Abstract
The Energy Charter Treaty has been controversially discussed as of late and is currently undergoing a reform process. For the time being, the ECT remains the only energy-specific trade treaty going beyond a narrow regional scope and it is therefore of particular interest in the context of increasing cross-border electricity trading. This Chapter analyzes how the ECT rules relate to the WTO Agreements. It identifies some innovations vis-à-vis the multilateral framework but also highlights some more problematic areas.
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Notes
- 1.
Energy Charter Treaty (17 December 1994) 2080 U.N.T.S. 95.
- 2.
Out of these 54, all but Australia, Belarus, Norway and the Russian Federation have ratified the ECT.
- 3.
Title 1 of the European Energy Charter states as the main objective of the energy charter process that Members are ‘determined to create a climate favourable to the operation of enterprises and to the flow of investments and technologies by implementing market principles in the field of energy.’
- 4.
- 5.
See Kustova (2016), p. 359.
- 6.
The International Energy Charter is a political declaration adopted in 2015 and signed by a total of 90 states and regional integration organizations. It aims at updating the initial European Energy Charter and at strengthening energy cooperation. It does not bear legally binding obligations. See International Energy Charter, agreed text for adoption in the Hague at the Ministerial Conference on the International Energy Charter on 20 May 2015, available at https://www.energycharter.org/fileadmin/DocumentsMedia/Legal/IEC_EN.pdf.
- 7.
On the current status of Azerbaijan’s accession see the WTO website, https://www.wto.org/english/thewto_e/acc_e/a1_azerbaidjan_e.htm.
- 8.
On the current status of the accession of Belarus see the WTO website, https://www.wto.org/english/thewto_e/acc_e/a1_belarus_e.htm.
- 9.
On the current status of the accession of Bosnia and Herzegovina see the WTO website, https://www.wto.org/english/thewto_e/acc_e/a1_bosnie_e.htm.
- 10.
On the current status of Uzbekistan’s accession see the WTO website, https://www.wto.org/english/thewto_e/acc_e/a1_ouzbekistan_e.htm.
- 11.
Turkmenistan has not yet initiated the WTO accession procedure.
- 12.
For further information on the progress of the ECT modernisation process see https://www.energychartertreaty.org/modernisation-of-the-treaty/.
- 13.
- 14.
Energy Charter Secretariat, ‘The Trade Amendment of the Energy Charter Treaty Explained to Decision-Makers of Ratifying Countries’ https://energycharter.org/fileadmin/DocumentsMedia/Thematic/Trade_Amendment_Explanations-EN.pdf.
- 15.
For this purpose, Article 29 (2) (a) ECT provides that ‘Trade in Energy Materials and Products and Energy-Related Equipment between Contracting Parties at least one of which is not a member of the WTO shall be governed, subject to subparagraph (b) and to the exceptions and rules provided for in Annex W, by the provisions of the WTO Agreement, as applied and practiced with regard to Energy Materials and Products and Energy-Related Equipment by members of the WTO among themselves, as if all Contracting Parties were members of the WTO.’
- 16.
Konoplyanik and Wälde (2006), p. 542.
- 17.
Ibid, at 541.
- 18.
Defilla (2003), p. 430.
- 19.
See Annex W to the Energy Charter Treaty.
- 20.
Article 29 (4) of the Energy Charter Treaty; see also Energy Charter Secretariat (2001) [42]. Finally, with respect to customs duties, whilst the Trade Amendment has maintained the ‘best endeavours’ system described above (now also applied to energy-related equipment), it has introduced the possibility to progressively replace the pledge to maintain levels of tariffs by a binding customs tariff standstill regime. See the amended Article 29 (6) of the ECT (n 367).
- 21.
These concern trade-related investment measures (Article 5), competition (Article 6), transit (Article 7) and transfer of technology (Article 8).
- 22.
On the application of ECT provisions to issues arising from electricity transit see below in Sect. 12.4, pp. 211 et seq.
- 23.
See Annex EM I of the ECT. The categories are nuclear energy, coal, natural gas, petroleum products, electrical energy and other energy. See also Energy Charter Secretariat (2001) [46].
- 24.
- 25.
Article 3 of the Amendment to the Trade-Related Provisions of the Energy Charter Treaty, in Energy Charter Secretariat (2004), p. 177.
- 26.
Azaria (2009), p. 561.
- 27.
See below in Sect. 12.4, p. 215.
- 28.
Article 26 ECT. See also Hobér (2010).
- 29.
Gundel (2004), p. 179.
- 30.
Sakmar (2008), p. 99.
- 31.
Treaty Establishing the Energy Community (signed on 25 October 2005) OJ 2006/L 198/18.
- 32.
See also the late Thomas Wälde in the preface to his edited volume on the ECT who speculated that ‘perhaps these forces will overshadow and deny to the Energy Charter Treaty any significant future growth’. Wälde (1996), Editors Preface.
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Frey, C. (2022). The Energy Charter Treaty and the Regulation of Electricity Trade. In: World Trade Law and the Emergence of International Electricity Markets. European Yearbook of International Economic Law(), vol 25. Springer, Cham. https://doi.org/10.1007/978-3-031-04756-5_6
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