The International Trading Regime and the Regulation of Trade in Energy Resources. Is Reform Necessary and is a New Energy Agreement within the WTO Framework the Way to Go?

Abstract

Although the WTO does not address energy as a distinct sector, numerous suggestions have been made, so far essentially in scholarly writings, to adopt a sectoral agreement dealing with energy issues. This contribution argues that a new Energy Agreement (EA) within the WTO framework would raise more problems than it would offer solutions. If such an Agreement were to be added to the WTO framework, several fundamental choices would have to be made in advance, e.g. will this new EA be plurilateral or multilateral; what will the scope of its provisions be, etc.? It may be argued that the sectoral approach is not new in itself, as it has already been used on several occasions. However, a comparative teleological analysis of these agreements proves that the issues in these sectors are substantially different from those concerning trade in energy resources. The model of existing sectoral agreements is therefore hard to transpose to the energy sector. Even if new rules were to be designed and Members reached an agreement as to the scope ratione materiae and ratione personae of such an EA, its integration into the WTO framework would have to be carefully regulated. Given all these complexities, combined with the current difficulty in reaching consensus, proposals for an Energy Agreement may hit a dead end, at least for several years to come. However, there are less problematic alternatives, such as the addition of an Annex to the WTO Agreement, a Reference Paper, or the adoption of an Interpretation decision. Arguably, all these solutions offer only partial adjustment of the existing framework. Major adjustment efforts will however prove to be futile, as most of the existing provisions are already either adjusted to deal with energy issues or sufficiently flexible to allow for an interpretation that will take into consideration sectoral specificities.