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SERVICES: SECTOR BY SECTOR

Energy services

Since the beginning of the1990s, when the energy sector was largely dominated by state-owned utilities, there has been a trend towards privatization and liberalization, with the emergence of new service activities. These ongoing structural changes have raised the profile of the energy sector in services negotiations.

Current commitments and exemptions   back to top

Energy services were not negotiated as a separate sector during the Uruguay Round. However, a few WTO members undertook limited commitments in three energy-related sectors: services incidental to mining, services incidental to energy distribution, and pipeline transportation of fuels.

Energy-related activities which are not exclusive to the energy industry are covered by other services sectors, such as transport, distribution, construction, consulting, and engineering.

One exemption to most-favoured nation (MFN) treatment (i.e. non-discrimination) has been made in pipeline transportation of fuels.

> All commitments and MFN exemptions.

Current negotiations   back to top

Energy services are included in the services negotiations, which began in January 2000.

• Proposals on energy services

Members have identified individually or in groups the following objectives for energy services negotiations (TN/S/23):

Scope of commitments

• meaningful commitments, based on the Central Product Classification, for all activities in the energy services sector and across all modes of supply
• commitments in the oil and gas sector, e.g. for exploration services, services incidental to mining, technical testing and analysis, and toll refining services
• ownership of natural resources is outside the scope of the negotiations.

Regulatory issues and additional commitments for negotiation

• need to ensure access to energy, reliability of supply, protection of consumers and the environment ('right to regulate')

Scheduling issues to be addressed

• use of the Scheduling Guide for Energy Services (JOB(03)/89) tabled by some members for scheduling commitments in energy and energy-related services in the WTO
• the absence of a specific energy services section in the WTO Classification List (MTN.GNS/W/120) should not prevent the scheduling of commitments as the Scheduling Guidelines (S/L/92) provide sufficient flexibility.

Following the Hong Kong Ministerial Declaration of December 2005, a group of members sent a collective request identifying 12 types of activities relevant to the energy industry, belonging to three main sectors, i.e. business services (including activities such as engineering, technical testing and analysis, services incidental to mining), construction (of long distance and local pipelines, for instance) and distribution (wholesale and retail of certain energy products).

The request seeks new or improved commitments across the four modes of supply, with a particular emphasis on Mode 3 (a foreign company setting up subsidiaries or branches to provide services in another country). The request is neutral with respect to energy source, technology and whether offered onshore or offshore. Furthermore, the request does not extend to the ownership of energy resources, which remains under the full sovereignty and sovereign rights of each member and is outside of the scope of GATS negotiations.

Some useful links and other resources    back to top

UNCTAD (2003), “Energy and Environmental Services: Negotiating Objectives and Development Priorities”, New York and Geneva, 2003

UNCTAD (2003), “Managing “Request-Offer” Negotiations Under the GATS: The Case of Energy Services”, UNCTAD/DITC/TNCS/2003/5, 23 May 2003, circulated as JOB(03)/141

Additional information    back to top