Restoring the World Trade Organization's crown jewel

Source:The Hindu

For Prelims: World Trade Organization (WTO), WTO’s Dispute Settlement System

(DSS),  WTO's Dispute Settlement Understanding (DSU), International Court of Justice and the

International Tribunal for the Law of the Sea.

For Mains: Dispute Settlement System of WTO.

Highlights of the Article:

• The WTO's dispute settlement system (DSS) has been stuck since 2019 because the US blocked the appointment of judges to the appellate body.
• The appellate body, which held powerful countries accountable for breaking international laws, is now criticized by the US.
• The US argues that the appellate body went too far and created binding rules, contrary to the WTO's dispute settlement understanding.
• The US wants to reduce the influence of international courts and have more control over its trade policies, especially with rising challenges from China.
• Negotiating with the US to fix the system is unlikely to succeed, and one suggestion is for countries to vote for judges at the WTO's General Council meeting, but this could anger the US.

Context: 

The context of the article revolves around the World Trade Organization (WTO) and its dispute settlement system (DSS). 

UPSC EXAM NOTES EDITORIAL ANALYSIS:

Introduction:

• The World Trade Organization's (WTO) dispute settlement system (DSS) has been rendered ineffective since 2019 due to the United States' obstruction in appointing judges to the appellate body.
• The appellate body, once hailed as the WTO's "crown jewel," is now under heavy criticism from the US for exceeding its authority and creating binding precedents.

Paralysis of the Appellate Body:

• The US has blocked the appointment of appellate body members, resulting in the stagnation of the dispute settlement system.
• This has had a detrimental impact on the WTO's ability to resolve trade disputes and hold countries accountable for violating international trade laws.

US Criticisms and Judicial Overreach:

• The US accuses the appellate body of engaging in judicial overreach, surpassing its assigned mandate.
• It argues that the body has been creating binding precedents that go against the WTO's dispute settlement understanding.
• The US seeks a precise definition of the appellate body's role before it can support its revival.

De-Judicialization of Trade Multilateralism:

• The US's opposition to the appellate body reflects a broader objective of de-judicializing trade multilateralism.
• It aims to regain decision-making power over its trade policies and reduce the influence of international courts.
• Rising challenges from countries like China contribute to the US's desire to assert its sovereignty in trade matters.

Futility of Negotiations and Alternative Solutions:

• Negotiations with the US to restore the appellate body are deemed unlikely to succeed.
• One proposed alternative is for countries to resort to voting at the WTO's General Council meeting to elect appellate body members.
• However, this approach risks further antagonizing the US and may create additional tensions within the organization.

Conclusion:

• The article highlights the critical issue of the paralyzed WTO dispute settlement system and the US's opposition to the appellate body.
• It raises concerns about the future of trade multilateralism and the potential consequences of de-judicialization.
• Constructive dialogue and innovative solutions are essential to reviving the system while addressing the concerns of all member countries.