MJIEL Vol 3 Issue 1 2006 - Article 1

AbstractThe energy services sector was largely disregarded during the Uruguay Round of multilateral trade negotiations. The process of privatization and liberalization, started at the end of the 1980s, revolutionized a sector traditionally dominated by state-owned, vertically integrated companies, and de facto conferred to it a new and more global, trade dimension. After a description of the characteristics of the energy services market, the paper illustrates several issues of fundamental importance for the ongoing negotiations on energy services. Particular emphasis is placed on the absence of an appropriate classification, on the trade barriers services suppliers face when supplying energy services in foreign markets, on the level of liberalization achieved so far, and on the ongoing market access negotiations. The heart of the work is devoted to the proposal of a reference paper on energy services, largely modelled on the already existing WTO Telecommunications Reference Paper. The authors analyze the ideal content of such instrument and its potential beneficial effects on the process of further liberalization of the energy services sector. Lastly, the paper addresses the unresolved issue of reciprocity; particularly in relation to market access concessions, and the scope of the application of Art. VII GATS on mutual recognition. The authors conclude that, for the sake of increasing the attractiveness of a new instrument setting pro-competitive rules in the field of energy services, the conditional MFN approach with the inclusion of a reciprocity requirement seems to be the most appropriate among the available options.

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