Trade, Taxation and Environment: Possible Impacts of India Solar Cells on the Brazilian Tax Incentives for the Solar Energy Sector

Abstract

In 2013, the U.S. filed a complaint against India before the World Trade Organization arguing the inconsistency of certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission (“NSM”) for solar cells and solar modules with the rules of the GATT, the SCM and the TRIMS (WTO/DS456). The India - Solar Cells (DS456) is unique because India defense under the GATT General Exception Article XX(d) identified international agreements – the preamble of the WTO Agreement, the United Nations Framework Convention on Climate Change, the Rio Declaration on Environment and Development (1992), and UN Resolution A/RES/66/288 (2012) (Rio 20 Document: “The Future We Want”) – as “laws and regulations” that the measures under dispute were necessary to secure compliance with. Nonetheless, both the Panel and the Appellate Body rejected the defense, and considered that India failed to demonstrate that the identified international provisions fell within the scope of “laws and regulations.” In this dispute, the International Environment system that hurdles to achieve substantial commitments from the States weakened the India’s defense based on the necessity of the measures under dispute to comply with domestic “laws and regulations” under GATT, Article XX(d), and can jeopardize environmental policies and rules enacted by developing countries that rely on the renewable energy market to secure high skilled jobs, transfer of technology and green development policies, i.e. Brazil.