Press Release 15 November 2007

RULES OF ENERGY TRADE -   
THE BEST WAY TO MOVE FOREWARD

Roma 15 November 2007 - Gerald Doucet, Secretary General of WEC, and moderator of the WEC session on the rules of energy, opened by telling delegates that the discussion topic of regulation and trade was a priority for the congress and vital for the future as the concept of energy independence was being replaced by energy interdependence around the globe.

"Everyone wants to meet energy needs in the most efficient and affordable way. To do this we need rules of trade and regulation," Doucet said.

Lawrence Herman, a Toronto lawyer and former diplomat who has complied a 150 page report on the rules of energy trade for WEC, said his report was a "compendium of issues to discuss" to which WEC could make an extremely useful contribution.

Looking at two approaches on energy trade - from the WTO and the Energy Charter Secretariat - Herman said: "Where WEC can help going forward is by gathering information from the various international organizations, NGOs, the World Bank and UNCTAD - to act as a clearing house of information."

Work to be carried out by a WEC Task Force on rules of energy trade will tackle the issue of how to get the WTO to pay attention.

Delegates at the session also discussed whether the GATT/WTO articles are sufficient to tackle emerging energy development and trade problems.

André Mernier, Secretary General, Energy Charter Secretariat (ECS), said: "Now energy is a topic that is almost too popular. To negotiate new rules regarding trade and regulation is probably impossible."
Pointing to the WTO and the ECS, Mernier said: "We have to work with what we have got".

Tackling the issue of whether countries' non-trade concerns, such as reducing greenhouse gas emissions and increasing R&D spend, could be met under existing trade rules, Simonetta Zarrilli, Legal Officer for the Divisions on International Trade and Commodities at UNCTAD said: "The question is where do we draw the line between non-trade objectives and trade. Trade may provide new markets and new technologies but there are possible problems in product differentiation (which means a different set of rules for different categories of energy products)."

She added: "WTO rules won't change but they will evolve through jurisprudence."

The key topic of dual pricing in the market - one price of energy for a country's domestic consumers and another for everyone else - was raised by participants.

Zarrilli said: "Dual prices are unfair, however negotiations in this area are extremely complex. It could become a major topic for the next round of discussions."

The delegates unanimously agreed that more must be done to free up the movement of energy engineers around the globe as demand for increasingly sophisticated technologies increases.

Herman said: "The WTO is operating on the old paradigm that separates services and goods - but the world is not like this now. This does not address the problems of modern commerce. WEC must look at this in greater detail."

To conclude the session, Doucet told delegates and participants that WEC's follow up work on the session would include consultation with a test group to improve understanding and ensure that key issues are identified and tackled.

WEC Media contact:
Mathias Hocke: hocke@worldenergy.org
Tel: +44 (0) 20 7734 5996
Stephan Albrechtskirchinger: albrechtskirchinger@worldenergy.org
Tel: +44 (0) 20 7734 5996