This is a guest post post from Anna Marhold, Assistant Professor at Leiden Law School
Energy in International Trade Law: Concepts, Regulation and Changing Markets (Cambridge University Press 2021) by Anna Marhold (Leiden Law School)
Against the backdrop of energy markets that have radically changed in recent decades, this book offers an in-depth study of energy regulation in international trade law.
The relevance of multilateral energy trading rules was for a long time overlooked, downplayed and underestimated. One explanation for this may be that for many years energy was almost exclusively traded by international, vertically integrated and often state-owned companies. However, energy trade is no longer confined to oil tankers transporting barrels from the Gulf; it now extends to, inter alia, wind turbines and solar panels. The last three decades have indeed brought revolutionary advancements in renewable and clean energy. The clean energy transition has been accompanied by increasing regulation, which in turn has triggered disputes in the context of the World Trade Organization (WTO). And this rise in international trade disputes relating to both renewable and non-renewable energy has led to a growing awareness of the importance of regulating international trade in energy. Moreover, an increasing number of major energy producing, exporting and transporting countries are joining the WTO, acceding to the Energy Charter Treaty (ECT) and/or concluding preferential trade agreements (PTAs) that include provisions relevant to energy.
In Part I, through a thorough discussion of the concepts, history and law of various legal frameworks applicable to international energy trade, the books seeks to clarify what we mean by ‘energy’ in the context of international trade rules:
Chapter 1 discusses energy as a concept that has transformed over time and explains how the rules of international trade law are relevant to the energy sector, paying particular attention to the challenges of decarbonization, decentralization and energy security. Chapter 2 examines the treatment of energy from the inception of the General Agreement on Tariffs and Trade (GATT) in 1947 to the present time. Chapter 3 continues by discussing the current legal framework of the WTO, providing an overview of WTO agreements relevant to energy. It is here that we expose some challenges – such as export restrictions and fossil fuel subsidies in the energy sector in the light of international trade law – which will be further elaborated upon in Part II of the book. Chapter 4 enquires into energy commitments beyond the WTO, namely in the ECT and in selected PTAs. By means of a comparative study, the chapter scrutinizes the nexus between the WTO and the ECT. It looks at the interplay between these international treaty regimes, including their overlap and potential conflict.
Part II of the book then addresses the relationship between the existing rules and the huge challenges faced by energy markets today – notably, their decentralization and decarbonization – in the light of the ongoing quest for energy security. Through several case studies, it will demonstrate that current international rules are often unable to meet the challenges faced by today’s changing energy markets:
Chapter 5 introduces the second part of the book and considers the challenge of decentralizing energy markets. It lays bare the difficulties WTO law has with respect to strategic, unevenly distributed natural resources and cartels maintained by states. It does so by taking the practices of the world’s best-known energy cartel, the Organization of Petroleum Exporting Countries (OPEC), as an example. It additionally looks at decentralization policies put in place by the European Union (EU) and how international trade rules enable or constrain such policies (by studying the panel report in DS476 EU-Energy Package). Chapter 6 examines the challenge of decarbonizing energy markets by looking at the treatment of environmentally harmful fossil fuel subsidies under WTO law. Lastly, Chapter 7 sheds light on the growing relevance of energy security in international trade law, including its use as a defence in WTO dispute settlement. By way of conclusion, Chapter 8 considers some policy options for enhanced energy governance at the institutional level.
Without a doubt, the multilateral trading system is undergoing a deep crisis. Energy is by no means the only subject in need of revision within the global trading system but is certainly a topic that, given today’s changing markets, can no longer be overlooked.
