- Prelims:Protectionism, liberalization, WTO, GATT etc
- Mains GS Paper III:Government planning, mobilization of resources, LPG reforms, protectionism etc
ARTICLE HIGHLIGHTS
- Indiaand the S. notified the World Trade Organization(WTO) of reaching a mutually agreed solution in the poultry dispute, withdrawing their respective pending WTO cases in the matter, following the settlement reached between the two countries.
INSIGHTS ON THE ISSUE
Context
World Trade Organization(WTO):
Principles of WTO:
Functions:
What is the Poultry dispute between India and the US?
- India imposed certain import restrictionsagainst the imports of poultry products from the U.S. on grounds of avian influenza or bird flu.
- Initiated by the U.S. in 2012,the dispute challenged India’s import restrictions on poultry products on account of avian influenza which could potentially transmit to humans.
- It comes under ‘sanitary and phytosanitary (SPS) measures’ initiated by a developing WTO member.
- The U.S.’s primary contention was that India, in deviating from internationally recognised standards set by the World Organization for Animal Health (formerly the OIE)
- India failed to provide scientific justificationsfor its poultry measures, as mandated by the WTO’s SPS Agreement.
- Both the panel and the WTO Appellate Body ruled in favor of the U.S.
- India was given a year tomodify or withdraw its inconsistent measures.
- The U.S. later alleged that India had still failed to meet its obligations, and filed a retaliation claim at the WTO.
- In response, India filed its own counter-disputeto establish that its revised measures conformed with WTO rules.
- India has dodged a yearly $450 million claim, as part of the larger settlement of pending disputes between the two countries.
- In exchange, India has agreed to reduce tariffs on select products such as cranberries, blueberries, frozen turkey, and premium frozen duck meat destined for luxury hotels.
Significance of resolution:
- The resolution represents a significant diplomatic breakthrough.
- The uphill task for negotiators from both sidesin resolving this dispute is evident that it could not be settled alongside the six other pending disputes by mid-2023.
- Collectively, the resolution of these seven disputes has achieved something unprecedented in international trade dispute settlement.
- It has demonstrated that despite complicated domestic compulsions, major trading partners can still rely on the advantages of diplomatic channels to effectively resolve sensitive trade matters.
- Along with India’s participation in the U.S.-led Indo-Pacific Economic Framework, it will also strengthen India-U.S. partnership.
Way Forward
- Settling disputes by arriving at a bilateral solutionis not uncommon at the WTO.
- For example, the U.S. and the European Union’s disputes over aircraft subsidies to Boeing and Airbus ultimately required a diplomatic resolution
- despite several iterations of challenges before the WTO panels and the Appellate Body.
- WTO rules encourage countries to resolve disputes amicably,with litigation only to be pursued as a last resort.
- The significance of this settlement package lies in both the total number of disputes settled and the diversity and complexity of their subject matter
- ranging from different types of subsidies to countervailing duties to SPS measures.
- In the absence of a functional Appellate Body (it became defunct in 2019),resolution of long-standing trade conflicts requires out-of-the-box solutions.
- Greater emphasis and thrust on using bilateral diplomatic channels to resolve such issues.
- Paralysis within a multilateral body need not prevent large trading partners from resolving differences through focused bilateral negotiations within the framework of litigation.
QUESTION FOR PRACTICE
The broader aims and objectives of WTO are to manage and promote international trade in the era of globalization. But the Doha round of negotiations seem doomed due to differences between the developed and the developing countries.” Discuss in the Indian perspective.(UPSC 2016) (200 WORDS, 10 MARKS)
