Global Trade War over Local Content Requirements

Global trade wars are looming over the establishment of local content requirements in national law. Nearly two months after Canada lost a case at the World Trade Organization, the US has approached the WTO to challenge the local content requirements in India’s solar power program. This growing trend could have serious implications for India’s new FDI policy on retail trade and other programs intended to encourage domestic manufacturing and job creation.
On 19 December 2012, a WTO panel backed complaints from Japan and the European Union that the local content requirements of Ontario’s Feed-in-tariff (FIT) program for the renewable energy sector violate WTO rules because…