Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Trade Organization (WTO)
Mains level: Read the attached story
A World Trade Organization (WTO) panel has ruled that India has violated global trading rules in a dispute with the European Union (EU), Japan, and Taiwan over import duties on IT products.
About World Trade Organization (WTO)
| Details | |
| Purpose | Regulate and facilitate international trade between nations |
| Establishment | 1995 |
| Headquarters | Geneva, Switzerland |
| Membership | 164 member countries as of 2023, representing over 98% of global trade |
| Goal | Promote free and fair trade by negotiating and enforcing rules and agreements governing international trade |
| Agreements | Administers a number of agreements, including GATT, SPS Agreement, and TRIPS Agreement |
| Dispute Resolution | Operates a dispute settlement system to resolve conflicts between member countries |
| Technical Assistance | Provides technical assistance and training to help developing countries participate more effectively in international trade |
| Decision-Making Body | Ministerial Conference, which meets every two years |
| Director-General | Chief executive responsible for overseeing the organization’s operations and activities |
| Criticisms | Some criticize the WTO for being undemocratic, favoring developed countries, and not doing enough to promote labor and environmental standards in international trade |
What was the case?
- The case involved a dispute over India’s introduction of import duties ranging from 7.5% to 20% on a wide range of IT products, including mobile phones, components, and integrated circuits.
- The EU, Japan, and Taiwan challenged these import duties in 2019, arguing that they exceeded the maximum rate allowed under global trading rules.
- The recent ruling by the WTO panel found that India had violated these rules and recommended that India bring its measures into conformity with its obligations.
WTO Panel’s Ruling
- The WTO panel has ruled that India violated global trading rules by imposing these import duties.
- The panel recommended that India bring these measures into conformity with its obligations.
- While the panel broadly backed the complaints against India, it rejected one of Japan’s claims that India’s customs notification lacked “predictability”.
Implications of the ruling
- The EU is India’s third-largest trading partner, accounting for 10.8% of total Indian trade in 2021, according to the European Commission.
- The ruling could have implications for trade relations between India and the EU, as well as Japan and Taiwan.
- India may be required to lower or eliminate the challenged import duties.
- It remains to be seen whether India will appeal against the ruling.
- If it does, the case will sit in legal purgatory since the WTO’s top appeals bench is no longer functioning due to US opposition to judge appointments.
Conclusion
- The panel recommended that India bring such measures into conformity with its obligations, and it remains to be seen whether India will appeal against the ruling.
- The case highlights the importance of complying with global trading rules and the role of the WTO in resolving trade disputes between countries.
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