I. Introduction

For all small and medium sized trading nations, conducting trade according to multilaterally agreed concepts, principles and rules rather than resort to bilateral negotiating power is of paramount importance. For developing countries, one of the most important outcomes of the Uruguay Round is the substantial strengthening of the rules based multilateral trading system and its extension to new areas of activity. Existing disciplines have been tightened in a number of areas including those involving the use of subsidies, countervailing and anti-dumping duties and safeguard measures. This will have important implications for developing countries. For example, "grey area measures" such as voluntary export restraints will be eliminated and there will be tighter disciplines on the use of anti-dumping measures. Developing countries have frequently found themselves on the receiving end of such measures. Besides, the extension of the rules of the multilateral trading system to new areas will serve to further increase the importance of the rules-based system for developing countries. However, tightened disciplines covering a wider area of international commerce are only effective if there exists an efficient and equitable means to settle disputes in the event of a breach of obligations. The Uruguay Round will bring considerable improvements in the dispute settlement mechanism.

The General Agreement on Trade on Services (GATS) extends the rules based multilateral trading system to the wide area of services. Similar advantages should accrue to developing countries from the operation of a rules based system in services as has been the case for merchandise trade. While many developing countries are not presently well placed to take advantage of some of the improved market access opportunities which the Agreement will provide, they will be in a position to do so in the future as their domestic supply capacity increases. However, a number of areas of export interest to developing countries (for example the movement of natural persons) have already been committed to liberalization by major importing countries or are the subject of ongoing negotiations to improve market access. Further, the GATS is unique in that it permits Member countries, including developing countries, to negotiate the conditions under which foreign services suppliers may establish in their countries. These terms and conditions are bound in the schedules of the Members concerned. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) offers potential benefits for developing countries by creating a framework which is conducive to technology transfer and foreign direct investment. Its main disciplines include non-discrimination (i.e. most-favoured-nation and national treatment) and the equal application by all Members of minimum standards of protection in relation to all categories of intellectual property rights.

Evidence on the relationship between an outward orientation in government policies and growth points to the fact that if trade is to be a positive stimulus to achieving sustainable development in the coming decade, the conditions affecting supply in developing countries, including competitiveness at the domestic level, play a critical role. Consequently, many developing countries have undertaken autonomous trade liberalization as part of wider programmes of economic reform and chosen to bind in GATT their recent trade liberalization. In this respect, the Uruguay Round has proven particularly timely, as these countries have been able to participate fully in the Round and actively promote and consolidate their own economic reforms. Adoption by developing countries of binding commitments in the Uruguay Round is a manifestation of their contribution to operating a transparent, open and predictable trade regime. This represents an important change in the relationship for many developing countries with the multilateral trading system. As a result of the Uruguay Round, developing countries will in general assume the same disciplines as their developed country trading partners, but in some instances benefit from greater flexibility in their implementation. Under certain circumstances developing countries can, for example, use quantitative restrictions and export subsidies that are not available for their developed counterparts. Further, they have been required to bind fewer tariffs than the developed countries, open fewer service sectors and have a longer time-frame for the implementation of their TRIPS obligations.

In any multilateral trade negotiations - in particular those as complex as the Uruguay Round negotiations - not all countries can expect to achieve what they consider to be positive results in each area of interest to them. However, with broadbased and significant reductions in border restrictions, all countries benefit positively even if there are, on occasions, temporary negative side effects. While the results of the Uruguay Round offer benefits for all developing countries, various aspects have been identified as having potential negative implications. In the main body of this document, these concerns are addressed with a view to providing a balanced view of the outcome of the negotiations for developing countries.

The vast results of the Uruguay Round require an institution to facilitate the implementation, administration, operation and furthering of the objectives of the Agreement Establishing the World Trade Organization (WTO). Thus, a common institutional framework encompassing the GATT as modified by the Uruguay Round (i.e. the GATT 1994), alongside with all Agreements and Arrangements concluded under GATT auspices and other Agreements and Ministerial Decisions/Declarations resulting from the Uruguay Round is envisaged. This will serve as a vehicle to ensure a "single undertaking approach" to the results of the Uruguay Round: membership in the WTO will automatically entail accepting all the results of the Uruguay Round without exception.

One of the functions of the WTO will be to cooperate with the International Monetary Fund, the International Bank for Reconstruction and Development and its affiliated agencies. In this respect, a Ministerial Declaration emanating from the Uruguay Round on the contribution of the WTO to achieving greater coherence in global economic policy-making is important. It sets out concepts and proposals with respect to increasing the contribution of the WTO to achieving greater coherence in global economic policy-making. The Declaration recognizes the need for an adequate and timely flow of concessional and non-concessional financial and real investment resources to developing country Members, and for further efforts to address debt problems, to help ensure economic growth and development. There is also a recognition that trade liberalization forms an increasingly important component in the success of the adjustment programmes that many Members are undertaking, and that this often involves significant transitional social costs. The Director-General of the WTO is called upon to review, with his opposite numbers in the World Bank and the International Monetary Fund, the implications of the WTO's future responsibilities for its cooperation with the Bretton Woods institutions.

II. Principal Elements of the Uruguay Round Agreement

The World Trade Organization (WTO) is a single institutional framework encompassing the GATT and all the agreements and legal instruments negotiated in the Uruguay Round: the General Agreement on Tariffs and Trade or GATT 1994 and other agreements covering trade in goods; the General Agreement on Trade in Services or GATS; the Agreement on Trade-Related Aspects of Intellectual Property Protection or TRIPs; the Understanding on the Dispute Settlement (DSU); and the Trade Policy Review Mechanism (TPRM). In addition, there are a number of Ministerial Decisions and Declarations that supplement the agreements reached.

The WTO will be headed by a Ministerial Conference meeting at least once every two years. A General Council will be established to oversee the operation of the WTO between meetings of the Ministerial Conference, including acting as a Dispute Settlement Body and administering the Trade Policy Review Mechanism. The General Council will have three principal subsidiary bodies: the Council for Trade in Goods, the Council for Trade in Services and the Council for TRIPs; these bodies can, on their side, establish subsidiary bodies. The Ministerial Conference will establish a Committee on Trade and Development. Unless otherwise provided for, decisions will be taken by consensus, continuing the GATT practice.

While the WTO is not a successor organization to the GATT, contracting parties to the GATT 1947 will automatically become Members of the WTO if they assume the obligations provided for in the agreements on goods, services and intellectual property protection, and submit schedules of concessions covering trade in goods (including both market access and subsidy commitments in the case of agricultural products) and services. This ensures a "single undertaking" approach to the results of the Uruguay Round, since membership in the WTO will entail accepting all the results of the Round without exception.  The WTO will also provide a forum for future trade negotiations.

The special status of developing countries in the GATT will continue to receive recognition in the WTO. The preamble of the Agreement Establishing the WTO states that "there is a need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth of international trade commensurate with the needs of their economic development". In addition to retaining the provisions that concerned developing countries in GATT 1947, the new agreements generally contain provisions for developing countries and least-developed countries, often consisting of longer transition periods for the full implementation of some obligations and various exemptions from obligations, particularly for the latter group of countries. Also, in some instances, the exports of developing countries benefit from a better treatment with respect to measures taken by other WTO Members. Technical assistance is to be provided to developing countries to assist them in assuming their obligations and more effectively realizing the benefits of the multilateral trading system.

Least-developed countries are singled out in the Final Act as requiring special attention. This is reflected in the agreements through a number of provisions which provide the most favourable treatment for this group in terms of rights as well as lower levels of obligations. In addition, the Decision on Measures in Favour of Least-Developed Countries makes provision for measures of special assistance, including technical assistance "in the development, strengthening and diversification of their production and export bases including those of services, as well as in trade promotion, to enable them to maximize the benefits from liberalized access to markets". As part of its functions, the Committee on Trade and Development (a subsidiary body of the General Council) will periodically review the special provisions in favour of least-developed countries and report to the General Council of the WTO for appropriate action.

The Declaration on the Contribution of the WTO to Achieving Greater Coherence in Global Economic Policy-making identifies the need for strengthening the relationship between the activities of the WTO, the International Monetary Fund (IMF) and the World Bank (IBRD) as a way of ensuring greater coherence in global economic policy-making. It notes, amongst other things, that progress in the trade area is linked to greater exchange rate stability, to an adequate and timely flow of concessional and non-concessional financial and real investment resources to developing countries, and further efforts to address debt problems. It also recognizes that while difficulties whose origins lie outside the trade field cannot be redressed through measures taken in the trade field alone, there are nevertheless interlinkages between the different aspects of economic policy. The Declaration provides guidelines on how the cooperation between the three organizations could be developed; in particular, it calls on the Director-General of the WTO to review, with his opposite numbers of the IBRD and the IMF, the implications of WTO's future responsibilities for its cooperation with the Bretton Woods Institutions. The fact that such interlinkages and, further, that the relation between economic adjustment and social costs have been explicitly recognized within the WTO context has been considered of considerable importance by developing countries. As underlined during the Uruguay Round negotiations, Ministers expect that such greater coherence will result not only in reinforced surveillance of national policies, but also, inter alia - and according to the working relations that will be established between the three institutions - ensure that developing countries which join multilateral efforts to liberalize trade can count on support to overcome financial pressures arising during the adjustment process, and help in reducing a perceived lack of consistency, in certain instances, between trade policy recommendations made in the context of lending programmes to developing countries and GATT/WTO requirements.

A. Trade in Goods

The first part of this section describes the main elements of the agreements covering trade in goods, and the second section summarizes the main results of the market access negotiations. It pays particular attention to matters of concern to developing countries.

Rules

The cornerstone of the agreements covering trade in goods is the GATT 1994, which is an updated version of GATT 1947, supplemented by understandings interpreting various provisions. In addition, there are agreements covering practices of relevance to GATT rules (trade-related investment measures and "grey-area" measures), agreements directed to liberalizing trade in agriculture and in textile and clothing, and agreements governing the application of non-tariff (see Box 1). While agriculture and textiles and clothing are in principle covered by GATT rules, the rules have been less effective in the past than for other products. For agriculture, the principal outcome of the negotiations includes improved market access through the reduction of barriers and the increase in the scope of bindings, a progressive reduction in trade-distorting measures of domestic support, and the lowering of subsidies to promote export competition. This process will set the stage for market-opening negotiations in the future. In the case of textiles and clothing, the reduction of restraints and the phase out of the Multi-Fibre Arrangement over a period of ten years will mean that a key export sector for many developing countries will be fully within the disciplines of the multilateral trading systems.

Rules governing the application of non-tariff measures have been clarified and updated. Agreement was reached that existing "grey-area measures" (voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side) will be eliminated or phased out within four years. Of particular importance for developing countries is that the application of anti-dumping and countervailing measures has been clarified and strengthened in relation to determining whether a product is being dumped/subsidized, whether the dumped/subsidized imports are causing injury to a domestic industry, the procedures to be followed in initiating and conducting anti-dumping/countervailing investigations, and the implementation and duration of anti-dumping/countervailing measures. There is a new provision under which anti-dumping measures expire five years after the date of imposition, unless a determination is made that, in the event of termination of the measures, dumping and injury would be likely to continue or recur. Another new provision requires the immediate termination of an anti-dumping/countervailing investigation in cases where the authorities determine that the margin of dumping/subsidization is de minimis, or that the volume of dumped/subsidized imports is negligible. These provisions are more generous in the case of developing countries than for developed countries.

Market Access

Industrial products

For developed countries, the main features of their market access commitments in industrial products include (i) the expansion of bindings to cover 99 per cent of imports (Table 1); (ii) the expansion of duty-free access from 20 to 44 per cent of total imports; and (iii) the reduction of the trade-weighted average tariff by 40 per cent (i.e. from the pre-Uruguay Round level of 6.2 per cent to the post-Uruguay Round level of 3.7 per cent (Table 2). With respect to tariff reductions on individual product categories (Table 3), developed countries will (i) reduce tariffs by substantially above-average amounts (60 per cent or more) in three categories - wood, pulp, paper and furniture; metals; and non-electric machinery; and (ii) reduce tariffs by less than the 40 per cent overall reduction in four categories - fish and fish products; textiles and clothing; leather, rubber, footwear; and transport equipment.

In terms of exports from developing to developed country markets, above-average tariff reductions apply to product categories accounting for slightly less than one-half of total exports. The result is that the total reduction in the average tariff of developed countries is 37 per cent (Table 3). Labour-intensive manufactures (textiles and clothing, leather goods) and certain processed primary products (fish products) have been - and continue to be - regarded as "sensitive" and therefore have below average tariff reductions. In the case of textiles and clothing, however, it is important to also consider the market access opportunities provided by the phase-out of restraints applied under the Multi-Fibre Arrangement (MFA). For those products for which an MFA quota is the binding restraint, the tariff-equivalent of the quota may well exceed the ordinary tariff, with the result that the percentage reductions in import barriers calculated on the basis of ordinary tariffs will understate the true increase in market access resulting from the Uruguay Round.

On the basis of data available for 26 developing countries, the GATT Secretariat has identified the main features of their market access commitments. These include: (i) the expansion of bindings to cover 61 per cent of imports, compared to the pre-Uruguay Round level of 13 per cent (Table 1); and (ii) a reduction of ceiling rates for tariffs leading to a decline of 30 per cent in the trade-weighted average tariff of developing economies (Table 2). The increase in the security of trade among developing regions is reflected mainly in Latin America - where participants will bind 100 per cent of tariff lines at ceiling rates.

To summarize, the Uruguay Round will provide more secure and open markets for world trade in industrial products (see Box 2). The proportion of total trade that is subject to bound rates will increase from 68 to 87 per cent, mainly as a result of the substantial increase in the level of bindings in developing economies (Table 1). And markets will be more open as a result of the reductions in average tariffs of developed countries (down 40 per cent), developing economies (down 30 per cent), and transition economies (down 30 per cent), with a post-Uruguay Round average tariff of 6.3 per cent on imported industrial products (Table 2).

In assessing the new market access opportunities for developing countries which will result from the Uruguay Round, the observation has been made that market access possibilities may be reduced since the preferences to developing country exporters under the Generalized System of Preferences (GSP) and other arrangements providing tariff preferences will be reduced by the cuts in MFN tariffs.

In this respect, it is important to note that the objective of GSP preferences is not to divert trade from other exporters, but rather to provide the possibility for developing countries to compete on an equal footing with producers in developed importing markets. This objective is also effectively met through the negotiated reduction of tariffs in multilateral trade negotiations. While preference schemes frequently place a priori restrictions and criteria on the granting of preferences, this is not the case with negotiated reductions of tariffs. Further, in many instances, tariff preferences are temporary and non-contractual. In contrast, tariff commitments made in GATT are legally binding. Nevertheless, while broad based tariff liberalization as achieved in the Uruguay Round can promote exports and economic growth, there may well be real adjustment costs associated with the loss of preferences in some countries.

In addition, a stimulus to developing countries manufactured exports will follow from the substantial reduction in tariff escalation for many products in the major markets as a result of the Uruguay Round. This too will encourage increased diversification of production and exports and encourage the production of higher value-added items in the developing countries (see Table 4).

Agricultural products

Increased market access for agricultural products (see Box 3 for main elements of the Agreement on Agriculture) includes the "tariffication" of all non-tariff border measures (conversion to tariff-equivalents) - with the exception of those products for which special treatment has been negotiated - and a binding of all tariffs on agricultural products (Table 5). As a result, the security of trade in agricultural products will - for the first time in GATT's history - be greater than in industrial products, since 100 per cent of agricultural product tariff lines will be bound.

Tariffs resulting from the "tariffication" process, together with the other tariffs on agricultural products, are to be reduced by a simple average of 36 per cent over six years in the case of developed countries and 24 per cent over ten years in the case of developing countries, with minimum reductions per tariff line of 15 per cent and 10 per cent, respectively. The reductions in the tariffs of developed countries - which account for about two-thirds of world imports of agricultural products - indicate an average percentage reduction of 37 per cent. With respect to individual product categories, developed countries will (i) cut tariffs by above-average amounts on oilseeds, flowers and plants; and (ii) cut tariffs by below-average amounts on sugar and dairy products, with other product categories close to the average cut. In the categories of "tropical products", which account for one-half of exports of developing countries of agricultural products, a 43 per cent reduction in tariffs will be implemented by developed countries (Table 6).

Current access opportunities will be maintained on terms at least equivalent to those existing prior to the tariffication process. However, for those products where tariffication took place and imports were less than 5 per cent of domestic consumption because of the existing restrictions, minimum market access commitments, implemented through tariff quotas on an MFN basis at a low or minimal tariff rate, are required. Figures on the increased market access in terms of tonnage resulting from minimum access commitments indicate that substantial increases in market access occur for coarse grains (1,757,000 tons) and rice (1,076,000 tons), as well as for other products. With regard to commitments on export competition, the quantities of exports which can be legally subsidized must be reduced by 21 per cent. The importance of this commitment is illustrated by the fact that, on average, developed countries subsidized annually during 1986-90 48.2 million tons of wheat, 19.5 million tons of coarse grains, 1.8 million tons of sugar, 1.2 million tons of beef, etc. Furthermore, total export subsidy outlays will decline by 36 per cent, from $21.3 billion to $13.7 billion by the end of the transition period (Table 7). These reductions are of particular significance for heavily subsidized products on world food markets such as wheat, beef, coarse grains, dairy products and sugar. With regard to commitments on domestic support to agricultural producers, total outlays (in terms of the Aggregate Measurement of Support) will be reduced by 18 per cent, from $197 billion to $162 billion by the end of the transition period (Table 8).

The new market access opportunities for agricultural products - which will result from the Uruguay Round as a result of a change in border measures, and policies relating to export competition and domestic support - will be of particular interest to developing countries exporting temperate food products. More generally, multilateral disciplines on trade-distorting practices in agriculture are expected to stabilize world food markets in the coming decades, providing potential trade opportunities for developing countries and reducing fluctuations in food import bills. However, the potential situation in net food-importing developing countries is of particular concern. Potential problems relating to least-developed and net food-importing developing countries are the subject of the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries. The Decision recognizes that, as a result of agricultural reform, these countries may experience negative effects with respect to supplies of food imports on reasonable terms and conditions. The Decision sets out objectives with regard to the provision of food aid, the provision of basic foodstuffs in full grant form and aid for agricultural development. It also refers to the possibility of assistance from the International Monetary Fund and the World Bank with respect to the short-term financing of food imports. The Committee of Agriculture, established under the Agreement on Agriculture, will monitor the implementation of the Decision. However, developing countries which are net-importers of agricultural products, while benefiting in the short-term from the greater availability of food aid, are experiencing a decline in the profitability of domestic and foreign investments in their own agricultural sector. The consequences of this reduced investment has been resulting in diverting production resources to other less competitive sectors, in delaying the adoption of new technologies and, could in the longer term, impair capacity to pursue adequate policies for the production of food. In this sense, the long-term effect of the reform will certainly be positive for at least a number of net food-importing countries.

B. Trade in Services

The General Agreement on Trade in Services is the first multilateral agreement on trade that has as its objective the progressive liberalization of trade in services. It will provide for secure and more open markets in services in a similar manner as the GATT has done for trade in goods. The Agreement covers trade in all services sectors and the supply of services in all forms (i.e. modes of delivery), including consumption abroad of services, cross-border supply of services, provision of services through a commercial presence and the movement abroad of the person supplying the service.

The GATS has two components: the framework agreement containing 29 Articles and a number of Annexes, Ministerial Decisions etc., as well as the schedules of commitments undertaken by each Member government to bind the existing degree of openness or remove existing restrictions (see Box 4). Although the coverage of the GATS in terms of service sectors is universal, the liberalization commitments follow a positive list approach, whereby each participant in its schedule lists the conditions of market access and national treatment for foreign service suppliers in the sectors and modes of supply for which it has undertaken a commitment. Ninety-five schedules of specific commitments (the European Union has submitted a common schedule on behalf of its 12 Member States) contain the results of the market access negotiations for services. With respect to the level of market openness for a service activity provided by any commitment, it depends on the existing regulatory regime and whether limitations have been placed on market access and national treatment by the importing country. In fact, the majority of the schedules contain bindings of the existing level of access while others also contain liberalization commitments. With the binding of commitments, foreign service suppliers - and domestic customers of foreign service suppliers - are given an assurance that conditions of entry and operation in the market will not be changed to their disadvantage. The GATS explicitly provides for successive rounds of negotiation in the future with a view to achieving a progressively higher degree of liberalization.

It is not possible to provide quantitative measures of commitments to liberalize services trade in the same way as for goods (see Box 5 for a description of the contents of schedules). As there is no international nomenclature for traded-services that covers the different modes of supply, there is no comprehensive set of data that could provide reliable estimates of imports of particular services under the different modes of supply. Further, there is no equivalent of customs duties in services; limitations on foreign services and service suppliers, where they exist, typically take the form of regulations relating to the supply of services. The effect of such measures, or of their removal, cannot be easily assessed, if at all.

Of importance to developing countries is the fact that virtually all Members have made commitments on the movement of natural persons, even if these are frequently circumscribed by the requirement of intra-corporate transferee status. In addition, commitments made by developed countries generally cover the cross-border supply of labour-intensive services such as computer-related services, professional and construction services. Further, most developing countries have committed themselves to bind or liberalize tourism and travel services, including, for example, the liberalization of foreign investment restrictions for hotel and resort operators. These commitments are likely to improve the supply capacity of this key sector, which provides the major source of foreign exchange earnings in a number of island developing countries and least-developed countries. In addition, a number of developing countries have taken the opportunity the GATS provides to schedule commitments, thereby binding their own domestic reform process. Improvements in the quality of services that will result from liberalization and increased competition will contribute more generally to improved efficiency, consumer welfare and growth in developing countries as well as all other countries.

C. Trade-Related Intellectual Property Rights

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) establishes minimum standards of protection for each category of intellectual property rights (IPRs). These standards must be available in the national law of each WTO Member and provided on the basis of most-favoured-nation and national treatment (see Box 6). They incorporate and extend to all WTO Members the substantive obligations of the main WIPO conventions, the Berne and Paris Conventions on respectively copyright and industrial property, with the addition of other obligations on matters where it was thought these Conventions could be complemented. This involves, in particular, setting standards on categories of IPRs where they were lacking (e.g. patents), setting disciplines relating to the enforcement of IPRs, and providing an effective dispute settlement mechanism. A key feature of the Agreement is that Members are required to provide within their national laws effective procedures and remedies for the enforcement of rights to the holders of those rights, mainly private enterprises. It is, however, recognized that Members are not obliged to create special judicial system for the enforcement of IPRs.

Once the WTO is operational, the number of countries providing intellectual property protection will increase over time. Developed countries have one year to meet their obligations, developing countries have five years and least-developed countries have eleven years, with the possibility of an extension. Special transitional arrangements apply in the situation where a developing country does not presently provide patent protection in a particular area of technology, such as pharmaceuticals or agricultural chemicals.

In fact, adherence to the Paris and Berne Conventions is fairly widespread among developing countries. Many developing countries already provide minimum standards of intellectual property protection on a national treatment basis, although the scope of such protection varies significantly. Potential benefits for developing countries emerging from the Uruguay Round include a framework more conducive to domestic research efforts and to technology transfer and foreign direct investment. There will, however, be additional administrative burdens of enforcing such rights (specifically dealt with under the TRIPS Agreement), potentially higher royalty payments and adjustment costs for industries which, in the absence of domestic legislation in the area, were producing goods that would be considered as counterfeit in the future. There will also be requirements relating to patents which may well mean an increase in prices of certain goods in some developing countries. Pharmaceutical and agricultural products present examples. These increases are expected to be small, and there are provisions in the Agreement itself to minimize any adverse implications for developing countries.

D. Dispute Settlement

The improvements in existing rules and their extension to areas where they were absent would be worth little if there were not a sufficiently strong dispute settlement system to enforce those obligations. For this reason, the GATT dispute settlement system has long been considered a cornerstone of the multilateral trading system. It has provided countries with the opportunity to challenge actions taken by trading partners and obtain rulings from independent panels of experts on the GATT-consistency of such measures. Upon their adoption by the GATT Council, such rulings have represented an authoritative basis on which to seek the removal of a GATT inconsistent measure.

The Uruguay Round Dispute Settlement Understanding (DSU) incorporates major improvements in relation to GATT dispute settlement procedures. The first and perhaps most significant change is the elimination of the need for consensus at the procedural steps leading up to, and including, adoption of panel rulings. Instead, a negative consensus approach will apply: a consensus will be needed in order to halt the proceedings from advancing at any stage of the formal dispute settlement procedures. This change will greatly enhance the confidence of all trading nations, large or small, in the multilateral trading system since the potential for procedural blockage will be removed. However, in order to ensure that this automaticity comes with a greater confidence in the results of the dispute settlement system, a new element is the independent review by an appellate body before a panel's recommendations become legally binding. Another change is the introduction of more precise and shorter time-limits for each stage of the procedures. One of the central provisions of the DSU reaffirms that Members shall not unilaterally make determinations of violations or suspend concessions, but shall make use of the multilateral dispute settlement rules and procedures of the DSU.

From the perspective of developing countries, it should be noted that the elements of the 1966 Decision on Dispute Settlement will continue to apply under the WTO dispute settlement procedures. Although this Decision has seldom been used, mainly because developing countries have only recently become more frequent users of the GATT dispute settlement procedures, it contains features of specific interest to developing countries, including automatic access to the "good offices" of the Director-General of the GATT/WTO to mediate and seek to find a satisfactory resolution to the dispute, and shorter time-limits in which panels must complete their deliberations.

Another major change - not in the procedures but in the functioning of dispute settlement within the system as a whole - is the integration of all the dispute settlement procedures established under the individual agreements (goods, services, TRIPS) into a single system operating under a Dispute Settlement Body. This integration of enforcement across the agreements is the mirror image of the integration of rights and obligations implied by the single undertaking of WTO Members. This change will help ensure that issues which arise in the enforcement of obligations in one area (e.g. anti-dumping) are dealt with by the WTO Members at the highest political level.

E. Monitoring of Trade Policies

The Trade Policies Review Mechanism (TPRM) has been given permanent status in the WTO, extending the mandate provisionally granted in 1989 following the Mid-Term Review of the negotiations held in Montreal. The objectives of the TPRM are to contribute to improved adherence by all Members to rules, disciplines and commitments made under the Multilateral Trade Agreements and, where applicable, the Plurilateral Trade Agreements, and hence to the smoother functioning of the multilateral trading system, by achieving greater transparency in, and understanding of, the trade policies and practices of Members. The mechanism enables the regular collective appreciation and evaluation of the full range of individual Members' trade policies and practices and their impact on the functioning of the multilateral trading system. It is not, however, intended to serve as a basis for the enforcement of specific obligations under the Agreements or for dispute settlement procedures, or to impose new policy commitments on Members. Reviews take place against the background of wider economic and developmental needs, policies and objectives of individual Members, as well as the external trading environment.

The TPRM provides for a Trade Policies Review Body (TPRB) to examine regularly the trade policies and practices of WTO Members, every two years for the four major traders (the European Union, the United States, Japan and Canada), every four years for the next sixteen leading traders (a group which currently includes nine developing countries), and every six years for the remaining traders, although longer intervals may be prescribed for least-developed countries. The basis for the examination is a report prepared by the Secretariat and a policy statement by the country under review. The TPRB will also carry out an annual overview of developments in the international trading environment which are having an impact on the multilateral trading system, assisted by an annual report by the Director-General setting out major activities of the WTO and highlighting significant policy issues affecting the trading system.

Since the TPRM has been in place for over five years and has become a well-established feature of the GATT system, it is already possible to draw some conclusions regarding its contribution to a more open and stable trading system. The first is the valuable stimulus of the TPR process to the internal discussion of trade policies in countries under review. Conducting a review, compiling a government report and responding to questions raised by the Secretariat in the preparation of its report, means that the national administration has to carefully examine the overall structure and impact of its own trade policies. For developing countries, this experience has been particularly valuable in assessing -and possibly fine-tuning or providing additional motivation for - domestic reform programs, and enhancing the inter-agency cooperation on the broader range of issues covered by the Uruguay Round (agriculture, services, intellectual property protection, etc.). For trading partners, the TPR process provides an opportunity to examine trade policies and practices in detail, with a view to communicating major areas of concern, and assessing, over time, whether these concerns are being satisfactorily resolved.

Together, these elements of the TPR process have helped countries assess their trade and economic reforms, and may have contributed to some portion of the liberalization that has taken place under the Uruguay Round. In the future, the TPR process will help WTO Members evaluate their implementation of the Agreements, as well as provide an early warning of trends of potential concern to all participants in the trading system.

Table 1

Pre- and post-Uruguay Round scope of bindings for

industrial products

(Number of lines, billions of US dollars and percentages)

Source: GATT Secretariat.

Table 2

Average tariff reductions on industrial products¹

(Billion US dollars and percentages)

¹Excluding petroleum.

²Imports of the 44 IDB participants from all origins (excluding intra-EU trade).

³Covers tariff lines whose tariffs were reduced (excludes ceiling bindings).

Source: GATT Secretariat.

Table 3

Tariff reductions of developed countries on industrial products by category

(Billion US dollars and percentages)

¹Excluding petroleum products.

Source: GATT Secretariat.

Table 4

Changes in tariff escalation on products imported by

Canada, European Union, Japan and United States from developing economies

(Absolute reduction on tariffs at each stage of processing)

Source: GATT Secretariat.

Table 5

Pre- and post-Uruguay Round scope of bindings for agricultural products

(Number of lines, billions of US dollars and percentages)

Source: GATT Secretariat.

Table 6

Developed economy imports and tariff reductions on agricultural products

(Millions of US dollars and percentages)

Source: GATT Secretariat.

Table 7

Export subsidy reduction commitments by country

(Millions of U.S. dollars)

Notes: 1. Commitments converted to U.S. dollars using 1990-91 average exchange rates. Reduction commitments apply to individual product categories as defined in this table.

2. Countries having submitted schedules which do not maintain export subsidies include: Algeria, Antigua and Barbuda, Argentina, Bahrain, Barbados, Belize, Bolivia, Brunei Darussalam, Cameroon, Chile, Congo, Costa Rica, Côte d'Ivoire, Cuba, Dominica, Domincan Rep., Egypt, El Salvador, Fiji, Gabon, Grenada, Gambia, Ghana, Guatemala, Guyana, Honduras, Hong Kong, India, Jamaica, Japan, Kenya, Korea, Kuwait, Macau, Malaysia, Malta, Mauritius, Morocco, Namibia, Nicaragua, Nigeria, Pakistan, Paraguay, Peru, Philippines, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Senegal, Singapore, Sri Lanka, Suriname, Swaziland, Thailand, Trinidad and Tobago, Tunisia, Zambia and Zimbabwe. Least-developed countries are exempt from export subsidy reduction commitments.

Source: GATT Secretariat.

Table 8

Reductions in domestic support to agricultural producers

(Millions of U.S. dollars)

Source: GATT Secretariat.

Table 9

Commitments on service activities of developed, developing and transition economies,

and by region

(Number of bindings on service activities and percentages)

Source: GATT Secretariat.

Table 10

Commitments on service activities by sub-sector

(Number of countries)

Notes:

1.  Based on a classification of services according to Document MTN.GNS/W/120.

2.  Based on 95 schedules of commitments (the European Union has submitted a common schedule on behalf of the member states). Of the total 106 countries, 25 are developed countries, 77 are developing countries and 4 are transition economies.

Source: GATT Secretariat.