Copyright 1995 NLCIFT
Title:TRADE POLICY REVIEW MECHANISM
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 MTO. 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 MTO and highlighting
significant policy issues affecting the trading system.