I have blogged about the Canadian FiT case at the WTO case here, here and here. News of Canada appealing the matter was reported here. It was not surprising since Canada had lost the case and was contesting the finding of the panel report that it had violated the provisions of the TRIMS and GATT.
Reports of the EU and Japan cross-appealing caught my attention. This would presumably be mainly on the interpretation of the provisions of the ASCM, especially the definition of a subsidy and benefit.
It is clear that the Appellate Body would decide the legal contours of this dispute, especially the compatibility of local content requirements with WTO law in the context of governments guaranteeing a minimum feed in tariff. With a number of countries across the world, both developing and developed, having massive renewable energy support programs (many of them with local content requirements), the AB ruling all be keenly awaited. One hopes that going by timeframe of the Antigua and Airbus-Boeing cases at the WTO dispute settlement, the wait for a closure is not too long!
It seems to be the week of renewable energy in international trade law circles with the United States requesting consultations with India in relation to domestic content requirements in India's national solar program.
"United States Trade Representative Ron Kirk announced today that the United States has requested World Trade Organization (WTO) dispute settlement consultations with the Government of India concerning domestic content requirements in India’s national solar program. India’s program appears to discriminate against U.S. solar equipment by requiring solar energy producers to use Indian-manufactured solar cells and modules and by offering subsidies to those developers for using domestic equipment instead of imports. These forced localization requirements of India’s national solar program restrict India’s market to U.S. imports. Tackling these barriers is a top priority of the Obama Administration.
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On January 11, 2010, India launched its national solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM). Phase I of that national policy is composed of two parts: Batch 1 and Batch 2. Under Batch 1, India required developers of solar photovoltaic (“PV”) projects employing crystalline silicon technology to use solar modules manufactured in India. Subsequently, under Batch 2, India expanded this domestic sourcing requirement to crystalline silicon solar cells as well. In its draft policy for Phase II of the JNNSM, India has stated that it is considering expanding the scope of the domestic content requirements further to include solar thin film technologies, which currently comprise the majority of U.S. solar exports to India. India also offers solar energy developers participating in the JNNSM a guarantee that the government will purchase a certain amount of solar power at a highly subsidized tariff rate, provided that they use domestically manufactured solar equipment instead of imports.
These elements of India’s national solar policy appear to be inconsistent with India’s obligations under the WTO agreements. These obligations include Article III of the General Agreement on Tariffs and Trade 1994 (GATT 1994), which generally prohibits measures that discriminate in favor of domestically produced goods versus imports; Article 2 of the WTO Agreement on Trade-Related Investment Measures, which prohibits trade-related investment measures that are inconsistent with GATT Article III; Article 3 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), which prohibits conditioning a subsidy on the use of domestic over imported goods; and Article 5 of the SCM Agreement, which prohibits causing adverse effects on other WTO Members through subsidies that discriminate against imported goods."
The case has been widely reported here, here and here.With Canada appealing the feed in tariff case at the WTO (that came to a finding that domestic content requirements int he Ontario context were violative of Canada's obligations under TRIMS and GATT) and the US requesting for consultations on this issue, will 2013 be the year where renewable energy support programs around the world will be challenged at the dispute settlement mechanism?
As expected Canada has appealed against the Panel decision (DS412 and 426) in the Ontario Feed in tariff case. It has been reported here in the WTO website. The Panel had ruled against the local content requirement that was mandated by Canada's law and regulations in relation to feed in tariff.
I have blogged about this far reaching decision in the renewable energy sector here, here, here and here. Hopefully the Appellate Body (AB) would settle the complex issues of law in relation to the interpretation of a "subsidy" under the ASCM as well as whether local content requirements violate the "national treatment" principle both under the GATT and TRIMS. It would be interesting to see if the AB accepts the "minority" reasoning of the Panel with respect to conferment of a benefit under the ASCM? Countries with massive renewable energy support programs, especially feed in tariffs will be watching very closely.
Over to the AB now...
