ANNEX 3
TRADE POLICY REVIEW
MECHANISM
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. 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) 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.
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(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.
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.
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.
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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.
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.