WTO 2024 News Update
TL/DR –
China has submitted a second request to the World Trade Organization (WTO) to establish a panel to assess the compatibility of certain tax credits under the US Inflation Reduction Act (IRA) with WTO rules. The US has justified these tax credits as necessary to combat climate change but China claims that they favor US goods over imports. Meanwhile, the US does not support the proposal to commence the appointment of Appellate Body members as it claims its concerns with WTO dispute settlement remain unaddressed, a position that has resulted in 130 members being unable to launch the selection processes for the 79th time.
DS623: US Inflation Reduction Act Tax Credits Under WTO Scrutiny
China has again requested a panel to assess the compliance of certain tax credits under the US Inflation Reduction Act (IRA) with WTO rules. The US previously declined China’s first request in July, citing climate change mitigation. China claims the IRA subsidies favor US goods, contravening WTO non-discrimination rules.
The US voiced disappointment over China’s pursuit of a panel request and maintained that the IRA is crucial for clean energy and sustainable global supply chains. The DSB approved the panel establishment, with 18 nations reserving third-party rights to participate in its proceedings.
DS597: US – Origin Marking Requirement (Hong Kong, China)
The US raised the DS597 panel ruling for the 12th time at a DSB meeting, citing recent concerns over free speech and human rights in Hong Kong. Hong Kong criticized the US for invoking national security in defense of trade-restrictive measures, suggesting objections should be addressed by the blocked WTO Appellate Body.
China strongly rejected US interference in other WTO member’s internal affairs and emphasized the necessity of a restored appeal mechanism to handle panel error claims.
Appellate Body Appointments
On behalf of 130 members, Colombia proposed the 79th selection process to fill Appellate Body vacancies. Despite the US’s refusal due to unresolved concerns, 20 members stressed the urgency to meet 2022 and 2024 Ministerial Conference mandates to have a fully functional dispute system by 2024.
Progress in the dispute settlement reform process was hailed, and Colombia expressed disappointment at the stagnation in selection processes, urging that the Appellate Body operate fully.
Surveillance of Implementation
The US and EU presented status reports regarding various disputes, including DS184, DS160, DS464, DS471, and DS291. Indonesia also presented its reports for DS477 and DS478.
Next DSB Meeting
The next DSB meeting is scheduled for 28 October.
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