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1994-01-11
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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.