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NEWS: WTO panel on EU challenge of Green Energy Act established

In March 2010, the Globe and Mail reported, “As a proposed large-scale free-trade and economic-integration pact (the Canada-EU Comprehensive Economic and Trade Agreement) between Canada and the 27 European Union countries enters a crucial stage of negotiations, Canadian and European officials say the deal’s biggest obstacle is the province of Ontario. …Europeans say that a particularly contentious point is Ontario’s new Green Energy Act. …The EU negotiators said in a position paper they tabled in the negotiations this year that the Ontario legislation is a perfect example of the sort of protectionist legislation that would prevent European access to markets and make CETA unworkable.”

Late last week, Global Tax News reported, “The World Trade Organization (WTO) has confirmed the creation of two panels to mediate on cases relating to Chinese anti-dumping and countervailing duties, and a third to examine Canadian support to local manufacturers of clean-tech products in cases brought by the European Union and Japan. …The creation of the third panel relates to Japan and the European Union’s challenge to Canadian province Ottawa’s Green Energy act, which provides concessionary treatment of providers of green energy products and services that meet local content requirements. To qualify for the concessionary treatment, solar projects must have at least 40% of their initial development contributed to by local producers or service providers, and wind energy 25%. Japan and the European Union agreed to merge their appeals.”

They have also noted, “The legal challenge is politically challenging for both parties as the two nations are currently concluding a Free Trade Agreement. The EU decided to bring the dispute on the basis that negotiations had failed to bring about a resolution.”

In August 2011, the Toronto Star reported, “Energy Minister Brad Duguid made no apologies for the initiative, which has led to $20 billion in investment and created 20,000 jobs — and should generate 30,000 more by the end of next year. ‘We’re now seen as the world leader and when you’re in that position, you’re going to have other jurisdictions looking somewhat enviously at what’s being achieved here,’ he said. Duguid said building a thriving clean energy industry in Ontario is as much about economic development as the environment — and warned the government would protect jobs here. ‘We’re going to stand up for Ontario. …And we will against anybody outside of Ontario that wants to threaten our efforts to create jobs.'”

The Toronto Star has reported, “Calling it a ‘test case globally,’ Council of Canadians chair Maude Barlow (said Japan’s WTO challenge) threatens policies designed to decrease greenhouse gas emissions. ‘Why should the Ontario taxpayer be paying high rates for clean energy if it is going to the profit margins of big corporations from Japan or Europe?’ she asked. …Barlow said: ‘(Given a WTO challenge can take years) it is the chill effect that matters. While a dispute is being settled, other jurisdictions are loathe to start any similar program or pass any similar rule.’ …Barlow said she sees a ‘perfect storm’ of events to strip the sovereignty of Canadian legislators… ‘We should be very worried,’ she said. ‘This challenge could constrain governments from introducing laws, practices and standards that reflect community values of Canadians on environmental sustainability, fair trade, local jobs and justice, and local economic development.’ …Barlow says the Green Energy Act is already under threat by the EU negotiations, pointing out the European Commission targeted the Ontario program in a leaked memo earlier this year, citing it as a bad example for the other provinces. ‘This is a dangerous and anti-democratic move on the part of Japan,’ she said. ‘The Ontario and Canadian governments should vigorously oppose this challenge at the WTO and halt (EU negotiations) until it is clear such programs are protected.'”