RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/52
9 September 1998
(98-3480)
Council for Trade in Services
ENERGY SERVICES
Background Note by the Secretariat
A. Introduction
1. This Note has been prepared at the request of the Council for Trade in Services and provides
background information on the energy services sector.  It is meant to facilitate the discussion in the
Council on the exchange of information programme and it should not be regarded as exhaustive.Energy services were not negotiated as a separate sector during the Uruguay Round.  A few Members
undertook sparse commitments in various energy related services, however, the vast majority of the
global energy services industry is not covered by GATS specific commitments.
2. In some instances the discussion in this Note is extended to the whole energy sector,
including aspects of trade in goods.  It is hoped that this would help to identify the role of trade inservices in the sector, considering the unified approach adopted by the industry, which traditionally –
and particularly before privatisation and liberalisation – did not distinguish between the goods and the
services aspects of energy trade.  Even in liberalised environments, however, it is worth considering
whether it makes sense to apply different trade rules and regulatory principles to the goods
(production) and services (transportation and distribution) aspects of energy industries.
3. The first hurdle in energy services is represented by the issue of definition.  Prior to engaging
in an analysis of the sector and of the existing main regulatory barriers to trade it is essential to outlineservices activities in the energy sector.  This is further complicated by the fact that most industries in
the energy sector have traditionally been dominated by state-owned vertically integrated utilities,
engaged in the production, transport and distribution of energy products, leaving little margin for
trade and competition.  The relatively recent trend toward privatization and liberalization in the sector
has contributed to isolate several economic activities which might constitute services and might be theobject of multilateral trade liberalization negotiations.
4. In liberalized markets, core energy services such as transport, transmission and distribution
are increasingly supplied by independent operators under conditions of competition.  Other services
include consulting (in various fields including energy efficiency, conservation and renewable energy),
construction, maintenance of the network, and services related to distribution such as metering andbilling.
5. Once established that certain energy activities such as transport and distribution constitute
services subject to the GATS, it might be worth co nsidering to what extent such services present
characteristics distinct from the transportation and distribution of other goods to warrant the creation
of separate categories.  It appears that the transportation and distribution of electricity and gas cannotbe assimilated to that of other goods, given the specific characteristics of the goods (impossible or
difficult to store) and of the nature of the transportation and distribution networks in question (quasi
natural monopolies).  This situation is partly reflected in the WTO “Services Sectoral ClassificationS/C/W/52
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List” (document MTN.GNS/W/120) and in the “United Nations Central Product Classification”
(UNCPC), both containing separate entries for “services relating to energy distribution” and “pipeline
transportation”.  In contrast, transportation and distribution of other energy products such as coal and
oil are included in the horizontal transportation and distribution categories.
6. With few exceptions, the process of internal liberalization is still at its early stages in those
countries where it has begun, while in most countries the energy sector is still dominated by state-
owned utilities.  The breaking up of the public monopolies and the unbundling of vertically integrated
utilities is the first market access issue on the road of multilateral liberalization in this sector.  Once
Members have chosen to liberalize this sector, major regulatory aspects need to be addressed in order
to ensure that such liberalizing effort is not nullified by the market power of existing suppliers,
especially those who control the transmission and distribution networks.  This situation is similar to
that of telecommunication services where market access and national treatment commitments havebeen supplemented by additional commitments on regulatory principles aimed at ensuring some basic
conditions of competition in the liberalized markets (including interconnection to the network for new
entrants).
B. Definition
7. A major difficulty in identifying energy services is represented by the fact that the industry
has traditionally not distinguished between energy goods and services.  This unified approach to
energy is probably explained by the market structure of the sector, until recently dominated by state-
owned, vertically integrated suppliers, which performed all energy related economic activities, fromthe production of energy to its distribution to the final consumers.  In this context energy services
would normally constitute value added to energy goods produced, transported and distributed by the
same supplier.  The privatization of public suppliers and the introduction of partial or full competition
in the sector in some countries has led to a separation of energy related economic activities and to the
identification of energy services as distinct form energy goods.
1
8. Some energy products clearly fall in the goods category.  This is the case with oil and solid
fuels, which are easily stored and traded across borders.  Less evident are the cases of gas and
electricity.  Natural gas is extracted and traded across borders via pipelines.  Local pipeline networks
also allow its distribution to consumers.  It can be stored in its gaseous form, however, for its storage
and transportation to geographically distant regions, not served by pipelines, it is transformed in
liquefied natural gas (LNG).  The case of electricity is even more complicated.  Electricity generated
by the combustion of other fuels (secondary energy) or by renewable natural resources and nuclearfuels (primary energy) is not easily stored
2 and is distributed to consumers via transmission and
distribution grids.  The non-storability of electricity might have been a factor which led the drafters of
the GATT to assume that electric power should not be classified as a commodity.3  M o s t  G A T T
                                                     
1 The general industrial classification of economic activities within the European Community (NACE)
classifies activities in the energy sector according to th e following categories: (a) mining of coal and lignite;
extraction of peat; (b) extraction of crude petroleum and natural gas; (c) services activities incidental to oil andgas extraction excluding surveying; (d) mining of uranium and thorium ores; (e) manufacture of coke, refined
petroleum products and nuclear fuels; (f) production and distribution of electricity; (g) manufacture of gas and
distribution of gaseous fuels through mains. The North American Industry Classification System (NAICS)includes the following categories among those relating to the energy sector: (a) electric power generation,transmission and distribution; (b) oil and gas extraction; (c) coal mining; natural gas distribution.
2 Limited quantities can be stored in expensive pumped hydro plants.
3 With respect to Article XX(g) of the GATT, the general exception relating to the conservation of
exhaustible natural resources, the New York Drafting Committee Report noted that “as it seemed to be generally
accepted that electric power should not be classified as  a commodity, two delegates did not find it necessary toS/C/W/52
Page 3
Contracting Parties have later regarded electricity as a commodity and some of them have also
undertaken tariff bindings on it.  The World Custom Organization (WCO) Harmonized Commodity
Description and Coding System (HS) classifies electrical energy as a commodity together with other
energy goods such as coal, gas, and oil.  Unlike other energy goods, however, electrical energy is an
optional heading in the WCO HS so that WCO Members are not required to classify it as commodityfor tariff purposes.  The optional nature of the electrical energy entry in the HS classification might
reflect the fact that some countries do not regard it as a commodity but as a service.
4
9. In spite of the element of uncertainty regard ing electricity, it seems generally accepted that
the production of primary and secondary energy do not constitute services subject to the GATS, but
result in goods, whose trade is subject to the GATT, as the production service is incorporated in the
value of the good produced.  Transportation and distribution of energy constitute services according to
the GATS if they are provided independently.  Other services intervene in the energy value added
chain (from production to resale to consumers), including construction, engineering, and consulting
services.  These services, however, are better defined as energy related services rather than energy
services.
10. The WTO “Services Sectoral Classification List” (document MTN.GNS/W/120), does not
include a separate comprehensive entry for energy services.  Important energy services (transport,distribution, construction, consulting, engineering, etc.) are covered by the respective horizontal
categories, while some energy related services are listed as separate subsectors.  An exception is
represented by 11(G)(a) “pipeline transportation of fuels,” which is listed as a separate sub-sector of
transport services.  Several entries under 1(F) “Other business services” cover energy related services,
including: (e) technical testing and analysis services; (h) services incidental to mining; (j) servicesincidental to energy distribution; (m) related scientific and technical consulting services; (n)
maintenance and repair of equipment.
11. The United Nations Provisional Central Product Classification (UNCPC) also does not list
energy services as a separate category.  Annex I, however, provides a compendium of energy related
products listed under different headings in the CPC, including energy related services.  These are:retail sale of motor fuels (61300); sales on a fee or contract basis of fuels, metals, ores, timber,
building materials and industrial and technical chemicals (62113); wholesale trade services of solid,
liquid and gaseous fuels and related products (62271); retail sales of fuels oil, bottled gas, coal and
wood (63297); transport services via pipeline: transportation of petroleum and natural gas (71310);
services incidental to mining (88300); manufacture of coke, refined petroleum products and nuclear
fuels, on a fee or contract basis (88450); services incidental to energy distribution (88700).  Among
the administrative services the CPC also include: administrative fuel and energy related services(91132) and administrative mining and mineral resources, manufacturing and construction related
services (91133).
12. The CPC entry “services incidental to energy distribution” (88700) and the relevant
explanatory note deserve particular attention.  The literal meaning of the title of this entry and in
particular the word “incidental” seem to refer to services such as consultancy, maintenance of thenetworks, reading of meters, etc.  However, the explanatory note reads as follows: “transmission and
distribution services on a fee or contract basis of electricity, gaseous fuels and steam and hot water to
households, industrial, commercial and other users.”  This seems to include transport and distribution
                                                                                                                                                                    
reserve the right for their countries to prohibit the ex port of electric power.”  See, GATT, Analytical Index:
Guide to GATT Law and Practice, Updated 6th Edition (1995).
4 Regarding the issue of whether electricity was a commodity subject to the GATT or should be
considered a services, see also A. Plourde (1990), “Can ada’s international obligations in energy and the Free-
Trade Agreement with the United States,” 24(5) Journal of World Trade , 35 at 36; and Jackson, World Trade
and the Law of GATT: a legal analysis of the General Agreement on Tariffs and Trade , at 745.S/C/W/52
Page 4
of electricity and gas, when these services are operated by an independent services supplier and not by
a vertically integrated manufacturer.  This uncertainty is also reflected in the W/120 definition and in
the Schedules which have included this entry ( infra ).
13. The UN CPC Rev.1, adopted by the statistical committee of the United Nations in February
1997, appears to take account of the change in the structure of energy industries, which has allowedfor the emergence of independent service segments, such as transport, distribution and transmission.
The CPC Rev.1 includes important energy services entries such as “electricity distribution services”
(69110) and “gas distribution services through mains” (69120).
5  Energy transport services on the
other hand remain within the horizontal category of transport services.
14. Recently an attempt to define energy services was undertaken under the Energy Charter
Treaty (ECT) ( infra ).  The draft ECT classification of energy services was never adopted by ECT
Members and it appears that this definitional exercise was recently abandoned.  The draft, based oncorrespondences with the WTO W/120 classification and the UNCPC, focused on energy related
services, leaving out core services activities such as transport and distribution in important energy
sectors.
6
• Would it be desirable from a trade liberalization point of view to classify energy
services as one sector, or should different parts of it be classified under relevant
sectors (transport, distribution, etc.)?
C. Energy sectors
Coal
15. This sector includes the extraction of all types of coal (hard coal, lignite, peat) as well as
associated preparation processes including cleaning,  crushing, screening and sizing of coal.  Most
aspects of this industry relate to trade in goods, as the establishments engaged in the mining and
preparation of coal are often the same who distribute  it and sell it to consumers.  There are, however,
also establishments which perform coal mining and preparation services for others on a contract or fee
basis.
16. A very large share of coal demand (up to 90% in the United States) comes from the electricity
generating sector, where the coal (primary energy) is used to produce electricity (secondary energy).
Transportation costs constitute an important part of the final price of coal, therefore a competitivetransport sector is an important factor in favouring trade in this sector.  Transportation of coal is
usually by rail and delivery to power stations not located directly on the mine may happen through a
dedicated rail link.  Smaller quantities of coal can be transported by road and dedicated transport
systems, such as slurry pipelines and conveyors, sometime used over very short distances.  There
                                                     
5 See, See, “Detailed analysis of the modifications brought about by the revision of the central product
classification,” Note by the Secretariat – Addendum, Energy, S/CSC/W6/Add.1, 4 June 1997.
6 The following is the ECT draft classification of energy services: Affecting several Energy sub-
sectors: meter calibration, certification and servicing; ge ological and seismic surveying; hazard analysis and risk
evaluation.  Energy Efficiency:  contract energy management (energy service companies); energy tariff analysis;
energy auditing; insulation design and installation.  Oil and Gas Production:  reservoir simulation and appraisal;
drilling and downhole services; non-recourse project finance.  Oil Transport:  marine tanker chartering.
Downstream Oil:  bunkering; carriage of oil products by pipeline.  Downstream Gas:  pipeline monitoring, repair
and maintenance; gas trading.  Coal:  Coal shaft sinking and roadway tunnelling; opencast contracting.
Electricity:  staff training in electrical engineering; system design.  Nuclear:  fuel enrichment.  Renewables:
resource assessment; energy forestry.S/C/W/52
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seem to be no compelling arguments to separate services such as transport and distribution of coal
from transport and distribution of other goods.
Petroleum
17. Activities in this sector include exploration and extraction of crude oil, drilling, completing
and equipping wells services activities in support of oil exploration and production and the
manufacture of refined petroleum products (gasoline, kerosene, distillate fuel oils, residual fuel oils,
lubricants, etc.).  This sector is dominated by large vertically integrated multinationals, engaged in the
extraction, refining and distribution of oil products, therefore leaving small margins for separate
services activities.  At the end of 1995, 49 refineries out of 95 or 61% of crude oil distillation capacity
in the EU was owned by just 10 companies, who also  dominated the extraction market.  In Europe the
major oil companies also dominate the distribution market, however, their market shares in the fuelretailing sector have been gradually eroded by supermarket outlets.  In France a third of automotive
fuels is sold by supermarkets (up to 40% only for gasoline) and in the United Kingdom 20%.
Competition in this sector has led to a reduction in prices and improved consumer access to the
distribution network.
7
Electricity
18. The supply of electricity involves several activities, including: purchasing of fuel;
constructing power stations and generating electricity; expanding, operating and maintaining
transmission and distribution networks; trading bulk electricity (both nationally and internationally);
supplying and metering; and operating customer billing and accounting systems.  Important servicesaspects can be isolated in competitive markets, where different suppliers intervene at different levels
of the value added chain. In the most open electricity markets, where generators, distributors and
consumers have access to the network, there is also a separate commercial activity referred to as
supply or merchant function.  The energy mercha nt buys bulk power from the generator, buys
transmission and distribution services and collect payments from the consumer.  Such trading functionis in principle distinct from the physical activities of generation, transmission and distribution.
19. Secondary electricity is produced by the combustion of fossil fuels such as coal, oil and
natural gas.  Primary electricity includes nuclear power plants, hydroelectric plants, wind power
plants and other sources of renewable energy.  Unlike secondary electricity, it does not require the
input of other energy products.  For example nucle ar power generation produces electricity from heat
generated by a nuclear reaction following scission of uranium-based fuels rods, while hydro-electric
power is generated by the turbines driven by the controlled release of water.  Once produced,electricity is delivered to the high voltage transmission networks, from which it is transmitted to sub-
stations near demand centres and distributed to final consumers on lower voltage lines and cables.
Transmission refer to the transportation of electric ity from generators to distribution companies and
large industrial consumers through high voltage mains.  Distribution includes the delivery of
electricity to ultimate consumers (including residential consumers) through low voltage mains.
Important services related to distribution include metering and billing.
20. Most countries in the world with the exception of the United States and Japan have had one
vertically integrated, state-owned utility compan y, responsible for supplying electricity.  This
situation has begun to change in the 1990s with the introduction of competition in several countries
including Argentina, Australia, Chile, Norway, Sweden and the United Kingdom.
21. In the United States, the largest competitive market, the electricity industry comprises various
groups of regulated entities (including private and public owned utilities subject to universal service
                                                     
7 See, Commission of the European Communities (1997), “Panorama of EU industry”.S/C/W/52
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obligations and to regulated rate setting procedures), several categories of non-utility power producers
and other market participants which do not generate power, but act as go-betweens in the transfer of
electricity (power marketers, energy brok ers and wholesale transmission services).8  Competition
already exists in the generation and wholesale electricity markets, while legislation extending
competition to the retail market is before Congress.  The “Comprehensive Electricity CompetitionAct”, introduces retail competition as from 2003, allowing all customers to choose their electricity
supplier.  A degree of flexibility is retained insofar as a State may opt out of retail competition if it
believes its consumers would be better off under the status quo or an alternative state plan.  The Act
also contains important provisions dealing with th e abuse of market power and a rule allowing the
regulatory authority to require transmitting utilities to turn over operational control of transmission
facilities to an independent system operator.  This is crucial to ensure competition where utilities are
involved in both generation and transmission, howev er, also in absence of vertical integration, an
independent system operator structure would greatly reduce the risk that operation of the transmission
system could be used to favour some generators or customers over others.
22. In the United Kingdom, a competitive supply market was introduced in 1990 for customers
having a maximum demand of 1 MW.  In 1994 competition was extended to cover all customers with
a maximum demand of over 100 MW.  This market covers over 50.000 customers, and about half of
the total electricity supply in the United Kingdom.  Full competition for supply was scheduled to be
extended to all consumers in April 1998.  In Europe, competition was also introduced in Norway and
Sweden, who instituted systems separating generation and distribution of electricity from transmission
and allowed free competition for generation and distribution.
9  As a result of experiences in countries
which have liberalized this sector it has become more widely accepted that if transmission mayremain a “natural monopoly”, competition may develop in the generation and distribution sectors in
presence of regulated rights of access to the transmission networks ( infra ).
Gas
23. Exploration and production of natural gas is cl osely linked to exploration and production of
oil and the establishments involved in exploration and production are often also involved in
transmission and distribution.  However, the gas transmission and distribution sectors present
characteristics rather different from oil and more similar to electricity.  Transmission activities
involve: (a) the bulk purchase of natural gas supplies, normally under long-term contracts with gasproducers; (b) the transport of gas via high-pressure, high-capacity pipelines from the point of
purchase to the principal areas of demand; (c) the storage of natural gas for strategic or load-balancing
purposes; and (d) the bulk sale of natural gas to distribution companies other than transmissioncompanies or large-volume industrial or power generation customers.  Distribution involves the
movement of gas through local low-pressure pipelines to final consumers in the residential,commercial and industrial sectors.  Other services related to distribution include meter-reading,
invoicing and administration accounting.
24. Gas is normally transported and traded via high-pressure pipeline networks between
geographically neighbouring countries.  Major pipelin e networks run across Europe and across North
America  and link Europe to North Africa, and to the former USSR Countries.  Long-distance
transportation and trade, however, often takes place in the form of liquefied natural gas (LNG) as
technical barriers and costs involved in building pipeline networks are too high.  For example the
major consumers of natural gas in the Far East (Japan, South Korea and Taiwan) are separated byoceans from the main producers (Indonesia, Malaysia and Australia), so that trade takes pace mainly
in LNG.  The supply of natural gas in the Far East therefore often also involves the liquefaction
                                                     
8 See, US Department of Commerce (1998), International Trade Administration, “US Industry & Trade
Outlook 98.”
9 See, Commission of the European Communities (1997), idem .S/C/W/52
Page 7
process, maritime transportation of LNG and re-gasification at the receiving end.  LNG can also
constitute an alternative to pipeline transportation in regionally neighbouring countries, when the
extra costs involved match the fixed and variable costs of pipeline transportation.
25. This sector, like electricity has been traditionally dominated by state-owned vertically
integrated utilities, which produced, purchased or imported gas, and stored, transported and deliveredit to the end users.  The introduction of competition in some countries has altered this pattern allowing
for the emergence of independent producers and distribu tors.  In the United States deregulation of the
natural gas transmission and distribution industry in the early 1990s has led to increased competition,
price transparency and lower end-user prices, thus favouring the role of natural gas with respect to
other energy products.  The share of natural gas in primary energy demand in North America is
currently estimated at just under 25%.
10  In the United Kingdom, British Gas (BG), who had a
monopoly on the transmission and distribution of ga s, was privatised in 1986.  BG’s monopoly was
gradually phased out with regard to the industrial and commercial markets and is also about to end in
the residential market.  In addition to liberalization, the former vertically integrated utility (BG) was
re-organised and divided in two companies, the fi rst responsible for domestic production, gas trading
and sales in the UK and the second responsible for gas transportation, storage, international
exploration and production.  Like for electricity, the natural monopoly nature of the transmissionnetwork need not prevent competition in the generation and distribution sectors provided that rules on
access to the network are in place.
Nuclear energy
26. Nuclear energy activities involve: (a) production of uranium from open pit or underground
mining methods; (b) the conversion of uranium oxide into uranium hexafluoride (representing 3% of
the total cost of the fuel), which possesses th e required chemical purity for enrichment and
fabrication; (c) enrichment by means of gas diffusion or centrifugal separation (25% of total cost); (d)
fuel fabrication, where the enriched uranium is used to produce the final fuels elements to be placed
into the reactors (11% of total cost); (e) produc tion of secondary energy from nuclear reaction; (f)
storage (disposal) and reprocessing of discharged fuels.  While production (of nuclear fuels as well as
of secondary energy) would seem to fall within the goods domain, it appears that the whole
transformation process might fall within the services domain, also in consideration of the fact that
conversion, enrichment, fabrication, reprocessing and disposal are often performed by different
service suppliers.
27. In the European Union the nuclear energy sector is subject to the Euratom Treaty, which
confers to the European Atomic Agency the excl usive right to conclude supply or procurement
contracts (including enrichment).  This exclusivity does not extend to transformation or processing
contracts, which only have to be notified to the Agency.  The production, transformation and disposal
of nuclear fuels are subject to strict safety and environmental regulations in all countries.  Specific
regulations also exist to ensure that no material in the civil fuel cycle is used for military purposes.
28. Article XIV bis of the GATS includes among the security exceptions Members’ action to
protect essential security interests “relating to fissionable and fusionable materials or the materials
from which they are derived.”  It is unclear whether “essential” security interests could be at stake in
the international trade of nuclear energy services for pacific purposes, also considering the potential
spillovers in the military field.
                                                     
10 See, Commission of the European Communities (1997), idem .S/C/W/52
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Renewable energies
29. Renewable energy sources are not depleted by their exploitation to produce electricity, heat or
liquid fuels.  Renewable energies include: hydr oelectric power, biomass, geothermal energy, wind
power and solar energy.  With the exception of bi omass (the conversion of wood, wood residues and
crops into heat, electricity or liquid fuels), renewable energy are almost free of pollution.  In this
respect the increase in conventional energy environmental regulations is likely to favour the less
regulated renewable energy sector.
30. The renewable energy sector offers good opportunities for energy related services such as
engineering and consulting services, as production is not only limited to major suppliers but it can
also involve end consumers.  End consumers involved in the production of renewable energies such as
small businesses and house owners are likely to increase demand for consultancy and maintenanceservices.  In this sector an important role is also performed by research and development services
which are carried out predominantly by departments of large energy companies, universities, and
government funded as well as private institutions.
D. Energy trade
31. Energy goods have been treated for a long time  as being outside the scope of reach of GATT
rules, by relying on the general exception relating to the conservation of exhaustible natural resources
(Article XX:(g)) and on the national security exception (Article XXI).11  Trade in this sector has on
the other hand been the object of special arrangements such as the OECD Agreement on anInternational Energy Programme.  The decline in oil prices and the consequent reduction in the
importance of “scarcity” considerations in the formulation of economic policies have more recently
led countries to treat energy goods like other commodities and therefore subject them to the GATT
multilateral trade rules.  In contrast, the public and vertical nature of the utilities and their monopoly
position have mostly prevented trade in energy services.  Also this situation, however, is fastchanging, following privatization and liberalisa tion of energy sectors in various developed and
developing countries.
32. The patterns of international trade in energy products change significantly among the various
sectors.  Coal and oil, easily stored and transported, are traded world-wide, while gas and electricity
are mostly traded on a regional basis, due to storing and transportation difficulties.  Most of trade in
natural gas (76% of total world trade) takes place between Canada and the US and between Russia
and Western Europe.  Canada is the main source for US natural gas imports, accounting for 99% oftotal imports of natural gas in 1995.  Three-fourth of world gas is transported via pipeline, the
remainder, is transformed into liquefied natural gas (LNG) and shipped.  LNG trade is most common
in Asia ( supra ); Japan alone accounts for more than half of the world’s LNG imports.
12  A  s m a l l
amount of gas is traded in Asia via pipeline between Malaysia and Singapore, while the construction
of an ASEAN wide pipeline network is under discussion.13
33. The regional nature of electricity trade is even more accentuated then for gas, due to the non-
storability of electric power and to the reliance on networks as the only means of transportation.
Moreover, electricity trade depends on the existence of interconnections between national electricity
grids.  In the European Union opportunities for electricity trade with non-EU Countries have been
historically limited by the lack of grid interc onnection, Norway and Switzerland being the only two
                                                     
11 Although not subject to GATT rules, trade in energy goods between vertically integrated public
utilities has traditionally taken place in a relatively liberal international environment.
12 See, US Department of Commerce (1998), idem .
13 See, International Energy Agency (IEA) (1997), “Asia Electricity Study.”S/C/W/52
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countries exchanging significant amounts of electricity with the EU.  This has been partly remedied
by the linking up of Poland, Czech Republic and Slovakia to the main European grid.14  In the United
States until the mid 1960s very little electricity was traded even within regions.  This has changed
radically, as in 1995 trade among regions was five time as large as in 1965 and the US has become a
net importer of electricity from Canada and Mexico.  In Asia, electricity trade occurs between a fewcountries, who are interconnected.  Interconnections exist between Thailand and Laos, Indonesia and
Singapore, Vietnam and Laos, China and Hong Kong, while it is being considered between Thailand
and Malaysia.  An ASEAN electricity grid has also been discussed by an ASEAN inter utility group.
15
34. Geographic constraints, however, seem to affect more the goods aspect, rather than the
services aspect of energy trade in electricity and gas.  Trade in energy services, in particular
establishment based trade (mode three), is less affected by the network transportation constraints
deriving from geographical distance and lack of interconnection, as service suppliers can establish andsupply energy services such transmission and distribution in countries which have liberalized and
opened their markets to international competition.  Cross-border supply of energy services (mode
one), on the other hand might be seriously affected by distance and lack of interconnection between
the country of origin of the service supplier and the destination country.
35. The principal GATS modes of supply for international trade in energy services appear to be
commercial presence (3), cross-border supply (1) and movement of natural persons (4).  With the
support of mode three commitments, competitive suppliers could take advantage of the privatization,
liberalization and unbundling of national energy markets, especially in the electricity and gas sectors.
Unbundling of vertically integrated utilities al lows for the emergence and the liberalisation of
important services such as transportation and distribution, by separating activities within the energyvalue added chain.  The network-bound distribution of gas and electricity should also make possible
the supply of energy distribution se rvices cross-border, where interconnection exist between different
national networks.  Consultancy services in the energy sector could also benefit from GATS mode
four commitments.
36. It was considered earlier (Section B) that, within the existing WTO framework, production of
energy goods comes within the scope of the goods agreements, while transmission, distribution and
related services come within the scope of the GATS.
37. The cross-border trade of energy goods encounters obstacles such as tariffs, non-tariffs
barriers and restrictive business practices (RBPs), such as vertical foreclosure of transmission and
distribution networks in the destination country.  The WTO goods agreements deal with the first types
of obstacles (tariff and non-tariff barriers), while the second type (RBPs) falls out of the scope of
WTO agreements, at least for the time being.  RBPs, however, are the object of the analytical andexploratory work, which is taking place in the Working Party on the Interaction between Trade and
Competition Policy.
16
38. Cross-border trade in energy services encounters market access, national treatment, and other
regulatory barriers and restrictive business practices by incumbent operators controlling transmission
and distribution networks.  All Members are bound by the GATS MFN unconditional obligation whilemarket access and national treatment barriers are dealt with by Articles XVI and XVII and by the
                                                     
14 See, Commission of the European Communities (1997), idem .
15 See IEA (1997), idem .
16 On this point, see A. Mattoo (1997), who has argued that liberalization of trade in distribution
services could go a long way in addressing restrictiv e business practices such as vertical foreclosure, by
providing for the possibility of establishing alternative distribution networks.  The author, however, recognisesthat if economies of scale considerations force foreign se rvice suppliers to rely on local distributors (as is often
the case for electricity and gas), then trade liberalization is not enough and there might be a case for pro-
competitive regulation.S/C/W/52
Page 10
progressive negotiation of specific commitments.  Other domestic regulatory barriers are subject to
the provisions of Article VI, including a test of necessity linking them to the policy objectives they are
meant serve.  Restrictive business practices by incumbent operators are subject to Article VIII (rules
on monopolies and exclusive services suppliers) and Article IX (consultation and exchange of
information between Members on RBPs).
39. In the cases of electricity and gas transmission services, often regarded as natural monopolies,
Article VIII would require Members to ensure that (a) the incumbent monopoly in a given market
does not act in a manner inconsistent with MFN and with the Member’s specific commitments in that
market; and (b) the monopoly supplier does not abuse its monopoly position in services markets
outside the scope of its monopoly, which are the object of specific commitments under the GATS.  A
clear example of this second situation would be that of a vertically integrated electricity utility, active
in the generation, transmission and distribution markets, which is the incumbent natural monopolist inthe transmission market and abuses this position in the liberalised generation and distribution
markets.
17  Other GATS disciplines on RBPs can be developed under Article XVIII, following the
example of the Reference Paper on basic telecommunications, which includes rules on transparency,
use of market power by major suppliers, interconnection, independent regulator and universal service.
40. Unlike trade in goods, trade in services is defined as including the cross-border movement of
the factors of production (capitals, mode three and labour, mode four).  In the case of goods, however,
foreign direct investment in the production of energy would not be considered part of international
trade.  As a result WTO multilateral trade rules cover foreign direct investment for the production of
energy services (thorough establishment based trade), but they do not cover foreign direct investment
in the production of energy goods.
41. Foreign direct investment in the production of energy goods (energy producers seeking
establishment abroad) is not the object of comprehensive multilateral trade rules.  The Agreement on
Trade Related Investment Measures (TRIMs) applies GATT Articles III and XI to trade-related
investment mesures such as those linking investors’ right to use imported goods as inputs to their
export performance.  This agreement, however, affects the cross-border trade of energy goods ratherthan establishment.  Broader aspects of the relatio nship between trade and investment are the object of
analytical and exploratory work in the Working Party on the Relationship between Trade and
Investment.  Also Restrictive Business Practices in this area, like for cross-border trade of goods, are
still outside the scope of WTO Agreements, pending the analytical work, which is taking place in the
Working Party on the Interaction between Trade and Competition Policy.  Article III of the GATT,
however, would seem to apply to govern ment induced anti-competitive practices.
42. Establishment based trade by energy service suppliers is covered by the GATS (mode three).
It is subject to the unconditional MFN obligation of Article II.  Market access and national treatment
barriers to mode three in energy services are the object of Members’ commitments under Article XVI
and XVII.  Like for cross-border supply, Article VI deals with other domestic regulatory barriers,
while important aspects of RBPs by incumbent operators are either dealt with by Article VIII (in the
case of monopolies or exclusive service suppliers) or can be the object of legally binding additionalcommitments under Article XVIII.
                                                     
17 The monopoly position must, however, de jure  or de facto  be authorised by the state.  In fact
according to Article XXVIII(h) of the GATS, “monopoly supplier” of a service means any person, public orprivate, which in the relevant market of the territory of a Member is authorized or established formally or ineffect by that Member as the sole supplier.  It appears that a natural monopoly, which is the result of a market
failure and exists without any facilitating government action would be outside the scope of Article VIII of the
GATS.  See A. Mattoo (1997).S/C/W/52
Page 11
43. It was considered earlier that one of the difficulties in defining energy services was the fact
that the industry itself did not distinguish between goods and services activities, as a result of the
vertically integrated structure of many energy markets.  Important services activities have emerged
with the unbundling and the liberalisation of energy markets.  The first result of unbundling, however,
has been the liberalisation of the production market  and the emergence of producers independent from
the utilities, which maintained control on transmission and distribution.  In general liberalisation of
transmission and distribution has followed the introduction of competition in the production market.
44. It appears, however, that under the current WTO agreements the distinction between
production (goods) and transmission/distribution (services) might create an imbalance in the
application of multilateral trade rules to different liberalised segments of a previously vertically
integrated market, especially with respect to establishment trade and restrictive business practices.
The GATS provides legally binding rules (including MFN, national treatment, market access anddomestic regulation) applying to the establishment of energy services suppliers, while at least for the
time being there are no comprehensive rules on investment for goods.  Moreover, the GATS also
includes binding rules on monopolies and exclusive service suppliers and the legal framework to
develop more regulatory disciplines touching upon important anti-trust issues, on the example of the
telecommunications Reference Paper, while RBPs of goods manufacturers are currently out of thescope of the WTO Agreements.
TRADE IN GOODS FOREIGN DIRECT INVESTMENT
Barriers Multilateral trade
rulesBarriers Multilateral trade
rules
PRODUCTION OF
ENERGY (GOODS )- Tariff and non-
tariff barriers
- RBPs, vertical
foreclosureWTO goods
Agreements
- Analytical work,
taking place inWGTCP- Market access,
national treatmentand otherregulatory barriers
- RBPs, vertical
foreclosure- Analytical work,
taking place inWGTI
- Analytical work,
taking place inWGTCP
CROSS-BORDER TRADE ESTABLISHMENT TRADE
TRANSMISSION AND
DISTRIBUTION OF
ENERGY (SERVICES )- Market access,
national treatment
and other
regulatory barriers
- RBP, vertical
foreclosure- GATS obligations
and commitments
- Articles VIII,
XVIII (reference
paper) of the GATS- Market access,
national treatment
and other
regulatory barriers
- RBP, vertical
foreclosure- GATS obligations
and commitments
- Articles VIII,
XVIII (reference
paper) of the GATS
• Is the WTO separation between goods trad e rules (applying to trade in energy
products per se) and services trade rules (applying to trade intransportation/transmission and distribution of energy products) desirable in the
electricity and gas sectors?  Would it be more efficient to apply a single coherent setof trade rules to liberalisation in these sectors, considering the structure of the
industry and the existing WTO rules?S/C/W/52
Page 12
E. Regional agreements
The European single energy market
45. In the European Union a good degree of competition and very few barriers to trade between
Member States exist in the oil refining and marketing sectors.  Competition also exists in the coal
sector, where, however, EU-wide subsidy schemes are still in place.  The natural gas and electricity
transmission and distribution industries have been tr aditionally less open and competitive, due to the
role performed by state-owned utilities in these sectors.  The movement towards liberalization and
privatization has led the European Commission to develop frameworks for single European energy
markets in the electricity and gas sectors.
46. The first stage of the Commission programme was completed in 1992 with the adoption of
Directives on the transit of electricity and natural gas, and on price transparency in these sectors.  The
electricity transit Directive (90/547/EEC) provides that “each high voltage transmission utility shall
facilitate power exchanges between other utilit ies though its grid, provided that transmission
reliability is not affected.”  The gas transit Directive (91/296/EEC) aims at facilitating the transit of
gas between high pressure transmission grids, by  requiring companies owning or controlling high
pressure gas pipelines to allow companies from other Member States to carry gas across their grid if
capacity is available and subject to price and quantity negotiations. All transit requests and the
outcome of negotiations must be notified to the Commission.  The price transparency Directive
(90/337/EEC) requires electricity and gas utilities to “supply to the Statistical Office the rates they
charge to all categories of customers on the understanding that published aggregate figures willrespect confidentiality.”
47. Further stages of the Commission programme aimed at the completion of the internal market
in the electricity and gas sectors, by introducing common rules on market opening and competition.
The electricity Directive (96/92/EC)
18 liberalises the generation sector and includes rules on
authorization and tendering procedures for the construction of new generating capacity.  It establishesthe freedom to choose the supplier for industrial consumers of over 100 GWh and distributors.
Minimum levels of market opening are set at 23% of national electricity consumption from 1997,
27% from 2000 and 33% from 2003.  Reciprocity conditions can be imposed by a Member State who
opens a larger part of the market than the other Member States for the higher levels of market access.
48. The core of competition rules deal with the right of access to transmission (transport of
electricity on the high-voltage interconnected system) and distribution (transport of electricity on the
medium-voltage and low-voltage interconnected system) networks.  The Directives allows MemberStates to choose between two alternative approaches: third party access (TPA) and single buyer (SB),
when organising access to the transmission and distribution networks.
49. TPA can be regulated or negotiated.  Under a negotiated TPA regime, producers and
consumers of electricity will contract supplies directly with each other, but they will have to negotiate
the access to the network, including the transport tariff,  with its operator.  These negotiations aresubject to a dispute settlement procedure.  In the case of regulated TPA customers have right of access
to the network on the basis of published tariffs.  The single buyer, normally but not necessarily the
transmission system operator, is a legal person responsible for the unified management of thetransmission system and/or for centralized electricity purchasing and selling.  The SB is under the
obligation to purchase the electricity contracted by an eligible customer ( supra ) from another
producer at a price which is equal to the sale price offered by the SB to eligible consumers minus the
                                                     
18 Adopted by the Council of Ministers on 19 December 1996.  It entered into force on 19 February
1997 and gives Member States two years to bring their legislation in compliance with its requirements.  Belgium
and Ireland have additional one year and Greece additional two years.S/C/W/52
Page 13
price of the published (fixed in advance) tariff for the transport.  The SB system should create similar
economical results as regulated TPA, however, it has been argued that it would not bring about the
same level of competition as TPA.19  The Directive also contains rules on public service obligations,
which can be imposed by governments on electricity companies, but should be clearly defined, non-
discriminatory, transparent, verifiable and published.
50. A draft Directive on the internal market in natural gas was adopted by the EU Council on 12
February 1998.  This document is now before the European Parliament.  The Directive establishes
common rules for the transmission, distribution, supply and storage of natural gas.  It takes over the
principles adopted in the electricity Directive, taking account of the specific features of the natural gas
market.  The level of market access is set at 20% of the total gas consumption at entry into force of
the Directive, 28% after five years and 33% after 10 years.  The organization of access to the system
is limited to two alternatives: (1) negotiated acce ss, whereby natural gas undertakings and eligible
customers negotiate access to the system on the ba sis of voluntary commercial agreements; and (2)
regulated access, whereby Member States guarantee the right of access to natural gas undertakings
and eligible customers on the basis of published tariffs and other terms and obligations for use of thesystem.  The Directive also contains rules on public service obligation similar to those contained in
the electricity Directive.
The Energy Charter Treaty
51. The Energy Charter Treaty (ECT) establishes energy cooperation between 49 states, including
all the Members of the EU, several central and Eastern European countries, Russia, all Newly
Independent States of the former Soviet Union, Australia and Japan.
20  The Treaty has come into force
on 16 April 1998, although ratification is still pending in some Members.  Pending formal ratification,
the ECT is provisionally in force in Russia.21  It contains rules on the protection of foreign direct
investment, rules on energy transit, rules applying GATT provisions to non-WTO Members in the
energy sector, a mechanism for the settlement of disputes between governments and between
governments and private investors, rules on transparency, and an obligation for governments to haveand enforce competition laws.  The ECT has also begun work on energy services, which resulted in a
draft list of energy related services, later abandoned ( supra ).  This work is still in its early stages, as
ECT Members are still focusing on issues of definition.
52. The provisions on investment apply to any in vestment of an investor of another ECT
Contracting Party associated with an “economic acti vity in the energy sector”, including exploration,
extraction, refining, production, storage, land transport, transmission, distribution, trade, marketing or
sale of energy materials and products.  Economic activities in the energy sectors also include suchservices as construction of energy facilities, pros pecting, consulting, management and design and
activities aimed at improving energy efficiency.  The ECT contains an obligation to grant to existing
investment and related activities of investors of other ECT Contracting Parties treatment no less
                                                     
19 See, Commission of the European Communities (1997), idem .
20 The following countries have signed the ECT in 1994: Albania, Armenia, Austria, Australia,
Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Cyprus, Denmark,Estonia, European Communities, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy,Japan, Kazakhstan, Kyrghyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Netherlands,
Norway, Poland, Portugal, Romania, Russian Federation, Slovak Republic, Slovenia, Spain, Sweden,
Switzerland, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, United Kingdom. The Former YugoslavRepublic of Macedonia acceded to the ECT on 1 April 1998.
21 As of 24 April 1998, the following countries had formally ratified the ECT: Albania, Armenia,
Austria, Azerbaijan, Bulgaria, Croatia, Czech Republic, Cyprus, Denmark, European Communities, Finland,Former Yugoslav Republic of Macedonia, Georgia, Germany, Greece, Hungary, Italy, Kazakhstan,
Kyrghyzstan, Latvia, Liechtenstein, Luxembourg, Moldov a, Netherlands, Portugal, Romania, Slovak Republic,
Slovenia, Spain, Sweden, Switzerland, Tajikistan, Turkmenistan, Uzbekistan, United Kingdom.S/C/W/52
Page 14
favourable than that accorded to domestic investors, investors of another ECT Contracting Party or of
any third country (Art.10(7)).  This corresponds to a National Treatment or MFN standard of
treatment, according to which of the two is more favourable.
53. Another provision (Art.10(2)) also stipulates th at Contracting Parties shall endeavour to grant
the same standard of treatment (National Treatment /MFN) to the “making of investment” by investors
of other Contracting Parties.  Article 10(4) provides for the conversion of this endeavour clause into a
binding rule in a Supplementary Treaty, to be concluded by 1 January 1998.  A draft Supplementary
Treaty dated 24 June 1998 is currently under consideration by ECT Members for adoption.  Other
investment rules in the ECT include (i) the right to transfer investment capital and profit in a freely
convertible currency; (ii) the right to employing key personnel of the investor’s choice; (iii) the right
to compensation for losses suffered by a foreign investor in time of war or civil disturbance; (iv) and
the right to compensation for expropriated assets at the market value as non-affected by the intentionto expropriate.
NAFTA
54. Chapter Six of the Nord American Free Trade Agreement (NAFTA) deals with “Energy and
basic petrochemicals”.  Although Chapter Six belongs to Part two of the Agreement, which deals withtrade in goods, it “applies to measures relating to energy and basic petrochemical goods originating in
the territories of the Parties and to measures relating to investment and to the cross-border trade in
services associated with such goods.”  Chapters Ten on Investment and Twelve on Cross-border
Services also apply to trade in energy services, however, Article 1201(2)(b) of Chapter Twelve
specifically provides that “this Chapter does not apply to services associated to energy and basicpetrochemical goods to the extent provided in Chapter Six.”
55. In Chapter Six, Article 603 incorporates th e provisions of the GATT “with respect to
prohibitions or restrictions on trade in energy and basic petrochemical goods”, including the
prohibition of quantitative restrictions, minimu m and maximum export-price requirements and
minimum and maximum import-price requirements (except as permitted in enforcement ofcountervailing and antidumping orders and undertakings).  Article 604 prohibits “any duty, tax or
other charge on the export of any energy or basic pe trochemical good to the territory of another Party,
unless such duty, tax or charge is adopted or maintained on: (a) exports of any such good to the
territory of all other Parties; and (b) any such good when destined for domestic consumption.”
56. Probably the most relevant provision to energy services is Article 606 on “energy regulatory
measures,” which subjects such measures to national treatment, the disciplines on import and export
restrictions and the prohibition on export taxes.  Energy regulatory measures are defined in theAgreement as “any measure by federal or sub-federal entities that directly affects the transportation,
transmission or distribution, purchase or sale, of an energy or basic petrochemical good.”  Annex
602.3 allows end-users and suppliers of natural gas or basic petrochemicals goods to negotiate supply
contracts cross-border, whenever end-users and suppliers consider this to be in their interests.  Mexico
has an exemption with respect to most activities relating to crude oil, natural gas and basicpetrochemicals, including exploration, refining, storage, transmission and distribution.
ASEAN
57. The Association of Southeast Asian Nation (ASE AN) has promoted several initiatives in the
field of energy cooperation, including an Agreem ent on Energy Cooperation (1986), an Agreement on
Petroleum Security (1986) and a Medium-Term Programme for Action on Energy Cooperation (1995-
1999).  A recent meeting of ASE AN Energy Ministers held in Sing apore on 1 August 1998 endorsed
a Conceptual Planning Framework on energy to be incorporated in the Hanoi Plan of Action, which is
to be adopted by ASEAN Heads of State/Government at the Sixth ASEAN Summit to be held inS/C/W/52
Page 15
Hanoi in December 1998.  The Planning Framewor k provides broad policy and implementation
initiatives including a commitment to pursue the early realisation of the trans-ASEAN energy
networks, namely the ASEAN Power Grid and the Trans-ASEAN GAS Pipeline projects, which
should pave the way for enhanced intra-regional en ergy trade.  ASEAN coop eration in energy should
also be facilitated by the establishment of a central body, the ASEAN Centre for Energy (ACE), due
to open in Jakarta on 1 January 1999.
APEC
58. Several initiatives in the energy sector are taking place under the umbrella of the Asia-Pacific
Economic Cooperation Forum (APEC).  An Energy Working Group (EWG), established to enhance
energy cooperation between APEC countries, is charged with the implementation of a program of
projects and cooperative activities including a power infrastructure initiative, a natural gas initiative,cooperation in energy standards, and a work progra m on energy efficiency.  The power infrastructure
initiative has seen the EWG involved in an extensive programme aimed at finding ways of reducing
the risks and costs associated with investing in power infrastructure projects and reducing the cost of
providing electricity within APEC Member Economies.  In order to identify the policies, institutional
arrangements and legislative and administrative regimes most conductive of business, the EWGestablished the “Energy Regulators’ Forum” and  the “Ad Hoc Business Forum on Regional
Cooperation for Power Infrastructure ” in 1996.  Among the main outcomes of the Energy Regulators’
Forum there are: (i) summaries of APEC Member Ec onomies’ electricity regulatory arrangements; (ii)
tariff pricing policy methodologies in APEC Me mber Economies; and (iii) Independent Power
Producers (IPPs) power purchase arrangements in APEC Member Economies.  The Ad Hoc Business
Forum on Regional Cooperation for Power Infrastructure has also done relevant work in the fields of
transparency, tender and bid process and standardisation.
22
59. A key outcome of the EWG for competition and trade in the energy sector was the
preparation of a “Manual of Best Practice Principles for Independent Power Producers”, which was
endorsed by APEC Energy Ministers at their sec ond meeting in Edmonton, Canada in August 1997.
This initiative was aimed at facilitating private sector investment in order to meet the APEC region’s
power infrastructure needs.  It has been estimated that as much as $US1.6 trillion in investment
capital will be required until 2010 to meet the increasing demand for electricity in the APEC region.
As such capital could not be furnished by governments and multilateral financing institutions alone,
APEC Energy Ministers agreed that a predictable, transparent, institutional and regulatory framework
was required to attract private capital.
60. The “Manual” contains non-binding principles covering institutional and regulatory
structures; tender/bid processes and evaluation criteria; power purchase agreements and associated
tariffs structures; and financing and its implications.  The title on institutional and regulatory
structures includes principles on: (i) the separation between regulator and utility; (ii) the separation
between generation and natural monopoly transmission functions (unbundling); (iii) the development
of a competitive market in electricity generation and energy supply; (iv) the complementarydevelopment of the transmission grid, including thr ough private investment; (v) transparency in the
application of environmental and public policy objectives to the electricity sector; (vi) a commercial
environment with performance targets set for the publicly owned utilities, commercial tariff policies
in place and a competitive and stable market in fuel supply; (vii) laws enabling foreign ownership and
control of IPPs; (viii) consistent central and provincial government regulations and approvalprocesses; (ix) clear, published and transparent approvals process; (x) independent regulation.  When
applied these principles should contribute to the reduction of business costs, facilitate private sector
                                                     
22 For more information on APEC energy initiatives see the APEC Energy Working Group web-site:
http://www.dpie.gov.au/resources.energy/energy/apec/.S/C/W/52
Page 16
investment and create conditions for the efficient allocation of capital to the power infrastructure
sector.
61. At their August 1997 meeting in Edmonton, APEC Energy Ministers also launched an
initiative to look at ways to accelerate investment  in natural gas supplies, infrastructure and trading
networks in the APEC region.  Recommendations, based on strong input from business, are to be
made to APEC Ministers at their next meeting in Okinawa in October 1998.  A Steering Committee,
comprising representatives from APEC economies, oversees the initiative.  It is proposed that options
for consideration under the initiative could include collaboration on best practices in gas
infrastructure, working together on technical issues like standards and testing procedures, and efforts
to reduce cross border and domestic regulatory impediments.
• Do regional initiatives in the energy sector provide useful models for trade
liberalisation and pro-competitive regulation at the multilateral level?
F. Regulation
62. The energy sector is generally highly regulated in order to protect important policy objectives
such as health and safety, environmental protection, universal service and consumer protection.  Inthose countries where vertically integrated public utilities maintain a monopoly on the supply of
energy, there is no scope for international competition.  Market access barriers, however, also remain
in partially liberalized markets, where only one segment of the energy value added chain is opened to
competition (i.e. generation, distribution, transport, related services, etc.).  Foreign equity
commitments may be used to favour cooperation between domestic and foreign suppliers andinvestment in recently privatized utilities.
63. All countries regard the energy sector as a strategic industry, critical to economic and social
development, and touching upon issues such as scarci ty of supply and states’ sovereignty over natural
resources.  Developments in energy markets, including  the collapse of the price of oil and the reliance
on alternative energy resources, have gradually shifted national energy policies from the culture ofscarcity of the 1970s and early 1980s to a more market oriented culture based on gradual liberalisation
and competition.  Even under conditions of competition, countries maintain important strategic
interests in the energy sector, which are expressed in national policy objectives ranging from
economic development, continuity of supply, universal service, environmental protection, health and
safety; with respect to the liberalisation of energy services the GATS allows WTO Members to
continue to pursue these national policy objectives by regulating the sector in a manner which is
compatible with their specific commitments and the rules contained in Article VI.
64. Once the energy sector is open to competition, a major trade diversion or trade facilitation
role can be played by domestic regulation and competition rules.  Those countries who have ended the
monopoly of vertically integrated public utilities, have had to introduce new complex regulation in
order to ensure the creation of a competitive market .  In this respect competition has required re-
regulation rather than deregulation.  The sectors where re-regulation has proven to be most importantto bring about competition are electricity and gas.  Central to liberalization in these sectors is the
concept of “unbundling”, which is the separation of previously vertically integrated utility’s
operations into separate generation, transmission and distribution operations.  This allows to introduce
competition into as many elements of power and gas supply operations as possible.  In fact, whilst
transmission may remain a natural monopoly, generation/extraction and distribution need not be.
65. Several countries around the world have began the liberalization process by opening their
electricity generation industries to competition and have invited independent power producers (IPPs)
to develop capacity in addition to that built by the utilities in place.  In some developing countries theS/C/W/52
Page 17
entry into the market of foreign owned IPPs was made inevitable by the inability of state owned
utilities to finance all of the rapid expansion in power generating capacity needed.
66. The next step consists in allowing certain categories of consumers - in the first place large
industrial consumers and distributors - to choose the generator from which to buy power.
Competition requires the definition of access rights to the transmission network, which may remain anatural monopoly.  The owner of the network could be a vertically integrated utility, which remains in
the competitive market, or an independent operator.  The most advanced competitive regimes
normally require the transmitting utility (whether vertically integrated or not) to relinquish control
over operation of its transmission facilities to an independent system operator.  In any case access to
the transmission network by other generators an d consumers would be subject to stringent rules,
aimed at preventing the transmitting utility from abusing its natural monopoly over the network.
67. Countries who have introduced competition in the power sector, have done so on the basis of
three different models: (a) full competition; (b) grid access
; and (c) single buyer .  The full competition
model requires the full vertical separation of power supply activities, combined with a competitivespot market.  This model has so far been adopted only in the United Kingdom and in the State of
Victoria in Australia, where competition in the retail market - allowing also residential consumers to
switch suppliers - is scheduled for 1998 and 2001 respectively.  The grid access model providesaccess for newcomers to their incumbent competitors’ grid, on the basis of long term contractual
arrangements.  This model has been adopted in the United States
23 and by the European Union
Directive on the liberalization of the internal power market in alternative with the single buyer model
(infra ).  Full vertical separation of generation, transmission and distribution is not required.  Rights of
access are generally limited to large industrial consumers and distributors, while other users, includingresidential consumers have no choice of supplier.  In practice this model allows monopolies to remain
in place at the local retail distribution level.  Competition in retail distribution is important because,
where consumers have no choice, there is less incentive for distributors to buy electricity at the lowest
price possible from competing generators, as they are able to pass the extra cost on the final
consumers.
68. The single buyer model allows for the introduction of a certain degree of competition next to
a centralised segment often consisting of a vertically integrated state-owned utility (the single buyer).
The single buyer is the only entity which can buy and sell electricity within a particular area.  All
produces have to sell to this single buyer and all consumers will buy from the single buyer.  The
single buyer (SB) manages the transmission network,  purchase and resell electricity and tender and
contract for new capacity.
69. In most countries the energy sector is subject to tight environmental, health and safety
regulations.  Those regulations, however, tend to affect the production of energy goods more than
services aspects such transport, transmission and distribution.  The production of all types of energies,
with the exception of some types of renewable energies, has a deep impact on the environment and on
the health and safety of human beings.  Environmental regulations attempt to balance the growing
demand (especially in developing countries) for energy products with the need to minimise thenegative impact on the environment of energy use and production.  Those regulations focus on non-
fiscal measures such as the rationalisation of energy use, including conservation and energy
efficiency, support of renewable energies, the introduction of cleaner and more efficient technologies
and the imposition of limits on CO
2 emissions, but also on fiscal measures such as taxes on
carbon/energy and exemptions on clean energies.  However, if on the one hand WTO Members have
the right to continue to regulate the energy sector to ensure the achievement of legitimate policy
objectives such environmental protection, and health and safety in the energy sector, on the other hand
                                                     
23 The United States, however, is now moving towards a full competitive market, with retail
competition scheduled for 2003.S/C/W/52
Page 18
the trade distortive effect of such regulatory measures should be minimised, by ensuring that they are
no more trade restrictive than necessary to achieve a given policy objective.  In this respect the
development of international standards by the relevant international organizations would serve an
important role in helping Members to identify th ose environmental and health and safety regulations
which could achieve the policy objective in sight with the least trade restrictive effects.
70. Another aspect of regulation concerns public service obligations.  With the end of the state-
owned monopolies, governments still need to ensure  that privatised energy suppliers continue to
provide certain essential services in the general interest of the public.  Thus, for example, electricity
distribution companies might be required to charge uniform prices across all regions of a country
regardless of cost and to bring power to isolated areas, even when the prices paid by consumers living
in these areas are not sufficient to cover the costs.  In those countries where income distribution is
more unequal, governments might require that below cost rates be offered to some consumer groupssuch as low income residential consumers.  In many developing countries governments require
utilities to undertake rural electrification programmes, which are generally unprofitable.  Rural
electrification can take two basic forms: connection of provincial town and villages to the existing
transmission infrastructure, where those are located close to existing lines; and the provision of non-
grid electricity produced by diesel generators, where the geographic location makes the link-up to thegrid uneconomic.
24
71. Like for telecommunications services, multilateral trade rules should not undermine
governments’ right to impose public service obligations, however, in an internationally competitive
environment it would be necessary to define rules requiring that public service obligations be clearly
defined, non-discriminatory and transparent.
• Would it be desirable in the context of a negotiation on energy services to agree on a
set of regulatory principles based on the example of the telecommunicationsReference Paper?
G. Specific commitments in energy services
72. In the absence of an energy sectoral initiative in the Uruguay Round, specific commitments in
energy services are very limited and rather sparse.  There are three sectors in the WTO Services
Classification List (W/120), which are specific to en ergy: pipeline transportation of fuels (a sub-sector
of transport services); services incidental to ener gy distribution and services incidental to mining (sub-
sectors of other business services).
73. Only three Members have commitments in pipeline transportation of fuels.25  Two of these
Members refer to UNCPC 713, which defines the entr y as “transportation via pipeline of crude or
refined petroleum and petroleum products and of natural gas.”
74. Eight Members have specific commitments in services incidental to energy distribution.26
Two of these Members specify that the entry covers only consultancy services incidental to the
distribution of energy, the core distribution and transmission services remaining unbound.  The othersix Members do not specify the coverage of the entry.  If the UNCPC explanatory note is relied upon
rather than the literal meaning of the words, thos e commitments might be read as including the core
                                                     
24 See IEA (1997), idem .
25 Australia, Hungary, and New Zealand.
26 Australia, Dominican Republic, Gambia, Hungary, Ni caragua, Sierra Leone, Slovenia and the United
States.S/C/W/52
Page 19
distribution and transmission activities.  Five of these six Members have referred to the relevant
UNCPC number (887).  One Member specify that the commitments covers only distribution of gas.
75. Thirty three Members have scheduled commitments in services incidental to mining.  In the
UNCPC, services incidental to mining are defined as “services rendered on a fee or contact basis at oil
and gas fields, e.g. drilling services, derrick building, repair and dismantling services, oil and gas wellcasing cementing services.”  Eleven Members ha ve limited their commitments to advisory or
consulting services.  Seventeen Members have listed no limitations on market access and national
treatment, with the exception of “Unbound except as indicated in the horizontal section” under mode
four.  Three Members have left mode one and two unbound due to lack of technical feasibility.  The
remaining Members have scheduled few limitations.
76. Other energy related services are also covered by commitments undertaken by Members in
sectors such as distribution, construction, research and development, related scientific and technicalconsulting services, management consulting services and supply services of personnel.  In the
construction sector, the W/120 entry “general construction work for civil engineering” (513)
corresponds to the same UNCPC entry, which, howev er, also includes the following sub-sectors: long
distance pipelines, communication and power lines (cables) (5134) and local pipelines and cables;
ancillary works (5135).  Forty-six members made commitments in “general construction work for
civil engineering services” in the Uruguay Round.  Distribution services commitments do not cover
electricity and natural gas, which according to the UNCPC definition are covered by the entry
“services incidental to energy distribution.”  The UNCPC definition of wholesale and retail trade
include the following sub-sectors: wholesale trade of solid, liquid and gaseous fuels and related
products (62271); and retail sales of fuel oil, bottled gas, coal and wood (63297).  In the UruguayRound 34 Members made commitments in wholesale trade services and 33 Members in retail trade
services.  Four Members, however, excluded some energy products (petroleum products, solid and
gaseous fuels) from their wholesale commitments, and four also excluded similar products from retail.S/C/W/52
Page 20
Table 1:  Structure and ownership of public electricity supply♦
Number of Companies except IPP
Generation (G) Transmission (T) Distribution/
Supply (D/S)Ownership Share of IPP
generation
Indonesia PLN + RECs 1 (PLN) PLN + RECs State (PLN)
Mixed (others)
Philippines 1 (NPC) 1 (NPC) 146 State (G + T)
Mixed (D/S)19%
Thailand (1992) 1 (EGAT/EGCO) 1 (EGAT) 2 (MEA, PEA) State
France EdF (+ others) 1 (EdF) (EdF) (+ others) State
US≈ 3 250Mixed 9.7%
Japan 12 (+ others) 10 10 Private
PLN: Perusahaan Umum Listrik Negara (Indonesia)
RECs: Regional Electricity CooperativesNPC: National Power Corporation (Philippines)
EGAT: Electricity Generation Authority of Thailand
EGCO: Electricity Generating Company Limited
(Majority private ownership; generates and sells electricity to EGAT)
MEA: Metropolitan Electricity Authority (Thailand)PEA: Provincial Electricity Authority (Thailand)
EdF: Electricité de France
Source:  IEA, Asia Electricity Study.
Shaded areas indicate a high degree of vertical integration.
                                                     
♦ Public electricity supply encompasses all those power companies whose main business is to generate,
transmit, distribute and/or deliver power to ultimate consumers.  Autogenerators are not part of public power
supply.S/C/W/52
Page 21
Table 2:  Structural reform and introduction of competition
Disintegration Competitive
Capacity
BiddingWholesale
Grid AccessHorizontal:
CompaniesVertical:
GridCompetitive
PoolRetail Grid
Access
Increasingcompetition══════════════════════════════════════▷
Centralised Controlled
/g49/g50/g51Indonesia
"Single Buyer"Internal
restructuring,partial, after1998?Possible
spin-offtransmission&
distribution
Philippines Centralised:
to gridco /Department
of EnergyPartial: NPC
gensetdivestiture,
consolidation
+ new entry indistributionPartial?  NPC
or successorgridco to
own and
operatetransmissiongrid
Thailand After 2000 Possible
generationsplit-up before
2000Separation of
transmissionand
distribution
after 2000
Centralised Controlled
/g49/g50/g51France
"Single Buyer"
Japan Since 1996 Since 1996
UK Since 1990 Partial in
generationPartial
reintegrationSince 1990 By 1998
Victoria
(Australia)Since 1994 Complete Complete Since 1994 By 2001
NPC: National Power Corporation (Philippines)
Source: IEA, Asia Electricity Study.S/C/W/52
Page 22
Table 3:  Summary of privatization plans in Asian countries
Company to be
PrivatizedTarget Date
IndonesiaGeneration:
Max.  40% of PLN's successors
Genco 1 (Java-Bali 1)
Genco 2 (Java-Bali 2)
Transmission:
Grid extensionAfter 1998
Time horizon not determined
PhilippinesGeneration:
NPC privatization through genset
divestiture, geothermal and hydro to
remain under gov't control
Transmission:
Possible
Distribution:
New private entryTime horizon not determined
Time horizon not determinedTime horizon not determined
ThailandGeneration:
EGAT's successor, EGCO, is already
under majority private ownership and
further privatisation is planned for 1997
Transmission:
Admission of "Strategic Partners"In progress
After 2000
PLN: Perusahaan Umum Listrik Negara (Indonesia)
NPC: National Power Corporation (Philippines)EGAT: Electricity Generation Authority of ThailandEGCO: Electricity Generating Company Limited
Source:  IEA, Asia Electricity Study.S/C/W/52
Page 23
Table 4:  Key factors affecting the emergence of competition in gas markets
Factor Europe1UK US
Number of incremental sources supplying
each market3 40 Hundreds
Multiple independent offshore
terminals/pipeline systems, or open access to
theseFew Yes Yes
Number of independent producers serving
each market3 major incremental 20+ Hundreds
Third party open access to transmission
infrastructureNo2Yes Yes
Third Party open access to distribution
infrastructureNo Yes No
Competitive supply to power sector No2Yes Yes
Competitive supply to large industry No2Yes Yes
Competitive supply to small consumers No Pending No
Spot market No Developing Yes
Scale of individual geogra phical markets Large Large Large
Rate of market growth Rapid in power
sector, slow in
othersRapid in power
sector, slow (1%) in
othersSlow to
moderate
Linkage between individual markets Integrated Integrated Interstate
pipelines
Export potential No From 1998 to
continental Europe(and Ireland)Not outside
NAFTA
1  Excluding the UK
2  Under discussion
Source: EC Commission, The Single Market Review.S/C/W/52
Page 24
Table 5:  The benefits of competition
England & Wales Argentina Norway New South
Wales
Reform Open access pool
PrivatizationUnbundlingOpen access pool
PrivatizationUnbundlingOpen access pool
UnbundlingClosed pool
Business unitsseparate
Market
culture/g51/g51 /g51 /g51
Productive efficiency gains
Labour 50% reduction in numbers by
NP/PG; NP output peremployee increased from 7.2GWh p.a. in 1989/90 to
17.4GWh in 1994/9530-35% reduction in
numbers at C.Puertoand C.Costanera;C.Puerto increased
capacity per
employee from 0.47MW in 1990 to 1.21MW in 199420% reduction at Oslo
Energin.a.
Fuel Reduction of coal subsidy by
UK£ 1bn p.a.;  NP reduced fuelcosts from 1.9p/k Wh in1990/91 to 1.7p/k Wh (current
prices) in 1993/94
Exploitation of lower cost gasn.a. n.a. n.a.
Plant
performanceNE availability improved
substantially:  46% increase inAGR output
Reduction in expenditure on
repairs and maintenance:  forNP reduced from UK£250 m in1992 to UK£213 m in 1994
Increased flexibility of plant
operationThermal plant
unavailabilityreduced from 60%to 20%n.a. Reduction in forced
outage rate from 6%to 5%
Improvement in
thermal efficiencyand operationalprocedures
Increased flexibility
of plant operationincluding two-
shifting
Dynamic
efficiency
gains8.5 GW coal plant retired;  9.5
GW new CCGTs from existinggenerators and IPPs with
consequent improvements in
thermal efficiency:  38% forcoal to around 50% for CCGTsPrivate sector
investment in 1231MW plant
Neuquen against
pool price riskReduction in annual
rate of investment ingeneration by over
50% while
consumptionincreased at under 2%p.a.n.a.
Allocative
efficiencygainsHalf hourly pool prices
responding to demand/supplyconditions introduced, though
some problems with dominance
of NP/PG
Average real price reductions of
10%Wholesale price
reduction of 40%from winter 1993 to
summer 1995Contract price
reduction of 38%(partly due to water
availability) and for
domestic consumersof 2%, reduction ofcross-subsidy betweenindustrial and
domestic sectorsPool prices
dominated by coalcontracts but
reflecting load shape
NP = National Power;  PG = PowerGen;  NE = Nucl ear Electric;  AGR = Advanced gas-cooled reactor.
Central Puerto and Central Costanera are main successor companies to SEGBA
Source: EC Commission, The Single Market Review.S/C/W/52
Page 25
Table 6:  The ten largest energy companies in Europe (1994)
Country Turnover
(million ECU)Net profit
(million ECU)Employment
(thousands)
Royal Dutch/Shell NL/GBR  79 764 5 242 106.0
British petroleum GBR 42 653 2 031 60.0
Elf Aquitaine F 33 172 -825 89.5
Electricité de France F 27 873 191 117.6
ENI I 27 377 1 675 91.5
RWE D 23 934 479 118.0
Total F 20 725 513 51.8
ENEL I 17 725 1 248 105.2
Repsol E 14 894 608 18.7
Petrofina B 14 094 259 14.0
Source:  DABLE, Fortune 500S/C/W/52
Page 26
Table 7:  Largest independent power producers, July 1996
Company July 1996 (MW) 1995 Rank
1. Edison Mission Energy 5,446 4
2. PowerGen 5,374 3
3. National Power 5,150 1
4. AES 4,413 7
5. Enrol Development 3,029 6
6. Cons. Elec. Power Asia 2,950 5
7. Destec Energy 2,599 9
8. Dominion Energy 2,224 20
9. Southern Electric International 2,183 10
10. Tractebel 2,179 17
11. US Generating 2,172 8
12. EGCO 2,056 n.a.
13. Sithe Energies 1,926 7
14. British Gas 1,862 12
15. CMS Generation 1,730 11
MW = megawatts
Source:  Independent Power ReportS/C/W/52
Page 27
Table 8:  World production of natural gas
(Million toe) (1) 1992 1993 1994 Share
1994(5)Change
1993/94
EUR 12 144.5 156.6 158.4 3 683.7 1.1
Rest of Western Europe 34.5 32.9 35.6 827.9 8.2
Former USSR & Eastern Europe 681.3 665.5 628.5 14 616.3 -5.6
North America 567.6 592.6 609.6 14 176.7 2.9
Latin America 88.9 91.0 86.2 2 004.7 -5.3
Asia 136.5 143.9 157.9 3 672.1 9.7
Africa 66.1 69.1 66.4 1 544.2 -3.9
Middle East 104.3 110.4 114.6 2 665.1 3.8
Australia & New Zealand 25.5 26.6 21.8 507.0 -18.0
World 1 849.2 1 888.6 1 879.0 43 697.7 -0.5
(1) toe:  tonnes of oil equivalent
Source:  BP Statistical Review of World Energy, Eurostat.S/C/W/52
Page 28
Table 9:  GATS commitments; services incidental to energy distribution
MEMBER SECTOR MARKET ACCESS
LIMITATIONSNATIONAL TREATMENT
LIMITATIONS
Australia Services incidental to energy
distribution (887**)Covers consultancy servicesrelated to the transmission and
distribution on a fee basis of
electricity, gaseous fuels andsteam and hot water tohousehold, industrial,commercial and other users1) None
2) None3) None4) Unbound except as
indicated in the horizontal
section1) None
2) None3) None4) Unbound except as
indicated in the horizontal
section
DominicanRepublicServices incidental to energy
distribution (887)1) None
2) Unbound
3) None
4) Unbound1) Unbound
2) Unbound
3) Unbound
4) Unbound
Gambia Other Business services
(including CPC 887)1) None
2) None3) Unbound except asindicated in the horizontalsection
4) Unbound except as
indicated in the horizontalsection1) None
2) None3) None4) Unbound except asindicated in the horizontal
section
Hungary Consultancy services
incidental to energydistribution (CPC 887)1) None
2) None3) None4) Unbound except as
indicated in Part I1) None
2) None3) None4) Unbound except as
indicated in Part I
Nicaragua Services incidental to energy
distribution (887)1) None
2) Unbound
3) None4) Unbound1) None
2) Unbound
3) None4) Unbound
Sierra Leone Other Business services 1) None
2) None3) Foreign service providersare permitted to establish
service companies or
institutions with SierraLeonean partners in the formof joint ventures4) Unbound except asindicated in horizontal
commitments1) None
2) None3) None4) Unbound except as
indicated in horizontal
commitments
Slovenia Services incidental to energy
distribution - for gas only(CPC 887**)1) None
2) None3) None4) Unbound except asindicated in the horizontalsection1) None
2) None3) None4) Unbound except asindicated in Part I
United States Services incidental to energy
distribution1) None
2) None
3) None4) Unbound except asindicated in Part I1) None
2) None
3) None4) NoneS/C/W/52
Page 29
Table 10:  GATS commitments; pipeline transportation of fuels
MEMBER SECTOR MARKET ACCESS
LIMITATIONSNATIONAL TREATMENT
LIMITATIONS
Australia Pipeline transport –
transportation of fuels (7131)1) None
2) None3) None4) Unbound except as
indicated in the horizontal
section1) None
2) None3) None4) Unbound except as
indicated in the horizontal
section
Hungary Pipeline transport 1) Unbound
2) None3) Services may be providedthrough a Contract ofConcession granted by the
state or the local authority
4) Unbound except asindicated in Part I1) None
2) None3) None4) Unbound except asindicated in Part I
New Zealand Pipeline transport (713) 1) None
2) None3) None4) Unbound except as
indicated in the horizontal
section1) None
2) None3) None4) Unbound except as
indicated in the horizontal
sectionS/C/W/52
Page 30
Table 11: GATS commitments; other energy related commitments♦
MEMBER SECTOR MARKET ACCESS
LIMITATIONSNATIONAL TREATMENT
LIMITATIONS
Canada General construction work for
civil engineering:
- power facilities and pipelines1) None, other than: cabotage
2) None3) None other than:
Construction (Ontario): an
applicant and holder of a waterpower site development permitmust be incorporated inOntario4) Unbound except as
indicated in the horizontal
section1) None
2) None3) None
4) Unbound except as
indicated in the horizontalsection, and: Construction(Ontario): an applicant andholder of a water power sitedevelopment permit must be a
resident of Ontario
Other: site preparation for
mining (CPC 511*)1) None, other than: cabotage
2) None3) None4) 
Unbound except as indicated
in the horizontal section1) None2) None3) None4) 
Unbound except as indicated
in the horizontal section
Colombia Design, construction,
operation and maintenance of
oil and gas pipelines1) None
2) None
3) None
4) Unbound except as indicated
in the horizontal section1) None2) None
3) None
4) 
Unbound except as indicated
in the horizontal section
Côte d’Ivoire Installation and assembly
work:
- prospecting, mining or
processing of minerals
- energy generation, excluding
wholesale or retail servicesrelating to equipment or parts
thereof1) Unbound
2) Unbound3) None4) Unbound except for the
entry and temporary stay of
some categories of naturalpersons1) Unbound
2) Unbound3) Government approval,granted subject to preferential
use of local services and
employment and training oflocal executives andsupervisors, required forenterprises.
4) None
Ecuador Site preparation work for
mining (CPC 5115)1) None
2) None
3) None4) Unbound except asindicated in the horizontalsection1) None
2) None
3) None4) Unbound except asindicated in the horizontalsection
Egypt General construction work for
civil engineering:
- Long distance pipelines,
communication and powerlines (cables)
Installation work:
- Gas fitting construction work1) Unbound*
2) Unbound*
3) Commercial presence only
allowed for joint venturecompanies; foreign capitalequity shall not exceed 49% ofthe total capital required forthe project
4) None1) Unbound*
2) Unbound*
3) None
4) None
                                                     
♦ This table lists some energy related commitments clearly spelled out in the schedules.  It provides
only some examples of energy related activities coming within the domain of other services sectors and should
not be regarded as exhaustive of all energy related commitments contained in the schedules.  Moreover, the vast
majority of commitments in sectors such as distribution, construction, management consulting, research and
development, etc., cover energy related services, also when this is not specified in the schedule.S/C/W/52
Page 31
MEMBER SECTOR MARKET ACCESS
LIMITATIONSNATIONAL TREATMENT
LIMITATIONS
India Construction work for civil
engineering:
- construction of pipelines,
power lines, constructions for
mining, power plants and coke
ovens (ex CPC 513)1) Unbound*
2) Unbound*3) Only though incorporationwith a foreign equity ceiling of51%
4) Unbound except as
indicated in the horizontalsection1) Unbound*
2) Unbound*3) None4) Unbound except asindicated in the horizontal
section
Research and development
services on natural sciences:
- heat, light, electromagnetism,
astronomy, but excluding
atomic energy and relatedmatters (CPC 85101)
- engineering and technology,
including applied science and
technology for casting, metal,
machinery, electricity,communications, vessels,aircraft, civil engineering,construction, information, etc.(CPC 85103)1) Unbound
2) Unbound*3) Only through incorporationwith a foreign equity ceiling of
51%
4) Unbound except asindicated in the horizontalsection1) Unbound
2) Unbound*3) None4) Unbound except as
indicated in the horizontal
section
Malaysia Management consulting
services covering advisory,
guidance and operationalassistance services concerningmanagement of thetransmission of non-conventional energy (CPC
8650)1) None
2) None
3) Only though a locallyincorporated joint-venturecorporation with Malaysianindividuals or Malaysiancontrolled corporations or both
and Bumiputera shareholding
in the joint-venturecorporation is at least 30%.4) Unbound except asindicated in 1 a) and c) in the
horizontal section1) None
2) None
3) None4) Unbound except for thecategories of natural personsreferred to under marketaccess
Namibia Related scientific and
technical consulting services:
off-shore oil and gasexploration (CPC (86751)1) None
2) None
3) None4) None1) None
2) None
3) None4) None
Venezuela Contracting of works and
supply of services for thenational petroleum andpetrochemical industry.
Petroleum technology (3)
(CPC Section 5)(CPC 85103-853)1) Unbound
2) None3) None4) Unbound except as
indicated in the horizontal
section1) Unbound
2) None3) None4) Unbound except as
indicated in the horizontal
section
__________