Canada is justified in making very clear to the European Union that it may well start a World Trade Organization lawsuit, if there is a vote in favour of a proposed measure that would attach a special opprobrium to oil from the Canadian oil sands, under the EU’s fuel quality directive.
A group called Friends of the Earth Europe is making much of Canadian documents it has obtained under a freedom-of-information request, but in fact Joe Oliver, the Minister of Natural Resources, made public the federal government’s position in October, 2011, in a letter to the EU’s commissioner for energy. He raised the prospect that Canada would “not hesitate to defend its interests” if “unjust, discriminatory measures ... are put in place.”
According to the WTO, countries have a duty to treat similar goods from other countries similarly to their own, and not to discriminate. Some elements in the EU, however, are trying to stigmatize oil-sands bitumen as being in an ignominious class of its own. What’s more, WTO case law has already established that different production processes – oil-sands extraction requires special techniques – do not make similar products dissimilar.
This controversy has a hypothetical, somewhat unreal, quality, because Canada does not export bitumen to Europe from the oil sands. Europe does, however, import comparable heavy crudes from Nigeria and the Middle East – which are often worse on the emissions front. The EU measure, if approved, would be a rhetorical gesture, but one that would doubtless be invoked in other settings in order to damage Canada’s reputation.
A vote is scheduled for Thursday. Fortunately, Britain and France are on Canada’s side, and a number of other EU members appear well disposed, too. The federal government is right not to let the oil sands be manipulated as a pawn in a much larger debate over climate change.