China has argued that Italy and Greece have broken WTO fair trading laws by unfairly favouring local companies in contracts securing subsidies under feed-in tariff systems. It cited the European Union’s renewable energy directive as the source of these problems and said it would make additional complaints to the WTO if it found similar faults in other feed-in tariffs.
If the WTO’s disputes settlement body backs China, it has the authority to demand EU member states change their green energy subsidy systems. Beijing argued Italy and Greece’s feed-in tariffs broke WTO agreements on goods (GATT), subsidies and trade-related investment by allegedly favouring renewable energy projects using Italian or Greek technology.
A Chinese government document said the Italian and Greek systems “afford protection to domestic production” and hence “nullify or impair…benefits accruing to China” from WTO agreements. Formal talks will now be staged. If – as expected – these fail to resolve the dispute, a WTO disputes panel will adjudicate and make a binding ruling.