India opposes inclusion of ‘environment sustainability and trade’ in WTO Ministerial agenda

India opposes inclusion of ‘environment sustainability and trade’ in WTO Ministerial agenda

Subject: IR

Section: International Organization

Context: India opposes inclusion of ‘environment sustainability and trade’ in WTO Ministerial agenda

More about the news:

• India, along with several developing nations, has opposed the introduction of discussions on environment sustainability and trade at a recent senior officials meeting of the World Trade Organization (WTO).
• India argued that the matter was “too premature” to be taken up by Ministers at the upcoming 13th WTO Ministerial Conference in February 2024.
• India also expressed concerns that linking sustainability issues to trade could be used as a barrier to trade.
• India has consistently opposed global talks on environment issues at the WTO, fearing that these discussions could lead to unjustified trade restrictions, such as the proposed carbon taxes under the European Union’s Carbon Border Adjustment Mechanism (CBAM).
• Many developing countries share these concerns and are not part of the discussions on trade and environmental sustainability at the WTO.

Some facts about W.T.O

• W.T.O is an international institution that oversees the rules for global trade among nations.
• It officially began operations on January 1, 1995, in accordance with the 1994 Marrakesh Agreement, thus replacing the 1948 General Agreement on Tariffs and Trade (GATT).
• WTO has 164 member countries and 25 observer countries and governments.

What is the Structure of Governance of WTO

• Ministerial Conference
  • The highest authority within the WTO is the Ministerial Conference, which typically convenes every two years. This gathering includes all WTO members, which consist of countries or customs unions. The Ministerial Conference holds the authority to make decisions concerning any aspect of the multilateral trade agreements.
• General Council
  • Situated in Geneva, the General Council serves as the WTO’s primary decision-making body, convening regularly to execute the WTO’s functions.
  • It comprises representatives, often ambassadors or equivalent officials, from all member governments and possesses the mandate to act on behalf of the Ministerial Conference, which holds infrequent sessions every two years.
  • The General Council also convenes, following different procedures, as the General Council, the Trade Policy Review Body, and the Dispute Settlement Body (DSU).
• Three councils, each with jurisdiction over distinct areas of trade, report to the General Council:
  • The Council for Trade in Goods (Goods Council)
  • The Council for Trade in Services (Services Council)
  • The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)
• These councils are responsible for overseeing the implementation of WTO agreements pertaining to their respective trade domains and encompass all WTO members.
• Trade Policy Review Body (TPRB)
  • The General Council, in its capacity as the TPRB, conducts trade policy reviews of WTO Members as part of the Trade Policy Review Mechanism) and considers regular reports on trade policy development submitted by the Director-General.
  • This forum is open to all WTO Members.
• Dispute Settlement Body (DSB)
  • The General Council assumes the role of the Dispute Settlement Body  inhandling disputes among WTO members. Such disputes may arise concerning any agreement outlined in the Final Act of the Uruguay Round, which is subject to the Understanding on Rules and Procedures Governing the Settlement of Disputes .
  • The DSB holds the authority to:
    • Establish dispute settlement panels
    • Refer matters to arbitration
    • Adopt reports from panels, the Appellate Body, and arbitration
    • Monitor the implementation of recommendations and rulings outlined in these reports
    • Authorize the suspension of trade concessions in cases of non-compliance with these recommendations and rulings.
• Appellate Body
• Established in 1995 under Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, the Appellate Body comprises seven individuals and serves a four-year term.
• This standing body hears appeals from panel reports in disputes initiated by WTO Members. 
• The Appellate Body may affirm, amend, or overturn the legal findings and conclusions presented by a panel.
• Once the Appellate Body Reports are approved by the Dispute Settlement Body (DSB), they must be accepted by the involved parties.
• The Appellate Body is headquartered in Geneva, Switzerland.

What are the stages in WTO Dispute Settlement:

• Once a complaint has been filed with the WTO, there are two main ways to resolve a dispute:
  • Mutually Acceptable Solution: The parties reach a mutually acceptable solution, particularly during the phase of bilateral consultations;
  • Adjudication: It includes the subsequent implementation of the panel and Appellate Body reports, which are binding on the partiesonce adopted by the DSB.
• The WTO dispute settlement process is divided into three stages:
  • Parties’ discussions;
  • Adjudication by panels and, if relevant, by the Appellate Body.
  • Ruling implementation includes the potential of countermeasures if the losing party fails to implement the ruling.