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Global trade watchdog defanged: Experts say it’s like going back to the law of the jungle

Updated : December 10, 2019 10:35 PM IST

Starting Wednesday, the World Trade Organisation or WTO will be on the verge of collapse. It will no longer be able to carry out dispute resolution, which is one of its biggest roles in this era of global trade. That's because the tenures of two of the three judges on the WTO's appellate body will end at midnight on December 10, 2019.

With India's Ujal Singh Bhatia and USA's Thomas Graham leaving, China's Hong Zhao will be left as the only member. The 7-judge appellate body has already dwindled significantly because the US has been blocking nominations since 2018, claiming the body has overstepped its mandate. Since any appointment to the appellate body needs unanimous approval from all 164 member countries, the empty seats have not been filled.

So far, the appellate body had continued functioning only because 3 members had to be present at any hearing to form a quorum. But with the departure of two of the three judges at midnight tonight, this will no longer be possible.

This will, in effect, put disputes worth billions of dollars under a cloud, with no resolutions being possible. India is a party to 30 on-going disputes at the WTO, and these cases will be left in limbo. To discuss this CNBC-TV18 spoke with Rohan Shah India's representative to the board ERIA and Jayant Dasgupta Former Indian Envoy to WTO.

Shah said, "Under the WTO mechanism the dispute settlement forum was the ability to sort of ensure that whoever no matter how powerful stepped out of line, your recourse was to sort of take them through the process and take them to the dispute settlement forum. The fact that we don't have a dispute settlement forum effectively starting tomorrow means that all of those proceedings effectively go into limbo. So, the mechanism to sort of bring to book and seek justice especially for developing countries and equally for developed countries in a way is now impaired. What you also must understand is that absent the dispute settlement you really go back in a way to the law of the jungle."
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