WTO Sets Panel To Examine Russia’s Challenge To EU Carbon Border Tax

New Delhi, Oct 8 (KNN) The World Trade Organization’s (WTO) Dispute Settlement Body (DSB) on September 25 agreed to establish a panel to examine Russia’s challenge to the European Union’s Carbon Border Adjustment Mechanism (CBAM) and an alleged export subsidy linked to the EU’s Emissions Trading System (ETS).

Russia has argued that the EU’s CBAM creates trade barriers for goods covered by the mechanism. It has also alleged that the allocation of emissions allowances to certain companies under the ETS amounts to an export subsidy that improves the competitiveness of European industries.

The EU rejected the allegations and said it was confident that CBAM and the ETS comply with WTO rules. Brussels said it would participate in the proceedings in support of the multilateral trading system.

The panel was established after Russia submitted a second request, following the EU’s objection to its first request at the DSB meeting in July, reported Money Control.

WTO Dispute Settlement Deadlock Continues

The DSB also postponed consideration of a panel report in a separate dispute between China and Türkiye concerning measures on electric vehicles and other vehicles originating in China. The report, circulated on July 28, will now be considered by October 27, 2026.

The meeting also highlighted the continuing deadlock over appointments to the WTO Appellate Body. Colombia, on behalf of 130 members, for the 100th time introduced a proposal to begin selecting candidates to fill vacant positions.

The United States opposed the proposal, maintaining that it did not address its concerns over the WTO dispute settlement system and that members remain divided over the reforms required.

More than 20 members supported the proposal and called for restoring a fully functioning dispute settlement system. 

Some members also encouraged wider participation in the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), an alternative appeal mechanism under Article 25 of the Dispute Settlement Understanding.

The next regular meeting of the DSB is scheduled for October 27, 2026.

(KNN Bureau)