Bridges Trade BioRes • Volume 6 • Number 12 • 30th June 2006

EU Trade Chief Proposes New WTO Round on Energy

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EU Trade Commissioner Peter Mandelson on 23 June called for a new round of WTO negotiations that would address the energy sector and seek to treat oil and gas like other traded goods. In an interview, he described how he envisioned how a new set of negotiations, could follow the completion of the Doha Round and apply WTO rules and procedures to trade in energy products. This could potentially require oil and gas producers to liberalise distribution networks, thus opening up access to Russia’s gas pipelines, currently under the control of Moscow. Energy-importing industrialised countries would like to eliminate barriers to trade in energy as increasing global demand for oil and gas drives up prices. To address the reluctance of energy producers unlikely to support liberalisation, Mandelson suggested offering them additional investment and more security for their energy exports.

In February 2006, a group of energy-importing nations and a few major energy exporters, including Canada, Saudi Arabia, the US, Australia, and the EU tabled a “collective request” in the WTO Services negotiations to a group of developing countries including Brazil, China, Colombia, Ecuador, Egypt, India, Kuwait, Nigeria, Qatar, and the United Arab Emirates. The proposal asks them to open up their markets to freer trade in energy services, including core activities of oil and gas production, processing and distribution. Energy-related products have been largely exempted from WTO rules as a result of the GATT exceptions for national security and the conservation of exhaustible natural resources. Instead, some 51 countries and the EU have to date been using the Energy Charter Treaty, a 1998 pact that provides for cooperation on energy-related policy making, investment and free trade, as a basis for international rules on energy. The EU’s proposed new WTO rules on energy would involve a broader scope and extent than the ECT text.

Information on the Energy Charter Treaty is available at http://www.encharter.org

ICTSD Reporting; “EU Trade Chief Poses WTO Rules In Energy Sector,” WALL STREET JOURNAL, 23 June 2006.