India Wins Solar Case Against US At WTO

By Moderator June 28, 2019 12:34

India wins a solar case against the US at the World Trade Organization, with a dispute settlement panel pronouncing that subsidies and mandatory local content requirements instituted by eight American states breached global trade rules.

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  • The panel urged the US to bring the eight states in conformity with US obligations under Article III:4 of “national treatment”.
    • Under the national treatment provision, foreign producers must be treated on a par with domestic producers.
  • US states were offering incentives such as renewable energy credits through direct and indirect payments and rebates, tax credits and tax refunds for the purchase of renewable energy systems manufactured in the states, to produce renewable energy equipment and systems.
    • New Delhi had challenged the “renewable energy cost recovery incentive payment programme” implemented by the state of Washington, California’s self-generation incentive programme, Montana’s tax incentive for ethanol production, Michigan’s renewable energy credits programme, Delaware’s solar renewable energy credits and the Made in Minnesota renewable incentive programme.
  • India had claimed that it violated several provisions of the Trade-Related Investment Measures (TRIMs) Agreement and Subsidies and Countervailing Measures Agreement.
  • The US can still challenge the panel’s ruling before the Appellate Body
    • However, the Appellate Body itself is feared to have become dysfunctional after 11 December because the US has been blocking appointments to it.
  • In 2014, the US had launched a similar trade dispute against India’s Jawaharlal Nehru Solar Energy Mission, on the grounds that it included incentives for domestically produced solar cells and modules.
    • WTO’s Appellate Body had upheld the US complaint against India in that case.
  • The ruling could further inflame US-Indian tensions at a time when the two trade partners are engaged in an escalating tit-for-tat tariff battle

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By Moderator June 28, 2019 12:34