WTO Disputes Current Affairs - 2019

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India to host WTO Ministerial Meeting of Developing Countries

India will be hosting a World Trade Organisation (WTO) Ministerial meeting of developing countries in New Delhi on 13-14 May 2019. The aim is to discuss various challenges being faced by multilateral rules-based-trading system.

Key Highlights of Meeting

  • Participants: includes
  1. Six Least Developed Countries (LDC), namely Benin, Bangladesh, Central African Republic (CAR), Chad, Uganda, Malawi.
  2. Sixteen developing countries, namely Turkey, Indonesia, Malaysia, South Africa, Argentina, Brazil, Egypt, Guyana, Jamaica, Kazakhstan, Guatemala, Nigeria, Oman, China, Saudi Arabia, Barbados.
  3. Director-General (DG) of World Trade Organization (WTO), Roberto Azevêdo.
  • The two-day meeting will be an interaction between participants in order to provide an opportunity to Ministers to discuss various issues and the way forward.
  • Purpose: The meeting is an effort to bring developing countries and Least Developed Countries (LDCs) together on one platform and to share common concerns on various issues affecting WTO and also working together in addressing these issues.
  • Significance: The meeting is being held at a time when multilateral rules-based-trading system is facing serious challenges. In recent times, there has been an increase in unilateral measures and counter measures by member nations, further leading to deadlock in key areas of negotiations and stand-off in Appellate Body. This is threatening the very existence of Dispute Settlement Mechanism of WTO and impacting WTOs position as an effective multilateral organisation. This current scenario has given rise to demands from various quarters to reform the WTO.
  • Importance: Meeting will provide an opportunity to LDCs and developing countries to build consensus on how to move forward on WTO reforms, at the same time preserving fundamentals of multilateral trading system (MTS) enshrined in WTO.
  • The key discussions will also be about at getting a direction on how to constructively engage on various issues (both institutional and negotiating) in WTO, in the upcoming WTO’s Twelfth Ministerial Conference which will be held in Kazakhstan in June 2020.

About Least developed countries (LDCs)

  • They are low-income countries facing severe structural limitation to sustainable development. LDCs have low levels of human assets and are also, extremely vulnerable to economic and environmental shocks.
  • Currently there are 47 countries designated as LDCs by United Nations (UN). The LDC status is reviewed every three years by Committee for Development (CDP).
  • CDP uses three criteria to identify LDCs –
    1. Gross National Income (GNI) per capita
    2. Human Assets Index (HAI)
    3. Economic Vulnerability Index (EVI)

India moves WTO against US

India has moved the World Trade Organisation (WTO) against the US as it has not yet complied with the rulings of the WTO pertaining to imposition of high import duty on certain Indian steel products.

In December 2014, the WTO’s appellate body pronounced a ruling against the act of US which is imposing high import duty on certain Indian steel products. It had ruled that the imposition of import duty on steel products was inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures.  

The Agreement on Subsidies and Countervailing Measures (the SCM Agreement) – addresses two separate but closely related matters-The multilateral disciplines on the use of subsidies and the conditions under which Members may apply countervailing measures.

India has sought consultation with the US for compliance of the WTO’s rulings. If the US refuses to comply then India has planned to approach the WTO’s compliance panel.

In order to comply with the WTO rulings on countervailing duties on imports of hot-rolled carbon steel products from India, the US needs to amend its domestic norms.

Earlier, the US had moved the arbitration panel of the WTO against India as it complained that India had failed to remove trade restrictions on American poultry.

WTO

The WTO is an inter-governmental organization for governments to negotiate global trade agreements and progressively liberalizing trade. The WTO operates a system of trade rules that apply to all its members. The WTO is also a place for Member governments to settle their trade disputes. Its located in Geneva, Switzerland. It was established on 1 January 1995 and its official languages are English, French and Spanish.

Countervailing duties are those duties that are imposed by a country to counter the negative impact of import subsidies to protect domestic producers.