Thursday, June 2, 2011

Japan takes WTO dispute with Ontario regarding FIT local procurement requirements to next stage

Reuters is reporting today that Japan asked the World Trade Organization (WTO) to form a legal panel to decide whether Canadian provincial backing for renewable energy gives an unfair advantage to Canadian equipment makers.

Japan has given up attempts to resolve amicably a dispute over the Ontario feed-in-tariff (FIT) that guarantees prices for renewable energy as long as it is generated with Canadian-made equipment, Japan's ambassador to the WTO said in a letter to the chairman of the WTO's disputes division.

"Consultations failed to resolve the dispute. As a result, Japan respectfully requests that a panel be established to examine this matter," Japanese Ambassador Yoichi Otabe wrote.

The dispute stokes a larger debate over plans by countries including Canada, the United States and China among others to reserve public works as well as energy and environmental projects worth billions of dollars for local firms.

"Japan is seriously concerned about a possible proliferation of such protectionist measures all over the world," Japan said in a statement.

Canadian officials in Ottawa were not immediately available for comment.

Japan says that the Ontario FIT violates Canada's obligations as a WTO member.

Japan says that the local procurement requirement of the FIT is illegal and cites Ontario's decision in January 2011 to further raise the local content requirement.

WTO members will discuss the opening of legal proceedings on June 17, 2011 with Canada likely to ask for a delay while it studies Japan's complaint.

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