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WTO Crisis

1. World Trade Organisation (WTO) has completed 25 years on 1st January 2020.

2. But it has been consistently losing its relevance due to various factors.

What is the WTO?

1. It is an international organization with the primary purpose to open trade for the benefit of all.

2. It provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all.

3. It also provides a legal and institutional framework for the monitoring of these agreements as well as for settling disputes arising from their interpretation and application.

4. The Ministerial Conference is the highest institutional body that meets every two years and decisions are generally taken by consensus of the entire membership.

5. A General Council conducts the organization's business in the intervals between Ministerial Conferences.

How does WTO function?

WTO has the following guiding principles

1. Pursuit of open borders

2. Guarantee of most-favoured-nation principle and non-discriminatory treatment by and among members

3. Commitment to transparency in the conduct of its activities.

Main activities of WTO are

1. Negotiating the reduction or elimination of obstacles to trade and agreeing on rules governing the conduct of international trade.

2. Administering and monitoring the application of the WTO's agreed rules for trade in goods, trade in services, and trade-related intellectual property rights.

3. Monitoring and reviewing the trade policies of our members, as well as ensuring transparency of regional and bilateral trade agreements.

4. Settling disputes among our members regarding the interpretation and application of the agreements.

5. Building capacity of developing country government officials in international trade matters.

6. Assisting the process of accession of some 30 countries who are not yet members of the organization.

7. Conducting economic research and collecting and disseminating trade data in support of the WTO's other main activities.

8. Explaining to and educating the public about the WTO, its mission and its activities.

Why is WTO losing relevance?

1. Powers of WTO arm ‘Appellate body’, that resolves trade disputes among the countries have been declining.

2. United States and other major powers blocks have criticized the functioning of the organization.

3. Emergence of many trade blocks, free trade agreements have provided alternatives to the countries.

Where lies the issue?

1. The WTO’s dispute settlement system (DSS) is the most extensively used international adjudicatory mechanism.

2. Appellate body of WTO has become unable to function due to lack of judges.

3. While the Appellate body has only one judge, WTO rules require three judges to hear each case.

4. USA has blocked the appointment of new judges to the Appellate Body due to judicial activism and concerns over U.S. sovereignty.

5. Efforts to reform the dispute settlement system and new appointments have been unsuccessful.

6. So, due to lack of Quorum, disputes remain unresolved.

Which are India’s major disputes?

1. India is an active participant in WTO dispute settlement system.

2. India has been a complainant in 21 disputes and respondent in 22 cases.

3. India lost in the dispute related to Export Incentive subsidy schemes to the USA. India has been asked to withdraw subsidies within 120 days.

4. Major ongoing disputes are

a) With the USA on import restrictions by India on certain agricultural products including poultry and poultry products.

b) With the USA on Domestic Content Requirements in the Jawaharlal Nehru National Solar Mission Programme of Ministry of Renewable energy.

c) With the USA on exorbitant countervailing duty by the United States on certain hot-rolled carbon steel products originating from India.