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Japan and EU cross appeal Ontario WTO ruling

The WTO (World Trade Organization) recently ruled that the local content requirement within Ontario's FIT program violates global trade rules. Ontario has already appealed the decision, but now Japan and the EU are counter appealing.

Developers have to ensure that 50-60% of a project’s equipment and services come from Ontario-based companies in order to qualify for the FIT.

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Two complaints were submitted in 2010 and 2011: DS412 (Canada-Renewable Energy) and DS426 (Canada-Feed-in Tariff). The original ruling was published in December and supports the claim for unfair discrimination against foreign companies since developers have to ensure that 50-60% of a project’s equipment and services come from Ontario-based companies in order to qualify for the FIT.

This requirement violates the national treatment obligations in the General Agreement on Tariffs and Trade (GATT) and the Agreement on Trade-Related Investment Measures (TRIM). Canada has already appealed against this on February 5, 2013. In a new move now, Japan and the EU have filed a cross appeal. The WTO Appellate Body will review the legal aspects of the case and the conclusive report can take up to three months.

However, the reports do not support the accusation that Ontario's FIT program should be classed as an illegal subsidy.