Sunday, February 10, 2013

Procurement by government, commercial resale and feed in tariff - Some interesting questions

Canada has decided to appeal against the Panel decision in the Ontario feed in tariff case. I had blogged about it here.

The notice of appeal is found here.Going by the contents, The main challenge is on the applicability of Article III:8(a) GATT to the facts of the case. Canada claims that it's measure is exempted under his provision and thus does not violate national treatment principle under GATT.
"Canada seeks review by the Appellate Body of the Panel’s findings and conclusion that the Government of Ontario’s FIT Program, as implemented through the FIT and MicroFIT Contracts, is not covered by the terms of Article III:8(a) of GATT 1994.This conclusion is in error and is based on erroneous findings on issues of law and legal interpretation including the Panel’s finding that the Government of Ontario purchases renewable electricity "with a view to commercial resale". 
Canada also requests the Appellate Body to find that the Panel acted inconsistently with Article 11 of the DSU by failing to make an objective assessment of the facts related to this issue, specifically with respect to the Panel’s finding that the resale of electricity purchased under the FIT Program is "commercial" in nature, and by using this faulty factual finding to support its conclusion about the applicability of Article III:8(a) of GATT 1994 to the FIT Program."
Article III:8(a) GATT states:
"The provisions of this Article shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale."
The contours of this provisions would definitely be the subject matter of the AB proceedings. For an interesting debate on this subject see my comments on the IELP blog here. Would be interesting to see the AB interpreting "commercial resale" and other provisions of GATT. This would definitely have widespread implications for renewable energy support programs across the world. Another classic example of domestic policy space being impacted by international economic law and policy.

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