Active Stocks
Fri Apr 19 2024 15:56:00
  1. Tata Steel share price
  2. 162.10 1.31%
  1. Tata Motors share price
  2. 963.20 -0.84%
  1. NTPC share price
  2. 350.90 -0.14%
  1. ITC share price
  2. 424.80 1.40%
  1. Power Grid Corporation Of India share price
  2. 281.70 0.54%
Business News/ News / Restore WTO dispute settlement body, says India at MC13
BackBack

Restore WTO dispute settlement body, says India at MC13

Continued disruptions in the Red Sea region to further impact global trade: WTO director general Ngozi Okonjo-Iweala

World Trade Organization DG Ngozi Okonjo-Iweala. (AFP)Premium
World Trade Organization DG Ngozi Okonjo-Iweala. (AFP)

NEW DELHI : New Delhi: India on Wednesday pressed for the revival of the World Trade Organization's (WTO) appellate body, which has remained defunct for over four years after the US refused to approve its members. At the WTO's ongoing 13th Ministerial Conference (MC13) in Abu Dhabi, India said this should be the top priority for any reform process of the multilateral trade body.

India also pitched for effective formalization of the ongoing informal dispute settlement reform discussions among WTO members, the commerce ministry said in a statement on Wednesday.

With the US blocking the appointment and reappointment of its members since December 2019, the appellate body's membership has shrunk from seven to four, posing a challenge to WTO's dispute resolution mechanism.

"India reiterated its long-standing position that a credible and reliable WTO DS system is the bedrock of an equitable, effective, secure and predictable multilateral trading system. India emphasized that the outcome of any reform process should provide for the restoration of the appellate body, which remains a top-most priority for the country," the ministry added.

Typically disputes at the WTO are settled in two ways, which include parties finding a mutually agreed solution, particularly during the phase of bilateral consultations, and through adjudication, including the subsequent implementation of the panel and appellate body reports.

The three main stages of the WTO dispute settlement process include consultations between the parties; adjudication by panels, and if applicable by the appellate body; and the implementation of the ruling, which includes countermeasures in the event of failure by the losing party to implement the ruling.

The entire multilateral trading system hinges on the dispute settlement body, as without it, the rules-based multilateral system is ineffective, said Biswajit Dhar, professor at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.

"There is no point in having a WTO if you don't have an appellate body in place. It's extremely important that India has always made this important point," Dhar added.

A paralysed appellate body WTO serves the US interests better, as the US-backed programmes like the Inflation Reduction Act will not be challenged, said Ajay Srivastava, the founder of Global Trade Research Initiative (GTRI).

"Local manufacturing now is the top priority for the US and not trade. However, the US is not the only country taking advantage of this situation; many other nations are spending billions on WTO-incompatible domestic subsidies to promote manufacturing," Srivastava said. "Hence, it's unlikely that there will be any progress in restoring the WTO's appellate body at the MC13," he added.

India has engaged in good faith in the facilitator-driven informal dispute resolution reform discussions between certain members, despite several deficiencies with the process," the commerce ministry said. "The format and pace of the informal discussions had posed significant challenges for most developing countries, particularly the least-developed countries, from the outset," it said.

"The informal organisation of these discussions made it extremely difficult for developing countries to participate effectively," it added.

As a way forward, India has sought the immediate and effective formalization and multi-lateralization of the informal dispute settlement reform process by rectifying the procedural and substantive defects.

It is very important that the members are appointed and the appellate body restored so that aggrieved parties are able to appeal adverse decisions, said Bishwajit Dubey, an advocate who specializes in dispute resolution.

"Appeal is a crucial part of any legal process. It is critical that this is done sooner as in the absence of this remedy, WTO itself is losing its effectiveness," Dubey added.

In the dispute settlement reform process, India has proposed a three-point action plan for members.

These include transitioning the discussions on dispute settlement reforms to WTO formal bodies to meet the mandates of the MC12 Ministerial Declaration, to ensure that the transition is not just a mere formality but results in an effective multi-lateralization of the process that is member-driven, open, transparent and inclusive, and to prioritize the restoration of the appellate body.

The entire multilateral trading system hinges on the dispute settlement body and the existence of the appellant body as without the appellate body the rule-based multilateral system is completely ineffective, said Biswajit Dhar, professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.

"There is no point in having a WTO if you don't have an appellate body in place. It's extremely important that India has always made this important point," Dhar added.

Meanwhile, continued disruptions in the Red Sea region will further downgrade global trade as the shipping disruptions in one of the world’s busiest trade routes have adversely impacted global merchandise trade volumes in 2023, WTO director general Ngozi Okonjo-Iweala said while addressing the Business Forum at the MC13 on Wednesday.

She said the WTO is working on a new forecast for global trade, which is expected to be out in March.

According to the agency's latest forecast, the volume of merchandise trade is expected to grow by 0.8% during the calendar year 2023, down from the 1.7% increase forecast in April.

However, the WTO's 3.3% growth projection for 2024 for merchandise trade remains unchanged from the previous estimate.

Ngozi Okonjo-Iweala added that despite all such disturbances and political pressures, the world's goods and services trade remains resilient.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Rhik Kundu
Rhik writes about the Indian economy and its crucial indicators. He is constantly navigating corporates, decoding policies, and dabbling with everything in between.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 28 Feb 2024, 07:57 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App