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Members hereby agree
as follows:
(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 back to top
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 back to top
(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.
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 back to top
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.
F.
Appraisal of the
Mechanism back to top
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 back to top
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.
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