The World Trade Organization's (WTO) 13th Ministerial Conference (MC13) in Abu Dhabi opened with both progress and sharp divisions. While some movement was made on reforming the dispute settlement system, accusations flew between India and the United States, threatening to derail further progress.
At the heart of the issue lies the WTO's Appellate Body, the highest court for resolving trade disputes between member countries. The US, frustrated by rulings it deems unfair, has effectively blocked the appointment of new judges, rendering the body dysfunctional since 2019. This has drawn criticism from India, which views the Appellate Body as crucial for safeguarding its interests in trade disputes.
Indian Commerce Minister Piyush Goyal accused the US of causing a "standstill" in the WTO's work. "It's important that the first issue we should settle is that there should be an appellate body," Goyal stressed, "The entire working of WTO currently has come to a little bit of a standstill."
The US, however, maintains that reforms are necessary before the Appellate Body can resume its functions. US Trade Representative Katherine Tai argued that "more work" is needed, emphasizing the need for a system that is "fair, impartial, and effective."
Despite the disagreement, both sides acknowledge the need for a functioning dispute settlement mechanism. The conference saw the establishment of a working group tasked with finding a solution on the Appellate Body. This group, led by representatives from Kazakhstan and Switzerland, will hold further consultations and report back in July 2024.
While the working group offers a glimmer of hope, the underlying differences between the US and India remain. The US wants the system reformed to address concerns about overreach and lack of transparency. India, along with many developing countries, fears that reforms could undermine their rights and give greater power to larger economies.
Beyond the dispute settlement mechanism, the MC13 also saw discussions on other key issues, including fisheries subsidies, e-commerce, and intellectual property. While some progress was made on these fronts, significant hurdles remain before any concrete agreements can be reached.
The success of the MC13 hinges on finding common ground between major players like the US and India. Whether the working group can bridge the gap on the Appellate Body and pave the way for broader reforms remains to be seen. With the future of the WTO's dispute settlement system hanging in the balance, the coming months will be crucial in determining the organization's effectiveness in addressing trade disputes in the years to come.
