India has urged for the initiation of formal negotiations by members of the World Trade Organization (WTO) to reform the dispute settlement body (DSB).
The current informal deliberations have hindered the participation of several nations in the talks, according to an official. To address this, the official stated that formal talks on the subject can help achieve consensus by the 13th ministerial conference in Abu Dhabi in February 2023.
The issue was raised during a recent meeting of WTO senior officials in Geneva. Certain countries expressed concerns about the informal system of talks and emphasized the need to formalize the process to maintain the credibility of the WTO.
The DSB of the WTO is a crucial component of the organization, responsible for monitoring global trade rules and resolving disputes between member countries. The official highlighted that the United States has already begun engaging in DSB reforms, albeit in an informal setting.
However, not all members have the opportunity to express their views in these informal meetings, and interpretation facilities are absent. This prevents effective participation from countries with limited delegate representation in Geneva.
Consequently, there is a growing consensus among WTO members that negotiations on DSB reforms should occur in a formal setting, specifically under the Committee on DSB. India, in particular, underscores the importance of formal talks that enable all members to participate and contribute their perspectives.
The official expressed confidence that the US would take concrete steps by formulating a formal text for discussion on the issue. While developed countries primarily focus on peripheral reforms, India advocates for a two-tier system within the DSB.
Trade experts also emphasize the necessity for collective effort in reforming the WTO, with the leadership of the US playing a crucial role in overcoming the organization’s challenges.
The dispute settlement mechanism of the WTO faced a deadlock when the US blocked the appointments of members in the Appellate Body (AB).
Although the AB ceased to function in December 2019, panels continue to operate. Over 20 appeals have been filed in the AB since December 2019. The US aims to weaken the two-tier system within the dispute settlement mechanism and shows no intention of reinstating the AB.
The US argues that the dispute settlement process has become synonymous with prolonged, expensive, and contentious litigation.
Developing countries strongly contend that a two-tier system is fundamental for the smooth operation of the dispute settlement mechanism.
Moving forward, it is essential for WTO members to work together to address these concerns and reform the DSB effectively. The US’s commitment to translating positive intentions into meaningful action will play a pivotal role in resolving the deadlock and revitalizing the functioning of the DSB.
