EU Lodges WTO Challenge Over UK’s Offshore Wind Subsidies

By Bryce Baschuk (Bloomberg) —

The European Union filed a dispute against the U.K. at the World Trade Organization on Monday over Britain’s alleged discriminatory support for green energy projects.

The EU said the U.K.’s procedure for granting subsidies for offshore wind energy projects unfairly favored domestic products and suppliers over foreign competitors, according to a news release. 

WTO rules require its members to treat imported and locally produced goods and services equally under its so-called national treatment principle.

The EU’s request for consultations marks the first stage of the WTO’s lengthy dispute resolution process and could escalate into the EU’s first WTO dispute case with the U.K. since its 2020 split from the European trading bloc.

The U.K. has 60 days to enter into consultations. If that doesn’t resolve the issue, Brussels can request the establishment of a WTO panel. 

It could take several years for the case to work its way through the WTO’s backlogged dispute-settlement system. Even if the EU wins the dispute, the U.K. could essentially veto the outcome by appealing the decision to the WTO’s paralyzed appellate body.

The U.K. is not a member of an EU-crafted appellate mechanism known as the multi-party interim appeals arrangement.

The EU and U.K. Are trying to bridge differences over their post-Brexit trade relations, with London pushing to rewrite the rules that apply to how goods move into Northern Ireland. British Prime Minister Boris Johnson has threatened to suspend the agreement if it isn’t changed, which could trigger a trade war.

© 2022 Bloomberg L.P.

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