Work stopped at WTO, know how it will affect India.

Work stopped at WTO, know how it will affect India.

 

The World Trade Organization (WTO), with 164 member countries, which has been operating and monitoring the world's trade rules for nearly 25 years, is now just a name. It cannot now hear a case after two of the three judges of its Appellate Body (AB), which has given its final verdict on trade disputes, retire on December 10. Normally it consisted of 7 judges, but due to the appointment of judges from the US and the budget constraints, this number had come down to the minimum quorum of 3, which has now been neutralized with 1 judge.

While the WTO is the only democratic platform for complaints and hearings on the global platform for developing economies like India, developed countries like the US have begun to expect arbitrary decisions. The US did not approve the appointment of the judges, saying that the appellate body has started taking decisions beyond its jurisdiction.

Decisions in the WTO take place at three levels. In the first phase, the plaintiff and the respondent countries are given an opportunity for negotiation and mutual consent. If this is not done, a panel is formed which gives the verdict. If its decision is not valid, it can be appealed in the Appellate Body. Of the 592 trade disputes that have come to the WTO so far, 118 have ended by mutual consent, while 137 have gone to appeal. India currently has 30 cases pending at all levels in the WTO, of which it is a petitioner in 12 and a defendant in 18 cases. But of the total 14 appeals pending in AB, only two are from India.

 Advantage or disadvantage of india

The abolition of AB may give India short-term relief, as the WTO panel ruled against India on 31 October 2019 on the US complaint against export subsidy schemes and ordered the closure of schemes like MEIS within six months. Was. India has appealed against this in AB and as long as it is stalled, it is not legally obliged to stop the schemes. This is the reason that India is resuming several recently closed export schemes on its behalf.

Failed to stop tariff war

India is also not too worried about the abolition of the AB, because in recent years the WTO has failed to stop the protectionism that started under the banner of 'America First' and tariff-war with many countries including China. India itself has had to pay a counter tariff to increase the US tariffs on many products including Indian steel, aluminum.

WTO was opposed

Apart from this, the way the developed countries had mobilized against India on agricultural products and to stop farmers from economical electricity, water, fertilizer to cheaper ration to the poor, so that India could become a big market for their processed food. In such a situation, there was strong opposition to the WTO in India. Not only the United States, Britain, New Zealand and Australia have tightened the visa rules keeping the WTO rules in check to prevent Indian students and professionals, which is a big challenge for India.

Benefits to developing countries

India has to compete with neighboring countries, especially ASEAN, to increase its share in global trade and many of these countries have free trade agreements with them. The more FTAs, the less the need for WTO. Experts also believe that the WTO has been a major contributor to the progress made in the global market for many developing countries like India. India itself has been able to express its views to veterans like America and China through this platform in about a dozen major cases in the last two decades. It has also protected many of its intellectual properties.