Energy Systems and Technologies for the Coming Century ...

are target figures — the agreement is flexible. In addition, the countries can settletheir dispute themselves at any stage. The dispute settlement involved four steps:consultations, panel process,If it is decided that a country has done something wrong, it should swiftly correct itsfault. And if it continues to break an agreement, it should offer compensation or suffera suitable penalty from the WTO members whose interests are harmed by theviolation.Even once the case has been decided, there is more to do before trade sanctions(the conventional form of penalty) are imposed. The priority at this stage is for thelosing “defendant” to bring its policy into line with the ruling or recommendations. Thedispute settlement agreement stresses that “prompt compliance withrecommendations or rulings of the DSB is essential in order to ensure effectiveresolution of disputes to the benefit of all Members”.If the country that is the target of the complaint loses, it must follow therecommendations of the panel report or the appeals report. It must state its intentionto do so at a DSB meeting held within 30 days of the report’s adoption. If complyingwith the recommendation immediately proves impractical, the member will be given a“reasonable period of time” to do so. If it fails to act within this period, it has to enterinto negotiations with the complaining country (or countries) in order to determinemutually-acceptable compensation — for instance, tariff reductions in areas ofparticular interest to the complaining side.If after 20 days, no satisfactory compensation is agreed, the complaining side mayask the DSB for permission to impose limited trade sanctions (“suspend concessionsor obligations”) against the other side. The DSB must grant this authorization within30 days of the expiry of the “reasonable period of time” unless there is a consensusagainst the request.In principle, the sanctions should be imposed in the same sector as the dispute. Ifthis is not practical or if it would not be effective, the sanctions can be imposed in adifferent sector of the same agreement. In turn, if this is not effective or practicableand if the circumstances are serious enough, the action can be taken under anotheragreement. The objective is to minimize the chances of actions spilling over intounrelated sectors while at the same time allowing the actions to be effective.In any case, the DSB monitors how adopted rulings are implemented. Anyoutstanding case remains on its agenda until the issue is resolved. The two tradedisputes on renewable energy are still at the consultation stage and there is no finaldecision has been made on them yet.5.3 The WTO rules on subsidies and domestic content requirementsThe case against China offering subsidies to Chinese funded and Chinese holdingmanufacturers of wind generating units, key components and parts indicates itviolates the Agreement on Subsidies and Countervailing Measures.While the case against Ontario offering higher tariff to renewable and has localcontent requirements of wind and solar PV projects, Japan claim that the measureviolate the Agreement on TRIMs and the Agreement on Subsidies and Countervailingmeasures. The subsidies are Trade-related investment measures as they affectinvestment.The TRIMs Agreement and Regulation of Foreign InvestmentThe disciplines of the TRIMs Agreement focus on discriminatory treatment ofimported and exported products and do not govern the issue of entry and treatmentof foreign investment. For example, a local content requirement imposed in a non-Risø International Energy Conference 2011 Proceedings Page 106