India has urged the initiation of formal negotiations within the World Trade Organisation (WTO) for the reform of its dispute settlement body, citing concerns that ongoing informal deliberations hinder broad participation by member nations. These reforms aim to enhance the credibility and functionality of the WTO. The discussion took place during a recent meeting of senior officials from WTO member states in Geneva.
Importance of Formal Talks
The Indian official stressed the need to formalize the process, as the credibility of the WTO depends on comprehensive and inclusive discussions. He emphasized that the 13th Ministerial Conference (MC), scheduled for February in Abu Dhabi, could benefit from formal negotiations, leading to a consensus.
Informal Challenges
Informal talks on the dispute settlement body (DSB) reforms have been ongoing, but some countries have raised concerns about this approach. The informal setting has limited participation, and the absence of interpretation facilities poses challenges, making it difficult for some member countries to contribute effectively to the discussions.
Formalizing Discussions
India advocated for formalizing the discussions to ensure the inclusion of all members. In a formal setting, members typically submit papers on the subject, which facilitates broader and more structured deliberations.
US Engagement and Two-Tier System
The United States has been engaging in DSB reforms informally. The official expressed confidence that the US would introduce a formal text for discussion, given its positive intent. However, India is pushing for a two-tier system within the dispute settlement mechanism, a crucial aspect of the reforms.
Importance of US Leadership
Trade experts, including Hi-Tech Gears Chairman Deep Kapuria, stressed the importance of US leadership in resolving WTO challenges. The US’s willingness to take meaningful action and work toward consensus on WTO reform and the functioning of the DSB is vital. Currently, the US has been blocking the appointment of Appellate Body members, contributing to the disruption in the dispute settlement mechanism.
Two Ways to Settle Disputes
In the WTO, disputes can be settled through mutual agreement or adjudication. Adjudication involves rulings by a panel and potential challenges at the appellate body. The appellate body serves as the highest institution for dispute resolution.
Issues with Dispute Settlement
The smooth functioning of the dispute settlement mechanism was disrupted when the US blocked the appointment of appellate body members, leading to the body’s cessation of operations in December 2019. Panels continue to work, but appeals cannot be heard. Over 20 appeals have been filed in the appellate body since then.
Differing Views
The US seeks to weaken the two-tier system in the dispute settlement mechanism, favoring alternatives to litigation such as conciliation and mediation. In contrast, developing countries advocate for a two-tier system, believing it is essential for effective dispute resolution.
US Proposals
The US Trade Representative, Katherine Tai, has suggested three ideas to reform the DSB. These include seeking alternatives to litigation, limiting panel involvement to necessary matters, and avoiding judicial overreach to allow members to regulate domestic policies effectively.
