‘Restore WTO dispute settlement body’
India on Wednesday pressed for the revival of the World Trade Organization’s (WTO’s) 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 shrank from seven to four, posing a challenge to WTO’s dispute resolution mechanism.
“India reiterated its longstanding position that a credible and reliable WTO DS system is the bedrock of an equitable, effective, secure and predictable multilateral traderal ing system. India emphasized that the outcome of any reform process should provide for the restoration of the appellate body, which remains a topmost priority for the country,” the ministry added.
Typically disputes at the WTO are settled in two ways—one is parties finding a mutually agreed solution, particularly during the phase of bilateral consultations, and two, through adjudication, including the subsequent implementation of the panel and appellate body reports.
The three main stages of the WTO dispute settlement process are: consultations between the parties; adjudication by panels, and, if applicable, by the appellate body; and the implementation of the ruling, which includes countermeasures if the losing party fails to implement the ruling.
The entire multilateral trading system hinges on the dispute settlement body, as without it, the rules-based multilatsystem is ineffective, said Biswajit Dhar, professor at Centre for Economic Studies and Planning, JNU, 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 paralyzed appellate body at WTO serves US interests better, as 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. “It’s unlikely that there will be any progress in restoring the WTO’s appellate body at the MC13.”
“India has engaged in good faith in the facilitator-driven informal dispute resolution reform discussions between certain members, despite deficiencies with the process,” the commerce ministry said.
With US blocking appointment, reappointment of its members, the appellate body’s membership shrank from 7 to 4