Dispute settlement mechanism of WTO

• According to the procedure established by the WTO, the first step to resolve a trade dispute is engaging in the consultation process. 
• If two trading partners having a dispute could not resolve at that level, one of them can ask for a settlement of the Dispute Settlement Body (DSB) for hearing. 
• The DSB’s ruling can be challenged at the appellate body, the highest court for global trade disputes.

WTO’s Appellate Body 

• The Appellate Body is a standing committee of seven members that presides over appeals against judgements passed in trade-related disputes brought by WTO members. 
• Members of the Appellate Body have four-year terms. 
• In the selection process, WTO members follow the consensus principle, which means that the nomination of the Appellate Body members can only proceed smoothly with the agreement of all 164 members of the WTO.
• The Appellate Body must have at least three sitting members to hear an appeal. 

Why in News?

• The WTO has set up two more dispute settlement panels, this time at the request of Japan and Taiwan, targeting import duties imposed by India on a number of Information and Communication Technology (ICT) products including mobile phones.
• The two new dispute settlement panels against India take up the number of panels constituted to examine the same tariff-related issue to three as the European Union had a panel established at the WTO last month.

Reference:

1. https://www.thehindubusinessline.com/economy/wto-sets-up-dispute-panels-against-indias-tech-tariffs-on-japan-taiwans-request/article32221738.ece