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8 Are Feed-in Tariff Schemes with Local Content Requirements Consistent with wto Law?

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Chapter Summary

A precise analysis of the treatment of Feed-in Tariff (FIT) schemes with Local Content Requirements (LCR) under WTO law is beneficial to highlight potential flexibilities for the use of such schemes by WTO Members, or to point to those WTO provisions that are irreconcilable with FITs that contain LCR. This chapter discusses whether FIT schemes with LCR are consistent with certain WTO provisions, and looks for provisions inside and outside the WTO realm that could potentially exempt these schemes from violating WTO law. FITs with LCR for renewable energy generation, if useful and politically important, may serve as one way of keeping up political support, especially from developing and emerging economies, for free trade. Looking at trade liberalization as a goal in itself, instead of a means to employment and economic goals, may end up carving out the free trade regime even more.

Keywords: Feed-in Tariff (FIT) schemes; Local Content Requirements (LCR); renewable energy; trade liberalization; WTO law



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