WORLD TRADE WT/TPR/27
28October 1996
ORGANIZATION(96-4484)
Trade Policy Review Body
TRADE POLICY REVIEW MECHANISM
REPORT TOTHE SINGAPORE MINISTERIAL CONFERENCE
1. TheTrade Policy Review Mechanism wasestablished in1989, onaprovisional basis, asan
early harvest oftheUruguay Round. Ithasthusbeeninexistence forseven years. TheMarrakesh
Agreement, which confirmed thestatus oftheMechanism, envisages anappraisal ofitsoperation at
thelatest in1999 ("not more thanfiveyears aftertheentry intoforce oftheAgreement Establishing
theWTO"). Members, however, havekepttheMechanism under constant review since itsinception
andanumber ofprocedural improvements havebeenintroduced inthepastfewyears.
2. Thisreport bytheTrade Policy Review Body provides aninterim assessment oftheextent
towhich theTPRM isfulfilling itsstated objectives, itsvalue toMembers, itscost-effectiveness and
thescope forfurther procedural improvements. AtableofTrade Policy Reviews todateisannexed.
Fulfilling itsObjectives
3. Inframing theirexpectations oftheTPRM, Members areguided bytheobjectives stated in
Annex 3totheMarrakesh Agreement:
"tocontribute toimproved adherence byallMembers torules, disciplines andcommitments
made under theMultilateral Trade Agreements and,where applicable, thePlurilateral Trade
Agreements, andhence tothesmoother functioning ofthemultilateral trading system, by
achieving greater transparency in,andunderstanding of,thetrade policies andpractices of
Members. Accordingly, thereview mechanism enables theregular collective appreciation and
evaluation ofthefullrange ofindividual Members 'tradepolicies andpractices andtheirimpact
onthefunctioning ofthemultilateral trading system. Itisnot,however, intended toserve
asabasis fortheenforcement ofspecific obligations under theAgreements orfordispute
settlement procedures, ortoimpose newpolicy commitments onMembers."
4. Measurement oftheTPRM 'scoverage todatedepends ontheyardstick used. The57members
reviewed sofar(anumber onseveral occasions) account for98percentofallMembers 'tradeingoods
andservices. TheTPRM spotlight hastherefore effectively focused onallthemajor players inthe
WTO trading system andhasilluminated themostsignificant trends. Byanother yardstick, however,
theoutcome islessreassuring: withWTO membership of108(counting theEuropean Communities
asoneentity) onlyjustoverhalfofMembers havebeenreviewed during theseven-year existence of
theMechanism. Thequestion ofcompleting thecoverage ofdeveloping countries istaken upin
paragraphs 12-14 below.
5. Thecontent andstyleofthereviews isobviously critical totheireffectiveness. There isgeneral
acceptance thatreviews should becomprehensive, rigorous andanalytical, andconducted atan
appropriately senior level. Byandlarge, experience todatesuggests thatthese criteria arebeing met.WT/TPR/27
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While thescope forprocedural improvements isconstantly being assessed, theessential character of
thereviews hasnotbeenchallenged. Oneindicator ofthegeneral health oftheprocess isthelevel
andcomposition ofdelegations from Members under review: thishasimproved markedly since the
establishment oftheWTO, withamajority ofMembers reviewed during thepasttwoyears being led
atMinisterial ordeputy Ministerial level, andwithdelegations including substantial expertise from
capitals.
6. Attempting toensure thatthereviews arecomprehensive isnotwithout risk. Acriticism has
beenmade thattheprocess canfocus toomuch ondetail, atthecostofgiving insufficient attention
topolicy direction. However, theTPRM isenvisaged asareview ofpolicies andpractices: ofthe
implementation ofpolicy aswellasitsoverall direction. Itwillcontinue tobeamatter fortheSecretariat
initspreparationofdocumentation,andforMembersinthemanneroftheirparticipationinthemeetings,
toseektoachieve anappropriate balance between discussion ofpolicy direction andofdetails of
implementation.
Value toMembers
7. There isaclear value forWTO Members inhaving aforum where theycanopenly discuss
eachother'strade andtrade-related policies, elicit information andregister concerns. Thebenefits
forthecountry under review arealsosignificant: theTPRM canprovide avaluable input intonational
policymaking,servingasanindependent,objectiveassessmentoftradeandeconomicpolicies;Members
havealsocommented ontheextent towhich theexperience ofreview hashelped tostrengthen inter-
agency discussion andco-operation intheirowncountries. Thetrading system asawhole benefits
inthattheprocess cansometimes assist governments inpursuing desirable trade policy reforms; it
alsofrequently illuminates areas ofWTO obligations which mayhavereceived insufficient attention
todateandthushelps toensure thatthese areaddressed.
8. Thedualaspects ofself-analysis andexternal audit underpin theeffectiveness oftheTPRM
exercise forallMembers. Inpractice, specific features ofareview canassume aparticular importance
depending onthetradeandeconomic situation oftheMember under review. Thelarger trading entities
aregenerally notshort ofopportunities forpresentation oftheirtradepolicies; intheircase, themost
significant aspect ofthereview istheopportunity fortrading partners tocomment onthebasis ofan
independent WTO Secretariat analysis. Inmany cases, however, review meetings canprovide auseful
forum forgovernments toexplain thedevelopment ofpolicies; additionally, inthecaseofdeveloping
countries, theprocess canhelptoidentify particular technical assistance needs.
Costeffectiveness
9. TheTPRDivision intheSecretariat hasanannual staffbudget ofsome Sfr.4million (just
under 6percentofthetotal). Withastaffcomplement of27(17professionals) itaccounts foraround
10percentoftheprofessional staffoftheorganization, excluding translators, interpreters and
administration. Members alsodevote considerable timetothepreparation andservicing ofmeetings.
Therelationship between tasks andcapacity obviously requires careful balancing: issues ofTPRM
coverage, depth ofthepreparatory process, anddesirable follow-up work, havetobeapproached in
thelightoftheresources available. Thiswillneedevenmore careful attention asWTO membership
expands.
10. Thecontinuing challenge istoensure maximum effectiveness oftheresources used. Inthis
connection, anumber ofareas offer scope forfurther examination:WT/TPR/27
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- Inreviewing across-section ofcountries eachyear, theTPRM inevitably shows up
wider patterns which areinfluencing policy approaches inindividual Members. Over
thepastfewyears, forexample, theoverriding common theme thathasemerged is
therapid pace ofchange, with asustained shift tomore market-oriented and
outward-looking trade andinvestment régimes, deriving inpartfrom autonomous
liberalization policies andinpartfromthestimulus provided bytheUruguay Round.
Interms ofenhancing theprocess, theAnnual Overview ofDevelopments inthe
InternationalTradingSystem,providedforinSectionGoftheAgreementontheTPRM,
maybeusedtodevelop amore structured approach thanhasexisted inthepastof
looking atthecomposite picture emerging fromindividual reviews andtoidentify wider
themes forconsideration byWTO members andcommittees.
- TheTPRM occupies aunique place within theWTO inpromoting non-confrontational
discussion ofkeytrade policy issues. Itsspecific delinkage from dispute settlement
procedures isanessential feature which must besafeguarded; however, further
opportunities might besought forencouraging greater cross-fertilization between TPRB
discussions andthose undertaken inother WTO bodies.
- Oneareawhich isreceiving particular attention isenhancing awareness oftheTPRM
outside theGeneva circle. While WTO member Governments ofcourse havethe
primary stake intheTPRM, thematerial produced isalsoofinterest inthebusiness
andacademic communities. Thelong-term health oftheprocess canonlybenefit from
widedissemination ofinformation about reviews. Aconsiderable amount ofmedia
briefing isalready done bytheSecretariat andtheChair, andboththeSummary
ObservationsbytheSecretariatandtheClosingRemarksbytheChairaremadeavailable
ontheWTO Internet home page. Further improvements suchasspeedier publication
ofreports (within onemonth tosixweeks ofTPRB meetings) andimproved useof
theInternet fordissemination andsaleoffullreports arecurrently under active
consideration bytheSecretariat forearly introduction.
Coverage ofDeveloping Countries
11. ThecoverageofdevelopingcountriesintheTPRMtodateincludesmostofthemajordeveloping
country Members oftheWTO, aswellasanumber ofsmaller countries thathavevolunteered tocome
under review. There arestill,however, over50developing country Members thatremain tobe
reviewed, including asignificant number ofAfrican andleastdeveloped countries.
12. Theinvolvement ofdeveloping countries intheTPRM isexamined insome detail inaNote
of12July1996, circulated toallWTO Members, from theChair oftheTPRM totheChair ofthe
Committee onTrade inDevelopment. Thesummary conclusion inthatNote was:
"Involvement intheTPRM isanimportant wayfordeveloping countries, particularly least
developed countries, todevelop confidence andexperience withtheWTO. Thisneeds tobe
borne inmind in(a)planning theTPRM timetable and(b)ensuring thattechnical assistance
isavailable tothoseLDCs whowould otherwise havedifficulty inpreparing forandundergoing
review.WithincreasedparticipationofdevelopingcountriesintheTPRM,itwillbeparticularly
important toensure thatlessons learned from these reviews arechannelled intotheWTO
machinery".
13. Inanefforttocompletethecoverageofdevelopingcountries,includingleastdevelopedcountries,
while taking account ofresource constraints, theSecretariat iscurrently exploring ways ofgroupingWT/TPR/27
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reviews -forexample inthecaseofsome Southern African orCaribbean countries -while respecting
theindividual nature oftheTPRprocess. Thequestion ofcompleting thecoverage ofTPRs, particularly
tothesmaller developing andleast-developed countries, isonewhich willrequire particular attention
inthepreparation oftheTPRB timetable.
Procedural Improvements
14. Asnoted, therehasbeenafairly continuous process ofself-examination within theTPRB over
theyears, leading toanumber ofimprovements inprocedures. Afirstsetofmodifications was
introduced in1994(L/7458). More recent discussions havebeenreflected intwoNotes fromtheChair,
thefirstinDecember 1995(WT/TPR/13) andthesecond inJuly1996(WT/TPR/20). Theprocedural
issues addressed include preparatory documentation, choice ofdiscussants, levelofrepresentation at
meetings, Chairperson 'ssumming up,follow-up tomeetings. Insofarasthere hasbeenagreement
onprocedural adaptations, these havebeenorarebeing putintoeffect.
15. Oneconcern ofMembers istoensure that,asanexercise intransparency, theTPRB clearly
reflects theprogress made byMembers inimplementing theWTO Agreements. TheSecretariat is
therefore encouraged tocontinue providing, initsreports, systematic information onmeasures taken
byMembers under review inthecontext oftheAgreements, themechanisms bywhich these are
implemented, andnotifications made.
16. Asindicated inparagraph 5,sincetheentryintoforceoftheWTO, themajority oftheMembers
coming forreview havebeenrepresented atMinisterial orDeputy Ministerial level; inmost other
cases, theyhave been represented bysenior officials from thecapital. However, thislevel of
representation hasnotalways beenmatched bytheparticipation -either innumbers orlevel-byother
Members oftheTPRB. IftherôleoftheTPRM istobepreserved andstrengthened, itisimportant
boththatthere beasubstantial number ofdelegations present inTrade Policy Reviews andthatthese
delegations berepresented atappropriate level.
17. Ithasalsobeenstressed thatMembers oweittothehealth ofthesystem toobserve strictly
thedeadlines laiddown foranswering questionnaires anddelivering documentation; delays inthe
completion ofreviews bothaffect thereview process fortheMember concerned andslowdown the
programme ingeneral.
18. Oneofthemoresubstantiveissuesaddressedhasbeenthecycleofreviews.Whileonedelegation
hasproposed amodification toprovide forathree yearcycle formembers currently onatwo-year
review pattern, there hasbeennosupport from other members forsuchachange. However, ithas
been agreed that,inthecaseoftwo-year reviews, every second review might have an"interim"
character, although thisshould notdetract fromthecomprehensive nature ofreviews ofsuchmembers.
Conclusion
19. TheTPRM isaunique element intherange ofWTO activities. Itistheonlyfocus forpeer
review ofthefullrange oftrade policies andcanoften beofconsiderable assistance toMembers in
their domestic review andrevision ofpolicy. Inaddition, itisofsignificant value inproviding
authoritative, wellfounded analyses ofdevelopments intradepolicies andpractices. Given thebenefits
oftheprocess, Members whohavenotyetpresented themselves forreview arestrongly encouraged
todoso;those whowould feeltheneedoftechnical assistance inundergoing theprocess arereminded
ofthepossibilities inthisregard.WT/TPR/27
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20. While Members aresatisfied withtheconsiderable progress made inimproving thefunctioning
oftheTPRM, theyarealsoconscious ofthehighlevelofSecretariat andnational resources involved
intheprocess, andanxious toensure thatthese resources continue tobeusedeffectively. Members
willtherefore continue toassess thecontent, coverage andresources usedinreviews totrytoensure
theneeds ofallWTO members aremet. They willalsoseektoenhance theimpact oftheMechanism
intheways outlined inthisreport, while ensuring thatitsdistinctive character ispreserved.
Trade policy reviews conducted under GATT 1947 andWTO provisions, 1989-1996
Europe/Middle East Asia/Pacific Africa America
Austria1aAustralia (2)aCameroonaArgentinaa
Czech RepublicbBangladeshaCôted'IvoirebBrazil (2)c
European
Communities (4)cHong Kong (2)aEgyptaBoliviaa
Finland1aIndiaaGhanaaCanada (4)c
HungaryaIndonesia (2)aKenyaaChilea
IcelandaJapan (3)aMauritiusbColombia (2)c
IsraelaKorea (2)cMorocco (2)cCosta Ricab
Norway (2)cMacauaNigeriaaDominican Republicb
PolandaMalaysiaaSenegalaElSalvadorb
RomaniaaNewZealand (2)cSouth AfricaaMexicoa
SlovakiabPakistanaTunisiaaPerua
Sweden1(2)aPhilippinesaUgandabUnited States (4)c
Switzerland (2)cSingapore (2)cZambiabUruguaya
TurkeyaSriLankabZimbabweaVenezuelab
Thailand (2)c
14 15 14 14
a Reviewed under theGATT.
b Reviewed under theWTO.
c Reviewed under theGATT andtheWTO.
1 Included inEUfrom 1995.