Wednesday, November 7, 2012

Renewable energy, WTO and local content - China takes on the EU

In signs of increased disputes in the renewable energy sector at the WTO, China filed a complaint against the EU and certain EU member states against certain Feed in Tariff programs that it alleged violated the GATT, ASCM and TRIMs. The WTO reported the filing of the complaint here. Though details of the complaint and the grounds of challenge are not yet clear, it seems that "local content" requirements are the main ground for he challenge.It was reported here.The NYT reported it here. Surprisingly, China has not filed a case against the U.S. with regard to which China connected a detailed investigation into State specific renewable energy programs recently. Many countries provide preferential tariff on generation of renewable energy and also mandate the use of locally produced products for this generation. Some countries provide an incentive on the tariff (additional tariff) on the condition that local products are used. 

EU and Japan have already challenged Canada's (Ontario's, more specifically) Feed-in tariff program as being violate of GATT law since it treats imported products less favourably than local products. The decision of the WTO Panel in this case is awaited in November. I had blogged about the dispute recently here.

With a number of countries implementing renewable energy programs of varying degrees and varieties, with and without local content requirements, the disputes at the WTO will offer some interesting insights on where the lines are to be drawn in balancing environment protection and trade.

1 comment:

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