TRADE POLICY REVIEW MECHANISM
A. Objectives
- (i) The purpose of the Trade Policy Review Mechanism 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 will enable the
regular collective appreciation and evaluation by the Ministerial Conference 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 to be carried out under the review mechanism will, to
the extent relevant, take place 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.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.
C.Procedures for review
- (i) Trade policy reviews will be carried out by the Trade Policy Review Body (TPRB).
- (ii) The trade policies and practices of all Members will 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) will
be subject to review every two years. The next sixteen will be reviewed
every four years. Other Members will 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 which 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) In the light of the objectives set out in A above, discussions in the
meeting of the TPRB will, to the extent relevant, take place against
the background of the wider economic and developmental needs,
policies and objectives of the Member concerned, as well as of its
external environment. The focus of these discussions will be on the
Member's trade policies and practices which are the subject of the
assessment under the review mechanism.
- (iv) The TPRB will establish a basic plan for the conduct of the reviews.
It may also discuss and take note of update reports from Members.
The TPRB will 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, in their personal capacity, will introduce the
discussions in the TPRB.
- (v) The TPRB will base its work on the following documentation:
- (a) A full report, referred to in paragraph D(i) below, 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, will be
published promptly after the review.
- (vii) These documents will be forwarded to the Ministerial Conference, which
will take note of them.
D. Reporting
- (i) In order to achieve the fullest possible degree of transparency, each
Member shall report regularly to the TPRB. Full reports will 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 initially shall be based on the Outline Format for Country
Reports established by the Decision of the GATT 1947
CONTRACTING PARTIES of 19 July 1989, 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 will
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 will 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.
E. Relationship with the balance-of-payments provisions of the GATT 1994
and the GATS
Members recognize the need to minimize the burden for governments also subject to
full consultations under the balance-of-payments provisions of the GATT 1994 or the 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 which would harmonize the normal rhythm of the trade policy reviews with the time-table
for balance-of-payments consultations but would not postpone the trade policy review by more than
twelve months.
F. Appraisal of the Mechanism
The TPRB will 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.
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 will also be undertaken by the TPRB. It will 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.
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W3 since October 3 1993.