In 2014 the United States launcheda WTO case against India’s ambitious solar program. The United States claimed that the “buy-local” rules of the first phases of the program, which say that power companies must use solar components made in India in order to benefit from the government-subsidized program, discriminate against U.S. solar exports. In its ruling, the WTO agreed that India’s buy-local rules “accord less favorable treatment” to imported solar components, even while acknowledging that “imported cells and modules currently have a dominant share of the market for solar cells and modules in India.” India has indicated that it may alter its solar program to try to persuade the U.S. to drop the case. It is unclear whether the U.S. will accept the proposed changes, and what impact they may have on India’s solar expansion plans.
Bringing this case is a perverse move for the United States. Nearly half of U.S. states have renewable energy programs that, like India’s solar program, include “buy-local” rules that create local, green jobs and bring new solar entrepreneurs to the economy. The U.S. government should drop this case to avoid undermining jobs and climate protections not just in India, but also at home……
The ruling boldly states that domestic policies seen as violating WTO rules cannot be justified on the basis that they fulfill UNFCCC or other international climate commitments. In effect, the WTO has officially asserted that antiquated trade rules trump climate imperatives.
Why is this about India in a blog about Canadian Democracy? Quite simply because various trade agreements both already in place (NAFTA) and waiting to be ratified (TPP – CETA) have clauses in them that enable this kind of backwards thinking in permitting corporations to sue governments for actions that give preference to their own manufacturing sectors. Any action (including environmental legislation) that gives preference to domestic suppliers for government projects is fair game for these multinationals or foreign corporations to claim a loss of business income and make a claim for ‘compensation’.
This is so wrong on so many levels that I cannot comprehend how the government of any country would agree to these clauses (clearly put in to satisfy the corporate interest) in said trade agreements.
It is no less than an attack upon our national interest and our democratic right to have say into our own destiny, small as that may be. It diminishes our sovereignty and those who promote such clauses in ‘trade agreements’ are bordering upon ‘traitorous’ action IMHO. That in India’s case it diminishes their ability to fight global climate change and is a sad reflection of where corporate and the U.S. Governments priorities lay, do not be fooled into thinking that our situation is any different!
UPDATE the CETA deal has just been “approved” (but not ratified) with some changes to the investor-to-state dispute settlement (ISDS) mechanism but without any changes to the clause itself.
. . . → Read More: Democracy Under Fire: WTO rules against solar industry