New Delhi:

 India has called for starting formal negotiations by WTO members to reform the dispute settlement body of the World Trade Organisation, as the present informal deliberations are creating hindrance for several nations to participate in the talks, an official said.

The official added that formal talks on the subject can help in arriving at some kind of consensus by the 13th ministerial conference (MC), the highest decision making body of the WTO, in Abu Dhabi in February next year.

The issue came up for discussion during a recent meeting of senior officials of WTO members in Geneva last week. Certain countries flagged their concerns on the informal system of talks.

“We have to formalise this process as soon as possible. India stated that if you want to maintain the WTO’s credibility, we need to talk on this,” the official said.

WTO’s dispute settlement body (DSB) is one of the important arms of the 164-member Geneva-based body. Besides monitoring global exports and imports related rules, it adjudicates trade disputes between the member countries.

“The US has started engaging in DSB reforms, but in an informal setting. In this setting, not all members get the opportunity to talk. There are no interpretation facilities in those informal meetings,” the official said.

Many WTO member countries have one or two delegates only in Geneva. So, they get busy in different meetings like general council and because of that, they are not able to participate in the deliberations on DSB reforms.

“So, there are some concerns. It was flagged in the break-away sessions’ meeting in Geneva recently. The sense was that as soon as possible, the negotiations should happen in a formal setting. The whole discussion should come under the Committee on DSB. At present, it is happening in an informal fashion,” the official added.

“The talks should be formalised so that all members can participate in that discussion and contribute their views. India wants the talks to happen in a formal way,” the official, who did not wish to be named, said.

Normally in the WTO, talks through a formal process involves submissions of papers on the subject for discussions among all the members.

The official, however, exuded confidence that the way the US is engaging on the subject, it looks like they will do something like coming up with some formal text for discussion on the issue.

“The developed countries are talking about peripheral reforms, but our main ask is that there should be a two-tier system,” the official said.

Trade experts too said that all the members would have to work together on this.

Hi-Tech Gears Chairman Deep Kapuria said that the US’ leadership is crucial for breaking the deadlock in WTO, which is facing multiple challenges.

“But the question is, how far is the US willing to translate this positive intent into some meaningful action, where it can work towards building consensus on WTO reform agenda and more importantly on reigniting the functioning of DSB. The US has been repeatedly blocking any proposed decision to commence the appointment of Appellate Body members,” Mr Kapuria said.

There are two main ways to settle a dispute once a complaint has been filed in the WTO – the countries find a mutually agreed solution, particularly during the phase of bilateral consultations; and through adjudication which includes ruling by a panel and if not satisfied, challenging that ruling at the appellate body.

The appellate body is the apex institution to adjudicate disputes.

Smooth functioning of the WTO’s dispute settlement mechanism hit a roadblock, when the US blocked appointments of members in the appellate body (AB). Though the AB stopped functioning from December 10, 2019, the panels are still working.

Since December 2019, over 20 appeals have been filed in the AB.

According to experts, the US wants to weaken the two-tier system of the dispute settlement mechanism and they do not intend to restore the appellate body.

The US had earlier stated that over time, the despite settlement has become synonymous with litigation, which is prolonged, expensive and contentious.

Developing countries, on the other hand, are of the strong view that a two-tier system is fundamental for the smooth functioning of the dispute settlement mechanism.

Citing the US Trade Representative Katherine Tai’s suggestions, Mr Kapuria said that the US has three specific ideas to reform DSB and that include finding appropriate alternatives to litigation.

The alternatives include conciliation, and mediation; the panels be restricted to address only those matters which are necessary to resolve the dispute and resist the urge to pontificate; and no judicial overreach so that members could exercise their power to regulate domestic policies.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Members of the World Trade Organization will have a tough task ahead to make WTO’s dispute settlement system fully functional by 2024 due to divergent approaches proposed by countries like China, and the European Union, experts say.

On September 9, G-20 leaders expressed their commitment to conducting discussions for having a fully and well-functioning dispute settlement system of WTO by 2024.

Besides formulating norms for global exports and imports, the Geneva-based 164-member multi-lateral body adjudicates trade disputes among the member countries.

Also Read | Restoring the World Trade Organization’s crown jewel 

The dispute settlement mechanism of WTO has been derailed due to a non-functional appellate body since December 2019.

“We reiterate the need to pursue WTO reform to improve all its functions through an inclusive member-driven process, and remain committed to conducting discussions with a view to having a fully and well-functioning dispute settlement system accessible to all members by 2024, ” the G-20 declaration has said.

Trade experts said that all the members would have to work together to achieve this 2024 goal.

“G-20 members have agreed to pursue WTO reforms, specifically aiming for a functional dispute settlement system accessible to all members by 2024. Members will have a tough task ahead considering the divergent approaches proposed by the U.S., EU, China, India, and other countries,” think tank Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.

Trade expert and Hi-Tech Gears Chairman Deep Kapuria said G-20 leaders’ reiteration to pursue WTO reforms is a much needed political boost to the WTO Secretariat as they have now started preparing for the 13th Ministerial Conference.

Also Read | Dispute settlements that have no parallel 

“But what is more important is the leaders’ call to make WTO dispute settlement system functional and accessible to all members by 2024. Giving a deadline of 2024 would build pressure on WTO and its members to work out a system which is acceptable to all on priority basis,” Mr. Kapuria said.

Besides formulating norms for global exports and imports, WTO adjudicates trade disputes among the member countries.  There are two main ways to settle a dispute once a complaint has been filed in WTO — the countries can find a mutually agreed solution, particularly during the phase of bilateral consultations; and through adjudication which includes ruling by a panel and if not satisfied, challenging that ruling at the appellate body.

The main problem at present in the WTO dispute settlement mechanism is its non-functional appellate body. The appellate body is WTO’s highest court.  It hears appeals of decisions made by WTO panels.

Mr. Srivastava said WTO member countries are supportive of reforming the appellate body, but they have different views on the specific reforms that are needed.

The U.S. has blocked the appointment of new appellate body members since 2017, arguing that the body has become too politicized and has overstepped its authority, he said.

He added that the European Union has called for reducing the number of members on the body and changing the way they are appointed.

“India wants to ensure that the appellate body remains an independent and impartial body, he said. The appellate body currently has seven members.  Some countries have proposed reducing the number of members to five or three. This would make the body more efficient and easier to manage,” another expert said.

Its members are currently appointed by consensus of WTO member countries. This has made it difficult to appoint new members in recent years. Some countries have proposed changing the appointment process to make it more transparent and democratic.

The U.S. has expressed concerns that the appellate body has become too politicized, Mr. Srivastava said. Some proposals have been made to strengthen the independence of the appellate body, such as requiring members to serve fixed terms and prohibiting them from lobbying for future appointments.

Further he said while all members stress the need for reforms at WTO, they differ on type and scope of reforms. “The key challenge in WTO reforms is to find a solution that is acceptable to all member countries. This is a difficult task, but it is essential for WTO to remain relevant and effective in the 21st century,” he said.

India submitted a comprehensive proposal to WTO on May 1 for improving the functioning of various WTO bodies/committees. The Indian proposal called “30 For 30” contains 30 suggestions that coincide with WTO’s completion of 30 years of functioning by the end of 2024.

New Delhi:

India and the US have settled the last trade dispute at the World Trade Organisation (WTO) over poultry products, according to a joint statement released on Friday.

With this, the two countries have mutually resolved all the seven pending trade disputes at the WTO.

“The leaders lauded the settlement of the seventh and last outstanding WTO dispute between India and the United States. This follows the unprecedented settlement of six outstanding bilateral trade disputes in the WTO in June 2023,” the joint statement said.

It was issued after the meeting of Prime Minister Narendra Modi and United States President Joe Biden in Delhi. 

PM Modi and the US President vowed to “deepen and diversify” the bilateral major defence partnership while welcoming forward movement in India’s procurement of 31 drones and joint development of jet engines.

In their over 50-minute talks, the two leaders deliberated on India’s G20 presidency, cooperation in nuclear energy, critical and emerging technologies such as 6G and artificial intelligence, and ways to fundamentally reshape multilateral development banks.

Earlier, the seventh dispute was discussed during the visit of US Trade Representative Katherine Tai’s meeting with Commerce and Industry Minister Piyush Goyal meeting last month here.

They had tasked their respective teams with continuing discussions on this dispute in order to reach a solution soon.

During PM Modi’s visit to the US in June, the two countries announced ending of six trade disputes at the WTO and India’s removal of tariffs on certain US products (chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents).

The poultry case was filed by the US against India in the WTO in 2012. India has lost the dispute both at the panel as well as the appellate body levels. It was ruled against India that New Delhi’s ban on imports of poultry products from the US was inconsistent with global norms.

As India was not able to implement the decision within the stipulated time frame, the US had demanded compensation. After that, both countries were discussing ways to resolve the case mutually.

The US is the largest trading partner of India. In 2022-23, the bilateral goods trade increased to USD 128.8 billion as against USD 119.5 billion in 2021-22.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)