Dispute Settlement Body

Canada – Certain Measures Affecting the Renewable Energy Generation Sector

Canada – Measures Relating to the Feed-In Tariff Program

Reports of the Appellate Body (WT/DS412/AB/R) (WT/DS426/AB/R)

24 May 2013

Statement by Australia

Mr Chairman

Australia notes the adoption of these reports by the Dispute Settlement Body. Australia participated in this dispute as a third party due to its systemic interest in the interpretation and application of the WTO Agreement to environmental measures.

Australia welcomes the Appellate Body's decision to uphold the Panel's original finding that the Minimum Required Domestic Content Levels prescribed under the Ontario Feed in Tariff (FIT) Programme and its related FIT and microFIT contracts are inconsistent with the national treatment obligations in Article 2.1 of the Agreement on Trade Related Investment Measures (TRIMS) and Article III:4 of the General Agreement on Tariffs and Trade (GATT) 1994.

Australia also welcomes the Appellate Body's reversal of the Panel's finding that the complainants had not been able to establish the existing of a benefit under Article 1.1(b) of the Agreement on Subsidies and Countervailing Measures (the SCM Agreement). 

Nonetheless, Australia would like to put on the record that we would not wish to see an unnecessarily narrow definition of the relevant market benchmark to assess whether there is a benefit under Article 1.1(b) of the SCM Agreement – particularly in highly regulated markets.

Australia would recall in this context that the use of subsidies by Members to promote environmental goals is disciplined, not prohibited, by the SCM Agreement. The SCM Agreement prohibits subsidies that are contingent on export performance or domestic content requirements, and disciplines those subsidies that cause adverse effects to other Members.  Australia considers that the SCM Agreement already provides Members with appropriate flexibility to develop environmental measures without trade distorting impacts.  

Thank you Mr Chairman.