Lamy Praises Report at Montreal Energy Meeting

24 September 2010

WTO Director-General Pascal Lamy embraced the findings of new report by the World Energy Council at the organisation's 21st major Congress, held last week in Montreal, Canada. Pointing to the findings by the Task Force of the World Energy Council on "Trade and Investment Rules for Energy" - which expresses support for the Multilateral Trading System - Lamy said he agreed 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 rules are relevant to energy, they remain relatively scattered, with little over-arching global policy consensus or goal. According to Lamy, 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.

Current WTO rules address issues such as trade-restrictive practices by state-trading enterprises, subsidies, export restrictions of various sorts, restrictions on transit, investment, and the movement of energy service providers often only by default.

Addressing the crowd of global leaders from the energy sector, Lamy said that more predictable and transparent trade rules in the energy field could benefit both energy producing and consuming nations.

What is needed, Lamy said, is that the poor must see their access to energy increased. To accomplish this, poverty levels must decline and the cost of energy must be made cheaper, he said. Secondly, the director-general said that energy issues cannot be divorced from the climate crisis. Pointing out future increases in global energy needs, Lamy said that the world needs greater energy efficiency, increased access to renewable sources, and improved lifestyles because current patterns of energy-use are harming the planet.

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). Traditional sources of energy are heavily geographically concentrated. A clear element of energy security would reside in the predictability of energy supply. According to Lamy, more sophisticated WTO rules could help achieve these goals.

With the changing composition of the WTO's membership, and with energy exporting countries, such as Russia, Libya and Algeria negotiating their accession, the imperative could become stronger to address the energy sector more fully.

Another main point that Lamy made in his address at the Congress, is that achieving consensus on the ongoing Doha Round will help improve access to clean energy by reducing tariffs and subsidies, improving transit rules, opening energy services, and liberalising trade in climate-friendly technologies. 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. Through more open markets, greater competition, and the spread of clean technology, the Doha Round can help stabilise the international trade and investment landscape in the energy field, Lamy said.

Lamy also drew attention to this year's World Trade Report of the WTO, that has been devoted to natural resources because of its clear relevance to energy (see Bridges Trade BioRes, 23 July 2010).

ICTSD Reporting.

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