BRICS for immediate restoration of fully functioning WTO dispute settlement system

New Delhi, BRICS leaders on Saturday strongly called for the immediate restoration of an effective and fully functioning two-tier, binding WTO (World Trade Organisation) dispute settlement mechanism.

According to the New Delhi Declaration adopted by BRICS leaders, the member countries expressed commitment to working towards strengthening the organisation through the necessary reform, facilitating the negotiation process within the WTO framework, and restoring the credibility of the multilateral trading system.

"We strongly advocate for the immediate restoration of an accessible, effective, fully functioning, two-tier binding WTO dispute settlement mechanism as a foundation for trust and predictability for all WTO members, and the appointment of new Appellate Body members without further delay," it said.\


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Supporting reform of the 166-member WTO and strengthening a non-discriminatory, open, equitable, transparent, fair, inclusive, predictable and rules-based multilateral trading system, the members expressed commitment to remain engaged in the multilateral negotiations in Geneva, especially in the debates regarding the reform of the WTO.

"We will engage constructively in the WTO reform to enhance the WTO's authority, effectiveness, inclusiveness, and relevance, and build an open world economy," it said.

WTO DISPUTE MECHANISM

Besides monitoring global exports and imports, the Geneva-headquartered multilateral body adjudicates trade disputes among the member countries.

India has been a member since 1995.

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The dispute settlement body (DSB) is one of the important arms of the WTO.

There are two main ways to settle a dispute once a complaint has been filed in the WTO: the countries find a mutually agreed solution, particularly during the phase of bilateral consultations; and through adjudication, which includes a ruling by a panel and, if not satisfied, challenging that ruling at the Appellate Body.

The Appellate Body is the apex institution for adjudicating disputes.

The smooth functioning of the WTO's dispute settlement mechanism hit a roadblock when the US blocked the appointment of members to the Appellate Body (AB). Though the AB stopped functioning on December 10, 2019, the panels are still working.

Since December 2019, several appeals have been filed in the AB.

Developed countries like the US have been advocating for changes in the system, arguing that the present dispensation is rigid.

The US had earlier stated that over time, despite settlement, it has become synonymous with litigation, which is prolonged, expensive and contentious.

According to experts, the US wants to weaken the two-tier dispute settlement system and does not intend to restore the Appellate Body.

Developing countries, by contrast, strongly believe that a two-tier system is fundamental to the smooth functioning of the dispute settlement mechanism.

Certain developed nations have suggested reforming DSB and that includes finding appropriate alternatives to litigation.

The alternatives include conciliation and mediation; the panels be restricted to address only those matters, which are necessary to resolve the dispute and resist the urge to pontificate; and no judicial overreach so that members could exercise their power to regulate domestic policies.

WTO REFORMS

The US has raised concerns about how WTO arms are functioning and has called for reforms, including to its dispute redressal mechanism.

WTO members, or groups of members, have made more than 30 submissions on WTO reform, either broadly or on specific topics.

The main focus of the WTO reform push to date has been dispute settlement, prompted by the crisis over the future of the Appellate Body.