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TWN
Info Service on WTO and Trade Issues (Jan26/13) Geneva, 28 Jan (D. Ravi Kanth) — For the 94th time in close to eight years, the United States on 27 January blocked a joint proposal from 130 countries for expeditiously filling all seven vacancies on the World Trade Organization’s Appellate Body, stating that the fundamental concerns raised by Washington about the dispute settlement system have not been addressed, said people familiar with the development. At a meeting of the Dispute Settlement Body (DSB), Colombia, on behalf of 130 countries, called for the expeditious filling of the vacancies on the Appellate Body. Colombia emphasized that the extensive number of members submitting the proposal reflects a common interest in the functioning of the dispute settlement system. Bogota expressed deep concern that despite bringing the issue to the DSB ninety-four times, members have not been able to launch the selection process for filling the vacancies on the Appellate Body. Colombia drove home a strong message that it will continue to pursue the matter. Around a score of countries intervened to call for “restoring” a fully-functioning dispute settlement system. Even Venezuela, which was attacked while its President Nicolas Maduro was seized in a raid and brought to the US on 3 January, condemned the fragmentation of global trade and international law. It cited recent US actions that violated Venezuela’s sovereignty, according to people present at the meeting. The US, however, protested that the issue of Appellate Body appointments had been included in the DSB agenda, arguing that it should not be there. At the informal ministerial meeting on the margins of the World Economic Forum in Davos, Switzerland last week, US Trade Representative (USTR) Ambassador Jamieson Greer said: “With the WTO, we created a rigid dispute settlement system built by unaccountable bureaucrats in Geneva, a couple of whom are here who work for the United States, and they interpreted the rules so narrowly that they lost much of their intended flexibility, and oftentimes the United States ended up changing our laws to accommodate what was found in Geneva, even though we had negotiated for something different at the bargaining table.” In contrast, in its submission on WTO reform circulated on 21 January, the European Union said a reformed system must be rules-based with an effective dispute settlement mechanism. However, in a critical footnote, the EU stated, “Discussions on dispute settlement reform should resume when progress is made on WTO reform and when the conditions are right.” Meanwhile, attempts are underway to promote the EU’s Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as an alternative to the dysfunctional Appellate Body, said people familiar with the development. The US and several other countries, including India, which refused to join the MPIA, argue that this mechanism can never gain the necessary traction to secure its legitimacy, said people familiar with the development. One member apparently said at the DSB meeting that the MPIA must not prejudice the shared objective of restoring a fully functioning and independent Appellate Body or addressing fundamental issues in the reform discussions. The MPIA was agreed upon among its original participating members in April 2020 to provide the possibility of resorting to arbitration under Article 25 of the Dispute Settlement Understanding (DSU) in the event of an appeal in trade disputes between any two or more participating members. CHINA-INDIA DISPUTE Meanwhile, at the DSB meeting, India blocked a first-time request from China for the establishment of a dispute panel (DS642) to rule on Indian measures concerning trade in the automotive and renewable energy technology sectors. China said the measures in question include incentives to promote the production of advanced chemistry cell batteries, automobile and auto components, and electric vehicles in India. It informed the DSB that though consultations between China and India took place on 25 November 2025 and 6 January 2026 aimed at resolving the dispute, the two sides failed to reach an amicable agreement. In its dispute complaint, China maintained that the Indian measures are in direct breach of New Delhi’s WTO obligations, violating several provisions of the Agreement on Subsidies and Countervailing Measures and the Agreement on Trade-Related Investment Measures. China also argued that the incentive schemes and trade restrictions are discriminatory, suggesting that the best way to address climate change and renewable energy goals is through collaboration among WTO members. “Interestingly, at a time when the US had walked out of the Paris Climate Change Agreement, while countries are opting for their own autonomous schemes, it appears somewhat unusual for China to raise a trade dispute on this issue at this juncture,” said a legal analyst, who preferred not to be quoted. In its response to the Chinese claims, India expressed surprise that China did not consider the information India had provided. New Delhi also raised concerns about China’s arguments on grounds that they are inaccurate, according to people present at the meeting. Pursuant to the DSU, panel establishment will be automatic if China presses ahead with a second request at the next regular DSB meeting on 24 February. Also, given the dysfunctional Appellate Body, the dispute could remain frozen even if China wins the dispute at the panel stage, the legal analyst said. +
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