> Pascal Lamy’s speeches
Ladies and gentlemen,
Thank you very much for having invited me to the XXIst World Energy
Congress. I had participated in your previous Congress in Rome, which
was held in November 2007. You have also participated in the WTO Public
Forum yesterday — and it is indeed the Public Forum that has kept me
here in Geneva. The joint WTO-WEC session in our Public Forum echoed
some of the very interesting discussions that you have been having in
Now, in 2007, my principal message to you was that more predictable and
transparent trade rules in the energy field could benefit both energy
producing and consuming nations.
Today, I would like to take that message further. To fine-tune it in
light of the report that has been recently issued by the Task Force of
the World Energy Council on “Trade and Investment Rules for Energy.”
I read the report with great interest, and certainly welcome the support
it expresses for the Multilateral Trading System throughout its many
pages. But I also see in the report a hope that the Trading System will
be able to do more for the energy sector.
I thank your Task Force for making the point that the international
community has yet to take a strategic approach to the rules of the
Multilateral Trading System with respect to energy trade. While several
portions of the WTO “rule-book” so-to-speak are relevant to energy, they
remain relatively scattered, with little over-arching global policy
consensus or goal. A stronger WTO rule-book could benefit the energy
sector, because just as with any sector where trade is feasible, trade
restrictions are feasible too. The WTO tackles these restrictions as its
So what could be the goal then? Well first, we must recognize that what
we have before us is a complex web of trade-restrictive practices by
state-trading enterprises; subsidies; export restrictions of various
sorts; restrictions on transit; on investment; on the movement of energy
service providers; and more. The WTO rule-book addresses some of these
issues, sometimes deliberately, but other times only by default.
Now you, in the World Energy Congress, have defined your goals around
three As: “Access,” “Availability” and “Acceptability” of energy
sources. Another way to call these issues is “long-term energy
security.” Were long-term energy security to also become the defining
principle of energy trade rules, what would those rules look like?
The word “long-term” would suggest to me that social and environmental
goals would need to be at the heart of those rules. Today, 2 billion
people do not have access to commercial energy and 1 billion only have
what is termed as “periodic” or “unreliable” supply.
Clearly, the poor must see their access to energy increased. This will
happen when their levels of poverty decline, so part of the answer lies
in economic growth. But it will also happen if we can make energy
cheaper, which enhancing access, at the international level, to
different energy providers.
Similarly, today the energy issue cannot be divorced from the climate
crisis that our planet is facing. We need to reconcile the fact that the
world will clearly need more energy, with the knowledge that our current
patterns of energy-use are harming our planet. The answer can only lie
in greater energy efficiency, renewable sources, and improved
Energy security also implies that energy supply must be allowed to
expand and to travel more readily from countries where there is surplus,
to countries where there is demand (just as with any other natural
resource). We all know, of course, that traditional sources of energy
are heavily geographically concentrated. A clear element of energy
security would reside in the predictability of energy supply. A sense of
certainty that supply will be sufficient and available, and will not
simply be cut-off. This while striking a balance, of course, between the
needs of energy exporting and energy importing countries.
A more sophisticated WTO rule-book could actually take us closer to
these goals. Having said that, trade policy would still need to be
couched in the midst of many other accompanying policies, in both the
social and environmental spheres. For instance, it is not the rule-book
of international trade that will decide “how” energy gets distributed
within a country, or the ownership of natural resources. Nor is it that
rule-book that will ensure that environmental regulations are put in
place. The need for accompanying policies will remain.
The Doha Round of trade negotiations, behind which your Task Force has
thrown its full support, could be considered a first stepping stone
towards the emergence of a customized approach in the energy field.
Towards greater energy trade security. It would build on existing
disciplines, such as the non-discrimination principle, that forms the
backbone of the WTO system as a whole.
And if successfully completed, it could open the door for a more
holistic approach, possibly encompassing new issues such as competition
policy. With the changing composition of the WTO's membership, and with
energy exporting countries, such as Russia and Algeria negotiating their
accession, the imperatives could become stronger to address the energy
sector more fully.
To give you a flavour, the Doha Round will reduce tariffs on various
renewable fuels (such as ethanol and biodiesel) and the equipment
involved in energy production and distribution; will improve WTO subsidy
disciplines; will improve the rules for transit under the Trade
Facilitation chapter of its negotiation; will open energy services in
areas such as drilling, engineering, technical testing, pipeline
construction, and distribution; and will accelerate trade opening in
energy-efficient and climate friendly technologies.
The latter, as you will have often heard me say, is a low-hanging fruit.
Today, the global value of the environmental goods and services industry
is estimated to be around US$800 billion, making it comparable in size
to the aerospace and pharmaceutical industries. Solar panels, fuel
cells, and climate consultancy services, are but a few examples of what
is on the WTO negotiating table. Barriers to the trade of these
technologies penalize the planet.
Through more open markets, greater competition, and the spread of clean
technology, the Doha Round would help stabilize the international trade
and investment landscape in the energy field.
Having said that, the Doha Round will not provide an answer to issues
such as export taxes. In addition, the many trade policies, that are
being contemplated in the climate sphere, may require examination at a
future date. I refer here to border measures that some countries may
apply to manage carbon leakage, or offset competitive disadvantage
arising from the carbon constraints imposed on production. How permits
are allocated within carbon markets may also need to be explored. The
Doha Round would only be the beginning of what the international
community may need to do.
Now, I would be remiss if I did not draw your attention to this year's
World Trade Report of the WTO, that has been devoted to natural
resources. I would strongly recommend that the Congress examine the
report, because of its clear relevance to energy. You may also wish to
note that the oil crisis of the 1970s had already placed the issue of
export restrictions in the energy sector on the Tokyo Round's
negotiating table. But this, without success. Later, the Punta Del Este
Declaration, that launched the Uruguay Round, initiated negotiations on
Natural Resource-Based Products, leading to controversial and unresolved
discussions on energy.
Let us remember that in the WTO, it would be
neither the Secretariat, nor the Director-General, that could mandate
negotiations, nor even make proposals for their initiation. This is the
prerogative of WTO members, and they would need to forge the necessary
consensus to set the negotiating machinery in motion.
Coming back to the themes of your Congress, I note that to your three
As, you have now also added a fourth, which stands for policy
“accountability” in the energy field. By placing international trade
under that goal, your message is loud and clear. A global framework for
trade in energy would bring accountability to a sector where various
types of barriers remain “unaccounted” for. As your Task Force has put
it (I quote): “the global economy requires concerted efforts to ensure
that markets remain open to energy goods, services, investments, and
movement of personnel” (unquote).
A basic point that may enable you to convince the WTO to address energy
more fully, would be to reassure its members that in so doing, they
would not be ceding sovereignty. Quite to the contrary, they would be
sovereignly deciding to create a more reliable international system for
trade in energy. Bringing greater law and order to this complex field
could turn out to be one of the best sovereign decisions ever made.
Thank you for your attention.
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