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The US decision to block selection of judges at the World Trade Organization’s Appellate Body has impacted India's attempt to get a ruling on its case challenging a verdict against safeguard duties imposed by the country on imports of iron and steel.
“We further note the backlog of appeals pending with the Appellate Body at present, and the fact that divisions for all appeals filed since October 1, 2018 are composed of the same three remaining Appellate Body members,” the WTO’s Appellate Body observed explaining why a judgment on India’s case has been delayed.
The US blocked the appointment of appeals judges at the WTO last year which has now resulted in shrinking of the number of judges from seven to just three. Washington has said that it will allow judges to be appointed only after reforms are brought about in the WTO decision-making process.
India’s case which has got stuck at the WTO is related to imposition of provisional safeguard duty — a levy that a member can apply over and above the existing import tariffs to protect domestic industry against import surges — of 20 per cent on import of certain categories of steel by the country in September 2015, which it subsequently reduced and extended till March 2018.
In November 2018, the WTO upheld Japan’s complaint against India’s safeguard which it said was not based on reasons consistent with multilateral rules. The following month India challenged the WTO verdict by filing a case with the Appellate Body, the highest decision making body of the WTO.
“It is important for India that the Appellate Body upholds its challenge as the decision could play an important role in determining if the company could impose similar duties in the future,” a government official said.
Since Japan has a free trade agreement with India, iron and steel imports take place at reduced import duties which affect the domestic industry.
The Appellate Body, however, may not be able to come up with its verdict anytime soon. While admitting its failure to submit its report within the 90 days period as is the norm, it said because of the complexity of the issue and the pending cases, it will not be able to staff the appeal for some time.
A number of WTO members, which includes the EU and India, have got together to put in place a system at the WTO which will allow judges to be appointed and the dispute settlement system to work properly.
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