The World Trade Organization (WTO) will next month rule that the Canadian province of Ontario’s feed-in tariff violates WTO non-discrimination policy, according to a leaked document.
The Geneva-based International Centre for Trade and Sustainable Development has revealed details of a confidential WTO report, which says that the body will uphold EU and Japanese complaints that the Ontario FiT’s domestic content policy breaks international trade rules.
In 2010, Japan and the European Union brought complaints against Ontario’s domestic content policy because they claimed it was illegal under the Agreement on Tariffs and Trade (GATT) and the WTO Agreement on Trade-Related Investment Measures (TRIMS).
The Ontarian feed-in tariff includes a domestic content requirement of at least 60% in order to qualify for subsidies and grid access.
“Through these measures, the government of Ontario provides subsidies contingent upon the use of domestic over imported goods,” said the Japanese delegation in its statement when it registered the complaint.
“This discriminatory measure is designed to promote the production of renewable energy generation equipment in Ontario rather than to promote the generation of renewable energy.”
Canada’s response to the Geneva-based WTO said: “Ontario countered that because a FiT programme is a form of governmental procurement to ensure affordable clean energy generation, it is therefore exempt from international agreements. Provided that Ontario is not conferring a benefit the country’s incentive system it is shielded from both the General Agreement on Tariffs and Trade and the Agreement on Subsidies and Countervailing Measures.”
In March, the ICTSD said: “The only WTO agreement that specifically addresses such governmental purchases is the plurilateral Government Procurement Agreement (GPA). While Canada is a party to the GPA, the Ontario Power Authority (OPA) – the agency that implements Ontario’s FiT programme – is not covered by Canada’s concessions in the plurilateral pact. As a result, Ontario is under no obligation to grant access to its energy procurement market.”
But according to details revealed by the ICTSD, a three-member WTO panel will condemn Ontario's rules for being discriminatory to foreign munfacturers and will make an official announcement next month.
A spokesman for the WTO said it could not comment on the leaks.