WTO DISPUTE SETTLEMENT

  • October 7, 2020
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Subject: Economy

Context:

India has said that China’s complaint at the World Trade Organisation (WTO) against the country’s foreign direct investment (FDI) policy and banning of apps such as TikTok doesn’t hold merit as no global laws were violated and instead Beijing should reflect on its own transparency record. However china hasn’t filed a formal compliant against India yet.

Concept:

  • WTO is an international body that also deals in Dispute Settlements.
  • The member country will approach the WTO’s dispute settlement body when a country fails to comply with WTO rules.
  • All the members are encouraged to settle the disputes through consultation or a panel if the consultation fails.
  • The constituted panel will circulate the verdict of the dispute settlement amongst WTO members who can decide to reject the ruling.
  • If the ruling is approved, the member country that violated the rules must change rules in line with the WTO Agreement.
  • In the case of failure to do so, the complaining country and the violating country may determine a mutually-acceptable compensation, failing which, the complaining country may retaliate suitably.

WTO’s Appellate Body

  • Appeals against the orders of DSB is taken to WTO Appellate Body.
  • The Appellate Body, set up in 1995, is a standing committee of seven members that presides over appeals against judgments passed in trade-related disputes brought by WTO members.
  • Countries involved in a dispute over measures purported to break a WTO agreement or obligation can approach the Appellate Body if they feel the report of the panel set up to examine the issue needs to be reviewed on points of law.
  • However, existing evidence is not re-examined but legal interpretations are reviewed.
  • The Appellate Body can uphold, modify, or reverse the legal findings of the panel that heard the dispute. Countries on either or both sides of the dispute can appeal.
  • The Appellate Body has so far issued 152 reports. The reports, once adopted by the WTO’s dispute settlement body, are final and binding on the parties.
economy WTO DISPUTE SETTLEMENT