One of the significant outcomes of Prime Minister Narendra Modi’s official state visit to the U.S. was the decision of the two countries to end six long-standing trade disputes at the World Trade Organization (WTO). The WTO Appellate Body has been redundant since 2019, and disputes filed into the ‘void’ will not be considered for adoption. In view of the continuing impasse in the appointment of ‘judges’ to hear appeals at the Appellate Body, a meaningful resolution of these disputes was almost out of sight. Three cases settled as part of the deal are before the defunct Appellate Body, while the rest could have potentially been ‘appealed into the void’. In this context, what has been achieved by both sides is without a parallel.
The disputes
One of the early cases among the settled disputes involved a challenge of the domestic content requirements under India’s National Solar Mission. While disagreements persisted regarding India’s compliance with the WTO treaty obligations, a number of off-shoot proceedings arose out of this dispute with the U.S. seeking authorisation from the WTO’s Dispute Settlement Body for trade retaliation, which India contested. India too challenged certain sub-federal programmes implemented in the U.S. in the renewable energy sector and won the case. However, over time, some of the sub-federal schemes expired or were modified substantially, and the prospects of enforcing the WTO panel ruling became slim. Amending domestic laws to effect compliance with international treaty obligations is a matter of great political sensitivity, especially in the U.S. That said, while India’s victory in the original WTO proceedings was significant, the U.S. also retrieved certain gains in the subsequent compliance proceedings. This dispute was poised to reach the Appellate Body and could have remained moribund for years.
