GENEVA Oct 16 Canada is set to lose a dispute
at the World Trade Organization brought by the European Union
and Japan over support for renewable energy in Ontario,
according to a newsletter published by a Geneva-based trade
Ontario's green scheme aimed to guarantee prices for
renewable energy as long as it was generated with Canadian made
equipment, which Japan described as protectionism when it
brought the case against Canada.
The WTO adjudication panel considering the case has issued
an "interim report" that says Canada was breaking WTO rules by
requiring firms in the scheme to source up to 60 percent of
their equipment locally.
However, the International Centre for Trade and Sustainable
Development, which obtained the leaked interim report, said the
ruling was not entirely in favour of the EU and Japan.
While Canada's "local content requirement" was found to be
discriminatory and therefore illegal, the WTO panel did not
agree with the EU and Japanese claim that the Canadian scheme
amounted to illegal subsidies.
Interim reports are confidential and preliminary rulings
sent to the parties to the dispute a few weeks before the final
report. The parties have a chance to comment, but the final
report is normally broadly in line with the interim report.
The WTO is expected to publish the panel's final report on
the case by the end of next month. Either side could appeal the
If Canada does lose the case, it may embolden critics of
other schemes with local content requirements, several of which
have been under scrutiny within the WTO.
The EU, Japan and the United States have questioned Brazil's
local content requirements for the telecoms sector, the Indian
government's preference for Indian-made electronic goods and
India's local content rules for a nationwide solar energy drive.
They have also asked Indonesia to explain local content
provisions for the telecoms sector and in mining, oil and gas,
and asked for more information about Nigeria's apparent
requirement for local content in its oil and gas industry.
(Reporting by Tom Miles; Editing by Jon Hemming)