Friday, May 2, 2014

A GATS dispute after a long time

News of a WTO dispute concerning General Agreement on Trade in Services (GATS) after a very long time trickled in with Russia seeking consultation with EU on the "Third Energy Package".  More on that here.
"The measures concern the production, supply and transmission of natural gas or electricity, the alleged discriminatory certification requirements in relation to third countries in this sector and the requirement in respect of granting access to natural gas and electricity network capacity by transmission service operators. 
According to the Russian Federation, these measures are inconsistent with a number of obligations and specific commitments of the European Union and constitute an infringement of these obligations and commitments.
The inconsistencies alleged by Russia refer to the GATS (General Agreement on Trade in Services), the Agreement on Subsidies and Countervailing Measures and the Agreement Establishing the WTO."
Russia, being a new member of the WTO, seems to be initiating its forays into dispute settlement. The dispute being one relating to EU's commitments under GATS caught my attention. There are very few GATS disputes as compared to the other WTO Agreements.

Some chance of GATS jurisprudence evolving?

1 comment:

Anu said...

Srikar- firstly, thank you for making us part of this wonderful blog, and I look forward to some vibrant discussions!

The EU-Russia energy dispute will indeed be an interesting one to watch. The measures at issue relate to EU’s Third Energy package – which comprise of norms that bans suppliers from owning transit facilities, such as pipelines. The dispute promises to test the sufficiency of WTO norms to address the various issues relating to the energy sector, as well as address issues relating to interface between WTO rules and principles of competition and investment. The EU is essentially a net consumer of energy, and Russia- a producer/supplier. So, while for EU, security of supply is critical, for Russia- it is the assurance of demand, and its control over the supply chain.
With regard to GATS, under the existing system of classification of services (W/120), there is no energy sector specific category. Instead sub-classes of energy services have been included in different sectoral categories. For example, services incidental to energy distribution and services incidental to mining are listed as a subclass under “Other Business Services” and pipeline transportation of fuel is listed as a subclass under “Transport Services”.

More on this- as the dispute evolves!