The trend toward regulatory and structural market reforms in foreign electric power markets fosters international trade in services, reports the U.S. International Trade Commission (ITC) in its study Electric Power Services: Recent Reforms in Selected Foreign Markets.

The ITC, an independent, nonpartisan, factfinding federal agency, conducted the investigation for the United States Trade Representative (USTR). The report examines the nature and extent of electric power industry reforms in Argentina, Australia, Brazil, Canada, Chile, the European Union, Japan, New Zealand, and Venezuela. Highlights of the report follow.

• Each of the countries studied has initiated policy reforms intended to introduce competition into the electric power market.

• As a consequence of reform, private firms increasingly have new opportunities to participate in the four traditional electric power industry segments (generation, transmission, distribution, and retail supply) as well as the newly created segment of electric power trading.

• Major elements of reform include privatizing government-owned entities, vertical unbundling to separate newly competitive from still-regulated activities, reducing concentration in the generation and retail supply segments, ensuring open access to common infrastructure, and establishing an independent regulatory authority.

• International implications of reform include new trade opportunities, both on a cross-border basis and through foreign-based commercial establishments, and more foreign direct investment in the electric power industry.

• International cooperation could support the development of competitive markets by facilitating regional interconnection and resolving fairness issues that may arise if reforms are implemented unevenly across countries.

• The General Agreement on Trade in Services may offer a vehicle for pursuing policy coordination, as the objectives of regulatory reform are generally compatible with the principles contained in the agreement.

Electric Power Services: Recent Reforms in Selected Foreign Markets (Investigation No. 332-411, USITC publication 3370, November 2000) will be posted in the Publications and Reports area of the ITC Internet site at www.usitc.gov. A printed copy may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC, 20436. Requests may also be made by fax to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade. The investigations are generally conducted at the request of USTR, the Senate Committee on Finance, or the House Committee on Ways and Means; the ITC may also self-initiate investigations. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.