ENERGY CONFERENCE CONSIDERS TRADE, CLIMATE CHANGE

A recent conference among major players in the realm of energy has called on the global trading system to support a transition to a sustainable energy future.

The Italian government hosted the tri-annual World Energy Congress in Rome from 11-15 November. The meeting was convened by the World Energy Council, which was established in the 1920s and has private-sector members representing both energy producers and consumers in 94 countries.

The global trade context featured prominently on the agenda. WTO Director-General Pascal Lamy delivered one of the keynote addresses. He noted that "short of having a specific agreement on energy trade," energy already featured in various areas of the Doha Round negotiations, such as in talks on energy services and on environmental goods and services.

As the conference wrapped up, Gerald Doucet, World Energy Congress secretary-general, urged WTO Members to "open a new chapter" of energy negotiations, looking in particular at new issues arising due to the need to significantly increase the use of clean and renewable energy. Currently, standards, subsidies and other measures to encourage the development and use of renewable energy have not been comprehensively considered within the WTO, leaving the legality of certain measures unclear.

Doucet warned against a "trade war between those who are concerned over carbon emissions and those who are not." This could come about if countries with stringent climate change policies decide to slap border taxes on imports from nations that take a more lax approach to emissions controls.

A recent report by the UK-based Tyndall Centre for Climate Change Research took a different approach to the issue of climate change policies and trade. The report showed that consumer products imported from emerging economies come with a significant footprint of 'embodied carbon'. This raises issues about who is responsible for emissions -- and points to the need for a comprehensive global regime to tackle climate change and avoid 'carbon leakage' from countries with strict climate policies to those that do not.

New Economics Foundation Director Andrew Simms has accused developed countries of 'carbon laundering' their economies by outsourcing polluting industries to developing countries.

These issues are likely to surface when climate change negotiators meet in Bali from 4-13 December to discuss how to tackle climate change after the current phase of the Kyoto Protocol expires in 2012.

For more detail, see BRIDGES Trade BioRes, 16 November 2007.

ICTSD reporting; "Why China Could Blame Its CO2 on West," WALL STREET JOURNAL, 12 November 2007; ""The Next 10 Years are Critical - the World Energy Outlook Makes the Case for Stepping up Co-operation with China and India to Address Global Energy Challenges," IEA PRESS RELEASE, 7 November 2007; "INTERVIEW-IEA says energy outlook gloomiest ever," REUTERS, 7 November 2007; "China to Topple US as Top Energy User After 2010 - IEA," PLANET ARK, 8 November 2007; "China, India Growth Force Climate Change Action - IEA," PLANET ARK, 8 November 2007; "World to Stay Hooked on Fossil Fuels - IEA," PLANET ARK, 8 November 2007," AFP, 15 November 2007; "The Next 10 Years are Critical - the World Energy Outlook Makes the Case for Stepping up Co-operation with China and India to Address Global Energy Challenges," IEA PRESS RELEASE, 7 November 2007; "INTERVIEW-IEA says energy outlook gloomiest ever," REUTERS, 7 November 2007; "China to Topple US as Top Energy User After 2010 - IEA," PLANET ARK, 8 November 2007; "China, India Growth Force Climate Change Action - IEA," PLANET ARK, 8 November 2007; "World to Stay Hooked on Fossil Fuels - IEA," PLANET ARK, 8 November 2007."

ASEAN SIGNS COMPREHENSIVE FTA WITH JAPAN, SERVICES DEAL WITH KOREA

Japan and the Association of Southeast Asian Nations on 21 November announced that they had concluded negotiations on a free trade accord.

The 'comprehensive economic partnership' agreement is comprehensive, covering trade in goods and services, as well as issues including investment, and development cooperation.

According to a joint statement released at the ASEAN summit in Singapore, leaders from Japan and the Southeast Asian bloc "expressed confidence that the agreement will provide a strong impetus for further invigoration of trade and investment and create a larger and more efficient market with greater opportunities in this region."

Agence France Presse reports that under the accord, import tariffs on some 90 percent of trade between the two sides will be lifted within ten years. Rice, beef and dairy products will remain protected as sensitive products.

Both Japan and ASEAN have pledged to place some 70 categories of goods on a list for accelerated tariff reduction, mostly farm, fishery, and chemical products.

ASEAN's more developed economies (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) will reduce 90 percent of tariffs over the next 10 years on major Japanese products, such as consumer electronics and automobiles. The other four (Cambodia, Laos, Myanmar and Vietnam) will eliminate tariffs within 15 to 18 years.

Japan may also pay out $300 million to ASEAN over the next five years to improve maritime safety and port infrastructure.

Formal signings have to wait for ratification by the partners' governments, but officials remain optimistic that the accord will enter into force by next year.

Meanwhile, ASEAN on the same day signed a services agreement with South Korea, marking the third in a four-step process for a comprehensive FTA between the 10-nation trading bloc and Asia's third largest economy. Korea's offer to open its market to ASEAN companies goes beyond its commitments to the WTO.

Negotiations on investment rules, the last step in the FTA process, will continue next year. Seoul is eager to complete the deal with ASEAN soon, because the bloc has either signed or is pursuing FTAs with other major competitors, including Japan, China, and India.

"ASEAN-Japan to pilot free trade-list," MCOT, 20 November 2007; "ASEAN, Japan endorse free trade pact, but rice, beef kept out," INTERNATIONAL HERALD TRIBUNE, 21 November 2007; "Japan, ASEAN welcome new trade deal," CHANNEL NEWS ASIA, 21 November 2007; "South Korea, ASEAN sign FTA on services," KOREA TIMES, 21 November 2007; "South Korea inked services deal with ASEAN," RTT NEWS, 21 November 2007; "ASEAN, Korea sign FTA Trade in Services Agreement," SINGAPORE NEWS, 21 November 2007; "Japan, ASEAN welcome new trade deal," AGENCE FRANCE PRESSE, 21 November 2007.