The Globe and Mail reports, “Canada will appeal a World Trade Organization ruling that could derail a key element of Ontario’s green energy program designed to encourage manufacturers to set up shop in the province. The formal ruling, released Wednesday, said the program breaks international trade rules because it forces companies selling premium-priced clean energy into the province’s electrical grid to source a proportion of their equipment and services in Ontario. Japan and the European Union had complained about those provisions to the WTO, although the complaint was actually filed against Canada, because the WTO deals with nations rather than regional governments.”
“The WTO’s 160-page decision says Ontario breached its obligations under the General Agreement on Tariffs and Trade, because the local-content requirements essentially treat imported equipment and components differently than domestic products. However, the WTO did not uphold part of the Japanese and European complaint that suggested the local content rules amount to an illegal subsidy. ‘We recommend that Canada bring its measures into conformity with its obligations under the … GATT,’ the ruling said.”
“Stuart Trew, trade campaigner with the Council of Canadians, said the WTO is inviting a backlash with its ruling. If there is no way to provide incentives for green energy in a free market system, ‘there is little hope of reducing our greenhouse gas emissions and addressing the climate crisis,’ he said. ‘As long as the trade rules are stronger than our environmental rules, we’ll continue to do nothing.’ Other countries should also be defending Ontario’s policies, or their own support programs could be challenged in the same way, he added.”
In early December, Trew wrote in a campaign blog, “The Council of Canadians is one of seven environmental, labour and student groups that filed a joint amicus curiae (friend of the court) submission to the WTO dispute settlement panel hearing the European and Japanese joint case against the Green Energy Act. In part, we argued that the obligation to reduce greenhouse gas emissions cannot, under international law, be relegated to secondary status to the goals of trade liberalization. To the contrary, by signing and ratifying the Framework Convention on Climate Change and the Kyoto Protocol, Canada, the EU and Japan have each declared that the pursuit of ecological security in the face of potentially catastrophic climate change is the paramount obligation.” To read the submission, please go to http://canadians.org/trade/issues/WTO/WTO-Challenge-GEA.html. For the rest of his blog, go to http://canadians.org/blog/?p=18338.
The Globe and Mail article this evening notes, “An appeal will likely take many months.”
