Consensus on dispute settlement reform at WTO may prove elusive

A consensus over reforming the dispute settlement system at the World Trade Organization (WTO) may prove to be elusive amid wide disparities between developed and developing economies, a study said.

The analysis by economic think tank Global Trade Research Initiative (GTRI) comes ahead of the 13th ministerial conference of the WTO in Abu Dabhi next month.

Trade ministers from the 164-member trade body will gather in the United Arab Emirates between 26-29 February with an aim to resolve differences over reforming the dispute settlement mechanism and farm-related issues.

At the ministerial, India will look for a lasting solution for its program on public stockholding, aimed at more flexible food procurement and pricing, the study said, while highlighting that a deal will be vital for meeting its food security needs .

“Regarding fisheries subsidies, India is advocating for fair rules that recognize the different responsibilities and capacities of various countries,” the report said, adding that India also proposes ending the current moratorium on customs duties for digital transactions, a significant move in the realm of e-commerce.

India is also focused on reforming the WTO’s dispute settlement system by re-establishing “a fully functioning, transparent, and fair appeals process.”

“Reforming the dispute settlement mechanism is essential, as without a reliable way to resolve conflicts between countries, WTO rules are ineffective. The US, a frequent participant in WTO disputes, has been obstructing the process due to dissatisfaction with inefficiencies and perceived overreaches by the WTO’s judiciary,” the report said.

Since 2017, the US has been blocking the appointment of new judges to the WTO’s seven-member appellate court, leading to 29 unresolved appeals. This stalemate highlights the need for reforms in the WTO’s dispute resolution system.

India has prioritized the restoration of a functional appellate body with a transparent, merit-based selection process ensuring diversity and expertise.

It has proposed reforms, including stricter decision timelines and a focus on legal issues, to enhance efficiency and fairness, particularly for developing countries.

New Delhi has also emphasized the need for transparency and inclusivity in the reform process, advocating for the protection of developing countries’ interests and their active participation in talks.