The Companionship of the Energy Sector and WTO Regulations; Facts, Challenges and Prospects

The absence of the most important oil exporting countries in the final round of Uruguay leave the commercial debates of energy sector out of the relevant discussions. This is while the contemporary debates about the participation of these countries in WTO cause to some serious concerns about their rights and duties concerning transactions in energy sector. This scenario has especially important for Iran as a country which is going to end the WTO accession process. In this regard the relevant countries face to several challenges like the necessity of the change of internal regulations, the situation for foreign investors and the conflict obligations which should be scrutinized. This article also explores whether the obligations and practices of the WTO and OPEC are necessarily incompatible. The central focus is to explain the proposition that OPEC-mandated production quotas operate as de facto export restraints and are thus prohibited by GATT Article XI:1. The Note is divided into several parts. First, it argues that there is an inherent difference between controlling the production of a nation's resources and imposing quantitative restrictions on the amount of those resources that can be exported abroad subsequent to production. It suggests that the WTO Appellate Body would likely find that Article XI:1 is not properly applied to quantitative production restrictions. Then, it describe that Article XI:1 is applicable to production quotas. Third, it examines the viability of certain affirmative defenses contained in the GATT exceptions clauses. These defenses could bring OPEC members back into compliance with their WTO obligations if they were found to be in violation of Article XI:1. Finally it examines the possibility that a defense might exist in the Article XXXVIII provision for intergovernmental agreements intended to promote the interests of developing countries.