U.S.-India trade dispute cites Minnesota solar law

A Minnesota renewable energy program has come under scrutiny from the World Trade Organization in a dispute between the U.S. and India.

State lawmakers established the Made in Minnesota Solar Incentive Program in 2013 as a way to boost Minnesota solar energy and create jobs.

The program, as well as similar incentives in seven other states, is now in the international spotlight as the U.S. and India fight over Indian solar energy policy.

The U.S. government is trying to get the WTO to stop India from giving incentives to Indian solar firms, saying it's unfair to American solar companies. India counters that Minnesota and several other states already have renewable energy policies that favor local companies.

Ben Lilliston, who directs climate strategies at the Institute for Agriculture and Trade Policy, said the legal battle likely won't be resolved anytime soon.

"Both sides will want something, so the question is what will they ask for?" he said. "The U.S. has gone through all this trouble to bring this case against India and India has kind of shown that they're not going to be intimidated. They believe in their policy."

He said the fact that state laws are involved makes the situation unique.

India has cited the solar energy policy as critical to reaching goals under the Paris climate agreement, Lilliston said. He said the case raises questions about how much the WTO and international trade agreements are acknowledging climate change and the actions needed to achieve aggressive greenhouse gas reductions.

The WTO in the past has looked down upon policies like India's and Minnesota's.

"Past dispute panels have consistently ruled against these types of programs that give incentives to local businesses," he said.

The Institute for Agriculture and Trade Policy published a report earlier this month concluding that trade rules tend to benefit multinational corporations but make it harder for governments to set climate-related policies.