India’s trade envoy J.S. Deepak. Pradeep Gaur/Mint
India’s trade envoy J.S. Deepak. Pradeep Gaur/Mint

India warns WTO’s appeals body may collapse

  • The Appellate Body will be down to a single member from 11 December, when it becomes dysfunctional
  • The US has repeatedly blocked the selection complaining the Appellate Body failed to follow rules in the Dispute Settlement Understanding

India has warned of the impending end of the World Trade Organization’s (WTO) Appellate Body, trade envoys said, with the US continuing to block the selection of judges to the global trade disputes court.

“The ongoing impasse in filling vacancies of the Appellate Body remains, with no response from the objecting member (the US), in spite of dozen proposals to address to concerns related to its functioning," India said at an informal trade negotiations committee meeting on Friday.

The US has repeatedly blocked the selection complaining the Appellate Body failed to follow rules in the Dispute Settlement Understanding. Several countries have submitted proposals to improve its functioning, but to no avail. The Appellate Body will be down to a single member from 11 December, when it becomes dysfunctional.

“The (WTO) membership needs to act before the Appellate Body moves from the ICU to the mortuary," J.S. Deepak, India’s trade envoy warned at the meeting. An end to the Appellate Body frees the most powerful countries from adhering to multilateral trade rules, said a Geneva-based trade law expert, who asked not to be named.

“Without resolution of this issue, existing rules will become unenforceable and the adoption of new rules becomes futile," cautioned ambassador Xolelwa Mlumbi-Peters of South Africa. China has urged the US to engage in exhausting all possibilities and options so to avoid “the real crisis by the end of this year."

However, at the meetings convened by a facilitator—ambassador David Walker of New Zealand—the US stayed silent. “The US wants to see the closure of the AB because it had repeatedly ruled against several illegal measures adopted by the US," the expert cited above said.

On 18 July, the facilitator submitted a report suggesting changes to the functioning of the Appellate Body. While the US remained silent, several countries said it was unfair to change its architecture to satisfy the US, a trade envoy said on condition of anonymity.

US trade envoy Dennis Shea blamed big developing countries like India and South Africa for failing to give up their special and differential flexibilities commensurate with their economic growth. “It is difficult to see a way forward in current and future trade negotiations without some significant changes on this important issue (of differentiation/graduation from availing special and differential flexibilities) and we need to see contributions from those who are manifestly able to make them," he emphasized.

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