Contents

  1. Tussle over Belagavi
  2. Why has U.S. Crippled the functioning of WTO

TUSSLE OVER BELAGAVI

Background:

  • On December 2019, Maharashtra Chief Minister appointed two Ministers as coordinators to oversee the State government’s efforts to expedite the case related to the boundary dispute with Karnataka.
  • The border areas along Maharashtra and Karnantaka including Belagavi (earlier Belgaum) has been the epicentre of the issue for over six decades.

What is the controversy?

  • In 1957, slighted by the implementation of the States Reorganisation Act, 1956, Maharashtra demanded readjustment of its border with Karnataka.
  • Maharashtra Govt. invoked Section 21(2)(b) of the Act, and submitted a memorandum to the Ministry of Home Affairs stating its objection to Marathi-speaking areas being added to Karnataka.
  • They claimed an area of 2,806 square miles that involved 814 villages, and three urban settlements of Belagavi, Karwar and Nippani with a total population of about 6.7 lakh, all part of the Mumbai Presidency before Independence.
  • The villages are spread across Belagavi and Uttar Kannada in north-western Karnataka, and Bidar and Gulbarga districts in north-eastern Karnataka — all bordering Maharashtra.
  • Later, when a four-member committee was formed by both States, Maharashtra expressed a willingness to transfer 260 predominantly Kannada-speaking villages with a population of about 3.25 lakh and total area of 1,160 square miles in lieu of accepting its demand for 814 villages and three urban settlements, which was turned down by Karnataka.

What was the basis of Maharashtra’s claim?

  • Maharashtra’s claim to seek the readjustment of its border was on the basis of contiguity, relative linguistic majority and wishes of the people.
  • If the claim over Belagavi and surrounding areas was based on Marathi speaking people and linguistic homogeneity, it laid its claim over Karwar and Supa where Konkani is spoken by citing Konkani as a dialect of Marathi.
  • Its argument was based on the theory of village being the unit for calculation and enumerated linguistic population in each village.
  • Maharashtra also points out the historical fact that the  revenue records in these Marathi-speaking areas are also kept in Marathi.

What is Karnataka’s position?

  • Karnataka has argued that the settlement of boundaries as per the States Reorganisation Act is final.
  • The State argues that the issue would reopen border issues that have not been contemplated under the Act, and that such a demand should not be permitted. 
  • Initially, Karnataka was open to adjusting the border in the 10 mile belt from the drawn boundary.

Did the States make an effort to find a solution?

  • In 1960, both States agreed to set up a four-man committee with two  representatives from each State. Except on the issue of contiguity, the committee could not arrive at a unanimous decision, and respective representatives submitted reports to their government.
  • Between the 1960s and 1980s, the Chief Ministers of Karnataka and Maharashtra have met several times to find a solution but with no avail.

How has the Union Government responded?

  • Under sustained pressure from Maharashtra, in 1966, the Centre announced setting up a one-man commission under the former Chief Justice of the Supreme Court of India, Meher Chand Mahajan, to look into border issues between Karnataka (then  Mysore state) and Maharashtra.
  • The commission was also asked to look into Karnataka’s demand for integration of Kannada-speaking areas in Kasargod in Kerala.
  • While Maharashtra reiterated its demand, Karnataka sought areas in Kolhapur, Sholapur and Sangli districts from Maharashtra, and Kasargod from Kerala.
  • The commission received more than 2,200 memoranda and met over 7,500 people.
  • It submitted its report to the Union Government in 1967.
  • The commission’s report was placed in Parliament in 1972.
  • The commission rejected Maharashtra’s claim over Belagavi city while recommending transfer of about 260 villages to Maharashtra and about 250 villages in Maharashtra to Karnataka.
  • Maharashtra said the report was inconsistent and an unfair application of its own principle. It also said that the report was not a final word on the issue.
  • Karnataka, however, agreed to the report.
  • In 2004, Maharashtra had approached the Supreme Court for a settlement under Article 131 (b) of the Constitution. Karnataka has questioned it.
  • With one of the judges recusing, the court has to set up a new bench.

WHY HAS U.S. CRIPPLED THE FUNCTIONING OF WTO

Background:

  • Even as the trade war between China and the United States shows no signs of ending, Washington has paralysed the World Trade Organization’s Appellate Body, which acts as a supreme court for international trade.
  • In December 2019, the U.S. chose to spike the Appellate Body by starving funds for its functioning.
  • It also stalled the selection process for filling six vacancies at the Appellate Body.
  • Consequently, the Appellate Body is left with only one member, who will not be able to deliver any rulings on pending trade disputes — a minimum of three  members is required to adjudicate any dispute.

What is the World Trade Organization’s Appellate Body?

  • Global trade disputes are complex and difficult to resolve.
  • For proper enforcement of trade rules, a binding, two-stage dispute settlement system was established at the World Trade Organization in the 1990s.
  • The Appellate Body is the scaffolding of the dispute settlement system, with seven  standing members.
  • In the first stage for adjudicating trade disputes, a panel would decide cases brought before it by the members.
  • Rulings issued by the panels can be appealed at the Appellate Body.
  • As part of the second-stage of adjudication, the Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel.
  • Therefore, the Appellate Body’s decisions are final and adopted within 30 days by the dispute settlement body.
  • Sanctions can be imposed on a member in case of its failure to comply with the Appellate Body’s rulings.
  • Cases involving trade remedies such as  countervailing and anti-dumping measures, and the use of a controversial practice called the zeroing methodology that initiated the anti-dumping duties, dominated the disputes among the WTO members.
  • The establishment of the Appellate Body has given teeth and credibility to the rules-based multilateral trading system.
  • Moreover, it provided security and predictability in the multilateral trading system.
  • But the U.S. chose to spike the highest appeals body for global trade disputes by alleging that it has gone astray.

Why did the U.S. choose to strangulate the Appellate Body?

  • The smooth and effective functioning of the Appellate Body, which is regarded as the jewel in the crown, has posed hurdles to the U.S. for adopting unilateral measures.
  • Several U.S. provisions for imposing countervailing and anti-dumping measures were found to be inconsistent with core provisions of the WTO agreements.
  • Finally, the U.S. chose to spike the Appellate Body by resorting to starving funds for its functioning as well as blocking the selection process for filling six vacancies.
  • Consequently, the Appellate Body is left with only one member, who will not be able to deliver any rulings on the pending trade disputes as a minimum of three members are required to adjudicate any dispute.

Why did the U.S. block the selection process for filling six vacancies?

The independent and impartial functioning of the Appellate Body in complex trade disputes has become a problem for Washington over the past many years.

While the U.S. has accepted favourable rulings that served its interests in global trade, it raised intransigent concerns about adverse decisions that struck down the U.S.’s trade measures.

Washington has repeatedly accused the Appellate Body of allegedly straying away from the dispute settlement understanding (DSU) in several disputes involving the U.S.’ measures that were challenged by other members.

It has maintained that the Appellate Body failed to issue rulings within the 90-day deadline.

The U.S. says the Appellate Body’s rulings failed to adhere to the provisions in the dispute settlement understanding in cases involving countervailing (anti-subsidy) and anti-dumping measures based on the zeroing methodology.

What is the future for an organisation that will not be able to enforce rules?

  • The strangulation of the Appellate Body is a reflection of unilateralism and protectionism that are on a sharp rise.
  • China has said: “It is therefore not surprising that someone attempts to use its might rather than WTO adjudications to change trade polices of other Members.”
  • The absence of the Appellate Body will create a jungle raj and paves the way for a steep descent into the General Agreement on Tariffs and Trade, 1947 rules.
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