July 13, 2020

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July 13, 2020

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July 10, 2020

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World Trade Organization Rules Against Ontario’s “Buy Local” Program

The Province of Ontario has imposed a requirement that in order to participate in its feed in tariff program (FIT) for solar energy a project much source at least 60% of the solar project content from within the Province. That requirement has been challenged by Japan and the European Union. The World Trade Organization now has ruled that this domestic-content requirement violates sections of the General Agreement on Tariffs and Trade 1994. Canada will be appealing the decision.

Many in Michigan have suggested that the Ontario requirement would be good for Michigan manufacturing, if coupled with a Michigan FIT. However, under the federal Constitution such a requirement would give rise to challenges from the other 49 states under the Commerce Clause, which generally prohibits one state from erecting impediments to interstate commerce. Now we see that such a state law would also violate international trade agreements. All this begs the question of whether the bow to Michigan content in granting bonus renewable energy credits may itself be subject to challenge.

© 2020 Varnum LLPNational Law Review, Volume III, Number 64


About this Author

Bruce Goodman, Environmental lawyer, Varnum

Bruce practices energy law, environmental law, and construction law. His energy background includes negotiating electric power sales agreements (both for wholesale sellers of energy and for retail consumers of energy) state electric rate cases, developing municipal energy tariffs, and energy project structuring and permitting. For years, he published a blog focused on alternative energy developments in Michigan. Most recently he has been involved in various alternative energy projects, including wind energy, biofuels and solar projects.

His environmental experience includes air...