US Appeals Against WTO Ruling in Solar DCR Trade Case with India

The United States’ delegation to the World Trade Organization (WTO) has appealed to the Appellate Body against the verdict in the recently concluded India-U.S. solar case. The U.S. says that certain issues of law covered in the WTO’s report and certain legal interpretations by the panel are based on an erroneous interpretation.

In June 2019, the WTO dispute resolution panel had ruled in favor of India in a case against the U.S. saying that America’s domestic content requirements (DCR) and subsidies provided by eight of its states in the solar sector were violating global trade norms.

Background

India had raised the issue at the WTO after the trade organization had found faults with India’s domestic content requirement category solar tenders at the behest of the United States.



India had requested consultations regarding the DCR measures of the United States in the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware, and Minnesota.

Upon examining the concerned policy prevalent in the United States, the panel formed by the dispute settlement body of the WTO found India’s claims to be correct. The panel found that all the measures at issue are inconsistent with the provisions of the General Agreement on Tariffs and Trade (GATT) because they provide an advantage for the use of domestic products, which amounts to less favorable treatment for similar imported products.

The panel exercised judicial economy on India’s claims under the provisions of the Trade-Related Investment Matters (TRIMS) Agreement and Articles 3.1(b) and 3.2 of the Subsidies and Countervailing Measures (SCM) agreement.

Now, the U.S. delegation in its communication has pointed out that the panel erred in finding that some of the amended measures were within its terms of reference.

“The U.S. hereby notifies its decision to appeal to the appellate body certain issues of law covered in the report of the panel in U.S. – Certain Measures Relating to the Renewable Energy Sector and certain legal interpretations developed by the panel,” the WTO communication stated.

Furthermore, because the Washington amended measure and California amended measure were not within the panel’s terms of reference, the panel erred as a matter of law in finding that these were inconsistent with Article III:4 of GATT.

Mercom had reported earlier that the financial implication of this ruling is going to be negligible on India.

Image credit: USA.Gov – BLM – BUREAU OF LAND MANAGEMENT [Public domain]