The Uruguay Round, which led to the creation of the World Trade Organization (WTO), GATT 1994, and various other agreements and Ministerial Decisions, resulted in strengthened and more comprehensive rules to deal with traditional international trade concerns. New rules were set up for areas of international economic relations previously not addressed by the GATT, including trade in services and protection of intellectual property rights. Many of the countries which became contracting parties to the GATT shortly before the conclusion of the Uruguay Round, or which are currently in the process of acceding to the WTO, are petroleum-producing and exporting countries, some of which are also Member countries of the Organization of the Petroleum Exporting Countries (OPEC) . This fact underlines the need to explore the 1 implication that the WTO Agreements will have for the flexibility of such countries in framing and implementing their petroleum-related policies. There is also a need to consider the consequences of this new international trade regime more generally for international trade in, and market access opportunities for, petroleum -based products and derivatives, including opportunities for export diversification. Conversely, these issues are equally important to developing and developed countries that rely on petroleum imports to power their economies.
At the same time, new issues have arisen which will influence trade in petroleum and petroleum products. The trade impact of environmental protection measures in this sector was the subject of the first case resolved under the dispute-resolution provisions of the WTO, and future negotiations on “trade and environment” issues will be of crucial interest to exporters in this sector. Investment and competition policy, which are also on the proposed future international trade agenda, also have important implications for producers and exporters of petroleum and petroleum products. It follows that a range of energy-related issues will be explored in the accession negotiations, including: governmental controls on production and exports of petroleum-based products, including in the framework of OPEC
• domestic prices and pricing policy
• export tariffs and taxation
• operations of state trading enterprises and monopolistic practices in this sector;
• “unfair” trade practices (e.g. subsidies and dumping)
• investment; and
• Trade in services related to the exploration, extraction, transportation and processing of petroleum.
All these issues are prominent in the WTO accession process of major petroleum-exporting2 Business enterprises directly benefit when their countries become a member of the World Trade Organization (WTO). The effects are tangible for businesses that work in both the international and national markets, but those benefits can only be used to the best advantage when companies fully understand the accession process and the changes it implies in trade. Accession to the WTO creates a number of rights for the business community. The improved rule-based system is designed to promote the expansion of international trade. The system’s primary
goal is to provide liberal, secure and predictable access to foreign markets for the goods and services of exporting enterprises. This allows business enterprises to work within the parameters of clearly identified arrangements.
WTO accession helps to ensure that enterprises can market their products internationally under competition conditions that are equitable and predictable without the disruptions caused by the sudden imposition of restrictions. The implementation of accession commitments measures can create both opportunities and challenges for the business community3
Most of countries have faced demands to modify their energy policies. Some of the applicants conceded to WTO members’ demands and changed their regulations. Some others, however, vigorously insist that these demands go beyond the standard WTO provisions and represent so-called “WTO- plus” requirements. These countries refuse to undertake binding commitments upon their accession to modify their energy policies.4
Some acceding countries have faced demands to fully liberalise their energy services sector, to eliminate export taxes and dual price systems, and even unbundle energy monopolies. Acceding countries find it difficult to defend their position in the accession negotiations as there are no clear guidelines or conditions for becoming a WTO Member. The WTO Agreement itself does not contain detailed provisions on accession to the organisation. Its only provision in this respect, Article XII, states that “Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO.” The WTO Agreement does not clarify what commitments acceding countries should
undertake and the scope and extent of demands that WTO Members can present (VanGrasstek, 2001).
Neither are there rules or guidelines for conduct of accession.5 Thus, the WTO accession process is one of negotiation rather than agreement compliance.
WTO Members have been relatively successful in getting acceding countries to undertake obligations that go beyond existing multilateral rules that address the import side of the problem of lack of energy-specific rules. Energy-importing states are interested in addressing issues such as pricing practices, natural resource development policies, procurement in the energy sector, and restrictive practices of incumbent energy companies.
Energy-exporting states would, however, be interested in addressing issues that are of concern for them such as discrimination and market access of energy products and materials as well as downstream products, the access to market of energy services of WTO Members, transit, etc. Many energy producing and exporting countries have expressed concern that high consumption and excise taxes imposed by importing countries on energy materials and products reduce the revenues received by exporting countries for their finite resources.6
