Friday, February 1, 2013

Canada reaps Ontario’s whirlwind: Ontario's FIT and the WTO

I found this article, by executives at the C.D. Howe Institute, to be the best overview of the problematic nature of Ontario's feed-in tariff program's domestic content provisions which have been found in violation on Canada's commitments as a member of the World Trade Organization.

Canada reaps Ontario’s whirlwind | FP Comment | Financial Post:
...with the December 2012 reports of the WTO panels, one dealing with a complaint by Japan and another by the European Union about the local-content requirements embedded in FIT contracts, yet another (supply-managed?) chicken hatched by the Green Energy Act came home to roost.
Countries whose industries might have expected to sell their proven and affordable equipment to Ontario’s expanding green-energy suppliers predictably threw, well, a fit, and took Canada to the WTO over measures that no one, not even Canada, claimed were non-discriminatory vis-à-vis the foreign producers. And Canada’s federal government necessarily, if wearily, got involved because, as a signatory to the WTO, it is the entire country that is on the hook, and it must defend provincial policies that are accused of running afoul of international trade rules.
Canada, of course, would and should complain in the same way when governments abroad discriminate against competitive Canadian producers. For allowing comparative advantages to play out — generating better income possibilities for all — is at the core of the trade liberalization that most of the world’s countries have sought to promote through the WTO.
And that, in turn, is what makes a federal case out of Ontario’s green electricity follies. 
Read the entire article at the Financial Post

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