WTO framework applicable to EU trade in energy (original) (raw)

2015, Trade and investments in energy in the context of the EU common commercial policy

The WTO legal framework in the field of energy is a disintegrated one. There are no specific rules on energy directly addressing its production, purchase and distribution, and even the word ‘energy’ is absent from the multitude of agreements composing the WTO system. The reason for this may be traced back to the historical roots of the organisation, with just a small number of producers of energy involved in the creation of the 1947 General Agreement on Tariffs and Trade (GATT) – the precursor of the WTO. Only more recently have major energy-producing States such as Russia and Saudi Arabia, together with some significant consumers like China or transit States like Ukraine, acceded to the WTO, amplifying a problem that is now strongly felt. This problem does not lie in the impossibility of applying WTO rules to energy-relating issues – this application is indeed absolutely possible – but in the fact that these rules were not tailored to energy, are incomplete and scattered throughout the WTO instruments. Incomplete because some topics are not covered (e.g., electricity as a non-storable, sui generis good has no status) or are covered in a general fashion, with no focus on energy problems (e.g., Art. V GATT on transit of goods is more basic than the relevant provision – Art. 7 – in the 1991 Energy Charter Treaty). Not-fully consistent because an activity like the transnational supply of energy is situated in the middle ground between the provision of a good (covered by the GATT) and of a service (covered by the General Agreements on Trade in Services; “GATS”), and ends up being subject to a dual regime49. This notwithstanding, there are many WTO rules that may find application in cases concerning energy resources. They range from the most-favoured-nation (Arts. I GATT, Art. II GATS) and the national- treatment principles (Art. III GATT, Art. XVII GATS)50 to the prohibition of quantitative restrictions (Art. XI GATT), subsidies (Agreement on Subsidies and Countervailing Measures, hereinafter “ASCM”) and dumping (Anti-dumping Agreement; “ADA”). The reach from the rules on monopolies and State enterprises (Arts. II and XVII GATT, Art. VIII GATS) and technical obstacles to trade (Agreement on Technical Barriers to Trade) to those on the Agreement on Trade-related Investment Measures (“TRIMs”; e.g., local-content requirements) and the Agreement on Agriculture (biofuels). The functioning of many of these rules is well known in legal doctrine, so they will not be analysed in-depth here. Except for the Government Procurement Agreement – which is important since the greatest energy transactions are concluded through contracts between states and private companies – only a few elements will be discussed, as incidental to the main topics of this chapter, namely the fight against market distortions and the protection of the environment, two of the main political and legal challenges the EU is now facing.