Dylan Geraets and Leonie Reins
‘Article 1 of the Energy Charter Treaty, entitled ‘Definitions’, contains a list of definitions of terms that are used throughout the ECT. It is the first article of Part I, entitled ‘Definitions and Purpose’. The ECT was adopted in the Final Act of the European Energy Charter Conference and is contained in Annex 1 to the Final Act of the European Energy Charter Conference. Important definitions are for example ‘Contracting Party’, ‘Regional Economic Integration Organization’, ‘Investment’ and ‘Investor’.
Article 2 of the Energy Charter Treaty lays down the purpose of the Treaty. The provision highlights the ‘treaty’s role in providing a legal framework promoting long-term cooperation, suggesting that the treaty is conceived as enhancing the stability required for such cooperation’. The Treaty’s purpose essentially contains four elements which are discussed in the following: 1. The establishment of a ‘legal framework’ aimed at; 2. The promotion of long-term cooperation in the energy field based on; 3. Complementarities and mutual benefits; 4. In accordance with the objectives and principles of the Charter.
This chapter provides a fine-grained analysis of the ECT Article 3 dedicated to ‘International Markets’. It details the dual obligation embodied by the wording of the provision: openness and competitiveness. Pursuant to this article, parties to the Charter must promote market openness as well as competition. The scope of these obligations is circumscribed to the energy sector as defined by the pertaining annexes to the Charter. Those annexes define the exact products and equipment that must be subject to alleviated trade and non-trade barriers and competition. This provision and the present commentary must be read in parallel to the Annex W.
This chapter contextualizes the trade regime defined by the Energy Charter Treaty. Designed to foster market openness in the field of energy for non-WTO countries, the ECT applies to countries which are WTO members and non-WTO members. Aiming at acclimatizing non-WTO countries to free trade, the Charter’s trade regime is alleviated and distinct from the WTO one. However, Article 4 closes the loop for WTO parties which are bound to the ECT. The formers cannot derogate from their WTO obligations on the basis of the Charter’s trade regime. Whence, the ECT does not affect trade interactions between WTO parties. Hence, this provision allows to the determine which trade regime applies – depending on the parties interacting with each other.
The present chapter details the ad hoc regime for trade-related investment measures of the Energy Charter Regime. The Energy Charter entails a bespoke trade regime which is inspired from the WTO architecture. However, it precludes some WTO treaties from its regime pursuant to Annex W to the Charter. Among those excluded agreements is the Agreement on TRIMs. Yet, the article 5 of the ECT transposes the content of this agreement in the main body of the Charter. This transposition is however not perfectly symmetrical. It therefore raises some issues about the clarity of obligations and exceptions available to the parties to the Charter. This question is all the more crucial that both WTO parties and non-WTO parties are subject to this article.