33 - Energy-related rules in Accession Protocols: where are they?

Summary

ABSTRACT

Energy issues have not been systematically discussed by WTO members in the multilateral trading system. This is owing to the fact that there is no rule on energy per se in WTO agreements. Yet all tradable energy goods and services are covered by the General Agreement on Tariffs and Trade 1994 and the General Agreement on Trade in Services respectively. With energy security and climate change high on the global agenda, there is increasing interest in how to deal with energy-related issues during WTO accession negotiations, particularly given that several energy-producing countries, energy-transit countries and energy-consuming countries are currently in accession negotiations. Following the examples of earlier accessions, the ongoing negotiation dossiers would need to negotiate energy-related specific obligations in their terms of accession. This chapter identifies five key themes relating to energy in the WTO Accession Protocols of the Article XII members and explains the rationale of how these topics relate to trade in energy based on the existing WTO rules. Further, it categorizes similar energy patterns and trends for Article XII members. Finally, the chapter draws lessons for future WTO rule-making by arguing that these ‘updated’ rules on energy, found in Article XII members' Accession Protocols, will have the potential to guide the envisaged regular work of the WTO on future rule-making on trade in energy, thereby contributing to international energy cooperation in the context of the rules-based multilateral trading system.

The importance of energy in the world economy is evident from the fact that it is a fundamental input to almost all economic activities. It also constitutes a considerable percentage of the world's aggregate gross domestic product (GDP). For instance, in the period 2009–2010, Africa, the Middle East and the Commonwealth of Independent States (CIS) all had resource shares in total exports in excess of 70 per cent, while North America, Europe and Asia all had 20 per cent or less. South and Central America were in between, at 47 per cent.

Energy will continue to play an important role in the world economy. In 2012, the International Energy Forum (IEF) projected that energy needs would rise by nearly one-third by 2035. Most of this growth and increased demand for energy is expected to come from emerging economies.