G20 Leaders Commit to Revamp WTO Dispute Settlement System by 2024

G20 Leaders Commit to Revamp WTO Dispute Settlement System by 2024. Image/ India Today

In a significant development, the G20 leaders have expressed their unwavering commitment to revamp the dispute settlement system of the World Trade Organisation (WTO) and restore it to a “fully and well-functioning” state by the year 2024. This crucial announcement comes at a time when the Geneva-based multi-lateral body, comprised of 164 member nations, has faced challenges in adjudicating trade disputes due to the non-functioning appellate body since December 2019.

A Call for Comprehensive WTO Reform

The G20 leaders underscored the urgent need for reform within the WTO, emphasizing the importance of enhancing all its functions. They expressed their dedication to engaging in discussions to establish a dispute settlement system that is accessible to all member nations and operates at full capacity by 2024. This commitment reflects the G20’s determination to strengthen the global trade ecosystem.

Positive Outlook for the WTO’s Thirteenth Ministerial Conference (MC13)

The G20 declaration also conveyed the leaders’ commitment to collaborate constructively to ensure favorable outcomes at the upcoming Thirteenth Ministerial Conference (MC13) of the WTO. MC13, scheduled to convene in Abu Dhabi in February next year, serves as the highest decision-making body within the WTO. It plays a pivotal role in shaping the future of international trade regulations.

The Challenge of WTO Dispute Resolution

Within the WTO, two primary methods are employed to resolve disputes once a complaint has been filed: mutually agreed solutions during bilateral consultations and adjudication involving rulings by a panel. The appellate body serves as the apex institution for settling disputes. However, the smooth functioning of this mechanism has been impeded by the US’s refusal to appoint members to the appellate body (AB), effectively rendering it non-operational since December 10, 2019. Despite this setback, the panels continue to function, and over 24 appeals have been filed since December 2019.

Divergent Views on the Dispute Settlement System

The impasse in the WTO’s dispute settlement mechanism primarily stems from the US’s desire to weaken the two-tier system and reluctance to reinstate the appellate body. In contrast, developing countries firmly assert that a two-tier system is fundamental to ensuring the effective functioning of the dispute resolution mechanism.

The Significance of the G20

The G20, composed of major developed and developing economies, wields immense influence on the global economic stage. Collectively, its member nations account for 85% of the world’s GDP, 75% of international trade, and two-thirds of the global population. This makes the G20 a premier forum for international economic cooperation and policy formulation.

Promoting a Rules-Based and Equitable Trading System

In their declaration, the G20 leaders reaffirmed their commitment to a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable, and transparent multilateral trading system. They emphasized that the WTO should remain at the core of this system. Furthermore, the leaders recognized the importance of ensuring that trade and environmental policies align with each other and with multilateral environmental agreements, all within the framework of the WTO.

Support for Developing Nations

The G20 leaders acknowledged the significance of the WTO’s ‘Aid for Trade’ initiative, especially for developing countries, particularly the least developed ones (LDCs). This initiative aims to empower these nations to actively participate in global trade while enhancing local value creation.