Lay WTO Speech

Moving along and on schedule. I wll be speaking myself twice and be at the
Seattle meeting for about four days negotiating on the side.
---------------------- Forwarded by Terence H Thorn/ENRON_DEVELOPMENT on
11/14/99 04:23 PM ---------------------------

Terence H Thorn
11/14/99 04:21 PM
To: Rob Bradley@ENRON, Joe Hillings@ENRON, Chris Long@ENRON, Edith
Terry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject: Lay WTO Speech

Rob has provided everyone a new set of slides for Ken's speech. They want Ken
to speak for 20 minutes. Once we agree on these we have to put together
talking points for Ken to use. I would like to be at that point this
Wednesday so we have the rest of the week to get feed back fro Ken and
finalize the speech next Monday or Tuesday.

Let me try out some themes.

We need to put energy developments in the context of globalization. The
world's economy is integrating as never before as transborder trade
increases, capital becomes more mobile. technology speeds this process. To
compete in this new arena countries must have access to the most talented
labor, the most advanced technology, and the lowest cost, highest quality
suppliers of goods and services. No where is this more critical that in the
areas of energy production, transportation, distribution and use.

Historically, energy trade has focused on technology to explore, produce and
export energy. In the 1990's the focus shifted to using that energy
internally to fuel the tremendous economic growth experienced by developing
economies. The focus became infrastructure development and inter-regional
trade as governments removed the legal and regulatory barriers to private
energy and infrastructure development. With energy demand increasing at high
rates, the potential for price increases, the need to develop and use new
energy technologies and the related environmental problems associated with
economic development, the next focus must be on opening these same economies
to the world class suppliers and partners which have the intellectual
property, talent, networks and technology to provide the answers to the more
efficient production, transportation and use of energy. By opening their
economies to an expanded trade in energy services, these countries gain
instant access to the skills and capabilities that have taken decades to
develop elsewhere.

But it's not just governments that benefit. In the US and Europe today we
have seen an explosion of customer choice in their providers of products,
services, prices and terms. The service industries have led the way in
providing more value at better prices. This will help economies leverage
their own financial, technological and intellectual capabilities.

Having put the need to have energy services on the WTO agenda I would now
turn the problem of defining the energy services sector. I don't like the
third chart, Energy Services Overview - it's confusing. I don't know if you
are listing the companies involved in services, in the coalition or what. I
far prefer the type of chart Rachel Thompson uses in her environmental
services presentation on page three: Some examples of environmental goods and
services. We can briefly talk about the historic issues here, but also
forward our recommendations on how energy services should be considered in
the WTO GATS discussions. The inclusion in the next GATS round is not an end
in itself but will start a process that will:

Clarify the definition of energy services
Identify the barriers to trade in energy services
Set the goals for the desired level of market openess
Establish commitments on transparency, due process and regulatory
implementation

From here we do a summary of global trends, the important role energy
services will play in a globalized economy, how expanded trade in energy
services can be a direct channel for technology transfer. This is the
"win-win" section.

In turning to the slides Rob provided, I have already mentioned my concerns
about the second slide. The list of members of the coalition can stay- it
represents the depth and variety of businesses in this area. The energy and
infrastructure slides fit the initial story. The energy services megatrend
slide has a long way to go. Maybe we can show the trend: production and
export, private infrastructure development, and the next step: mass
customization. The privatization slide doesn't go here but I'm not sure what
the point is or how we want to tie privatization to energy services. The
globalization slides need to go earlier if we are to use the story I outlined
but the globalization of energy trade slide is about the trade in
commodities. It doesn't fit- we are after data on the goods and services
that make this trade happen, not the commodity per se.

The customization is fine- we need to have solid talking points about why
customization of energy services helps economies. This will be a tough
section- I don't think we have anything in the can exactly on this point. Do
we need new markets for competitive energy? Energy outsourcing and
information age are fine, I like the nexus between energy and environment.
The talking points here should focus on this part of the energy services
business. EES should have lots of talking points in this area. The benefits
slide can be expanded. I don't see the need for the fragmentation slide.
Point?

On the conclusions don't be so threatening. Rather than say must adapt, we
should be talking about the benefits of embracing the new energy market. Add
a point about rising demand, environment problems, the need to produce and
use energy more efficiently.

.