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WTO meeting ends with demand for breaking dispute settlement system logjam

Subhayan Chakraborty/New Delhi 14 May 19 | 11:21 PM

India, along with 16 other key World Trade Organization (WTO) economies, on Tuesday called for the urgent appointment of judges to the appellate body of the WTO. The issue threatens to derail dispute settlement between nations.

The mini-ministerial held by India also saw nations commit to multilateralism, and bat for special trade rule provisions for developing and least developed countries (LDCs), that have been under attack from richer nations.

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Amid an increasing push by powerful nations, such as the United States (US), to run roughshod over WTO rules by calling them biased, the two-day meet - which concluded on Tuesday - also called for a more "open, transparent and inclusive process" at the WTO as the first step to wider-reforms at the Geneva-based body.

"The process of WTO reform must keep development at its core, promote inclusive growth, and fully take into account the interests and concerns of developing members, including the specific challenges of graduating LDCs," said a joint declaration issued after the meeting.

It was signed by 17 countries, while the remaining five - Turkey, Kazakhstan, Argentina, Brazil and Guatemala - refrained from supporting the outcome.

Dispute settlement push

"This ongoing impasse has weakened the dispute settlement system and threatens to completely paralyse it by December 2019," the joint declaration said.

The logjam in the appellate body, whereby the US has consistently blocked the appointment of judges to the body, will remain the first priority of the talks, officials added. The lack of judges on the seven-member body has become a serious concern, since it is the principal body tasked with arbitration between nations on trade disputes. As of now, cases take more than a year to be even heard, officials said.

Currently, only three judges are on the board, and one of them is set to retire later this year. This will render the body useless — each case requires at least three members, an official said.

The latest push by the New Delhi mini-ministerial has also been backed by the WTO secretariat. WTO Director General Roberto Azevedo, who was also present in New Delhi, and has called it a "deep crisis" and warned business as usual is not possible anymore. 

India feels the issue trumps other ones at the WTO, and therefore should not be linked with the more complicated ones to resolve it as soon as possible, officials said.

Further categorisations

The meet, however, could not reconcile the different approaches to the special and differential treatment (S&DT) issue taken by India and the WTO secretariat. 

The S&DT mechanism must be innovative in order to address the impasse which if left unaddressed, may go either way, said Azevedo said.

Azevedo suggested a benchmark to differentiate between developing and least developed countries, arguing that differentiation is already happening and is essential for small developing countries. 

However, India has stuck to its initial position. "S&DT is unconditional. It's not only a principle but a modality in helping developing nations achieve their trade growth. We have completely and repeatedly riled out the possibility of further categorisations," said J S Deepak, India's permanent representative at the WTO.

India has also shot down a plan to have a trade-facilitation-agreement-type model where countries may set their own benchmarks, sources said.

But official discussions averted the crucial issue of e-commerce talks at the WTO. Things have moved fast since January this year when 77 nations agreed to officially initiate talks on the subject. On May 3, the EU submitted a nine-page proposal to the general body that aims to shield traders from attempts to restrict data flows or seize their data and source code. "We note that many members have evinced interest in pursuing outcomes in some areas through joint initiatives approach," the joint declaration said., hinting towards South Africa and China, who have taken part in e-commerce talks. 

It said the outcomes of these should be conducive to WTO rules.

After five years of choppy global trade, increasing protectionism in most markets and little headway in key trade policy debates, the current government had been keen to end its term with a final push at the WTO.

Subsequently, the commerce department obtained the Election Commission's approval to hold the event. New Delhi feels it will help in forming policy positions in the run up to the Twelfth Ministerial Conference of the WTO to be held in Kazakhstan in June 2020.

Other key takeaways

 Nations should adopt measures that are compatible with WTO rulesWTO needs to provide adequate policy space to developing nations to support their farmersMinisterial Conferences need to be more open, transparent and inclusiveProcess of accession of new members should be fastenedCooperation and a gradual approach needed for developing nations

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