Monopolies in the energy sector: legal and economic perspectives

Arguably, the monopolies in the energy sector do not enable efficient use of the globe’s resources as requested in the preamble of the WTO Agreement. Yet, given these structures, countries are particularly reluctant to cede sovereignty over natural resources and to engage in international commitments to the progressive liberalization of energy supplies and services. A framework agreement will need to take this into account and seek solutions reinforcing sovereign rights by bringing about a more reliable international trading regime in the field. According to Lamy, bringing greater law and order to this complex field could turn out to be one of the best sovereign decisions ever made.

The project will address the principle of permanent sovereignty over natural resources revisited in the light of the common concern responsibilities of the states, then it will turn to address state trading and competition and export restrictions in the energy sector more specifically, with a view to developing elements for a framework agreement. It will study the issue in the light of multilayered governance, taking into account appropriate vertical allocation of powers. The framework should provide a specific timeframe for implementation and periodic assessment of results. It should be flexible and allow adaptation to changes in the marketplace; finally it should also promote energy efficiency.