Developing nations for immediate resolution of WTO dispute settlement issue

Seventeen developing countries, including Saudi Arabia and China, Tuesday made a strong case for resolving the impasse over appointment of members in the WTO's appellate body, cautioning that failure to do so would "completely paralyse" the dispute settlement mechanism of the global trade body by December.

This was stated in a declaration released after the two-day ministerial meeting of 22 developing and least developed member countries of the Geneva-based World Trade Organisation (WTO), a body responsible for framing global trade rules.

It also said that the flexibilities being provided to developing countries under the WTO's 'Special and Differential Treatment' (S&DT) provisions must be preserved as they are rights of developing members.

"S&DT is one of the main defining features of the multilateral trading system and is essential to integrating developing members into global trade. S&DT provisions are rights that must be preserved and strengthened in both current and future WTO agreements," it said.

The outcome or the Delhi Declaration was signed by 17 of the 22 participating countries. Five countries, including Kazakhstan, Turkey, Argentina, Brazil and Guatemala, did not sign the declaration due to some technical reasons.

Briefing reporters on this, India's Ambassador to the WTO J S Deepak said: "Our position is clear that it is an unconditional right. It is not only a principle but a modality to help developing countries including LDCs to adjust themselves to the global trade rules".

It is a useful tool which India will continue to use in existing and new agreements, he said, adding in future negotiations, India will demand appropriate and effective S&DT including in issues of fishery subsidies.

The S&DT norms provide flexibility to developing member countries in the WTO to enjoy benefits like higher domestic support for the agriculture sector and longer time periods for implementing WTO agreements and binding commitments.

Currently, any WTO member can designate itself as a developing country and avail these benefits.

As part of reforms in the WTO, the US is arguing that countries which are doing well in terms of economic growth and prosperity should not be allowed S&DT benefits.

On the issue of the impasse over the appointment of members in the appellate body of WTO's dispute settlement system, Commerce Secretary Anup Wadhawan said in the two-day meeting, there was a unanimity across all countries that this is the most urgent and critical issue that needs to be resolved.

"It's functioning need to be continued beyond the period when some members will be retired and the quorum will be lost," he said.

In the declaration, the 17 countries noted with concern that members have failed to arrive at a consensus in the selection process to fill vacancies in the appellate body.

"This ongoing impasse has weakened the dispute settlement system and threatens to completely paralyse it by December 2019," it said adding "We urge all WTO members to engage constructively to address this challenge without any delay".

The delay in the appointment would hamper the functioning of WTO's dispute settlement system, which is fundamental for fair global trade as it provides security and predictability to the multilateral trading system. Rulings of dispute panel are challenged in the appellate body of the WTO. Both are part of the WTO's dispute settlement mechanism.

The minimum quorum (3) for the functioning of this body will end on December 10, after which it will become dysfunctional.

The participating countries also deliberated upon the issue of e-commerce, although the matter was not mentioned in the declaration.

Wadhawan said there was a technical session on e-commerce, where there was unanimity on the issue that its scope and definition are still not fully understood and appreciated and its boundaries are still "somewhat ambiguous and unclear".

E-commerce is one of the new issues being pushed by developed countries, including the US, in the WTO. They want member countries to negotiate an agreement on this. But countries like India have not yet agreed for that due to certain sensitivities of small players of the sector.

The outcome document also stressed on working collectively to strengthen the WTO to promote development and inclusivity.

It said the process of WTO reform must keep development at its core, promote inclusive growth, and take into account the interests and concerns of developing members, including the specific challenges of graduating LDCs.

"The way forward must be decided through a process that is open, transparent and inclusive. We agree to work collectively with the aim to develop proposals to ensure that our common interests are reflected in the WTO reform process," it added.

With reference to the global agreement on agriculture, it said there was a need to provide adequate policy space to the developing countries to support their farmers by correcting the asymmetries and imbalances on priority.

"In order to instil confidence among the Members, it is imperative that the Ministerial Conferences of the WTO are organized in a more open, transparent and inclusive manner," it said.

WTO notification obligations must consider the capacity constraints and implementation related challenges faced by many developing nations, it said.

The 17 members that signed the document include Egypt, Nigeria, Jamaica, Saudi Arabia, Malaysia, Bangladesh, China, India, Indonesia, and South Africa.