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CHINA’S TRADE PRACTICES & WTO’S DISPUTE SETTLEMENT MECHANISM – CAN THE TEETH BITE?

By Divisha Sharma & Harsh Sodha

Allegations pertaining to China’s mercantilist policies posing a threat on the liberal international trading mechanism have kept on coming forth on numerous occasions. A significant event in the country’s trading history on an international level, was its accession to WTO in 2001. Whether this accession was merely a platform to China to extract maximum benefits at the cost of minimum obligations, or has the Organization actually been able to keep China’s trade practices in check, is a question that this paper seeks to answer.
This issue has been analysed specifically in light of the effectiveness of WTO’s Dispute Settlement Mechanism by firstly tracing its establishment from the erstwhile GATT System, and stating the repercussions brought by it upon breach of WTO provisions, and secondly, by analysing the track record of China in complying with the WTO’s principles and abiding by the directions given by its Dispute Settlement Mechanism.
The paper goes on to explain how China has, unlike the allegations imposed against it, been largely compliant with the principles and directions of WTO. However, the country has been demonized in the international front even when there have been other member-states flouting the directions of the Organization’s Dispute Settlement Mechanism. Its role has become all the more prominent with the uncertainties brought by the COVID-19 outbreak upon the economies worldwide, and especially with various nations blaming China and posing possibilities of adopting a hostile trading environment.

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