Canada Feed-in Tariff WTO Case

Srikar at the “Tread the middle path” blog reports about first results in the DS 412 WTO case Japan has brought against Canada, complaining about a local content requirement for a feed-in tariff.

Not surprisingly, the panel seems to think that this kind of discrimination is illegal under GATT, but not an illegal subsidy.

As Srikar points out, that would lead to the question of the general exception of article XX GATT.

One might make a case that these local content rules are necessary to deal with climate change. If so, an exception under article XX might allow them after all.

However, I am not sure how such a case is supposed to be made. Allowing more protectionism in the field of solar and wind technology will, all things equal, lead to less efficient production and slower reductions of costs. That in turn will lead to slightly slower deployment.

With possibly the risk of runaway global meltdown at stake, this is not really the time for allowing that.

As mentioned before, I read the existing Information Technology Agreement as to already include solar panels.

The basic idea of the Information Technology Agreement is of course that it is in the common interest of all countries to accelerate the transition to a information society. Protectionist interests are trumped by that.

If anything, the common interest of all countries in mitigating catastrophic consequences of global warming is even stronger than the interest behind the Information Technology Agreement.

For the discussion of an article XX exception this would indicate that there is no environmental merit of allowing discrimination by a local content rule in the first place.

Related posts:

Feed-in tariffs and WTO rules

GATT Article III, Paragraph 8 b) and feed-in tariffs

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

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