Think Piece

Trade Remedies on Clean Energy: A New Trend in Need of Multilateral Initiatives

By Jonas Kasteng, 
December 2013
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In recent years, trade remedies have increasingly been directed towards clean energy, such as solar panels, wind turbines and biofuels (biodiesel and bioethanol). This new trend has become apparent among most major producers of clean energy, such as the European Union, the United States, Australia, India, and China. The trend has been particularly strong in the EU, which was also the first World Trade Organization (WTO) member to use the trade remedies on clean energy on a major scale.

The use of trade remedies on clean energy is causing a conflict with the national climate goals of many countries, as well as a clash with the environmental objectives of international agreements. The measures risk having a negative effect on the global climate and the environment since clean energy will become more expensive and less competitive. As a consequence, the answers to this new trend should preferably be found on a multilateral level.

The paper explores different multilateral options for limiting the use of trade remedies on clean energy for further consideration. The main priority is to improve current WTO agreements on trade remedies. It is argued that current WTO provisions need to be improved to only target truly anti-competitive behaviour, and not normal competition, as mainly is the case today.

It could also be relevant to further explore the pros and cons with environment provisions on the use of trade remedies in other WTO agreements. For example, a provision on the non-use of trade remedies in a future WTO agreement on environmental goods could be explored. Another option would be to consider the extension or revision of WTO provisions on non-actionable environmental subsidies with regard to the use of trade remedies.

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