backInternational trade and investment in the energy sector takes place in a framework of treaties based on the conviction that all boats rise on the tide of free trade and underpinned by legal obligations, including the commitment to treat foreign products no less favourably than domestic products. Although international treaty obligations should limit violations of basic trade rules, in times of economic crisis domestic political imperatives of collecting revenue and protecting local employment often trump economic wisdom and lead to violations of international trade treaties. That the current global economic crisis has produced its share of trade protectionism comes as no surprise. However, the ever expanding substantive and geographic scope of international trade rules forces governments to seek out increasingly nuanced and creative modes of protection in order to disguise treaty violations. The recent trend toward unapologetic protectionism may indicate a new direction in trade policy. This article reviews trade protectionism that affects businesses in the energy sector, discusses attendant violations of international trade law, and identifies actions that could be taken to counter trade protectionism affecting the energy sector.
1. International economic theory and legal obligations relevant to energy trade
The rules underpinning our international economic order recognize that all boats rise based on the efficient global allocation of resources and means of production. International trade rules support the distribution of investment capital for producing energy and ensure the efficient distribution through trade of primary and value-added energy products in global markets.
International treaties generally encourage and in many cases require governments to refrain from intervening for economic or political reasons in the allocation of resources. Energy products are subject to all international trade rules and several of these rules have particular relevance for trade and investment in energy and energy-related products. International trade rules apply in the context of certain government requirements regarding the production of oil, gas and coal, like local content conditions, and continue to apply after primary energy products and energy-intensive products enter the stream of commerce. Trade rules likewise apply to government support provided for the development of renewable energy infrastructure and production, and can also apply to various requirements for producing and distributing electricity.
Traditional international trade rules and energy
The most important and most basic trade rules that apply to the energy sector have existed at least since the creation of the General Agreement on Tariffs and Trade (GATT) in 1947. The most fundamental rules have been restated and reinforced in the World Trade Organisation (WTO) agreements and in a multitude of free trade agreements (FTAs) that have proliferated throughout the world. [1]
The international trade rules most relevant to the present discussion of the energy sector are:*No discrimination: governments may not treat national products more favourably than imported products, [2] and may not favour imports from one country over another[3];
*No quantitative restrictions: governments may not limit quantities of imports or exports[4];
*No investment conditions that discriminate or restrict trade in violation of the above rules[5]; and
*No unfair trade: host governments may not confer prohibited subsidies, and governments may protect their domestic industries from injury caused by unfairly subsidized or dumped imports.[6]
New trade and investment rules
The WTO agreements include rules on trade in energy services covered by the General Agreement on Trade in Services (GATS). The GATS specifies that trade in services may be carried out through a commercial presence on the territory of other WTO Member countries,[7] thus extending international investment rules into the traditional trade sphere. This overlap is compounded further in most recently concluded trade agreements that include investment chapters, which bring traditional bilateral investment treaty disciplines under the same framework as trade rules. [8] All of these disciplines curb governments ability to limit market access and to discriminate against foreign products in the energy sector. [9]
2. Renewable challenges
The energy sector plays a central and unique role in revenue and job creation and in economic development generally due to the value-added element of the energy production chain and implications for trade-related transportation. The development of alternative energy industries has created new opportunities for developing new value chains -- and new jobs -- based on developing, manufacturing and installing products needed to create energy though wind, solar and other renewable sources of power.
During times of economic crisis, governments come under intense pressure to preserve state revenue and protect jobs in their national markets. Renewable energy industries have recently grown to commercial scale, and in addition to national interests in diversifying sources of energy from fossil fuels, governments see great potential for national economic development and job creation based on the development and implementation of new technologies.
The renewable energy sector has logically become a focus area in recent years for governments to try to develop, often with measures not based on market principles or WTO rules. At the same time, the alternative energy sector competes in many ways with traditional industries and related vested interests. To the extent that the development of alternative energy technologies and related products is often not driven by economic considerations, but rather by concerns over the environmental effect of using carbonbased fuel and on dependence on traditional, imported fossil fuels, the sector may not fit well into WTO economic efficiency model where products should be made in the most efficient location notwithstanding externalities. These factors can combine with the economic crisis to form a cocktail of government policies that violate basic WTO rules.
Renewable subsidies, discrimination and unfair solar power
Canadas model case of WTO violations
Canada is currently defending a challenge by Japan and the European Union under WTO dispute settlement procedures in Canada - Certain Measures Affecting the Renewable Energy Generation Sector 10. This international trade dispute concerns Ontarios renewable energy policy that provides for guaranteed, long-term pricing for the output of renewable energy generation facilities that contain a defined percentage of domestic content. [11] This dispute provides an interesting case study, not only for its timing, but also because it consolidates in one single context many of the key trade issues that affect the energy sector.
Although government support for renewable energy is not necessarily problematic under WTO rules, the manner in which Ontario conditions the receipt of support on the use of Canadian products appears to violate several of the key rules cited above. In particular, Japans Request for the Establishment of a Panel claims the following WTO rules have been violated:
*Articles 3.1(b) and 3.2 of the SCM Agreement, [12] because the measures are subsidies within the meaning of Article 1.1 of the SCM Agreement that are provided contingent upon the use of domestic over imported goods, namely contingent upon the use of equipment for renewable energy generation facilities produced in Ontario over such equipment imported from other WTO Members such as Japan; [13]
*Article III:4 of the GATT 1994, because the measures accord less favourable treatment to imported equipment for renewable energy generation facilities than accorded to like products originating in Ontario; and
*Article 2.1 of the TRIMs Agreement, in conjunction with paragraph 1(a) of the Agreements Illustrative List, because the measures are trade-related investment measures inconsistent with Article III:4 of the GATT 1994 which require the purchase or use by enterprises of equipment for renewable energy generation facilities of Ontario origin. [14] In view of the fact that Ontario provides financial support in the form of guaranteed, long-term pricing for the output of renewable energy generation facilities in Ontario, from a local political perspective it would seem reasonable that beneficiaries of local financial support should use a certain amount of local content in the form of power generation equipment made in Ontario. When viewed through the lens of international trade rules, however, Ontarios measures (for which Canada answers at the WTO) appear at once to provide prohibited subsidies to Canadian products, to discriminate against foreign products, and to condition investment by energy production businesses on participation in Ontarios discriminatory programme.
The panel plans to complete its work on this dispute in November 2012, [15] and it is widely expected to find that the measures defended by Canada violate WTO rules. Although such a decision would set a precedent that might dissuade other governments from pursuing similar programs in the future, from a business perspective, certain damage has already been done with respect to the installed generation facilities that have used local content in order to obtain the benefit of feed-in tariffs supported by Ontario. As WTO relief is prospective, foreign competitors have no remedy with respect to past procurement in violation of WTO rules. [16] Although the measure might be brought into conformity with WTO rules such that future facilities will procure goods on a nondiscriminatory basis, it remains unclear whether the feed-in tariff for existing generation facilities will be amended or whether different tariffs will apply to new facilities.
In sum, Ontarios measures appear to nullify or impair the benefits of the WTO agreements because they discriminate against foreign products and subsidize Canadas renewable energy sector through illegal local content requirements. A finding of WTO inconsistency by this panel would not, however, limit WTO Members legitimate policies supporting the development of renewable energy. Rather, by making a Members support to renewable energy open to investment by all other Members on a non-discriminatory basis, a panels rejection of the local content requirement in this case may spur investment in renewable energy production in a non-protectionist manner based on Members comparative advantages. Therefore, such a ruling could support, not hinder, the development of renewable energy generation.
Unfair solar power
Chinese companies have invested heavily in the production of solar panels and have gained a significant market share in global markets for this technology. The domestic industry in the US considers that Chinas exports are unfair because they are dumped and subsidized, and cause injury to the US industry. Therefore, in October 2011, the US industry petitioned the US government to impose antidumping and countervailing measures against imports of solar panels from China. [17] In May 2012, the US government found that solar panels were indeed being traded unfairly and imposed preliminary measures of 31.14 per cent249.96 per cent antidumping duty and 2.9 per cent4.73 per cent countervailing duty against imports from China. [18] Although the application of trade remedy measures against specific countries is a form of discrimination, GATT rules provide an exception for this particular violation of the most-favoured nation (MFN) rule.
We expect to see many more trade remedy actions against imports from major producers of alternative energy products. In addition to solar panels, investigations have been initiated against wind turbine towers from China and Vietnam. [19] A December 2011 complaint by the US Wind Tower Trade Coalition against unfairly subsidized wind towers was found to have a reasonable basis by the International Trade Commission (ITC) in February 2012, which recommended that the Department of Commerce (DOC) conduct a full investigation. [20] Based on the preliminary results of that investigation, DOC imposed tariffs ranging from 13.74 per cent to 26 per cent on Chinese wind towers. [21] These tariffs will become final if DOC and ITC uphold these results when the investigation concludes and final determinations are issued around October 2012. These types of measures may be implemented against other products as well, [22] and they may also result in reactive measures by the countries that are affected. [23]
Economic policy: export restrictions and access to raw materials
Countries have taken steps to discriminate in favour of domestic industries through economic policies to restrict exports of raw materials, including primary energy products and essential inputs for the energy sector. In the renewable energy sector, governments attempt to justify such measures based on laudable environmental policy goals. When the policies fail to advance legitimate legislative goals and instead merely protect domestic industries, the measures are likely WTO-inconsistent, disguised restrictions on trade or are more trade restrictive than necessary to achieve the stated policy goals. Recent export restrictions by China and Indonesia on rare earths and other minerals of importance to renewable energy production and products highlight this tension.
Rare earth metals such as neodymium and dysproprium are essential to produce a variety of products such as rechargeable batteries and wind turbines. [24] Although demand for renewable energy products is expected to expand significantly in the next 25 years, current production may not meet that demand. [25] While reserves of these minerals are known to exist in various locations around the world, China currently produces over 90 per cent of world supplies (while maintaining that it has only about 30 per cent of world reserves). [26] China, however, has taken a number of recent steps to restrict the exportation of 17 rare earth metals as well as tungsten and molybdenum. [27]
Governments and industry have reacted in two ways: while WTO Members have challenged Chinas measures at the WTO, industry actors outside of China have begun the search for alternative sources of rare earths as well as alternatives to rare earths. The US, the European Union (EU), and Japan challenged Chinas new export restrictions this year at the WTO. [28] Relying on the GATT Article XI prohibition on export restrictions and Chinas Protocol of Accession, [29] these Members argue that the measure discriminates in favour of Chinese companies in violation of Chinas WTO commitments and that the measure disrupts their domestic industries and increase production costs. [30] China is expected to argue that, even if these measures are contrary to WTO obligations, they are justified under GATT Articles XI:2 and XX exceptions relating to environmental, health, and domestic supply concerns. [31] While such protectionist measures certainly raise WTO legal issues, they have also prompted a response by industry players eager to ensure the long-term supply of necessary inputs.
While Chinas comparative advantage in the production of rare earth metals led mining ventures in other countries to wind up operations elsewhere throughout the 1990s, [32] Chinas recent actions have spurred a renewal of investment in rare earth mining projects and the search for replacement materials. For example, Colorado-based Molycorp is expanding its rare earth mining facilities in California, [33] and other US rare earth reserves (accounting for about 13 per cent of world reserves) are located in Colorado, Idaho, Montana, Missouri, Utah, and Wyoming. [34] Other sources have been identified in Australia, Brazil, Canada, India, Malawi, Malaysia, Russia, and South Africa, [35] with important mining projects now underway in the latter. [36]
Secondly, industry is pursuing technological developments to reduce consumption of rare earths by introducing efficiency measures, recycling, and substitution. [37] New designs of wind turbines, oil refinery catalysts and other energy products may reduce the amounts of rare earths needed for production. Recycling the rare earths from old products also reduces demand. Finally, alternative inputs may lead to less reliance on rare earths. For example, nickel-metal-hydride rechargeable batteries require rare earths, but they can be replaced by lithium-ion batteries, which do not. Toyota reportedly is making advances in the production of hybrid car motors not reliant on rare earth elements. [38]
Even as the WTO case on rare earths progresses through the dispute resolution system, Indonesia has taken recent actions to apply restrictions on the export of raw materials. A regulation passed by the legislature on 6 May will ban the export of 65 minerals (not including coal) beginning in 2014 unless they are first processed locally. [39] As a part of that measure, Indonesia will charge a 20 per cent export duty on unprocessed minerals, such as nickel, tin, gold, copper, silver, lead, zinc, chromium, platinum, bauxite, iron ore and manganese, [40] until the export ban takes effect. [41] While the export duty is consistent with WTO rules, [42] the Indonesian requirements that exporters either establish a local smelter or cooperate with local companies to process minerals locally before exportation may amount to export restrictions contravening the WTO TRIMs Agreement and GATT Article XI. Japan, the second largest consumer of nickel ore, has already threatened a WTO complaint against Indonesias measures. [43]
Political developments: the nationalization and monopolization of energy services as GATS violations
Major headlines in recent months have highlighted the politically charged moves by Argentina to nationalize and control energy services by its expropriation of Yacimientos Petrolferos Fiscales (YPF), a Spanish-owned oil company. [44] On 16 April, President Cristina Fernandez de Kirchner announced the plan to take a 51 per cent share in YFP, the local subsidiary of the Spanish company Repsol, leaving 49 per cent of shares in the hands of Repsol and other investors. Having passed quickly through the Argentine National Congress, the measure was signed into law on 4 May 2012. The EU has stated that it will consider all possible responses, [45] and the company is expected to initiate an investment arbitration. [46]
According to Kirchner, the expropriation is justified by Repsols failure to uphold its contractual obligation to make sufficient investment in new production of oil, which has forced the country to import more energy. Repsol has responded that Argentinas increased energy imports are caused by the governments unsustainable energy policy. [47]
Whatever Argentinas motivation, the governments actions are disciplined by international trade and investment rules. As recently described by one commentator, the EU could challenge this nationalization program as a violation of GATS commitments at the WTO. [48] The GATS prohibits the creation of monopolies and limitations of the supply of services by foreign companies in sectors where full commitments exist, as with Argentina in the case of services incidental to mining and wholesale trade services for energy products. By nationalizing the major oil and gas company and keeping long-term control over exploration and distribution services, Argentinas move runs afoul of its GATS obligations. The move may also be illegal under GATS Article 2 on MFN treatment if Argentina grants other countries more favourable treatment than the EU in energy services.
The YPF Expropriation Act itself highlights Argentinas policy of self-sufficiency and increased investment in the energy sector, which is a legitimate matter of government concern. [49] Yet the purpose of international trade and investment disciplines is to ensure that domestic policy does not unduly limit international trade or liberalization commitments, including foreign direct investment in covered services sectors. Even if Argentina seeks further investment in energy following this move, its justifications under international trade law remain dubious as foreign investors are not allowed to supply services through investment in a commercial presence in Argentina as provided for under its GATS commitments. [50]
Legal precedent: the very same, but unlike energy products
When considering the central international trade rule of non-discrimination, the key initial question is whether the products at issue are like. This question applies to the assessment of whether coal is like oil or whether alternative energy products are like traditional energy products. If electricity produced by coal-fired power plants is like electricity produced by nuclear, wind, solar, or any other source, then any taxes, duties, or regulatory measures that impact on electricity products must be applied to all electricity on a non-discriminatory basis. [51] To the extent that the end products are identical, it appears that regulation of alternative energy must not be more favourable than regulation of traditional energy. However, the question remains open of whether process and production methods (PPMs) that differ dramatically but result in exactly the same end products affect likeness.
A series of GATT dispute settlement panels considered this question. Early panels found that PPMs do not affect products, which are the relevant focus of GATT disciplines. Thus, in TunaDolphin I [52] a GATT panel found that the US ban on certain imported tuna fell under Article XI as a border measure and not under Article III:4 as a domestic regulation because PPMs are not measures on products as the text of Article III requires. [53] The GATT panel in TunaDolphin II reached the same result. [54] However, in USAuto Taxes the panel found that fuel-efficient cars are not like other cars under GATT Article III:2, and therefore could be subject to differential taxes. [55] These GATT reports were not adopted by the Contracting Parties to the GATT, and therefore have limited legal precedent. Under WTO rules, as a practical matter dispute settlement reports are adopted automatically, which lends more credibility and predictability to the multilateral trading system.
An important decision by the WTO Appellate Body, with relevance for the energy sector, considered the likeness of cement products made from asbestos fibres and those made from non-asbestos fibres. The Appellate Bodys reasoning in that case provides the now well-established test of likeness based on four criteria:
(i) the physical properties of the products;
(ii) the extent to which the products are capable of serving the same or similar end-uses;
(iii) the extent to which consumers perceive and treat the products as alternative means of performing particular functions in order to satisfy a particular want or demand; and
(iv) the international classification of the products for tariff purposes. [56]
While the panel found that the difference in inputs was irrelevant for the commercial-based analysis of the end products, the Appellate Body found the health impacts of the asbestos inputs must be considered as a part of the first (physical properties) and third (consumer preferences) factors of the likeness test. [57] Ultimately, the Appellate Body found that the physical property of carcinogenicity and the consumer preference in France for non-asbestos-based products indicate that the products are not like. [58]
While the panels ruling was not particularly focused on PPMs, its reasoning was very recently cited with approval by the panel in USTuna II, a case that concerned PPMs relating to tuna fishing. [59] In that case, the US required that tuna fishing must be conducted without setting on dolphins to receive the coveted dolphin-safe label. Mexico challenged the measure, arguing that it used other procedures to ensure that dolphins were not harmed, even though its fisherman often fished by setting on dolphins. Mexico argued before the panel that the products at issues were like and that PPMs were not relevant to the likeness analysis. [60] The panel employed the ECAsbestos likeness test and found that the Mexican tuna products were like US tuna or third-country tuna without consideration of the PPMs involved. [61] Although this determination was a necessary finding to continue the analysis of discrimination under the WTO Agreement on Technical Barriers to Trade, the panel ultimately rejected the claim of discrimination on the treatment no less favourable prong of the analysis. [62] In sum, while the ECAsbestos case indicates that health or other indirect product characteristicswhich potentially might include PPMsmay be relevant in the likeness analysis, the decision by the USTuna II panel not to analyse PPMs indicates that products may be found to be like in spite of different inputs or production methods.
This WTO jurisprudence indicates that panels and the Appellate Body are willing to look beyond products themselves to determine likenessand PPMs may be relevant. A government measure that favours domestic, renewable production methods over imported, traditional production methods will require extra scrutiny. If, as in ECAsbestos, the consumer preferences for renewable sources of energy support a finding of un-likeness, a measure may be found non-discriminatory even though the same products are accorded different treatment. However, if the energy products are like under the Appellate Bodys four criteria then government measures may not discriminate among the energy products based on national origin.
3. More discrimination on the horizon
The preceding section discussed a number of current instances of protectionism in the energy sector and the responses by trading partners. The economic crisis continues apace in many countries and protectionism is on the rise, so it is only a matter of time until industries are injured and jobs are lost. Therefore, it appears that challenges are set to increase in the near term.
Recent reports from a number of international organizations, governments and academics highlight this negative trend. According to the International Monetary Fund (IMF), the global crisis did not spark much of a rise in trade protectionism during the years 20082011.[63] This could have been taken as a positive sign, but 2012 has seen a stark increase in protectionist measures, including many by G20 nations and mostly non-traditional measures (ie not tariff or trade remedy measures). The IMF report notes that these measures are often focused on natural resources along with agricultural and manufacturing products.[64]
The 2012 Global Trade Alert (GTA) report confirms these conclusions.[65] Since the G20 2011 summit, G20 countries have introduced at least 89 protectionist measures out of 110 identified by the GTA. So, while 60 per cent of trade protectionism came from G20 members in 2009, G20 governments are responsible for as much as 79 per cent so far in 2012. Echoing the IMF finding of non-traditional measures, the GTA report characterizes recent discrimination is murky protectionism,[66] through which Members seek to circumvent WTO rules. Trade protectionism is thus accomplished through discrimination in origin-neutral dress in addition to overtly discriminatory measures.
Origin-neutral, but discriminatory regulation
The government of France has made a considerable investment in nuclear-power generation and believes that nuclear power is more environmentally friendly than fossil-fuel-based electricity generation.[67] France is the global leader in nuclear power, which accounts for nearly 80 per cent of electricity generation capacity, with another 12 per cent generated by hydroelectric power.[68] Notwithstanding reports that Frances nuclear power industry has been operating at a significant loss, meaning that electricity is subsidized by the government,[69] the cost of electricity for the industrial production of goods is the second lowest in Europe, second only to Bulgaria, and less than half the cost of electricity for industry in Italy.[70]
Many developed countries have suggested that products should be taxed according to carbon emitted in their production process. France has championed carbon taxes for some time, and demands have been renewed by Frances newly formed government.[71] Arnaud Montebourg, Frances recently appointed Minister for Industrial Revival has called for the application of a carbon tax to protect local industry from unfair competition.[72] Minister Montebourg stated that [t]he European Union will have to revise its totally liberal doctrine which is to say that it is forbidden to favour local industry.[73]
The Government of France could pressure EU members to implement measures to differentiate energy-intense products, such as aluminium and steel, based on CO2 emitted during production. In order to comply with WTO rules, the measures would apply in a neutral manner to all products, regardless of origin. Of course, as French products use low- or no-carbon sources of electricity, they will naturally be subject to no or low carbon taxes. Products from countries that have relatively less nuclear or alternative power sources will be subject to relatively higher carbon taxes. If WTO rules allow exactly the same aluminium to be taxed differently based the source of electricity used in its production, then France and the EU have nothing to fear from the WTO complaints that this measure will surely engender. However, this question deserves a closer look through the lens of international trade law.
WTO commentators have debated extensively the question of applying border taxes to offset the environmental cost of CO2 emissions.[74] The WTO consistency of environmental border taxes turns on whether different rules can be applied to likeproducts. However, origin-neutral measures applying a variable domestic charge based on CO2 emission costs would raise only the issue of whether aluminium is aluminium, regardless of CO2 emitted during production.[75] The relevant question to determine the likeness of such aluminium products should be whether the production inputs are incorporated into the final product. While specific taxes on incorporated production inputs may be eligible for border tax adjustment,[76] CO2 emissions are not incorporated and thus not border-taxable.
In response to such action by France or the EU, in addition to the matter of subsidies that could be raised under Frances industrial electricity pricing measures, trading partners could raise issues based on Frances orientation on nuclear power. For example, WTO Members could question the long-term environmental damage caused by nuclear power generation and could insist that electricity costs cover the remediation of damage and long-term storage/disposal costs of spent nuclear fuel, as well as transmission infrastructure costs, research and development costs and even the costs of insurance against nuclear accidents.
Overt protectionism
As a rule, WTO Members take very seriously compliance with multilateral trade rules. Many Members believe that all boats do indeed rise on the tide of market competition and free trade. Even Members that wish to protect domestic industries usually do so through arguably WTO-compliant means. Members have almost always at least paid lip-service to WTO rules in order to avoid countermeasures by trading partners or to maintain a veneer of rules-based policy-making to attract foreign investment and to be seen as a member in good standing of the WTO club.
Trade protectionism scores political points
Recently, Members appear to be engaging in a more overt form of protectionism, where domestic political imperatives may override faithfulness to international obligations. In fact, domestic political capital may even be accumulated when national leaders claim to protect local jobs rather than follow international rules. As Argentinas Foreign Minister Hector Timerman recently stated Argentina and Brazil share several positions when it comes to policies that favour development and growth in order to face the world economic crisis.[77] Such statements suggest that protectionist trade policies may protect jobs, but this contradicts the theory of the international economic system that short-term protectionism only weakens national economic performance.
The regular reports issued by the WTO on trade-restrictive measures applied by both G20 members and WTO Members generally highlight the application of overtly WTO-inconsistent measures. The most recent such report on G20 members highlights trade measures taken by Members during the period from mid-October 2011 to mid-May 2012.[78] The report concludes that new measures continue to be introduced at the same high rate as in previous reporting periods. Although not leading numerically in terms of protectionist measures, Argentina is one of the most visible protectionists. During the recent reporting period, Argentina introduced fourteen measures (and participated in three further measures imposed by MERCOSUR).[79] Argentina attracted attention in the recent WTO challenge to its trade restrictions by the EU.[80] The EUs case, which was filed in the days immediately following the expropriation of YFP Repsol, challenges a wide array of measures.[81] Notably, the challenged regulations concerning the importation approval process, among others, were implemented in 2012 when Argentinas G20 obligations required the government to avoid introducing and to roll back trade-restrictive measures.
In addition, outside of multilateral rules, the Argentine government recently suspended for three years a bilateral agreement with Mexico concerning trade in the auto industry between MERCOSUR countries and Mexico.[82] The suspension of this agreement is cited as yet another example of Argentinas increasingly protectionist and unilateral trade policies.[83] Argentina is by no means alone in applying such protectionist measures, as confirmed by the WTO[84] and GTA[85] reports. However, the unapologetic and overt manner in which Argentina applies its measures suggests a new and unwelcome development in trade protectionism.
Renewable export restrictions
While the US has protested the maintenance of export restrictions by other countries, newly proposed measures may add to its imperfect history on energy export restrictions. The US has in the past applied export restrictions on Alaskan crude oil,[86] and this precedent may be repeated as concerns exports of liquefied natural gas (LNG).
A recent proposal by certain US Congressmen would restrict LNG exports from the US. Senator Ron Wyden and Representative Ed Markey have proposed a moratorium on the granting of export licenses and facility construction permits for US LNG producers.[87] This proposal follows the approval of a $4 billion project by Cheniere Energy to export LNG from its Sabine Pass LNG terminal in Louisiana.[88] Because of the large supply of domestic LNG and the consequent low domestic price (around $22.50 per million Btu, compared to at least $11 in Europe and $15 in Asia [89]), numerous enterprises have sought government permission to export LNG in order to benefit from high world prices.
US FTAs generally include a provision that allows the export of energy products in preferential trade.[90] Although WTO rules, in particular GATT Article XI, generally prohibit the application of measures that restrict exports, in practice the US government only allows restriction-less LNG exports to FTA partners.[91] Many US exporters seek approval to ship LNG to countries with which the US has not concluded FTAs, as Cheniere Energys permit allows. While permits are nearly automatic for exports to countries with FTAs, many desirable markets such as Spain and Japan do not have FTAs with the US.[92] Japan, which has had particularly high demand for LNG since the Fukushima meltdown last year, is currently paying $20.87 per million Btus for imported LNG.[93]
The US LNG export debate recalls a similar export ban in the energy sectorthe requirement that all oil produced from the Alaskan North Slope and transported through the Trans-Alaskan Pipeline be consumed domestically.[94] The 1973 Trans-Alaska Pipeline Authorization Act opened Prudhoe Bay reserves for production but also banned export of any Alaskan oil. This export ban, which was the result mainly of interest group lobbying by the US maritime shipping industry,[95] could have been challenged under GATT rules prohibiting export restrictions, but was revoked in 1995. [96]
In addition to the issue of WTO consistency, an LNG export ban would raise questions of practical enforceability. Under the North American Free Trade Agreement, natural gas from the US can legally enter Canada and Mexico through a highly integrated market and existing pipelines.[97] If the US government were to restrict exports of its LNG, then those exports would simply flow to the world as Mexican or Canadian exports.[98] Alternatively, those countries could consume US gas domestically and thus free up their own production for sale on the world market.[99] In either case, the proposed measure would not effectively constrain exports and would not depress domestic prices. At the same time, US companies would not benefit from the international sale of LNG surpluses.[100]
Finally, the US would lose credibility in challenging protectionist export bans by other countries. As the WTO dispute with China over rare earth exports progresses, China is expected to argue that the export ban is justified as an environmental measure or to counteract harm to domestic industry.[101] If the US was to impose its own export ban, it would be forced to rely on the arguments that it will oppose in the dispute with China. Alternatively, the US could apply WTO-consistent export duties on exports of LNG. Although the US has not undertaken specific disciplines with respect to export duties, the US government has supported the negotiation of increased disciplines on export restrictions at the WTO[102] and even challenged export restraints as illegal subsidies in dispute settlement proceedings.[103]
4. Evolution toward solutions
Accountable, political re-confirmation of mutual business and legal interests in free trade
The G20 has held summits at the level of heads of state since 2008, with the most recent summit recently concluding in Los Cabos, Mexico, in June 2012. In the final communique from the 2012 summit, as in most final declarations since 2008,[104] the G20 nations included a standstill commitment obliging them not to introduce new protectionist measures:
We are deeply concerned about rising instances of protectionism around the world. Following up our commitment made in Cannes, we reaffirm our standstill commitment until the end of 2014 with regard to measures affecting trade and investment, and our pledge to roll back any new protectionist measure that may have arisen, including new export restrictions and WTO-inconsistent measures to stimulate exports. We also undertake to notify in a timely manner trade and investment restrictive measures. We uphold the inventory and monitoring work of the WTO, OECD and United Nations Conference on Trade and Development (UNCTAD) on trade and investment measures and encourage them to reinforce and deepen the work in these areas, consistent with their respective mandates.[105]
These important pledges seem to be largely disregarded in practice, in light of the WTO and other reports discussed above concerning trade-restrictive measures.
At the beginning of the June summit, Brazil and Argentina committed to oppose any financial adjustment plan proposed during the G20,[106] seemingly because such plans have lead to the depreciation of currency in developed countries, thus making their exports more competitive vis-a`-vis countries like Argentina and Brazil. However, these two MERCOSUR members stated that they would wait for cues from the European members, especially Germany, during the summit. Based on the final communique and action plan from the G20 summit, it appears no proposal for financial adjustment was made at the G20 level.[107] Whether Argentina and Brazil were able to eliminate or water-down such a proposal or the feared proposal simply was not introduced, this coordinated action by two of South Americas largest users of trade protectionism does not bode well for increased liberalization in South America. That said, there is simply no substitute for high-level political commitments to free trade. Once commitments are made, political actors, particularly G20 members, must be held accountable.
Trade negotiations on world energy law and business issues
Political commitments to follow multilateral trade rules will only have credibility if such rules address the business issues faced by companies in the energy industry. In order to maintain relevance for the energy sector, new trade negotiations may be needed to obtain broader commitments under existing rules and to introduce new disciplines specific to the energy sector.
Trade negotiations revolve around trade-offs among governments. Even in situations where additional treaty commitments could in principle be made to decrease business costs and increase predictability, governments would need to make trade-offs where negotiating partners obtain benefits in return for giving market access and new rules. Therefore, the negotiations need to be structured in a manner that allows all countries to obtain benefits.
The energy sector has historically played a limited role in the development of international trade rules.[108] The international trade regime focuses on import restrictions more than export restrictions; the energy sector has not been a main target because energy importers usually maintain low customs duties to increase their energy security. Furthermore, many energy exporters were either not Members of the trading system or not major players in trade negotiations process due to the already low tariffs and high demand for their products as well as the general lack of discipline on (non-discriminatory) export tariffs.[109] Major energy exporting countries have recently become more involved as they attempt to diversify their export industries outside of energy or in downstream products. This development means that traditional energy exporters now have an economic interest in exporting manufactured goods, including those with a high level of energy intensity like metals, petrochemicals and fertilisers.
As environmental issues impact more and more on trade negotiations, the World Energy Council (WEC) has stressed that the reduction of greenhouse gases and other important goals must not lead to violations of trade obligations. The WEC argues against excessive reliance on GATT Article XX exceptions or the use of trade measures for climate change goals.[110] While the hierarchy of international trade obligations vis--vis other treaty obligations is sometimes debated, as a matter of international treaty law, all obligations must be respected ( pacta sunt servanda). Whether environmental or trade issues are given primacy by any particular actor(s) in any particular sector, countries are obligated to uphold the commitments they have undertaken. So, while countries are entitled to obtain high levels of environmental protection and quality,[111] their efforts must not lead to discrimination or amount to trade protection.[112]
Business engagement in world energy law
In view of the prospects for continuing hard times in the global economy, business should be prepared for the additional application of discriminatory and trade-restrictive measures. Although private companies do not have standing to appear directly in WTO proceedings, there are many opportunities for businesses to engage in the context of international trade and investment rules.
Business must first understand the basic rules and how they are relevant to specific business interests. In the framework of international rules, each business should identify a short list of its specific interests that are protected internationally. Unless a business has a practical grasp of its interests under treaty rules it cannot spot, question and prevent violations of international obligations that affect its operations.
If gaps in international rules are identified and the interests at stake are significant enough, a strategy can be crafted to obtain new international rules and commitments. For example, the GATS sets out an effective framework for providing market access rights and non-discriminatory treatment of energy services. However, these rules only apply in sectors where countries have made sector-specific commitments. The Doha Round of WTO negotiations holds out an opportunity to obtain additional commitments to protect energy services suppliers in WTO Members markets.
A number of governments participating in the Doha Round of trade negotiations formed an informal group called Friends of Energy Services to support the goal of obtaining energy services commitments, and businesses can support the engagement of their national governments in the context of this group. Businesses in the energy sector can provide their governments with information and anecdotes about contributions that foreign trade and investment make to foreign countries. Trade negotiators in Geneva from time to time organize informal seminars at which private businesses are invited to explain how they operate in the real world that trade negotiators do not often see. Many private businesses participated in and attended a conference held at the WTO in October 2009 on Global Challenges at the Intersection of Trade, Energy and the Environment.[113] Each of these events raises the level of mutual understanding between negotiators/policy makers and businesses in the energy sector.
Just as WTO Member governments organize into groups with common goals like the Friends of Energy Services, businesses with common positions can also organize and formulate suggestions to improve terms of trade and to avoid discrimination in the energy sectors. Such organization can take place at national and international levels.[114]
Having developed an understanding of the rules and their relevance to energy business, a company will need to monitor the development and application of measures that may be covered by treaty obligations. Measures that raise issues under WTO rules can be reported to governments and to international monitoring agencies like GTA.[115] Private companies can benefit from information exchange, questions and follow-up among multiple stakeholders.
Most importantly, businesses need to engage with governments to encourage WTO-consistent policy-making and compliance. As noted above, businesses have no standing to bring complaints under the WTO system. WTO disputes occur most often against the backdrop of commercial interests that underlie the national economic interests of WTO Members states. Private companies often support WTO Member governments with information and arguments to reach negotiated settlements in either informal negotiations or though formal consultations and dispute settlement procedures. The private sector can also express its interests in amicus curiae briefs submitted either as part of government submissions or directly for the consideration of a panel.
In conclusion, it is clear that WTO and international trade rules provide a global framework for trade and investment in energy goods and services. In difficult economic times, governments may seek short-term political gain by breaking international rules in the name of fostering economic grown and protecting domestic jobs. In order to resist such protectionist action by governments, business should be aware of the tools and rules available under international treaties. Much work remains to be done on developing international trade and investment disciplines, but the current set of rules is a good starting point. They need to be enforced and even strengthened for the future.
This article first appeared in the Journal of World Energy Law and Business and is reprinted here with kind permission.
[1] For a comprehensive discussion of trade rules that apply to the energy sector, see Joost Pauwelyn (ed), Global Challenges at the Intersection of Trade, Energy and the Environment (Centre for Trade and Economic Integration 2010). [2] See the national treatment principle as set out in GATT, Art III. [3] See the Most-Favoured Nation principle as set out in GATT, Art I. [4] See, eg GATT Art XI on the prohibition of quantitative restrictions of imports and exports. [5] See the WTO Agreement on Trade-Related Investment Measures (TRIMs Agreement). [6] GATT, Arts VI and XVI; the WTO Agreement on the Implementation of Art VI of the GATT; and the WTO Agreement on Subsidies and Countervailing Measures. This article does not discuss unfair trade rules in technical detail, but rather limits discussion to the business implications of unfair trade rules and measures. [7] GATS, Art I:2(c). [8] See Chapter 11 of the NAFTA for an early example, and recent US FTAs such as Chapter 11 of the KoreaUS FTA. [9] See, eg GATS, Arts XVI (market access) and XVII (national treatment). [10] See Request for the Establishment of a Panel by Japan, WT/DS412/5 (7 June 2011), and the now-parallel Request for the Establishment of a Panel by the European Union, WT/DS426/5 (10 January 2012) in CanadaMeasures Relating to the Feed-In Tariff Program. [11] WT/DS412/5 (7 June 2011), at 1. [12] WTO Agreement on Subsidies and Countervailing Measures; see footnote 7. [13] As subsidies falling under the provisions of Art 3 of the SCM Agreement, the measures are deemed to be specific under Art 2.3 of the SCM Agreement. [14] WT/DS412/5 (7 June 2011), at 3. [15] See Communication from the Chairman of the Panel, WT/DS426/8 (14 June 2012). [16] See Panel Report, USSection 129(c)(1) of the Uruguay Round Agreements Act, WT/DS221/R, adopted 30 August 2002, paras 3.90 and 3.93. [17] 77 U.S. Federal Register 31309, 31309 (25 May 2012). [18] ibid 3132223. [19] 77 U.S. Federal Register 3440 (24 January 2012). [20] 77 U.S. Federal Register 9700, 9700 (17 February 2012). [21] 77 U.S. Federal Register 33422, 33439 (6 June 2012). [22] For example, steel cylinders and gas transportation tanks. Brian Wingfield and William McQuillen, U.S. Sets Duties as High as 26 per cent on Wind Towers From China, Bloomberg (31 May 2012). [23] Chinas Ministry of Commerce condemned five U.S. states renewable energy policies as violating WTO subsidy rules one week after the U.S. decision on Chinese solar panels. Justin Doom and Ehren Goossens, China Says U.S. Renewable Subsidies Violate Trade Rules, Bloomberg (24 May 2012). [24] Philip Andrews-Speed, The Rare Earth Case against China at the WTO: Who Wins? (30 March 2012), < www.transatlanticacademy.org/blogs/philip-andrews-speed/rare-earth-case-against-china-wto-who-wins> accessed 16 July 2012. [25] David L Chandler, Clean Energy Could Lead to Scarce Materials, Massachusetts Institute of Technology (9 April 2012) < web.mit.edu/newsoffice/2012/rare-earth-alternative-energy-0409.html> accessed 16 July 2012. [26] International Centre for Trade and Sustainable Development, China Defends Rare Earths Export Restrictions (27 June 2012) < ictsd.org/i/news/bridgesweekly/136948/> accessed 16 July 2012. [27] Philip Andrews-Speed, The Rare Earth Case against China at the WTO: Who Wins? (30 March 2012), < www.transatlanticacademy.org/blogs/philip-andrews-speed/rare-earth-case-against-china-wto-who-wins> accessed 16 July 2012. [28] See Requests for Consultations by the US, EU, and Japan; respectively, WT/DS431/1 (15 March 2012), WT/DS432/1 (15 March 2012), and WT/DS433/1 (15 March 2012). [29] See the US Request for the Establishment of a Panel, WT/DS431/6 (29 June 2012). [30] International Centre for Trade and Sustainable Development, China Blocks EU, US, Japan Request for WTO Dispute Panel on Rare Earths (11 July 2012) < ictsd.org/i/news/bridgesweekly/138084/> accessed 16 July 2012. [31] These exceptions may apply to the Art XI claims, but the Appellate Body has found that GATT Art XX does not apply to Chinas Protocol of Accession. See Appellate Body, ChinaMeasures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R (30 January 2012), at para 307. [32] James B. Hedrick, Rare Earth Elements: Geology, Geography, and Geopolitics (Center for Strategic and International Studies, 15 December 2010), available at < csis.org/files/attachments/101215_EnergyHedrick.pdf> accessed 16 July 2012, at slide 8. [33] Paul Willis, Rare Earth Metals Future May Hinge on China (27 June 2012), < www.earthtechling.com/2012/06/rare-earth-metals-future-may-hinge-on-china/> accessed 16 July 2012. [34] Marc Humphries, Rare Earth Elements: The Global Supply Chain (Congressional Research Service, 8 June 2012), 9. [35] ibid. [36] Nicholas Jepson, A 21st Century Scramble: South Africa, China and the Rare Earth Metals Industry (South African Institute of International Affairs, March 2012), 236. [37] Philip Andrews-Speed, The Rare Earth Case Against China at the WTO: Who Wins? (30 March 2012), < www.transatlanticacademy.org/blogs/philip-andrews-speed/rare-earth-case-against-china-wto-who-wins> accessed 16 July 2012. [38] Toyota Finds Way to Avoid Using Rare Earth-media, Reuters (23 January 2012) < http://www.reuters.com/article/2012/01/23/toyota-rare-earth-idUSL4E8CN4GC20120123> accessed 16 July 2012. [39] Rabby Pramudatama, Govt to Go Ahead with Export Restriction Despite Protests, The Jakarta Post (6 July 2012) < www.thejakartapost.com/news/2012/07/06/govt-go-ahead-with-export-restriction-despite-protests.html> accessed 16 July 2012. [40] Titik Anas, Indonesias New Protectionist Trade Policies: A Blast from the Past, East Asia Forum (18 June 2012) [41] International Centre for Trade and Sustainable Development, China Blocks EU, US, Japan Request for WTO Dispute Panel on Rare Earths (11 July 2012) < ictsd.org/i/news/bridgesweekly/138084/> accessed 16 July 2012. [42] Members can impose export duties in line with GATT Art XI as long as they are non-discriminatory, unless they make such commitments in their Protocols of Accession like China has done. See Annex 6 of the Protocol on the Accession of the Peoples Republic of China, WT/L/432 (23 November 2001). [43] Rabby Pramudatama, Govt to Go Ahead with Export Restriction Despite Protests, The Jakarta Post (6 July 2012) < www.thejakartapost.com/news/2012/07/06/govt-go-ahead-with-export-restriction-despite-protests.html> accessed 16 July 2012. [44] Beretta Godoy, Developments in the Oil and Gas Sector Post YPF Expropriation, International Law Office (2 July 2012); International Centre for Trade and Sustainable Development, EU, Argentina Trade Relations in the Spotlight amid Repsol Fallout, (26 April 2012) < ictsd.org/i/trade-and-sustainable-development-agenda/132028/> accessed 16 July 2012. [45] International Centre for Trade and Sustainable Development, EU, Argentina Oil Company Row Gains Steam, (2 May 2012) < ictsd.org/i/news/bridgesweekly/132624/> accessed 16 July 2012. [46] Debora Rey, Argentinas YPF CEO Announces $7B Investment Plan, Bloomberg BusinessWeek (5 June 2012). [47] International Centre for Trade and Sustainable Development, Argentine Seizure of Spanish Oil Company Unlikely to Reach WTO, EU Officials Say, (18 April 2012) < ictsd.org/i/news/bridgesweekly/131492/> accessed 16 July 2012. [48] Jasper Wauters, European Union Weighs Responses to Repsol Privatization, International Law Office (15 June 2012). [49] Beretta Godoy, Developments in the Oil and Gas Sector Post YPF Expropriation, International Law Office (2 July 2012). [50] Argentina: Schedule of Specific Commitments, GATS/SC/4 (15 April 1994). [51] See GATT Art III:2, 4. [52] United StatesRestrictions on Imports of Tuna (Tuna I), Panel Report, not adopted (DS21/R, BISD 39S/27 1993). [53] ibid para 5.14. [54] United StatesRestrictions on Imports of Tuna (Tuna II), Panel Report, not adopted (DS29/R, 1994). [55] United StatesTaxes on Automobiles, Panel Report, not adopted (DS31/R, 11 October 1994); see also Yulia Selivanova, The WTO and Energy: WTO Rules and Agreements of Relevance to the Energy Sector(International Centre for Trade and Sustainable Development, August 2007), 26, box 3. [56] Appellate Body Report, European CommunitiesMeasures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (5 April 2001), at para. 101 [57] ibid paras 11326. [58] ibid para 126. [59] Panel Report, United StatesMeasures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (USTuna II), WT/DS381/R (15 September 2011). Note that the US did not challenge likeness at the Panel nor appeal the Panel finding to the AB. [60] ibid para 7.232. [61] ibid para 7.251. [62] Panel report, USTuna II, at para. 7.374. [63] Bernard Hoekman, Trade Policy: So Far So Good?, (2012) 49 Finance & Development 17. [64] ibid 19. [65] Simon J Evenett (ed), Dbcle: The 11th GTA Report on Protectionism (Centre for Economic Policy Research June 2012). [66] ibid 2. [67] Ministre de lcologie, du Dveloppement Durable, et de lnergie, Nuclaire et politique nergtique (6 January 2010) < www.developpement-durable.gouv.fr/Nucleaire-et-politique-energetique.html> accessed 16 July 2012. [68] ibid. [69] Doug Koplow, Nuclear Power: Still Not Viable Without Subsidies (Union of Concerned Scientists February 2011). [70] European Union, Electricity: Industry < www.energy.eu/#Industrial-Elec> accessed 16 July 2012. [71] Sarkozy Renews Pressure for CO2 Border Tax, EurActiv.com (14 September 2009) < www.euractiv.com/climate-change/sarkozy-renews-pressure-co2-bord-news-222460> accessed 16 July 2012. [72] Frdric Simon, France Plans to Revive EU Carbon Tariff, The Guardian (18 May 2012) < www.guardian.co.uk/environment/2012/may/18/france-eu-carbon-tariff> accessed 16 July 2012. [73] ibid. [74] For a discussion of WTO rules and climate change regulations, see Joost Pauwelyn (ed), Global Challenges at the Intersection of Trade, Energy and the Environment (Centre for Trade and Economic Integration 2010); Gary Clyde Hufbauer, Steve Charnovitz and Jisun Kim, Global Warming and the World Trading System (Peterson Institute for International Economics 2009); Ottavio Quirico, EU Border Tax Adjustments and Climate Change: Reaching Consensus within the International Legal Context, (2010) 19 European Energy and Environmental Law Review 2308. On the legal controversies over border measures (especially border taxes on production inputs that are not physically incorporated into the products concerned), see also Trade and Climate Change. A Report by UNEP and the WTO (UNEP and WTO 2009) 98ff; Ernst-Ulrich Petersmann, International Trade Law and International Environmental Law: Environmental Taxes and Border Tax Adjustment in WTO Law and EC Law in Richard L Revesz (ed), Environmental Regulation, the Economy and Sustainable Development (Cambridge UP 1999); Christian Pitschas, GATT/WTO Rules for Border Tax Adjustment and Proposed European Directive Introducing a Tax on Carbon Dioxide Emissions and Energy (1995) 24 Georgia Journal of International and Comparative Law 479500; Paul Demaret and Raoul Stewardson, Border Tax Adjustments under GATT and EC Law and General Implications for Environmental Taxes (1994) 28 Journal of World Trade 566. [75] See Paul Demaret, and Raoul Stewardson, Border Tax Adjustments under GATT and EC Law and General Implications for Environmental Taxes (1994) 28 Journal of World Trade 59 (Other types of input or process taxes, such as taxes on efficiency, waste disposal, air emissions or sustainable forest practices, are unlikely to be eligible for adjustment on the import or export of the resulting product under GATT law as such inputs or processes are not physically incorporated in the final product.). [76] ibid 31. [77] Brazil/Argentina Agree G20 Common Position, But Will Wait to Listen to Germany, MercoPress (19 June 2012) < en.mercopress.com/2012/06/19/brazil-argentina-agree-g20-common-position-but-will-wait-to-listen-to-germany> accessed 16 July 2012. [78] WTO, Report on G-20 Trade Measures (WTO, 31 May 2012) < www.wto.org/english/news_e/news12_e/g20_wto_report_may12_e.doc> accessed 16 July 2012. [79] ibid 3941. [80] See Request for Consultations by the European Union, ArgentinaMeasures Affecting the Importation of Goods, WT/DS438/1 (30 May 2012). [81] ibid. [82] Esteban P Rpolo, Argentina Suspends Car Trade Agreement with Mexico, International Law Office (13 July 2012). [83] ibid. [84] Annex I of the WTO report lists the following numbers of trade and trade-related measures: Brazil30; EU27; India27; US22; and China13. WTO, Report on G-20 Trade Measures (WTO, 31 May 2012), < www.wto.org/english/news_e/news12_e/g20_wto_report_may12_e.doc> accessed 16 July 2012. [85] In the four categories of harm to trade that the GTA covers, Argentina ranked number 1 for number of sectors affected by (almost certainly) discriminatory measures (63). Yet, the EU had the highest number of (almost certainly) discriminatory measures imposed (302); Vietnam had the highest number of tariff lines (product categories) affected by (almost certainly) discriminatory measures (931); and China had the highest number of trading partners affected by (almost certainly) discriminatory measures (193). Simon J Evenett (ed), Dbcle: The 11th GTA Report on Protectionism (Centre for Economic Policy Research June 2012), 6, table 1.1. [86] See, eg Trans-Alaska Pipeline Authorization Act, 43 USC (1973) s 1651. The export ban on Alaskan oil was eliminated in 1995 by the Alaska Power Administration Asset Sale and Termination Act of 1995, Pub L No 104-58, 109 Stat 557 (1995). [87] Ron Wyden and Ed Markey, Opposing View: Call a Timeout on Gas Exports, US Today (20 June 2012), < www.usatoday.com/news/opinion/story/2012-06-20/gas-exports-Wyden-Markey/55721898/1> accessed 17 July 2012. TheWyden-Markey proposal is based on two main premises. First, allowing exports would drive up domestic prices to international levels, causing energy-intensive domestic industry to lose a competitive edge. Second, restricting exports will lead to US energy independence and create US jobs. Regarding the price increase argument, Wyden and Markey claim that LNG exports could lead to a 54 per cent increase in domestic prices. This is based on one of four scenarios discussed in a US Energy Information Administration (EIA) study, but the more likely scenario discussed by the EIA would lead to only a 10 per cent increase. EIA, Effect of Increased Natural Gas Exports on Domestic Energy Markets (US Department of Energy January 2012). [88] Brian Wingfield and Joe Carroll, Cheniere Wins Approval for Biggest U.S. Gas-Export Terminal, Bloomberg BusinessWeek (17 April 2012). [89] Michael Levi, A Strategy for U.S. Natural Gas Exports (Brookings Institute June 2012) 5. [90] See Chapter 6 of the NAFTA (Energy and Basic Petrochemicals), and NAFTA Art 603 (disciplining import and export restrictions on energy products). More recent agreements do not single out energy products, but have generally applicable disciplines on export restrictions. See, eg KoreaUnited States FTA Art, 2.8; PanamaUnited States FTA, Art 3.8. [91] Michael Levi, A Strategy for U.S. Natural Gas Exports (Brookings Institute June 2012) 6. [92] Brian Wingfield and Joe Carroll, Cheniere Wins Approval for Biggest U.S. Gas-Export Terminal, Bloomberg BusinessWeek (17 April 2012). [93] ibid. [94] Samuel A Van Vactor, Time to End the Alaskan Oil Export Ban, Cato Policy Analysis (No 227, 18 May 1995) < www.cato.org/pubs/pas/pa-227.html> accessed 17 July 2012. [95] ibid. [96] Alaska Power Administration Asset Sale and Termination Act of 1995, Pub L No 104-58, 109 Stat 557 (1995). [97] Michael Levi, A Strategy for U.S. Natural Gas Exports (Brookings Institute June 2012) 19. [98] Karen Boman, Paper: US LNG Export Benefits Outweigh Modest Impacts on Industrial Output (6 June 2012) < www.rigzone.com/news/article.asp?a_id=118418 >accessed 17 July 2012. [99] Michael Levi, A Strategy for U.S. Natural Gas Exports (Brookings Institute June 2012) 19. [100] ibid. [101] ibid 1819. [102] WTO, Enhanced Transparency on Export Licensing: Communication from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Japan and the United States, TN/MA/W/15/Add.4/Rev.2 (7 July 2008). [103] See Panel Report, United StatesMeasures Treating Export Restraints as Subsidies, WT/DS194/R (29 June 2001), adopted 23 August 2001 (finding that [a]n export restraint as defined in this dispute cannot constitute government-entrusted or government-directed provision of goods in the sense of subparagraph (iv) and hence does not constitute a financial contribution in the sense of Art 1.1(a) of the SCM Agreement para, 9.1). [104] See, eg G20, Declaration of the Summit on Financial Markets and the World Economy, Washington, D.C., 15 November 2008 < www.g20.utoronto.ca/2008/2008declaration1115.html> accessed 17 July 2012, at para 13. [105] G20, Leaders Declaration, Los Cabos, Mexico, 19 June 2012, < www.g20.utoronto.ca/2012/2012-0619-loscabos.pdf> accessed 17 July 2012, at para 28. [106] Brazil/Argentina Agree G20 Common Position, But Will Wait to Listen to Germany, MercoPress (19 June 2012) < en.mercopress.com/2012/06/19/brazil-argentina-agree-g20-common-position-but-will-wait-to-listen-to-germany> accessed 16 July 2012. [107] G20, Leaders Declaration, Los Cabos, Mexico, 19 June 2012, < www.g20.utoronto.ca/2012/2012-0619-loscabos.pdf> accessed 17 July 2012; G20, The Los Cabos Growth and Jobs Action Plan, Los Cabos, Mexico, 19 June 2012 < www.g20.utoronto.ca/2012/2012-0619-loscabos-actionplan.html> accessed 17 July 2012. [108] Daniel Crosby, Background to WTO Rules and Production/Trade Restrictions in the Field of Energy, in Joost Pauwelyn (ed), Global Challenges at the Intersection of Trade, Energy and the Environment (Centre for Trade and Economic Integration 2010) 834. [109] Yulia Selivanova, The WTO and Energy: WTO Rules and Agreements of Relevance to the Energy Sector, (International Centre for Trade and Sustainable Development August 2007) 25. [110] World Energy Council, Trade and Investment Rules for Energy (World Energy Council, 2009) 15. [111] See Panel Report, United StatesStandards for Reformulated and Conventional Gasoline, WT/DS2/R (29 January 1996), adopted 20 May 1996, at para 6.40 (Indeed, the United States remained free to regulate in order to obtain whatever air quality it wished.). [112] See Appellate Body, United StatesStandards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (29 April 1996), adopted 20 May 1996, at 29 (finding nonetheless that the US measure was not justified under the chapeau of GATT Art XX because it was unjustifiable discrimination and a disguised restriction on international trade). [113] See conference program and presentations at < wto.org/english/res_e/reser_e/energy_oct09_e/energy_oct09_e.htm> accessed 19 July 2012. [114] See, eg World Energy Council, Task Force on Rules of the Energy Trade & Investment, < www.worldenergy.org/work_programme/global_studies/rules_of_energy_trade_task_force/default.asp> accessed 19 July 2012. [115] GTA, Report a Measure < www.globaltradealert.org/report-a-measure> accessed 19 July 2012. GTA notes that for reported information it will not reveal this information to any third party, now, or at any time in the future.