The Legal Problems Of Energy Trade And Investment Cooperation Between China And ASEAN

This article firstly explores the significance, status, scope and the main problems of China-ASEAN energy trade and investment cooperation, from the concept and connotation of China-ASEAN energy trade and investment cooperation; secondly analyzes the existing legal mechanisms of China-ASEAN energy trade and investment cooperation, on the basis of confirming energy security as a common strategic objective of China and ASEAN presently; thirdly elaborates the legal system and legal problems of China-ASEAN energy trade and investment cooperation, separately from the perspective of energy trade cooperation energy investment cooperation; finally put forward suggestion to improve the legal regime of China-ASEAN energy trade and investment cooperation, by analyzing favorable and unfavorable factors of China-ASEAN energy trade and investment cooperation.Besides the introduction, the text this article can be divided into six parts:five chapters (main part) and the conclusion, the basic contents are summarized as follows.The first chapter is "The Overview of China-ASEAN Energy Trade and Investment Cooperation". China-ASEAN energy trade and investment cooperation, refers to the international cooperation in the energy field of trade and energy investments between China and ASEAN or its member states, the purpose of which is to protect energy security of their own, and the subject of which is China and ASEAN and its member states. Being of great significance, China-ASEAN energy trade and investment cooperation not only can protect the energy supply security of China and ASEAN’s member states by realizing the complementary advantages of resources, but also can reduce transportation costs and protect energy transport security of China and ASEAN’s member states, as well as is beneficial to the exchange of capital and markets of China and ASEAN’s member states. At present, China-ASEAN energy trade and investment cooperation opens up from the reality and institutional level:in practical level, China and ASEAN’s member states interdepend and have complementary advantages; in institutional level, dialogue and cooperation mechanism of China and ASEAN’s member states has been initially established. The contents of China-ASEAN energy trade and investment cooperation lie in three main areas:energy products trade, energy service trade and energy investments; but there still existed some legal problems such as:lack of specialized legal cooperation mechanisms, export restrictions on trade of energy products, barriers and obstacles on trade in energy service and energy investment.The second chapter is "The Legal Mechanisms of China-ASEAN Energy Trade and Investment Cooperation". Although China-ASEAN energy trade and investment cooperation does not form specialized legal mechanisms in current basically, China and all of the ASEAN’s member states are members of some international organizations and regional economic integration cooperation, such as the United Nations, World Trade Organization, and China-ASEAN Free Trade Area. China and some ASEAN’s member states also are members or participating countries of other international and (sub)regional organizations (cooperation), such as Multilateral Investment Guarantee Agency, International Centre for Settlement of Investment Disputes, Trans-Asian Railway (Singapore-Kunming), Greater Mekong Subregion economic cooperation. China has signed bilateral investment protection agreements with all of the ASEAN’s member states, and bilateral trade agreements with all of the ASEAN’s member states besides Malaysia and Brunei. In addition, China and Myanmar havesigned a oil and gas pipeline agreement. The above-mentioned bilateral agreements and multilateral agreements under the framework of international organizations, regional economic integration, part contents involving energy trade and energy investment issues, can played the role of norms and guidelines on China-ASEAN energy trade and investment cooperation. Overall, the legal mechanisms of China-ASEAN energy trade and investment cooperation can be divided into four layers:universally multilateral cooperation, regionally multilateral cooperation, sub-regional cooperation, bilateral cooperation.The third chapter is "The Legal System and Problems of China-ASEAN Energy Trade Cooperation". China and ASEAN or its member states do not formulate any specialized rules on energy trade cooperation. The relevant content of China-ASEAN energy trade cooperation mainly embodyed in WTO agreement, CAFTA Framework Agreement, CAFTA agreement in trade of goods, CAFTA agreement in trade of service, and CAFTA agreement in dispute settlement. The main contents of China-ASEAN energy trade cooperation legal system consists of complying with WTO disciplines, non-discriminatory, trade liberalization. There still existed some legal problems in China-ASEAN energy trade cooperation. The legal problems in energy trade of goods are:imperfect constraint of non-tariff import restrictions on energy products, unconstraint on energy products export tariffs, exception clause facilitating implementation of non-tariff export restriction measures, negative impact of state-owned energy enterprises on international energy trade. The legal problems in energy trade of service are mainly:energy service not arranged separately, not enough in market openness, too much restrictive provisions, and exception clause facilitating implementation of restrictive measures.The fourth chapter is "The Legal System and Problems of China-ASEAN Energy Investment Cooperation". the main legal basis of China-ASEAN energy investment cooperation are CAFTA agreement in investment, CAFTA agreement in trade of service, TRIMs agreement, SCM agreement, TRIPs agreement, GATS, MIGA convention, ICSID convention and other universal or regional multilateral treaties, as well as the bilateral investment protection agreement signed by China and ASEAN member states. Overall, the main contents of the legal system of China-ASEAN energy investment cooperation constitute of promoting investment liberalization, fair and impartial investment protection, and judicialization of investment dispute settlement. The primary legal problems of China-ASEAN energy investment cooperation as follows:too much restrictive provisions on energy investment access by the host country, inadequate constraints by international treaties on the right of energy investment access control of host country, unclear application scope of the MFN clause, the host country’s expropriation or contract breach behavior on foreign energy companies not yet attracting sufficient attention.The fifth chapter is "The Prospects of China-ASEAN Energy Trade and Investment Cooperation". China-ASEAN energy trade and investment cooperation has not only favorable basis but also negative factors. The favorable basis of China-ASEAN energy trade and investment cooperation is that the complementary advantages of resources allocation, existing mutual needs in reality, and increasingly close relations of cooperation. The negative factors of China-ASEAN energy trade and investment cooperation is that the impact of the China threat theory, developed countries to intervene in the affairs of the ASEAN region, the internationalization of the South China Sea issue. Improving the legal system of China-ASEAN energy trade and investment cooperation, should begin from the following three aspects:energy trade in goods, energy trade in service, and energy investment. In aspect of energy trade in goods, export tariffs and non-tariff measures on energy products shall be bound, and exceptions shall be strictly controled, especially the use of environmental exception. In aspect of energy trade in service, energy service should be separatly arranged, and the market openness of energy service should be expanded. In aspect of energy investments, China and the ASEAN member countries should clean up the existing regulations in domestic laws which violate the obligations of energy investment access and protection in international treaties, apply the national treatment to access phase of energy investment except the sectors which can not be opened or given national treatment and allow to be separatly included in the "temporary exclusion list" and "sensitive list", use the investment guarantee mechanism of MIGA to prevent potential political risks and increase the protection level of foreign energy investments, strengthen the use of dispute settlement mechanism of ICSID in investment disputes settlement.The conclusion part undertake combing the full text of this article and point out once again:China-ASEAN energy trade and investment cooperation is an important way to protect China’s energy security which is suffering a major challenge in the present time, and has practical foundation and broad prospects; although China-ASEAN energy trade and investment cooperation does not form specialized legal mechanisms in current basically, there still exist available composite legal mechanisms as well as specific legal system for China-ASEAN energy trade and investment cooperation, but it should be further improved by taking such measures as building specialized legal mechanism, constraining energy products export tariffs and non-tariff measures, controlling the use of exception clause, separately arranging energy service sector and expanding the market openness degree, strengthen energy investment protection, etc.