                      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.  



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