What WTO shutdown means for India, what can be done to save it

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Updated: December 10, 2019 7:28:07 PM

The shutdown of the WTO's appellate body, which acts as an arbiter in trade disputes, leaves nations including India unable to reach a final resolution on several issues.

After Tuesday, the 24-year old Geneva-based international body will not have the quorum needed to hear on trade disputes including the US-China trade war.

The shutdown of the WTO’s appellate body, which acts as an arbiter in trade disputes, leaves nations including India unable to reach a final resolution on several issues. After Tuesday, the 24-year old Geneva-based international body will not have the quorum needed to hear on trade disputes including the US-China trade war. However, it’s important for developing economies such as India to ensure that the WTO survives as there is no other platform as neutral and democratic as the WTO, Vikramjit Singh Sahney, President of International Chamber of Commerce (ICC) – India told Financial Express Online. A single country (US) can’t be allowed to hold a multilateral body such as WTO to ransom, Vikramjit Singh Sahaney also said, adding that the other countries should come together and exert pressure on the US. Since it is a much better and neutral platform for developing nations as compared to several other emerging blocs, the WTO shouldn’t be allowed to die, he added.

“India has several critical trade disputes currently pending at the WTO. For India, the spotlight will now firmly be on Regional Trading arrangements like the ASEAN. In parallel, India will look to pursue bilateral arrangements with U.S.A. and the EU,” Rohan Shah, India’s Representative and Governor on the board of Economic Research Institute for ASEAN and East Asia said. The interesting issue will be whether a Dispute Settlement Mechanism can be created within these arrangements, which will have the stature and enforceability of the WTO Dispute Settlement Mechanism, Rohan Shah added.

WTO shutdown issue

The term of two judges at the WTO, an international body with 164 nations as its members, ends on December 10, 2019, leaving the panel with just a single member. Since a minimum of three judges is required to rule on an appeal, the arbiter of the global trade issues will cease to exist since January 1, 2020. The US blocked the fresh appointments to the body claiming the WTO has breached its mandate. The Donald Trump administration has also threatened to block the WTO’s budget.

Among the various roles that WTO plays, it operates a global system of trade rules, acts as a forum for negotiating trade agreements and settles trade disputes between its members and it supports the needs of developing countries. It was established on 1 January 1995.

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