Everyone reading this blog probably knows that the local content requirements in Ontario's feed-in tariff program have been found to violate WTO rules. Will the removal of those measures lead to additional trade restrictions? This is from a decision by the Canadian International Trade Tribunal on injury in an AD/CVD proceeding related to solar panels:
177. In the present case, the Tribunal had a clear picture of what will likely happen in the domestic market in the absence of a threat of injury finding. The evidence establishes that there is substantial production capacity in China, a significant share of which is freely disposable, and that Chinese producers have a propensity to dump and subsidize the subject goods or similar products in other major export markets, including the United States and the European Union. In particular, the fact that a significant volume of the subject goods was recently diverted from the United States to Canada shows, in the Tribunal’s view, that the domestic market is an attractive destination for exporters of the subject goods, which are no longer fettered by local content requirements under the FIT Program in Ontario. The collapse of sales experienced by several of the supporting parties in connection with the micro-FIT 3 program in 2014 and the market’s behaviour since the imposition of provisional duties in early March 2015 also provide a proxy for what will happen when the domestic industry experiences the full impact of the subject goods, in the absence of any local content requirement in Ontario, by the end of 2015. Given the specific set of projected circumstances created by the FIT Program, the Tribunal finds that the likelihood of increased dumped and subsidized goods is clearly foreseen and imminent.
If I'm reading this correctly, it looks like the removal of one form of protection (local content requirements) was a factor in a decision to impose another form of protection (AD/CVD duties).
Thanks to Canadian football super fan -- better known to most of you as a trade law professor -- Bryan Mercurio for the tip. (And to clarify, when I say football, I mean soccer, rather than that league with the Saskatchewan Roughriders).
