Think Piece

Trade Remedies and Development of Renewable Energy

December 2013
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As the aggressive use of trade remedies by the United States and the European Union against China, and vice versa, in the solar panel disputes shows, each of the major trade remedies — anti-dumping (AD), subsidies and countervailing duties, and safeguards — present different challenges to the development of renewable, non-greenhouse gas-emitting energy. This paper examines each of these separately, although some, but not all, of the possible solutions overlap.

It points out that anti-dumping law as currently practiced around the world prevents the kind of rapid cost and price decreases that are necessary to make solar energy, and probably other clean energy technologies, viable competitors with fossil fuels and suggests several possible solutions.

Coming to countervailing duties (CVDs), the paper points a trade-depressing effect even of the near initiation of AD and CVD cases. The paper proposes the negotiation of the definitions by which subsidies should be treated specially by a group including the main stakeholders and experts on different aspects of renewable energy, and three principles it should be guided by.

The main problems with safeguards as applied to renewable energy are the same as with AD and CVD— initiation of cases in themselves could have trade-distorting affects. So the recommendation is to abolish safeguards for renewable energy, as with AD and CVD, while implementing other possibilities that include modifying the Safeguards Agreement and speeding up WTO dispute resolution.

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