Trade Policy Review Mechanism
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| Trade Policy Review Mechanism | |
|---|---|
| Name | Trade Policy Review Mechanism |
| Formation | 1988 |
| Founder | GATT/WTO |
| Purpose | Review of trade policies |
| Headquarters | Geneva |
| Region | Worldwide |
Trade Policy Review Mechanism The Trade Policy Review Mechanism provides periodic assessments of members' trade policies within the framework established by GATT and the WTO. It aims to improve transparency among members such as United States, China, European Union, India, and Brazil by documenting measures related to trade in goods and services and monitoring compliance with obligations arising from agreements like the TRIPS and the GATS. Reviews inform multilateral deliberations involving bodies such as the Dispute Settlement Body and the WTO Secretariat.
Overview
The mechanism operates under the auspices of the WTO and parallels review processes used by the OECD and the IMF for policy surveillance. It assesses trade measures enacted by members including tariff schedules, non-tariff measures administered by agencies like Office of the United States Trade Representative and Ministry of Commerce authorities, and commitments under plurilateral instruments such as the Information Technology Agreement. Reviews generate official reports prepared by the WTO Secretariat and discussed in the Trade Policy Review Body.
History and Development
Initiated in the late 1980s during negotiations involving GATT contracting parties, the mechanism was formalized alongside the establishment of the WTO in 1995 following the Uruguay Round and the Marrakesh Agreement. Early reviews covered founding members including Japan, Canada, Australia, and Switzerland and reflected trade tensions from events like the Plaza Accord and shifts arising from the Asian financial crisis. Expansion of membership through rounds of accessions involving Russian Federation, Viet Nam, and China led to adaptations in frequency and scope, influenced by precedents from the NAFTA era and the emergence of regional groups such as the EFTA.
Objectives and Principles
The mechanism pursues objectives set out by the WTO Ministerial Conference and the General Council: enhancing transparency among members such as Brazil and South Africa, facilitating adherence to obligations under the GATT 1994 and ASCM, and promoting predictability for participants like World Bank partners and private firms represented by chambers such as the ICC. Core principles include non-discrimination as in the MFN clause of GATT agreements, periodicity tailored to members’ share of global trade (e.g., major traders like United States and China reviewed more frequently), and reliance on factual reporting and consensus-based discussion within bodies like the TPRB.
Procedures and Process
The review cycle is managed by the WTO Secretariat using submissions from the member under review and questions from members including delegations from European Union, Japan, Argentina, and Mexico. The process culminates in a secretariat report and a multilateral discussion chaired by the TPRB with participation from ambassadors accredited to Geneva. Frequency is calibrated by members’ trade weight, echoing methodologies employed by IMF surveillance. Reviews cover measures such as tariff bindings, administered by customs authorities like U.S. Customs and Border Protection, services commitments under GATS, and trade remedies under the Safeguards Agreement.
Participation and Transparency
Participation includes full members such as Canada, Nigeria, Turkey, and acceding members like Cambodia with transparency practices influenced by civil society actors, industry associations like the World Economic Forum, and legal firms advising stakeholders in disputes before the Appellate Body. The mechanism encourages written submissions and questions from members and allows observers including representatives from UNCTAD and ITC. Public accessibility of reports varies; major reviews often attract attention from media outlets like Financial Times, The Economist, and policy institutes such as the Brookings Institution.
Impact and Criticisms
The mechanism has influenced trade policy by increasing disclosure of measures affecting World Trade, informing negotiations such as those at the Doha Round, and supporting adjudication in the DSB. Critics from think tanks like Peterson Institute for International Economics and scholars at London School of Economics argue that reviews lack enforcement teeth compared to rulings in the Dispute Settlement Body and that political economy factors limit candor among major players including China and United States. Other critiques focus on resource constraints at the WTO Secretariat and the challenge of reviewing complex sectors such as digital trade implicated in instruments like the GDPR.
Case Studies and Notable Reviews
Notable reviews include periodic assessments of China following its 2001 accession, reviews of European Union trade practices during deliberations over the Common Agricultural Policy, and scrutiny of United States measures linked to the Buy American Act and tariffs applied during trade actions involving Steel and Aluminium disputes. Reviews of India and Brazil highlighted tariff policy, export incentives, and industrial policies examined in light of agreements such as the ASCM. High-profile examinations have influenced bilateral dialogues with trading partners like Australia and New Zealand and informed negotiations in regional forums such as the APEC.