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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Lora Sullivan X-To: Steven J Kean, Terence H Thorn, Hap Boyd, John Ambler, Jose Bestard, Rob Bradley, Aleck Dadson, Carolyn Green, Chris Long, Mac McClelland, David Merrill, Peter Styles, Scott Bolton, Janine Migden, Edith Terry, Janel Guerrero, Mona L Petrochko, James D Steffes, Margaret Carson, Joe Hillings, don.deline@halliburton.com, tim.richards@corporate.ge.com, sburns@pecc.org, Chris Long, CBCapStrat@aol.com, 75361.622@compuserve.com, Lora Sullivan, cahills@hillsandco.com, rcfisher@hillsandco.com, Amy Fabian, Rob Bradley X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf Forwarded at the request of Joe Hillings: Joe Hillings: -- The notes look great. I have made a couple of technical corrections to the document, which I am attaching as a separate file. To all -- everyone here at Hills & company hopes you have a wonderful holiday! Bob Fisher (Hills & Company) ___________________________________________________________________________ Dear Friends: Please review, correct, make additions and return. Joe The Energy Services Coalition (please note that we are no longer using US WTO ESC) met at the request of Carol Balassa of USTR to get her perspective on energy services negotiations of the WTO and what our coalition needs to accomplish as well as a time perspective. Present from the USG were Carol Balassa (USTR), Josephine Ludolph and Richard Boll (DOC), Russ Profozich (DOE), Patricia Norman (DOS) and a regular from the ITC. Joe Hillings, Christina Bolton, Bob Fisher, Steve Burns, Brian Petty and Chris Long represented the ESC. Carol conducted an extensive and excellent briefing listing several phases of activity. She started the session by telling those present that the lack of action at Seattle was not a negative on what we need to accomplish this coming year. We are on track and need to produce various position papers as early as the end of January. Articles 19 of the GATT requires that the WTO make progress on agriculture and services issues although it does not identify a date certain to achieve agreement.. Ambassador Barshefsky is committed to beginning services negotiations beginning in January. A Committee on Specific Committments is charged with the responsibility to draft issues. The USTR wants to have a definition of issues from the ESC by the end of January to be submitted to the USG representatives on the Committee. A second significant group in the process is the Working Group On Domestic Rights.This group is chaired by Peter Collins. Peter needs to know what are the domestic regulatory issues that could be raised by other WTO members as reasons not to liberalize various sectors. This information is to be supplied in the first half of 2000. In late spring after group one and two have done a significant part of their work the USTR will be deciding what additional principles are needed to be tabled in the negotiation. They expect these working groups will begin to meet at the WTO by the end of next summer. Three basic columns headed by (1) Market Access, (2) National Treatment, (3) Additional Committments (Could be proposed annex such as the process Tim Richards has proposed in our Electricity Working Group listing examples) is the format to be developed for the two groups. Carol advised us that whatever we develop should be with the intention of getting Less Developed Countries (LDCs) supporting our basic principles in case a multilateral negotiation is not launched. We should work the current liberalization process being prosecuted in the APEC and FTAA negotiations.. The next phase of Carol's presentation addressed the recent response USTR received to the questions they submitted to DG 17 (it no longer exisits under the new commission) asking the EU to address their feelings about the liberalization of energy services. We have not been given a copy of the EU response and Carol has asked Ms. Klinkers of the EU if the response can be shared with the ESC to secure industry responce. Carol and others from the USG attending the meeting are trying to ascertain just who drafted the responses which they characterized as "confusing and not indicating a real understanding of the current practices and developments in the energy services sector." We do know that the USG has called this office to ask how they need to respond to the EU response that electricity is a good and not a service. Our immediate response is that this is a matter of some disagreement among EU members and the EU staff. The movement of electricity across national boundries may be a good but the sale and trading of electricity is definately a service. The EU response we were told makes the agrument that in their view that many of the items raised in the October paper of the USTR were GAT covered such as construction, engineering, etc and therefore, may not need to be raised in the services negotiations although these items will at least need some sort of annex to make sure they are included.. The EU believes that if you own or operate electricity producting then its a good but if you operate an IPP to sell electricity to various parties, its a service. We were told that the EU response does not seem to understand or cover renewables such as wind and solar both of which are important in Europe's plan to diversify and develop green energy. They also believe that price/risk management should be considered under finance services not energy services. The session was then open to general discussion. Bob Fisher commented that the EU does not seem to understand the scope of today's energy services industry. That we now have a seemless web of energy services that has been developed. What about environmental services? Again, the EU response is confusted and incomplete. Apparently they feel that environmental services can be considered elsewhere in the negotiation. Who from the EU drafted this paper? The staff has changed and we don't know how "high" in their heirarchy this was considered. Carol Balassa responded that she is trying to determine who drafted the response.. Brian Petty advised that his intelligence is that energy services is being discussed and considered at the highest levels of the Commission. Carol told us that she is trying to get everything together before "talking" to the EU in January when she hopes to specifically respond and discuss their current returned response. Therefore, she is asking the Energy Services Coalition to complete the work of our four Working Groups which will allow the Hills people to develop the definition and basic negotiating position papers. The DOS representative then suggested that we engage in some"capacity building." This was defined as an outreach program to brief WTO member delegations on the meaning of energy services. Carol suggested that after her January meeting the EU could be agreeable to having our industry group meet with their representatives to explain how energy services has evolved and what is included in energy services. We moved to a discussion of the definitions paper itself. Bob Fisher reminded those present that the current matrix developed for the APEC process was still an excellent guide to definitions although items such as renewables, heating and certain trading and financial services would need to be added. To meet some EU concerns that they are not a party to APEC and therefore suspicious of any such document, we should remove the reference to APEC. Our group pointed to the Tim Richards paper developed for our Electricity Working Group which gives a broad definition but then contains a footnote known as the illustrative list which lists the various items that we believe constitute energy services under that heading. Bob Fisher said that this was the likely format we would ultimately adopt in the material prepared for USTR and others in the WTO process. Bob said that once negotiators agree on the need for liberalized energy services they can "fit" whatever they want under the broad definition. The last question raised was what happens to the ATL (accelerated tariff liberalization) which also covers some energy matters which WTO countries had contemplated being approved in Seattle. Carol said that she did not know. The meeting then adjourned. The ESC needs to complete the Working Group process and complete the questionaire at the earliest possible time to allow the Hills people to prepare the basic document. Working Group chairs are to be asked to complete this process by mid January. Dear Reviewers: Please review at your earliest opportunity, make corrections, additions and whatever and return to me for distribution. Distribution will be to our ESC Executive Committee first and then to our entire membership of 45 (not to those who have not signed on as members) and to USG participants. - ESC~Balassa~briefing~memcon~12-99.doc
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