commons governance frameworks are built around investment certainty and environmental protection rather than benefit redistribution to non-contributing parties, with licensing structures that give investors secure and transferable rights and environmental obligations tied to actual extraction—the structural incentives for defection-by-proxy will persist.
In short, non-binding bilateral instruments are not an aberration given the environment created for States by many international treaties. They are a rational adaptation to it.
