The G20 leaders have reaffirmed their dedication to revitalize and enhance the World Trade Organization’s (WTO) dispute settlement system by achieving a “fully and well-functioning” mechanism by 2024. The WTO, established in 1995, promotes and oversees global trade, striving for free and equitable trade by eliminating trade barriers like tariffs and quotas and resolving disputes transparently. Its Dispute Settlement Understanding (DSU) serves as the primary framework for resolving trade disagreements, with a panel and the Appellate Body for appeals. Non-compliance with rulings may lead to trade compensation or sanctions. The G20’s commitment seeks to reinforce the WTO’s pivotal role in global commerce.
Facts/Terms for UPSC Prelims
- World Trade Organization (WTO): An international organization founded in 1995 to facilitate and regulate global trade, replacing the General Agreement on Tariffs and Trade (GATT). Its primary goal is to promote free and fair trade by removing trade barriers and ensuring transparent dispute resolution.
- Dispute Settlement Understanding (DSU): The primary WTO agreement for resolving trade disputes. It establishes procedures for dispute resolution, including the formation of panels and the option for appeals through the Appellate Body.
- Appellate Body: Comprising seven members, the Appellate Body is responsible for hearing appeals from reports issued by dispute settlement panels. It can uphold, modify, or reverse legal findings and conclusions, playing a crucial role in ensuring fairness and legality in trade disputes.
- General Agreement on Tariffs and Trade (GATT): The predecessor of the WTO, GATT was a multilateral trade agreement established in 1947, aimed at reducing trade barriers through negotiations among member nations. It was replaced by the WTO in 1995.
- Trade Compensation and Sanctions: In cases of non-compliance with WTO dispute settlement rulings, member nations may face trade compensation or sanctions. These can take various forms, such as increased customs duties, to encourage adherence to WTO recommendations and rulings.
