{"id":197,"date":"2010-09-21T08:14:02","date_gmt":"2010-09-21T13:14:02","guid":{"rendered":"http:\/\/blogs.law.columbia.edu\/climatechange\/?p=197"},"modified":"2013-07-19T12:16:10","modified_gmt":"2013-07-19T17:16:10","slug":"japan-v-canada-at-the-world-trade-organization-whither-green-jobs","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2010\/09\/21\/japan-v-canada-at-the-world-trade-organization-whither-green-jobs\/","title":{"rendered":"Japan v. Canada at the World Trade Organization: Whither Green Jobs?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div><p><em>Daniel Firger<br \/>\nAssociate Director and Fellow<\/em><\/p>\n<p>In what may be an ominous shot across the bow for green jobs advocates, Japan on September 13 submitted a complaint to the World Trade Organization alleging that a Canadian renewable energy law violates WTO non-discrimination rules. [1] At issue are a set of domestic content requirements built into Ontario\u2019s landmark green energy law, [2] which are designed to guarantee that local producers \u2013 and local jobs \u2013supply a minimum percentage of the technology used to meet the province\u2019s ambitious goals for renewable energy generation. [3] While Japan\u2019s \u201cRequest for Consultation\u201d with Canada does not formally initiate a case before the WTO\u2019s Dispute Settlement Body (DSB), it nevertheless sets the stage for a high-stakes showdown between the two countries, with potentially global repercussions for energy and industrial policy linking renewable power to high tech employment opportunities.<\/p>\n<p>On the one hand, Ontario hopes to spur investment in homegrown clean energy jobs by guaranteeing favorable feed-in tariff (FIT) rates for power generators who purchase solar panels and other equipment produced locally. [4] On the other hand, Japan \u2013 already home to many of the world\u2019s leading solar PV producers \u2013 seeks to maintain its sizable lead in renewables manufacturing.<\/p>\n<p>The resolution of this dispute may have far reaching consequences for countries like the U.S., where policymakers have explicitly linked controversial clean energy mandates with more popular green jobs programs.\u00a0 If the solar panels and wind turbines used to green the American grid must come from Japan and Denmark (where industries are well-developed) rather than Michigan and Ohio (where they may need government support to get off the ground), then what is already a delicate balancing act between climate action and job creation may prove even harder to pull off.\u00a0 A closer look at Japan\u2019s three claims against Canada helps to explain why.<\/p>\n<p>Japan\u2019s first claim rests on Article III.4 of the General Agreement on Tariffs and Trade of 1994 (GATT), which prohibits discrimination between imported products and \u201clike products of national origin\u201d with respect to rules and regulations affecting their \u201csale, purchase, transportation, distribution or use.\u201d [5] Under this Article, imported goods must be accorded treatment \u201cno less favorable\u201d than that accorded to goods produced domestically. [6] This principle is known as \u201cNational Treatment,\u201d and an extensive body of WTO case law makes it clear that domestic origin requirements such as those Ontario\u2019s FIT program are GATT-illegal.<\/p>\n<p>Japan\u2019s submission to the WTO is straightforward, claiming that the domestic content rules in Ontario\u2019s new green energy law<\/p>\n<blockquote><p>&#8220;appear to be laws, regulations or requirements affecting the internal sale, offering for sale, purchase, transportation, distribution, or use of equipment for renewable energy generation facilities that accord less favorable treatment to imported equipment than that accorded to like products originating in Ontario.&#8221; [7]<\/p><\/blockquote>\n<p>To the extent the provincial rules in fact discriminate in this manner, they may be held to violate Canada\u2019s commitments under the GATT.<\/p>\n<p>Second, Japan argues that Ontario\u2019s rules violate Article 2.1 of the Agreement on Trade-Related Investment Measures (TRIMs), [8] which requires that any TRIM applied by Canada must be consistent with the national treatment rules set out in Article III.4 of the GATT.\u00a0 Annex 1(a) of the TRIMs Agreement contains an illustrative list of such measures, including those which require \u201cthe purchase or use by an enterprise of products of domestic origin or from any domestic source [. . .] specified in terms of a proportion of volume or value of its local production.\u201d [9] Again, to the extent that Ontario\u2019s domestic content requirements are found to be couched in these terms, they too may be struck down by the DSB.<\/p>\n<p>Finally, Japan points to Article 3.1(b) of the Agreement on Subsidies and Countervailing Measures (SCM), [10] alleging that Ontario\u2019s FIT program constitutes a prohibited subsidy because it is provided \u201ccontingent [. . .] upon the use of domestic over imported goods.\u201d [11] If Japan can show that Ontario\u2019s favorable tariff rates are granted to power producers contingent upon their use of a certain proportion of renewable energy equipment produced in the province rather than in, say, Japan, it will likely prevail before the DSB.<\/p>\n<p>What does all this mean for green jobs in the U.S.? The answer is anything but clear, as current and proposed U.S. legislation on green jobs looks quite different than Ontario\u2019s unique FIT program. Rather than utilize conditional feed-in tariffs to incentivize domestic manufacturing, the 2007 Green Jobs Act, for instance, authorizes millions of dollars to create an \u201cEnergy Efficiency and Renewable Energy Worker Training Program\u201d to help develop skills in energy efficient construction and manufacturing, among other things. [12] Such workforce training would seem to steer clear of the thorny trade law problems triggered by Ontario\u2019s approach.\u00a0 To the contrary, WTO rules may yet emerge as a major stumbling block as U.S. politicians increasingly tout climate legislation as a vehicle for job creation. [13]<\/p>\n<p>For now, all eyes are on Geneva, where diplomats and trade law experts dispatched from Tokyo and Ottawa work to resolve the first \u2013 but by no means the last \u2013 WTO dispute on clean energy and jobs. [14]<\/p>\n<p>&#8211; &#8211; &#8211; &#8211; &#8211;<\/p>\n<p>[1] <em>Certain Measures Affecting the Renewable Energy Generation Sector<\/em>, Request for Consultations (Japan-Canada), WT\/DS412\/1, Sept. 16, 2010, https:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds412_e.htm<\/p>\n<p>[2] <em>Green Energy and Green Economy Act, 2009<\/em>,<em> <\/em>S.O. 2009, c. 12 (Can. Ont.), https:\/\/www.ontla.on.ca\/bills\/bills-files\/39_Parliament\/Session1\/b150ra.pdf<\/p>\n<p>[3] <em>See<\/em> Lee Greenberg, <em>Green Energy Has Japan Seeing Red<\/em>, OTTAWA CITIZEN, Sept. 14, 2010, <em>available at<\/em> https:\/\/www.ottawacitizen.com\/business\/Green+energy+Japan+seeing\/3520596\/story.html<\/p>\n<p>[4] <em>See <\/em>Ontario Power Authority, Renewable Energy Feed-In Tariff Program, https:\/\/fit.powerauthority.on.ca\/Page.asp?PageID=1115&amp;SiteNodeID=1052<\/p>\n<p>[5] General Agreement on Tariffs and Trade, Article III.4 (1994), https:\/\/www.wto.org\/english\/docs_e\/legal_e\/06-gatt_e.htm<\/p>\n<p>[6] <em>Id<\/em>.<\/p>\n<p>[7] <em>Certain Measures Affecting the Renewable Energy Generation Sector<\/em>, Request for Consultations (Japan-Canada), WT\/DS412\/1, Sept. 16, 2010, at 2, https:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds412_e.htm<\/p>\n<p>[8] Agreement on Trade-Related Investment Measures, Article 2.1, https:\/\/www.wto.org\/english\/docs_e\/legal_e\/18-trims_e.htm<\/p>\n<p>[9] <em>Id<\/em>., Annex 1.<\/p>\n<p>[10] Agreement on Subsidies and Countervailing Measures, Article 3.1, https:\/\/www.wto.org\/english\/docs_e\/legal_e\/24-scm_01_e.htm<\/p>\n<p>[11] <em>Certain Measures Affecting the Renewable Energy Generation Sector<\/em>, Request for Consultations (Japan-Canada), WT\/DS412\/1, Sept. 16, 2010, at 2, https:\/\/www.wto.org\/english\/tratop_e\/dispu_e\/cases_e\/ds412_e.htm<\/p>\n<p>[12] <em>See <\/em>GreenForAll.org, <em>The Green Jobs Act<\/em>, https:\/\/www.greenforall.org\/what-we-do\/working-with-washington\/the-green-jobs-act<\/p>\n<p>[13] <em>See, e.g.<\/em>, BOSTON HERALD, <em>John Kerry Touts Jobs in Climate Bill<\/em>, March 13, 2010, <em>available at <\/em>https:\/\/www.bostonherald.com\/news\/politics\/view\/20100312john_kerry_touts_jobs_in_climate_bill_deems_environment_secondary<\/p>\n<p>&nbsp;<\/p>\n<p>[14] <em>See<\/em> REUTERS, <em>Japan Starts WTO Dispute with Canada on Clean Power<\/em>, Sept. 13, 2010, <em>available at <\/em>https:\/\/www.reuters.com\/article\/idUSTRE68C2RN20100913<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Daniel Firger Associate Director and Fellow In what may be an ominous shot across the bow for green jobs advocates, Japan on September 13 submitted a complaint to the World Trade Organization alleging that a Canadian renewable energy law violates WTO non-discrimination rules. [1] At issue are a set of domestic content requirements built into [&hellip;]<\/p>\n","protected":false},"author":580,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5671],"tags":[9434,5424],"class_list":{"0":"post-197","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-international","7":"tag-energy-efficiency","8":"tag-international-trade","9":"czr-hentry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Japan v. 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