USTR convenes meeting to discuss WTO's dispute settlement reforms in Bali on 21 September

New Delhi: The US Trade Representative has convened a meeting of trade ministers of G20 countries in Bali on September 21, to discuss World Trade Organisation’s (WTO) dispute settlement reforms, an official said.

The meeting will be attended by the Commerce and Industry Minister Piyush Goyal, who will be in Bali for G20’s Trade, Investment, and Industry Ministerial Meeting on 21 September.

“US Trade Representative (USTR) Katherine Tai has called the meeting to discuss their issues with regard to WTO’s dispute settlement mechanism at the sideline of the ministerial meeting,” the official said.

The Geneva-based 164 member multi-lateral body deals with global exports and import-related norms. Besides, it adjudicates trade disputes between the member countries.

Global trade experts term the dispute settlement mechanism of the WTO as the “jewel in the crown”.

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 10 December, 2019, the panels are still working.

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Since December 2019, as many as 24 appeals have been filed in the AB. Out of this, four are filed by India that includes Japan’s case on India’s safeguard measures on steel; the US case against India’s export subsidies and Brazil, Australia and Guatemala’s cases against India on sugar.

According to international trade 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.

It is unfortunate that the US has kept the entire WTO membership for meeting its very selfish objectives on dispute settlement and so far, the US has not indicated any solution to the problems which it has highlighted.

“… So, now it is really incumbent upon the US to provide solutions. But the overall objective of the US is clear, it doesn’t appear to have faith in the rule-based systems and it is more comfortable with the power-based multilateral trading system,” international trade expert Abhijit Das said.

The meeting called by the USTR assumes significance as the member countries have agreed in the WTO’s ministerial meet in Geneva in June to discuss the issues.

According to the outcome document of the Geneva meet, members acknowledged the challenges and concerns with respect to the dispute settlement system including those related to the AB, recognised the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all members by 2024.

Except for a few countries like the US, all the WTO members are regularly tackling a proposal to expeditiously fill vacancies in the AB since 2017. India is also a co-sponsor of this proposal.

The G20 or Group of 20 is an intergovernmental forum of the world’s major developed and developing economies.

It comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US, and the European Union (EU).

Collectively, the G20 accounts for 85 per cent of the global GDP, 75 per cent of international trade, and two-thirds of the world population, making it the premier forum for international economic cooperation.

India is currently part of the G20 Troika (current, previous, and incoming G20 Presidencies) comprising Indonesia, Italy, and India.

During India’s Presidency next year, India, Indonesia and Brazil would form the troika.

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