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European Energy Charter conference

The European Energy Charter Conference met for the first time this year on 7-11 March. There were informal consultations with some of the major delegations during the preceding months. The Plenary Session itself was attended by nearly all the countries of Western and Eastern E...

The European Energy Charter Conference met for the first time this year on 7-11 March. There were informal consultations with some of the major delegations during the preceding months. The Plenary Session itself was attended by nearly all the countries of Western and Eastern Europe, Russia and the other nine Republics of the former Soviet Union, as well as the United States, Japan, Canada and Australia. The founding concept of the Charter initiative is that the process of economic activity can be supported by cooperation between Western and Eastern energy companies and can act as a catalyst for economic recovery in Eastern Europe and the former Soviet Union. The focus of the Plenary Session was the negotiation on the European Energy Charter Treaty. There is now almost complete agreement on the coverage of the treaty, which will include investment protection, energy trade, transit, and the environment. There is also provision for transitional arrangements and dispute procedures. The treaty establishes a permanent Charter Conference and Secretariat to ensure that the Treaty is implemented and to provide a forum for future East-West energy discussions. Negotiations during the Plenary week covered an extensive range of issues. Progress was made in a number of areas but a number of problems still remain. On the investment aspects of the Treaty there is now agreement on the two-stage approach suggested by the European Community last year. Specifically, delegations have agreed that in two or three years time they will sign a second Supplementary Agreement committing themselves not to discriminate in any way against companies from other Charter countries wanting to make energy investments in their territories. Trade was also extensively discussed. All delegations have now accepted in principle that Russia and the other Eastern countries who are not yet GATT members will be treated, as far as energy is concerned, as if they had already joined GATT. But some difficult issues on trade have yet to be resolved such as the impact of the Treaty on existing legislation in some countries, and the Treaty's relationship with other agreements covering energy trade, some of which are also still under negotiation. One other important issue which was largely resolved was the question of what transitional arrangements might be requested by some Eastern countries, to give them sufficient time to adapt their laws and practices to the market system provided for in the Treaty. Requirements for such transitional arrangements have now been reduced considerably and should not in most cases represent any obstacle to the Treaty's signature. Other important Treaty provisions on which the text, although mainly agreed, is still subject to reservations by one or two countries, include technology transfer, national sovereignty and State enterprises. Another difficult issue has been the possible effect of the Treaty on the future development of the European Union. At the beginning of the week, the conference settled the final provisions of the Treaty dealing with important legal and procedural issues such as accession, entry into force and association agreements. At the beginning of February a Charter Conference Working Group met to consider the text of an Energy Efficiency Protocol to the Treaty and reached more or less complete agreement. The Plenary welcomed this and decided in principle that this Protocol should have legally binding status, in consideration of the importance which the Charter countries attach to energy efficiency policies. The next and hopefully final Plenary session on the Charter will take place on 16-20 May 1994. Success at this Plenary would allow the Treaty to be signed in the summer of this year.

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