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WTO ANALYTICAL INDEX: TRADE POLICY REVIEW Trade Policy Review Mechanism |
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> Paragraph A |
Members hereby agree as follows: (i) The purpose of the Trade Policy Review Mechanism ("TPRM") is 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. Accordingly, the review 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.
(ii) The assessment carried out under the review mechanism takes place, to the extent relevant, against the background of the wider economic and developmental needs, policies and objectives of the Member concerned, as well as of its external environment. However, the function of the review mechanism is to examine the impact of a Member's trade policies and practices on the multilateral trading system. 1. With respect to the mission of the TPRM, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB reaffirmed the relevance of TPRM's mission as defined in Annex 3. The TPRM had been conceived as a policy exercise and it was therefore not intended to serve as a basis for the enforcement of specific WTO obligations or for dispute settlement procedures, or to impose new policy commitments on Members. The Mechanism should continue to focus on 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 contribute to the smoother functioning of the multilateral trading system, by achieving greater transparency in, and understanding of, the trade policies and practices of Members. Accordingly, 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. Reviews under the Mechanism should continue to take place, to the extent relevant, against the background of the wider economic and development needs, policies and objectives of the Members concerned, as well as of their external environment. Greater attention should be given to transparency in government decision-making on trade policy matters, in line with Paragraph B of Annex 3."(1) 2. With respect to GATT practice on this subject-matter see GATT Analytical Index, pages 305-308.
II. Paragraph B back to top Members recognize the inherent value of domestic transparency of government decision-making on trade policy matters for both Members' economies and the multilateral trading system, and agree to encourage and promote greater transparency within their own systems, acknowledging that the implementation of domestic transparency must be on a voluntary basis and take account of each Member's legal and political systems. 3. The TPRB, in its Report to the Third Ministerial Conference, found: "The Mechanism had demonstrated that it had a valuable public-good aspect, particularly in its contribution to transparency. The Mechanism had also been a catalyst for Members to reconsider their policies, had served as an input into policy formulation and had helped identify technical assistance needs."(2) 4. The TPRB then concluded in the Report that "[g]reater attention should be given to transparency in government decision-making on trade policy matters, in line with Paragraph B of Annex 3."(3)
III. Paragraph C back to top (i) The Trade Policy Review Body (referred to herein as the "TPRB") is hereby established to carry out trade policy reviews.
(ii) The trade policies and practices of all Members shall be subject to periodic review. The impact of individual Members on the functioning of the multilateral trading system, defined in terms of their share of world trade in a recent representative period, will be the determining factor in deciding on the frequency of reviews. The first four trading entities so identified (counting the European Communities as one) shall be subject to review every two years. The next 16 shall be reviewed every four years. Other Members shall be reviewed every six years, except that a longer period may be fixed for least-developed country Members. It is understood that the review of entities having a common external policy covering more than one Member shall cover all components of policy affecting trade including relevant policies and practices of the individual Members. Exceptionally, in the event of changes in a Member's trade policies or practices that may have a significant impact on its trading partners, the Member concerned may be requested by the TPRB, after consultation, to bring forward its next review.
(iii) Discussions in the meetings of the TPRB shall be governed by the objectives set forth in paragraph A. The focus of these discussions shall be on the Member's trade policies and practices, which are the subject of the assessment under the review mechanism.
(iv) The TPRB shall establish a basic plan for the conduct of the reviews. It may also discuss and take note of update reports from Members. The TPRB shall establish a programme of reviews for each year in consultation with the Members directly concerned. In consultation with the Member or Members under review, the Chairman may choose discussants who, acting in their personal capacity, shall introduce the discussions in the TPRB.
(v) The TPRB shall base its work on the following documentation:
(a) a full report, referred to in paragraph D, supplied by the Member or Members under review;
(b) a report, to be drawn up by the Secretariat on its own responsibility, based on the information available to it and that provided by the Member or Members concerned. The Secretariat should seek clarification from the Member or Members concerned of their trade policies and practices.
(vi) The reports by the Member under review and by the Secretariat, together with the minutes of the respective meeting of the TPRB, shall be published promptly after the review.
(vii) These documents will be forwarded to the Ministerial Conference, which shall take note of them. (a) Establishment of Trade Policy Review Body 5. With respect to the composition of the TPRB, see the Chapter on the WTO Agreement, paragraph 150. 6. At its meeting of 6 June 1995, pursuant to Article IV:4 of the WTO Agreement, the TPRB adopted the rules of procedure for its meetings(4), where the TPRB follows, mutatis mutandis, the rules of procedure for the General Council(5), with certain exceptions. 7. The procedural improvements proposed by the TPRB to the TPRM and the discussion of these proposals can be found in two Notes by the Chairperson.(6) 8. As of 31December 2002, the TPRB has conducted 165 reviews since its establishment in 1989.(7) The reviews have covered 89 Members, counting the European Union as one Member.(8) In its annual report for 2002, the TPRB stated: "By the end of 2002, the TPRM will have conducted 165 reviews since its formation. ...The reviews have covered 89 of 130 Members, counting the European Union as one, representing around 85% of the share of world trade in 2001. The trade policies and practices of five Members were reviewed for the first time in 2002.(9) The increased importance given to the reviews of least-developed countries (LDCs) has led to 14 such reviews since 1998.(10)"(11) 9. The TPRB issues annual reports covering its annual assessment of the TPRM and the extent to which it fulfils its objectives as set out in the WTO Agreement.(12) (a) Timing and frequency of review 10. Paragraph 2 of the rules of procedure for TPRB meetings provides as follows: "The cycle of reviews provided for in Paragraph C (ii) of the Agreement on the Trade Policy Review Mechanism (TPRM) shall be applied with a general flexibility of up to six months, if and as may be necessary. Schedules of subsequent reviews shall be established counting from the date of the previous review meeting. Members should adhere strictly to the timetables for the preparation of reviews, once agreed."(13) 11. The TPRB, in its Report to the Third Ministerial Conference, observed: "The TPRB considered that the current frequency of reviews provided a balance amongst numerous competing considerations, including TPRM objectives, particularly the smoother functioning of the multilateral trading system, the need to maintain a realistic workload, and the benefits of reviewing all Members soon."(14) 12. Also in the Report, the TPRB concluded that "[a]ll Members, including LDCs, should be reviewed at least once as soon as possible."(15) (b) "the review of entities having a common external policy" 13. With respect to the reviews of regional entities and "grouped" reviews, the Note by the Chairperson dated 13 December 1995 states: "I believe it should be stressed that individual reviews must remain the basis of the TPRM. There is room for consideration of grouping of reviews, where possible; however, at this stage there is no support for reviews of regional entities other than the EU."(16) 14. Also, the Note by the Chairperson submitted to the TPRB meeting of 11-12 June 1996 states: "There is caution about the idea of 'grouping' countries for review, since criteria for such groupings would be difficult to develop and the benefits are not self-evident. However, where smaller member States might themselves volunteer to be reviewed as a group, such requests would be sympathetically considered."(17) 15. Further, the TPRB, in its Report to the Third Ministerial Conference, stated: "Efforts to maximize efficiency might include: (i) a more considered use of grouped reviews ...."(18) 16. The TPRB has conducted reviews of the European Communities and its members. Also, the TPRB has conducted to date the group review of the WTO Members of (i) the South African Customs Union ("SACU")(19) and (ii) the Organisation of Eastern Caribbean States ("OECS").(20) 17. On TPRB meetings, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB judged two half-days as an appropriate time-span for a TPRB review, and a day-in-between as desirable. More interactive discussion was encouraged, as was greater participation in reviews of smaller Members, if possible at a rank reflecting the high-level representation often sent by Members under review. Reviews could highlight changes since the previous review."(21) 18. On the issue of documentation, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB felt it essential to meet the agreed four weeks lead time for document distribution in all WTO official languages, as active participation in reviews depended on the timely availability of documents. The TPRB favoured flexibility on the lead time to submit written questions, as well as on the role and number of discussants. Current practice concerning minutes of meetings was seen as appropriate, as was the inclusion of written questions and answers in minutes. Members were encouraged to provide written answers whenever possible during the TPRB meetings. Questions left unanswered during the review should be answered in writing, with responses made available to the Membership; on this there should be a regular follow-up by the WTO Secretariat."(22) 19. With respect to reports by Members, see paragraphs 22-27 below. 20. On the Secretariat reports, the TPRB, in its Report to the Third Ministerial Conference, stated: "The Secretariat should retain its capacity to prepare autonomous, in-depth reports that allowed the TPRB to arrive at an independent, fully informed evaluation of a Member's trade policies and practices. The present structure and coverage of Secretariat reports was generally satisfactory; care should continue to be taken that the reports achieve an appropriate balance between the traditional and relatively new areas of the WTO. Reports should be WTO-relevant, comprehensive and self-contained. The TPRB saw scope for making the Summary Observations of the Secretariat report more readable and for presenting in relevant parts of the report subsequent developments on issues raised at the previous review."(23) 21. On the dissemination of reviews, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB considered present dissemination practices as satisfactory. Members noted the value of building awareness within the wider public of the work of the TPRB. Taking existing publication arrangements and budgetary implications into account, the fullest possible dissemination of reviews was encouraged, particularly through the Internet."(24)
IV. Paragraph D back to top In order to achieve the fullest possible degree of transparency, each Member shall report regularly to the TPRB. Full reports shall describe the trade policies and practices pursued by the Member or Members concerned, based on an agreed format to be decided upon by the TPRB. This format shall initially be based on the Outline Format for Country Reports established by the Decision of 19 July 1989 (BISD 36S/406-409), amended as necessary to extend the coverage of reports to all aspects of trade policies covered by the Multilateral Trade Agreements in Annex 1 and, where applicable, the Plurilateral Trade Agreements. This format may be revised by the TPRB in the light of experience. Between reviews, Members shall provide brief reports when there are any significant changes in their trade policies; an annual update of statistical information will be provided according to the agreed format. Particular account shall be taken of difficulties presented to least-developed country Members in compiling their reports. The Secretariat shall make available technical assistance on request to developing country Members, and in particular to the least-developed country Members. Information contained in reports should to the greatest extent possible be coordinated with notifications made under provisions of the Multilateral Trade Agreements and, where applicable, the Plurilateral Trade Agreements. 22. With respect to the Decision of 19 July 1989(25), see GATT Analytical Index, page 307. 23. On this topic, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB saw the Secretariat and Government reports as complementary. Governments were free to define the structure and coverage of their own reports, but were encouraged to keep them short, WTO-relevant and forward-looking, highlighting recent trade policy development and future policy directions and their impact on trade."(26) 24. Further, a decision of the CONTRACTING PARTIES to GATT 1947 adopted at the Council meeting of 10 May 1994, states: "[I]n order to avoid duplication of the material contained in the Secretariat report, and to lighten the burden of delegations, Government reports shall be in the form of policy statements."(27) 25. The rules of procedure for the TPRB meetings state: "Documentation relating to each review meeting shall be circulated in all working languages not less than four weeks in advance of the relevant meetings."(28) 26. Also, the TPRB, in its Report to the Third Ministerial Conference, stated: "The TPRB felt it essential to meet the agreed four weeks lead time for document distribution in all WTO official languages, as active participation in reviews depended on the timely availability of documents. The TPRB favoured flexibility on the lead time to submit written questions, as well as on the role and number of discussants."(29) 27. In practice, Members are accordingly requested to submit their government reports to the WTO at least eight weeks before the TPRB meeting for their review.(30)
V. Paragraph E back to top E. Relationship with the balance-of-payments provisions of GATT 1994 and GATS Members recognize the need to minimize the burden for governments also subject to full consultations under the balance-of-payments provisions of GATT 1994 or GATS. To this end, the Chairman of the TPRB shall, in consultation with the Member or Members concerned, and with the Chairman of the Committee on Balance-of-Payments Restrictions, devise administrative arrangements that harmonize the normal rhythm of the trade policy reviews with the timetable for balance-of-payments consultations but do not postpone the trade policy review by more than 12 months. No jurisprudence or decision of a competent WTO body.
VI. Paragraph F back to top The TPRB shall undertake an appraisal of the operation of the TPRM not more than five years after the entry into force of the Agreement Establishing the WTO. The results of the appraisal will be presented to the Ministerial Conference. It may subsequently undertake appraisals of the TPRM at intervals to be determined by it or as requested by the Ministerial Conference. 28. At its meeting of 27 January 1999, the TPRB agreed on a procedure to appraise the operation of the TPRM.(31) On 5 October 1999, the TPRB adopted a report to the Third Ministerial Conference concerning the results of its first appraisal.(32) With respect to the contents of this report, see paragraphs 1, 3, 4, 11, 12, 15, 17, 18, 20, 21, 26 and 29 in this Chapter. 29. With respect to a further appraisal of the operation of the TPRM, the TPRB's report to the Third Ministerial Conference states: "The TPRB should undertake a further appraisal of the operation of the TPRM not more than five years after the conclusion of the Third WTO Ministerial or as requested by a Ministerial Conference."(33)
VII. Paragraph G back to top G. Overview of Developments in the International Trading Environment An annual overview of developments in the international trading environment which are having an impact on the multilateral trading system shall also be undertaken by the TPRB. The overview is to be 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. 30. Annual reports by the Director-General are submitted to the TPRB in accordance with Paragraph G.(34)
Footnotes: 1. WT/MIN(99)/2, para.
3. See para. 28 of this Chapter. back to text |
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