The dispute panel of the World Trade Organisation (WTO) said that the import duties imposed by India on certain informational and technology products violates global trading norms.

The ruling followed a dispute filed by the European Union, Japan and Taiwan against these duties in the WTO.

The dispute was filed on imposition of import duties by India on certain ICT products, including telephones for cellular networks, machines for reception, conversion and transmission or regeneration of voice, images or other data, and parts of telephone sets.

India may appeal against the ruling at the appellate body of the Geneva-based multilateral organisation.

What is the WTO?

• The World Trade Organisation (WTO) is the only global international organisation dealing with the rules of trade between nations. 

• The primary purpose of the WTO is to open trade for the benefit of all.

• At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.

• The WTO came into being on January 1, 1995. But its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements cover trade in services, and in traded inventions, creations and designs (intellectual property).

• The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. 

• It also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application. 

• The WTO currently has 164 members, accounting for 98 per cent of world trade. A total of 25 countries are negotiating membership.

• The WTO’s top level decision-making body is the Ministerial Conference, which meets usually every two years.

• WTO activities are supported by a Secretariat led by the WTO Director-General. The Secretariat is located in Geneva, Switzerland.

• The General Council meets regularly to carry out the functions of WTO. It has representatives (usually ambassadors or equivalent) from all member governments and has the authority to act on behalf of the ministerial conference which only meets about every two years.

Dispute settlement mechanism of WTO

• Bilateral consultations between the parties are the first stage of formal dispute settlement. They give the parties an opportunity to discuss the matter and to find a satisfactory solution without resorting to litigation. 

• Only after such mandatory consultations have failed to produce a satisfactory solution within 60 days may the complainant request adjudication by a panel. Even when consultations have failed to resolve the dispute, it always remains possible for the parties to find a mutually agreed solution at any later stage of the proceedings.

• Although the panel report contains the findings and conclusions ruling on the substance of the dispute, it only becomes binding when the Dispute Settlement Body has adopted it. 

• If a party has notified its decision to appeal, the panel report cannot be adopted, given that the Appellate Body could modify or reverse it. If there is no appeal by either party, the Dispute Settlement Body is obliged to adopt the report.

• The Appellate Body is composed of seven Members who are appointed by the Dispute Settlement Body to serve for four-year terms. Each person may be reappointed for another four-year term. Each member of the Appellate Body is required to be a person of recognised authority, with demonstrated expertise in law, international trade and the subject-matter of the covered agreements generally. They are also required to be unaffiliated with any government and are to be broadly representative of the membership of the WTO.

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