pv magazine spoke with energy and environmental law expert Anatole Boute about the past and future role of the World Trade Organization (WTO) in regulating trade disputes involving clean energy technologies amid current geopolitical tensions. He noted that despite recent protectionist efforts to revive the solar energy production industry, the European Union is still committed to remaining compliant with WTO rules.
Once a feared international entity that regulated global trade, the World Trade Organization (WTO) appears to be heading towards its end, in a geopolitical scenario that is contributing to the rise of various forms of protectionism in all world economies.
“The WTO is clearly in crisis,” said energy and environmental law expert Anatole Boute pv magazine. “The Appellate Body of the WTO, the principal body of the organization dispute resolution authority, is paralyzed and no longer functions. First of all, this as a result of the blocking of the appointment of judges since 2019 Through the United States during Trump and Biden administrationS.”
The impasse effectively paralyzed the system as the judges’ remaining terms expired and new judges could not be appointed to replace them.
This implies that technically no appeal can be heard, effectively undermining the WTO dispute settlement system. “Decisions of the panel can be appealed, but appeals are made in the void,” Boute explains. “But this paralyzes the entire dispute resolution process because an appeal means the dispute cannot be resolved and the decision cannot be enforced.”
The professor of law Also pointed out shortcomings in the regulateON by clean technology disputes before the WTO due to the multi-year time frame of the procedure. “The The WTO is not a perfect system,” he continued. “However, it is still used. New disputes are initiated. cContracting parties still use it are dispute settlement body, even though they know this to be the case decisions are is unlikely to be complied with.”
Although these processes Today do not lead to onen enforceable decision, she still have great valuesaid Boute. “WTO law is still binding law. TThe enforcement of international law in general is always one delicate matter, but That doesn’t mean states don’t have that legal obligations. And I think it’s helpful to understand what these obligations are because they are there for a reason. WTO decisions help understand the Parties’ obligations under the WTO agreements, including with regard to trade in cleantech equipment and products.”
Europe has always been one of the strongest supporters of the WTO in an effort to ensure fair competition and strong trade ties with China, where most renewable energy technologies are produced, but this appears to have changed recently, as several European countries introduced incentives for domestic or EU-based production, not to mention the Net Zero Industry Act (NZIA), which is intended to help Europe produce at least 40% of its annual deployment needs for strategic technologies, including PV. modules, batteries and heat pumps.
“Despite these protectionist efforts, the European Union still cares about the WTO. It still tries to frame policies as being WTO compliant,” Boute said. “For examplewhen the Carbon Border Adjustment Mechanism (CBAM) was defined, the EU to emphasizeD the fact that it is WTO compliant.”
“Various aspects of the NZIA Act are likely to be at odds with the EU’s obligations WTO legislation” he said. In particular, the use of resilience criteria and diversification requirements in renewable energy auctions is likely to be incompatible with WTO non-discrimination standards and difficult to justify under existing exceptions.
“Naturally, a potential claim would likely not result in an enforceable decision the paralysis of the system. But in this article I did not examine whether the WTO is still functions. What I dispute is that designing clean energy security strategies in a WTO-compatible manner to minimize cost increases and delays in the energy transition. I think it does not help the EU, and certainly not the EU’s energy transition, to ignore these obligations,” Boute said.
He also argued that justify protectionist green industrialization policy using the argument of security of supply can the energy transition. “Looking at the energy transition scenarios outlined by the International Energy Agency (IEA), the low-international cooperation is the case the most pessimisticof net zero reached 40 years later than in a case of high cooperation”, he emphasized.
“The problem with the NZIA law is that it tries to do many things at the same timeincluding achieving it security of supply, competitiveness, decarbonization and geopolitical objectives that are difficult to reconcile with each other and with the non-discrimination principles of the international trade regime,” he continued. “But with restrictive measures there is a risk That the speed and scale of the energy transition can be negatively influenced. WWhat is missing from the NZIA law in my opinion is a detailed analysis of the risks to security of supply for specific technologies.”
Creating jobs is according to Bouteanother crucial factor in shaping the future of the European transition to clean energy. “And fFrom an employment perspective it is makes feeling not alone to focus on cleantech production, but also about the opportunities it creates stake of these technologies”, he emphasized. These latter jobs could be at risk if trade restrictive measures delay the transition.
This content is copyrighted and may not be reused. If you would like to collaborate with us and reuse some of our content, please contact: editors@pv-magazine.com.
