Page379
ANNEX 3
TRADE POLICY REVIEW MECHANISM
Members hereby agree asfollows:
A. Objectives
(i) Thepurpose oftheTrade Policy Review Mechanism ("TPRM") istocontribute to
improved adherence byallMembers torules, disciplines andcommitments made under theMultilateral
Trade Agreements and,where applicable, thePlurilateral Trade Agreements, andhence tothesmoother
functioning ofthemultilateral trading system, byachieving greater transparency in,andunderstanding
of,thetradepolicies andpractices ofMembers. Accordingly, thereview mechanism enables theregular
collectiveappreciationandevaluationofthefullrangeofindividualMembers'tradepoliciesandpractices
andtheirimpact onthefunctioning ofthemultilateral trading system. Itisnot,however, intended
toserve asabasis fortheenforcement ofspecific obligations under theAgreements orfordispute
settlement procedures, ortoimpose newpolicy commitments onMembers.
(ii) Theassessment carried outunder thereview mechanism takes place, totheextent
relevant, against thebackground ofthewider economic anddevelopmental needs, policies andobjectives
oftheMember concerned, aswellasofitsexternal environment. However, thefunction ofthereview
mechanism istoexamine theimpact ofaMember 'strade policies andpractices onthemultilateral
trading system.
B. Domestic transparency
Members recognize theinherent value ofdomestic transparency ofgovernment decision-making
ontrade policy matters forbothMembers 'economies andthemultilateral trading system, andagree
toencourage andpromote greater transparency within theirownsystems, acknowledging thatthe
implementationofdomestictransparencymustbeonavoluntarybasisandtakeaccountofeachMember's
legalandpolitical systems.
C. Procedures forreview
(i) TheTrade Policy Review Body (referred toherein asthe"TPRB") ishereby established
tocarry outtrade policy reviews.
(ii) Thetrade policies andpractices ofallMembers shallbesubject toperiodic review.
Theimpact ofindividual Members onthefunctioning ofthemultilateral trading system, defined in
terms oftheirshare ofworld trade inarecent representative period, willbethedetermining factor
indeciding onthefrequency ofreviews. Thefirstfourtrading entities soidentified (counting the
European Communities asone)shallbesubject toreview every twoyears. Thenext16shallbereviewed
every fouryears. Other Members shallbereviewed every sixyears, except thatalonger period may
befixed forleast-developed country Members. Itisunderstood thatthereview ofentities having a
common external policy covering morethanoneMember shallcover allcomponents ofpolicy affecting
tradeincluding relevant policies andpractices oftheindividual Members. Exceptionally, intheevent
ofchanges inaMember 'strade policies orpractices thatmayhaveasignificant impact onitstrading
partners, theMember concerned mayberequested bytheTPRB, afterconsultation, tobring forward
itsnextreview.Page380
(iii) Discussions inthemeetings oftheTPRB shallbegoverned bytheobjectives setforth
inparagraph A.Thefocus ofthese discussions shallbeontheMember 'stradepolicies andpractices,
which arethesubject oftheassessment under thereview mechanism.
(iv) TheTPRB shallestablish abasicplanfortheconduct ofthereviews. Itmayalsodiscuss
andtakenoteofupdate reports from Members. TheTPRB shallestablish aprogramme ofreviews
foreachyearinconsultation withtheMembers directly concerned. Inconsultation withtheMember
orMembers under review, theChairman maychoose discussants who,acting intheirpersonal capacity,
shallintroduce thediscussions intheTPRB.
(v) TheTPRB shallbaseitswork onthefollowing documentation:
(a) afullreport, referred toinparagraph D,supplied bytheMember orMembers
under review;
(b) areport, tobedrawn upbytheSecretariat onitsownresponsibility, based
ontheinformation available toitandthatprovided bytheMember orMembers
concerned. TheSecretariat should seekclarification from theMember or
Members concerned oftheirtrade policies andpractices.
(vi) ThereportsbytheMemberunderreviewandbytheSecretariat,togetherwiththeminutes
oftherespective meeting oftheTPRB, shallbepublished promptly afterthereview.
(vii) These documents willbeforwarded totheMinisterial Conference, which shalltake
noteofthem.
D. Reporting
Inordertoachievethefullestpossibledegreeoftransparency,eachMembershallreportregularly
totheTPRB. Fullreports shalldescribe thetrade policies andpractices pursued bytheMember or
Members concerned, based onanagreed format tobedecided upon bytheTPRB. Thisformat shall
initially bebased ontheOutline Format forCountry Reports established bytheDecision of19July1989
(BISD 36S/406-409), amended asnecessary toextend thecoverage ofreports toallaspects oftrade
policies covered bytheMultilateral Trade Agreements inAnnex 1and,where applicable, thePlurilateral
Trade Agreements. Thisformat mayberevised bytheTPRB inthelightofexperience. Between
reviews, Members shallprovide briefreports when there areanysignificant changes intheirtrade
policies; anannual update ofstatistical information willbeprovided according totheagreed format.
Particular account shall betaken ofdifficulties presented toleast-developed country Members in
compilingtheirreports.TheSecretariatshallmakeavailabletechnicalassistanceonrequesttodeveloping
country Members, andinparticular totheleast-developed country Members. Information contained
inreports should tothegreatest extent possible becoordinated withnotifications made under provisions
oftheMultilateral Trade Agreements and,where applicable, thePlurilateral Trade Agreements.
E. Relationship withthebalance-of-payments provisions ofGATT 1994 andGATS
Members recognize theneedtominimize theburden forgovernments alsosubject tofull
consultations under thebalance-of-payments provisions ofGATT 1994 orGATS. Tothisend,the
Chairman oftheTPRB shall, inconsultation withtheMember orMembers concerned, andwiththe
Chairman oftheCommittee onBalance-of-Payments Restrictions, devise administrative arrangements
thatharmonize thenormal rhythm ofthetradepolicy reviews withthetimetable forbalance-of-payments
consultations butdonotpostpone thetrade policy review bymore than12months.Page381
F. Appraisal oftheMechanism
TheTPRB shallundertake anappraisal oftheoperation oftheTPRM notmore thanfiveyears
aftertheentry intoforce oftheAgreement Establishing theWTO. Theresults oftheappraisal will
bepresented totheMinisterial Conference. Itmaysubsequently undertake appraisals oftheTPRM
atintervals tobedetermined byitorasrequested bytheMinisterial Conference.
G. Overview ofDevelopments intheInternational Trading Environment
Anannual overview ofdevelopments intheinternational trading environment which arehaving
animpact onthemultilateral trading system shallalsobeundertaken bytheTPRB. Theoverview
istobeassisted byanannual report bytheDirector-General setting outmajor activities oftheWTO
andhighlighting significant policy issues affecting thetrading system.