April 2009/N°3 WTO´s Trade Policy Review Mechanism: Explanations and Reflections Steffen Grammling The Trade Policy Review Mechanism(TPRM) con­stitutes one of the main functions of the World Trade Organization(WTO) as laid down in Article III of the Marrakesh Agreement(1994). Strictly speaking, the TPRM was already established in 1988 as an early result of the Uruguay Round ne­gotiations(1986-1994), still under the General Agreement on Tariffs and Trade(GATT). However, its application since 1989 was provisional and its scope limited to trade in goods. 1 Legal foundation Annex 3 of the Marrakesh Agreement forms the legal basis for the TPRM and specifies the charac­teristics of the mechanism in only three pages. Objectives Accurate, timely and easily accessible information on countries´ trade regimes are important for poli­cy makers, business and civil society that are in­volved in trade. In this respect, the TPRM plays a crucial role and fulfills, according to Annex 3, mainly three objectives: (i) To increase the transparency in and the under­standing of WTO Members´ trade policies, regula­tions and practices; (ii) To undertake a regular collective appreciation and evaluation of these policies and practices, and to assess their impacts on the functioning of the multilateral trading system; and (iii) To enable a debate on WTO Members´ trade policies and practices, taking into account their wider economic and developmental needs, poli­cies and objectives. 1 For a short general introduction to the TPRM, see: WTO: Understanding the WTO, Geneva 2008. The TPRM is not intended to enforce WTO regula­tions and agreements, which is the purpose of WTO´s Dispute Settlement Mechanism. However, by scrutinizing a country´s trade policy, attention is indirectly drawn to its conformity with WTO obli­gations. Remarkably, WTO Members also agreed in Annex 3(paragraph B) to increase domestic transparency of their decision-making on trade policy matters; yet on a voluntary basis. Process All WTO Members are reviewed periodically, but the frequency varies according to the coun­try’s share of world trade(see Box 1). Box 1: Frequency of Trade Policy Reviews - Every two years: first four trading entities(cur­rently the European Communities, United States, Japan and China) - Every four years: the following 16 WTO Mem­bers with lesser share of world trade - Every six years: the remaining WTO Members, except for the Least Developed Countries (LDCs), which have the possibility to be re­viewed at larger intervals. For the list of countries that have been reviewed since 1995 and comprehensive documentation, see: http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e. htm#chronologically(consulted on 16 April 2009). Two reports provide the basis for Trade Policy Re­views(TPRs): one produced by the WTO Secreta­riat(Trade Policies Review Division) and one from the government of the country under review. The detailed“Secretariat Report” starts with summary observations and contains the following four chapters: Economic Environment; Trade and In-