From UPSC perspective, the following things are important :
Prelims level: About WTO
Mains level: Trade disputes; India and USA at the WTO
Why in the News?
In March, India and the U.S. settled their last lingering WTO poultry dispute, marking the end of seven trade disputes resolved since Prime Minister Modi’s U.S. visit.
What is ‘Litigotiation’?
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Trade dispute on poultry products between India and USA at the WTO
- Indian Scenario: India had prohibited the import of various agricultural products from the US because of concerns related to Avian Influenza.
- U.S. argued: The U.S. challenged India’s import restrictions on poultry products, which were imposed due to concerns about avian influenza (bird flu) potentially transmitting to humans.
- It argued that India deviated from internationally recognized standards that were set by the World Organization for Animal Health (formerly OIE) and failed to provide scientific justifications for its measures, violating the WTO’s Sanitary and Phytosanitary (SPS) Agreement.
- The dispute was initiated by the U.S. in 2012 and remained unresolved for over a decade, making it the oldest of the seven trade disputes between India and the U.S. In 2015, India lost a long-pending dispute over poultry imports from the US at the WTO.
- The recent settlement allowed India to avoid a yearly $450 million claim.
- In exchange, India agreed to reduce tariffs on select U.S. products such as cranberries, blueberries, frozen turkey, and premium frozen duck meat, marking a significant diplomatic breakthrough.
What are the standards set by the World Organization for Animal Health?
- The Terrestrial Animal Health Code
- First published in 1968, provides standards for the improvement of terrestrial animal health and welfare and veterinary public health worldwide.
- These standards should be used by Veterinary Services to set up measures for the early detection, reporting, and control of pathogenic agents, including zoonotic agents, and preventing their spread.
- The Aquatic Animal Health Code
- Introduced in 1995, provides standards for the improvement of aquatic animal health and welfare worldwide.
- These standards should be used by Aquatic Animal Health Services to set up measures for the prevention, early detection, reporting, and control of pathogenic agents in aquatic animals (amphibians, crustaceans, fish, and mollusks).
- Implementation of the recommendations in the Aquatic Code ensures the safety of international trade in aquatic animals and aquatic animal products.
About WTO:The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade among its member nations. It was established in 1995 and has 164 member countries, representing over 98% of global trade and global GDP. |
Conclusion: The India-U.S. settlement underscores the power of diplomatic negotiations in resolving complex trade disputes, fostering stronger bilateral ties, and promoting a more stable and cooperative international trade environment.
Mains PYQ:
Q WTO is an important international institution where decisions taken affect countries in a profound manner. What is the mandate of WTO and how binding are their decisions? Critically analyse India’s stand on the latest round of talks on Food security. (UPSC IAS/2014)
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