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WTO ANALYTICAL INDEX: TRADE POLICY REVIEW

Trade Policy Review Mechanism

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> Paragraph A
> Paragraph B
> Paragraph C
> Paragraph D
> Paragraph E
> Paragraph F
> Paragraph G

 

> Analytical Index main page


I. Paragraph A     back to top

A. Text of Paragraph A

Members hereby agree as follows:

A. Objectives

(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.

 
B. Interpretation and Application of Paragraph A

1. Mission of TPRM

1.     The TPRB’s report on its third appraisal of the operation of the TPRM remarked as follows:

“The TPRM is linked to WTO disciplines, transparency, understanding and a collective appreciation by the WTO Membership as a whole of individual Members’ trade policies and their impact on the trading system. The TPRB reaffirmed the relevance of TPRM’s mission as defined in Annex 3 of the Marrakesh Agreement.”(1)

2. Reference to GATT Practice

2.     The WTO Trade Policy Review Mechanism (TPRM) continues and expands the GATT 1947’s TPRM, which was established on 12 April 1989 on a provisional basis by a GATT Council Decision adopted as one of the “early harvest” decisions of the Uruguay Round.(2) The 1989 Decision established the TPRM “to contribute to improved adherence by all contracting parties to GATT rules, disciplines and commitments … by achieving greater transparency in, and understanding of, the trade policies and practices of contracting parties”.

3.     The WTO TPRM, like the GATT 1947 TPRM, “enables the regular periodic appreciation and evaluation of individual Members’ trade policies and their impact on the functioning of the multilateral trading system”, but “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.”(3)

4.     The WTO Agreement incorporated the April 1989 Decision and expanded trade policy reviews to cover services trade and intellectual property rights. On 10 May 1994, just after the conclusion of the Uruguay Round, the GATT 1947 Council agreed to continue the TPRM until the WTO’s TPRM entered into force.

3. “not … intended to serve as a basis … for dispute settlement procedures”

5.     In Canada — Aircraft, Brazil referred to material from a Trade Policy Review, and Canada argued against reliance on this material. Brazil argued that assistance to the regional aircraft industry conferred a “benefit”, relying on a statement in the Secretariat report in the 1998 Trade Policy Review of Canada that the programme in question “provides export guarantees for projects considered too risky by private financial institutions”. The Panel noted that according to TPRM section A(i), the TPRM “is not, however, intended to serve as a basis for the enforcement of specific obligations under the Agreements or for dispute settlement procedures ….” The Panel then stated that it would “attach no importance” to this Trade Policy Review in relation to this issue, and it then found that Brazil had “failed to adduce any evidence” of assistance to the Canadian regional aircraft sector by the programme in question, and therefore that there was “no basis for a prima facie case” that such assistance had been provided as export subsidies prohibited by the SCM Agreement.(4) The Panel noted separately that none of its findings were based on the Trade Policy Review material.(5)

6.     In Chile — Price Band System, Argentina argued that a Secretariat Report in a Trade Policy Review of Chile had stated that Chile’s price band mechanism “works as a variable levy”, arguing that the document “represents a respectable technical opinion”.(6) The Panel found that a Secretariat TPRM Report “should not be taken into account in the context of dispute settlement proceedings”, and decided to disregard the information contained in the TPRM report referred to by Argentina.(7)

 

II. Paragraph B     back to top

A. Text of Paragraph B

B. Domestic transparency

         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.

 
B. Interpretation and Application of Paragraph B

7.     The TPRB Report on its 1999 appraisal of the TPRM concluded 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.”(8)

 

III. Paragraph C     back to top

A. Text of Paragraph C

C. Procedures for review

(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.

 
B. Interpretation and Application of Paragraph C

1. Subparagraph (i)

(a) Establishment of Trade Policy Review Body

8.     The TPRB is formally established by paragraph C(i) of the TPRM, but its composition and rules of procedure are based on Article IV:4 of the WTO Agreement, which provides that “[t]he General Council shall convene as appropriate to discharge the responsibilities of the Trade Policy Review Body provided for in the TPRM. The Trade Policy Review Body may have its own chairman and shall establish such rules of procedure as it deems necessary for the fulfilment of those responsibilities.”

(b) Rules of procedure

9.     At its meeting of 6 June 1995, the TPRB adopted rules of procedure for its meetings(9), which provide that the TPRB follows, mutatis mutandis, the General Council’s rules of procedure,(10) with adaptations regarding the timing of meetings, advance notice for agendas, and conduct of reviews. The rules provide that there is no requirement for a quorum to conduct reviews. TPRB rules provide that TPR reports by governments and the Secretariat are immediately derestricted after the relevant press embargo, and the Member under review may request derestriction at an earlier date; the minutes of TPRB meetings are issued as unrestricted documents.

10.     The TPRB revised its rules of procedure in 2005 and 2008 as a result of its second and third appraisals of the TPRM, to adjust the procedures for conducting reviews.(11)

(c) Overview of activities

(i) Reviews

11.     As of 30 September 2011, the TPRB have conducted 334 reviews since its formation in 1989, at 250 review meetings. The reviews have covered 140 of 153 Members, representing some 89% of world trade and 97% of the trade of Members.(12) Of the 32 least developed Members of the WTO, 28 have been reviewed by the end of 2010.(13)

(ii) Reporting

12.     The TPRB issues annual reports assessing the TPRM and trade policy reviews conducted during the year.(14)

2. Subparagraph (ii)

(a) Timing and frequency of review

13.     Paragraph 3 of the TPRB rules of procedure, as amended, 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.”(15)

14.     In 1999, in its report on its first appraisal of the TPRM, the TPRB observed 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.”(16) In its 2005 report on its second appraisal of the TPRM, the TPRB concluded that “[t]he WTO Secretariat should continue to give priority to reviewing all Members at least once as soon as possible”.(17)

(b) “the review of entities having a common external policy”

15.     A Note by the Chairperson dated 13 December 1995 stated that “individual reviews must remain the basis of the TPRM … at this stage there is no support for reviews of regional entities other than the EU.”(18) However, the 1999 TPRB report on the first appraisal of the TPRM suggested that “Efforts to maximize efficiency might include: (i) a more considered use of grouped reviews ….”(19) In addition, the 2005 report on the second appraisal of the TPRM welcomed “the use of grouped reviews as an instrument to make a more efficient use of resources and generate greater interest in the reviews of smaller Members” and encouraged “the identification of further opportunities for reviews of geographically or economically close trading partners, while taking due account of their rights and obligations as individual WTO Members.”(20)

16.     Since 1995, the TPRB has conducted reviews of the European Union and its members. In addition, the TPRB has conducted group reviews of the WTO Members of (i) the South African Customs Union (“SACU”)(21), (ii) the Organisation of Eastern Caribbean States (“OECS”)(22), and (iii) the East African Community.(23) The TPRB has also conducted grouped reviews of Switzerland and Liechtenstein(24); Cameroon and Gabon(25); Benin, Burkina Faso and Mali(26); Niger and Senegal(27); and Guinea and Mauritania.(28)

(c) Reviews of least-developed countries

17.     The TPRB’s 2010 annual report notes:

“Trade Policy Reviews of LDCs have increasingly performed a technical assistance function along with increasing understanding of the trade policy structure in place and its relationship with the WTO Agreements. The reviews have helped to enhance understanding in these countries of the WTO Agreements, enabling better compliance and integration in the multilateral trading system; in some cases, better interaction between government agencies has been facilitated by the reviews. The reports’ wide coverage of Members’ policies also enables Members to identify any shortcomings in policy, and specific areas where further technical assistance may be required. The Secretariat Report includes a section on technical assistance and aid-for-trade needs and priorities, as identified in cooperation with the Member concerned, prepared in close collaboration with staff of the secretariat of the Enhanced Integrated Framework as well as the WTO’s Development Division and Institute for Training and Technical Cooperation.

 

“When requested by the Member concerned, the Secretariat organizes ex-post seminars to discuss the outcome of the trade policy review process with domestic stakeholders.”(29)

3. Subparagraphs (iii)–(v)

(a) TPRB Rules of Procedure

18.     The TPRB Rules of Procedure set out rules for conducting reviews, including:

“8. The TPRB shall adopt a programme of reviews for each year, as referred to in section C(iv) of the Agreement on the TPRM… by the middle of the previous calendar year.

 

10. A TPRB review shall normally take place in two sessions (each typically half a day) with a day in between.

 

11. Documentation relating to each review meeting shall be circulated in all working languages not less than five weeks in advance of the relevant meetings… .”

 

12. Members should submit written questions to the Member under review at least two weeks before the review meeting, to allow time to prepare replies.

 

13. The Secretariat should identify the main points contained in the questions submitted at least two weeks before a review meeting, post them on the Members’ Website one week before the meeting, and distribute a revised list of main points during the first session of a review when questions received after the two-weeks deadline give rise to significantly new issues.

 

14. Initial remarks by Members under review … should provide an overview of policies … Statements from the floor should not exceed seven minutes.

 

15. Replies by the Member under review, which should be comprehensive, should be structured according to the main themes identified in consultation with the Chairperson, discussants and Secretariat; the themes should be distributed to Members in advance of the second session of a TPRB review. … Questions left unanswered at the end of the second session should be answered in writing no later than one month after the meeting with some latitude in the Chair’s discretion for Members reviewing a very large number of questions.”(30)

(b) Reports by the Member or Members under review

19.     See paragraphs 2729 below.

(c) Reports by the Secretariat

20.     The TPRB’s Rules of Procedure prescribe that “Secretariat reports should focus principally on the trade policies and practices of the Member under review, seen, to the extent necessary, in the context of overall macro-economic and structural policies.”(31) On this subject, the TPRB’s 2008 report on its third appraisal of the TPRM stated:

“Secretariat reports should remain closely focused on the trade policies and practices of the Member under review, considered against the background of its wider economic environment. The Secretariat should also continue to prepare comprehensive and focused reports that through objective, analytical presentations assist the TPRB to arrive at a collective, fully informed evaluation of a Member’s trade policies.

 

The TPRB saw scope for Secretariat reports to highlight more explicitly the significant changes made by the Member under review to the trade policies and practices discussed in its previous reviews.”(32)

(d) Derestriction of reports

21.     The TPRB’s Rules of Procedure provide: “Reports by the Member under review and by the Secretariat shall be derestricted immediately on the expiry of the relevant press embargo; a Member under review may request the Chair to de-restrict the two reports at an earlier date.”(33)

4. Subparagraph (vi)

22.     On the dissemination of reviews, the TPRB’s report on its second appraisal of the TPRM stated:

“The TPRB considered present dissemination practices as satisfactory but noted the value of building greater awareness within the wider public of TPRM work. The Secretariat was thus encouraged to publish the respective documentation in all WTO official languages within three months after the review meeting. Written questions and answers should be included in the final publication provided this does not create delays in the publication of documents. The published documentation, including that available through the WTO website, should reflect any revisions made after the distribution of the meeting documents.”(34)

 

IV. Paragraph D     back to top

A. Text of Paragraph D

D. Reporting

         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.

 
B. Interpretation and Application of Paragraph D

1. Reports by the Member(s) under Review

(a) Format

23.     With respect to the Decision of 19 July 1989,(35) see GATT Analytical Index, page 307.

24.     The TPRB’s Rules of Procedure as amended provide that “Reports by Members under review shall be in the form of policy statements, whose form and length is essentially to be determined by the Member under review.”(36) The TPRB’s 2008 report on its third appraisal of the TPRM stated that “The TPRB thought that Members should remain free to define the structure and coverage of their own reports in accordance with Annex 3 of the Marrakesh Agreement, and Chapter VI of the Rules of Procedure for Meetings of the TPRB.”

(b) Timing

25.     See above regarding deadlines for circulation of documentation relating to review meetings. In practice, Members are requested to submit their government reports to the WTO at least nine weeks before the TPRB meeting for their review.(37)

 

V. Paragraph E     back to top

A. Text of Paragraph E

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.

 
B. Interpretation and Application of Paragraph E

26.     For Members invoking the balance-of-payments exceptions of the GATT, trade policy reviews have been coordinated with balance-of-payments consultations, for instance in the case of the Slovak Republic in 1995.(38)

 

VI. Paragraph F     back to top

A. Text of Paragraph F

F. Appraisal of the Mechanism

         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.

 
B. Interpretation and Application of Paragraph F

27.     The TPRB has conducted three appraisals of the operation of the TPRM. Each appraisal has reaffirmed the relevance of the TPRM’s mission, and concluded that the TPRM has functioned effectively and its objectives are generally being achieved. The appraisals have provided guidance on priorities for operation of the TPRM; the second and third appraisals resulted in changes to the TPRB’s rules of procedure.

28.     At its meeting of 27 January 1999, the TPRB agreed on a procedure for its first appraisal of the operation of the TPRM.(39) On 5 October 1999, the TPRB adopted a report on its first appraisal to the Third Ministerial Conference.(40) The TPRB agreed on 31 May 2005 on a procedure to carry out its second appraisal, and on 14 September 2005, adopted a report on its second appraisal to the Sixth Ministerial Conference.(41) On 10 November 2008, the TPRB adopted a report on its third appraisal.(42) The 2008 report calls for the next appraisal of the operation of the TPRM to take place within the three years following that date.(43)

 

VII. Paragraph G     back to top

A. Text of Paragraph G

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.

 
B. Interpretation and Application of Paragraph G

29.     Annual reports by the Director-General are submitted to the TPRB in accordance with Paragraph G.(44) The most recent such report explains that:

“This is intended to be a purely factual report and is issued under the sole responsibility of the Director-General. It has no legal effect on the rights and obligations of Members, nor does it have any legal implication with respect to the conformity of any measure noted in the report with any WTO Agreement or any provision thereof. This report is without prejudice to Members’ negotiating positions in the Doha Round. It is a preparatory contribution to the report by the Director-General that is called for in Paragraph G of the TPRM mandate and that aims to assist the TPRB to undertake an annual overview of developments in the international trading environment which are having an impact on the multilateral trading system.”(45)

 

Footnotes:

1. WT/TPR/229, para. 4. back to text
2. L/6490, GATT BISD 36S/403; see the text of this decision in the GATT Analytical Index at pp. 303–308. back to text
3. TPRM, para. A(i). back to text
4. Panel Report, Canada — Aircraft, paras. 9.274–9.275. back to text
5. Panel Report, Canada — Aircraft, para. 8.14. back to text
6. Panel Report, Chile — Price Band System, paras. 4.47, 4.108. back to text
7. Panel Report, Chile — Price Band System, footnote 664. back to text
8. MIN(99)/2, section VIII. back to text
9. WT/TPR/6; regarding rules of procedure and practices for TPR reviews under GATT 1994, see L/7208 (1993) and L/7458 (1994). back to text
10. WT/L/28. back to text
11. WT/TPR/Rev.1 (2005), WT/TPR/6/Rev.2 (2008). back to text
12. WT/TPR/269, para. 2. back to text
13. WT/TPR/269, para. 7. back to text
14. Annual reports: WT/TPR/27 (1996), Annual reports: WT/TPR/41 (1997), WT/TPR/59 (1998), WT/TPR/69 (1999), WT/TPR/86 (2000), WT/TPR/101 (2001), WT/TPR/122 (2002), WT/TPR/140 (2003), WT/TPR/154 (2004), WT/TPR/173 (2005), WT/TPR/192 (2006), WT/TPR/213 (2007), WT/TPR/232 (2008), WT/TPR/249 (2009), WT/TPR/269 (2010). back to text
15. WT/TPR/6/Rev.2. back to text
16. WT/MIN(99)/2, para. 9. On this matter, see also WT/TPR/13, section (i) and WT/TPR/20, para. 10. See para. 29 of this Chapter. back to text
17. WT/MIN(05)/1, section VII, second bullet point. See para. 29 of this Chapter. back to text
18. WT/TPR/13, para.11. The Note, however, states that “[t]he general feeling was that national trade policy reviews should not be confused with analyses of regional agreements under Article XXIV of GATT 1994 and Article V of GATS.” WT/TPR/13, para. 9. back to text
19. WT/MIN(99)/2, para. 15. See para. 29 of this Chapter. back to text
20. WT/MIN(05)/1, para. 14. See para. 29 of this Chapter. back to text
21. WT/TPR/M/3438, 114 (Botswana, the Kingdom of Lesotho, Namibia, South Africa and the Kingdom of Swaziland), and 222. back to text
22. WT/TPR/M/85 (Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines), and 190. back to text
23. WT/TPR/M/171 and 171/Corr.1 (Kenya, Tanzania, and Uganda). back to text
24. WT/TPR/M/77 (2000), WT/TPR/M/141 (2004), WT/TPR/M/208 (2008). back to text
25. WT/TPR/M/187 and 188 (2007). back to text
26. WT/TPR/M/131, 132, 133 (2004); WT/TPR/M/236 (2010). back to text
27. WT/TPR/M/118, 119 (2003, WT/TPR/M/223 (2009). back to text
28. The meeting was held on 28 and 30 September 2011 (see WT/TPR/279). Minutes have not been issued as of 30 September 2011. back to text
29. WT/TPR/269, paras. 8–9. back to text
30. WT/TPR/6/Rev.2, paras. 8 and 10–15. back to text
31. WT/TPR/6/Rev.2, para. 11. back to text
32. WT/TPR/229, paras. 11–12. back to text
33. WT/TPR/6/Rev.2, para. 16. back to text
34. WT/MIN(05)/1, para. 16. See para. 24 of this Chapter. back to text
35. L/6552. back to text
36. WT/TPR/6/Rev.2, para. 11. back to text
37. See also the Decision adopted by the GATT Council at its meeting 12 April 1989 to establish the Trade Policy Review Mechanism, L/6490, para. B(i), WT/TPR/6, para.10 and WT/MIN(99)/2, para. 12. See para. 25 of this Chapter. back to text
38. WT/TPR/S/7. back to text
39. WT/TPR/69, para. 7. back to text
40. WT/MIN(99)/2. back to text
41. WT/MIN(05)/1, para.3. back to text
42. WT/TPR/229. back to text
43. Id, para. 17. back to text
44. The reports are numbered WT/TPR/OV/-. back to text
45. WT/TPR/OV/W/5/Rev.1, footnote 1. back to text

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