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Australia, India and the World Trade Organisation

Published 15 Oct 2022
Ashrika Paruthi

Australia views the World Trade Organisation (WTO), particularly its dispute settlement body as being “key” to fostering its trade “interests”. A major result of the Uruguay Round, the dispute settlement body reiterates the rule of law for engendering consistency and security in the multilateral trading system. In the case of a member’s alleged non-compliance with the WTO Agreement, it allows for a reasonably quick settlement of the issue through an impartial decision that needs to be executed promptly, or the non-implementing member risks trade penalties. To carry out the role mentioned above the dispute settlement body has been imbued with the authority to set up expert panels for a case, in addition to its utilising its permanent Appellate Body, which in-turn is responsible for examining the legal elements of the reports produced by panels. The dispute settlement body is a valuable tool for separating certain bilateral grievances, while preserving the overall bilateral ties.

As a democratic middle power, Australia has always sought a degree of preservation from the whims of stronger states through the international organisations such as the WTO. Most significantly, the WTO as an international organisation and its rules-based dispute resolution mechanism, protects Australia and the entire global system from upheavals that may otherwise cascade into more serious conflicts making the world more fragile and unsafe. Australia has specifically been concerned about its future, about existing within a world in which power can enforce a state’s will or dictate justice, making it increasingly vulnerable to threats and intimidation from authoritarian governments. This is the reason Australia takes the conscious approach to the WTO Dispute settlement mechanism that it does.

As a consequence of a US veto on crucial appointments to the WTO’s Appellate Body Australia has warned that the organisation seems to morphing into a ‘might makes right’ entity. While Australia has succeeded in minimising the repercussions of a non-functioning WTO Appellate Body, by securing an interim framework under which appeals will be arbitrated, it is an inadequate approach since it applies only to WTO members who decide to adopt the arrangement.

In 2023, India is assuming the Presidency of the G20, the world’s leading economic forum and this could work to Australia’s advantage. Canberra has a rapidly evolving relationship with India and can be confident that New Delhi will work to determine the G20 agenda, host the Leaders’ Summit, and convene ministerial, government, and civil society gatherings in a way that will reiterate its longstanding role as an apostle of moderation and practitioner of a comprehensive model for development, while aiming to direct cooperation on international development and fortifying multilateralism. This will all be in Australia’s interest.

Ashrika Paruthi is a third-year Dalyell Scholar and Vice Chancellor’s International Scholar, undertaking a Bachelor of Arts/Advanced Studies, majoring in International Relations and Politics, at the University of Sydney. Ashrika is an intern with the Australian Institute of International Affairs NSW.