The Eu in the Global Investment Regime: Commission Entrepreneurship, Incremental Institutional Change and Business Lethargy by Johann Robert Basedow

Author:Johann Robert Basedow [Basedow, Johann Robert]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9781351621564
Google: a2U9DwAAQBAJ
Goodreads: 36872505
Publisher: Routledge
Published: 2017-11-07T00:00:00+00:00

6.1.4 The ‘supplementary protocol’

The negotiations on the ‘supplementary protocol’ started in early 1995, soon after the conclusion of the ECT. The ‘supplementary protocol’ should enshrine NT for foreign investors in energy sectors of host countries and promote the privatisation and demonopolisation of energy markets (Agence Europe, 1997a). In comparison to the preceding negotiations on the European Energy Charter and the ECT, the negotiations on the ‘supplementary protocol’ attracted only a little attention. European policymakers primarily focused on speeding up the ratification process and extending the ECT membership to interested third countries. The ratification process of the ECT, moreover, became increasingly complicated. The Russian Duma voiced concerns about the limitation of Russia’s sovereignty over its energy resources under the ECT and its ‘supplementary protocol’. By 1997, it became clear that Russia was unlikely to ratify the ECT and would abide to the ECT merely on a preliminary basis (Agence Europe, 1997b). Taking into consideration that the ECT project had been conceived in order to subject Russian energy policy and its energy sector to international economic law and market mechanisms, this development was a serious blow. European policymakers spent most of their time trying to convince Russia to ratify the ECT.

The negotiations on the ‘supplementary protocol’ rapidly progressed in the slipstream of these events (Agence Europe, 1997a). In January 1997, media reported that the negotiations on the ‘supplementary protocol’ could be wrapped up within hours, if the parties showed the political will to do so (Agence Europe, 1997b). Mostly Russia, Norway, Australia and Iceland remained critical of the ‘supplementary protocol’ due to the potential limitation of their sovereignty over their energy resources. France, on the other hand, disliked the idea of opening up its energy market to foreign investors. The French position not only slowed down the negotiations on ‘supplementary protocol’ of the ECT but also undermined the finalisation of the Single Market for energy. France generally rejected measures which would challenge the monopolies of its utilities Electricité de France or Gas de France or allow foreign investors to buy shares in these companies. In particular, the United Kingdom expressed criticism that French utilities were benefiting from the gradual liberalisation of energy trade and investment within the EU, while the French government went to great lengths to keep the French energy sector closed to foreign investors (Johnstone, 1998). In December 1997, the chairman of the ECT, Charles Rutten, nevertheless, informed the public that most sensitive issues in the negotiations on the ‘supplementary protocol’ had been resolved. He stressed that the conclusion of the talks in early 1998 was realistic (Agence Europe, 1997a). Rutten’s optimism was premature. During spring 1998, France re-emphasised its opposition to investment liberalisation in the energy sector. France, moreover, linked the conclusion of the ‘supplementary protocol’ to the conclusion of the stalled negotiations on the MAI in the OECD. It stressed that the concerns of civil society against the liberalisation of international investment flows, which came forcefully to the fore in the context of the MAI negotiations, could not be discarded in the negotiations on the ‘supplementary protocol’ of the ECT.

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