Question

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One of the major responsibilities of the World Trade Organization (WTO) is to hear and help resolve disputes between its 164 member organizations. If a member organization feels that its rights under trade agreements are being infringed upon, they will file requests for consultation with the WTO. If the consultations do not resolve the issue, the complainant can request their dispute be heard by a dispute settlement panel established by the WTO Dispute Settlement Body (DSB). 19 disputes were initiated in calendar year 2019, with eight (8) of the disputes leading to the establishment of a panel. (WTO Annual Report 2020, wto.org)

My summary is being provided for the WTO dispute number DS588 - India Tariff Treatment on Certain Good in the Information and Communications Technology Sector, which was initiated by Chinese – Taipei, known as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. (DS588 Summary, wto.org)

The controversy centers around Chinese Taipei accusing India of incorrect tariffs being applied to five (5) information and communication technology (ICT) sector trade lines on India’s WTO schedule which includes: cellular phones, modems, routers, headphones, and earphones. Chinese Taipei submits that India’s WTO schedule includes an ad valorem duty rate of 0% for the line items in question, however India is applying a duty rate of up to 20% for the same line items. (DS588 Summary, wto.org)

Chinese Taipei requested WTO consultations in September 2019. Several countries requested to join the consultation, including: United States, Japan, Canada, European Union, and Singapore. The consultations took place in Geneva, Switzerland in November of 2019. Unfortunately, the consultations failed to resolve the dispute. In March 2020, the Chinese Taipei delegation requested the formation of a dispute settlement panel. To date, no further action has been concluded on this case. (DS588 Summary, wto.org)

My initial thought was this could be a product categorization error, which we talked about in class, but I thought better of it and questioned why something that simple wouldn’t get resolved in consultations. A closer look, and Apple might be at the fulcrum of this dispute. With Apple’s share of India’s booming smartphone market at a feeble 5%, they would really benefit from stiff import tariffs on Chinese Taipei technology, along with easing restrictions on foreign direct investment (FDI). India, with a population of 1.2 billion people, is the 2nd largest smartphone market behind China. If you couple India’s Prime Minister Narendra Modi desire to increase investment and technology-based manufacturing jobs, along with Apples desire to be there, you have motive to increase tariffs on technology devices from Chinese Taipei.

PLEASE REPLY TO THE POST ABOVE :-

Does the position taken by the WTO on the tariff issues highlighted above ? have the potential to impact all countries equally or does there seem to be favoritism towards a certain ‘type’ of nation. Explain how you arrive at that conclusion with logical analysis.

put ideas into your own words to demonstrate understanding.

please answer

Answer 1

It is very clear to see how the above analysis can seem to favour the developed nations such as US from which Apple originates, which means the US has underlining agendas to withhold the settlement of the dispute.

However, it can also be seen that China has dominant influence on the WTO as well and has been in the past, at the driver's seat in the various WTO negotiations. Hence, it is difficult to believe that China would not have been able to leverage this deal into place.

Seeing as the matter has been quite simple and can be resolved easily, it might not be just one nation trying to influence the panel. Apple does seem to have the advantage in this deal going south, but there might be other hidden ideas in place that are much than what meets the eye. Per this analysis, we can say that at least for now, it seems that the WTO is favouring the rich nations.