Canada green energy scheme broke trade rules: WTO

Wed Dec 19, 2012 4:22pm EST
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GENEVA (Reuters) - A Canadian scheme to pay green energy companies more for their electricity if they use local technology broke World Trade Organization rules, the global body said on Wednesday in a ruling that could lead to challenges against similar programmes.

The WTO largely backed complaints from Japan and the European Union that the scheme set up by the Canadian province of Ontario discriminated unfairly against foreign companies.

The case has been closely watched because it deals with "local content requirements", where countries ensure their own firms get a guaranteed cut of big projects, that are at the center of a number of other disputes.

The EU welcomed the ruling and said it would open up more business for the bloc's businesses in Canada.

"Exports from the EU into Canada in wind power and photovoltaic power generation equipment are significant, ranging from 300 to 600 million euros in 2007-2009," the European Commission said in a statement.

"These figures could be higher should the local content requirements be removed from the legislation in question," it added.

The Canadian government, acting on a request from Ontario, said it would appeal the ruling.

Separately, a spokeswoman for the Ontario ministry of energy said the program was consistent with Canada's obligations under WTO agreements.

Brazil, India, Indonesia and Nigeria have been criticized repeatedly in WTO committee meetings for having similar local content clauses in big infrastructure projects.   Continued...