GS Paper 2:
Topic covered: Important International institutions, agencies and fora, their structure, mandate.
Context:
The European Union has launched a case against Beijing at the World Trade Organization (WTO) for targeting Lithuania over its stance on Taiwan.
- Lithuania made waves in July when it allowed Taiwan to open a diplomatic outpost in Vilnius.
- The move outraged Beijing, which does not recognise Taiwan as a state and considers the self-ruled democratic island a rebellious territory of the mainland.
Lithuania:
- It is one of three Baltic states and lies on the eastern shore of the Baltic Sea.
- Lithuania shares land borders with Latvia to the north, Belarus to the east and south, Poland to the south, and Kaliningrad Oblast of Russia to the southwest.
Dispute settlement:
Resolving trade disputes is one of the core activities of the WTO.
- A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO.
- The WTO has one of the most active international dispute settlement mechanisms in the world. Since 1995, 609 disputes have been brought to the WTO and over 350 rulings have been issued.
There are two main ways to settle a dispute once a complaint has been filed in the WTO:
(i) the parties find a mutually agreed solution, particularly during the phase of bilateral consultations.
(ii) through adjudication, including the subsequent implementation of the panel and Appellate Body reports, which are binding upon the parties once adopted by the Dispute Settlement Body.
There are three main stages to the WTO dispute settlement process:
(i) consultations between the parties.
(ii) adjudication by panels and, if applicable, by the Appellate Body.
(iii) the implementation of the ruling, which includes the possibility of countermeasures in the event of failure by the losing party to implement the ruling.
WTO’s 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.
Sources: the Hindu.
