Landmark Reforms to WTO Trade Policy Approved

IAS Prelims 2023

The WTO General Council approved landmark reforms to the Trade Policy Review Mechanism (TPRM) in July 2017 to improve the process of reviewing members’ trade policies and practices and the monitoring of the global trading environment.

This consensus decision to amend the TPRM for the first time since its establishment in 1989 demonstrates members’ continued success in enhancing the workings of the WTO.

Adjustment to the cycles of WTO members’ Trade Policy Reviews (TPRs) is one of the important reforms that will ensure the continued effectiveness of TPRs amid the rising number of WTO members, of which there are now 164.

The current review cycle, which has members undergoing a TPR every two, four or six years depending on the size of their economy, will be changed to frequencies of three, five, or seven years respectively, with the largest economies reviewed most frequently. The new arrangement will be phased in, starting from 2019.

Members’ agreement to the amendment was accomplished after a series of intensive consultations and meetings following the launch of the Sixth Appraisal of the TPRM on 20 June 2016 under former TPRB Chair Ms Irene Young (Hong Kong, China).

Just six months later, members formally agreed on the final appraisal report at a TPRB meeting on 21 December 2016. The TPRB then agreed on 27 January 2017 to submit the proposal to the General Council to amend the TPRM as contained in Annex 3 to the Marrakesh Agreement Establishing the WTO.

Following approval by the General Council, the amendment has been officially incorporated into the WTO Agreement, pursuant to paragraph 8 of Article X of the Marrakesh Agreement.

This is the second amendment to the WTO Agreement following the amendment to the WTO’s intellectual property (TRIPS) agreement, which took effect on 23 January 2017. The decision is also the first ever amendment to the TPRM, which was established in 1989 under the General Agreement on Tariffs and Trade (GATT) and made permanent under the WTO, as part of the 1994 Uruguay Round agreements. The TPRM includes regular Trade Policy Reviews for WTO members and a monitoring of developments in the international trading environment.

Besides the decision to amend the TPR cycles, members also agreed to revise the timeline for the question-and-answer process of the TPRs, so that members under review who opt to provide early written answers to other members’ questions will have one more week to prepare the answers.

Members also noted efforts by the WTO Secretariat to develop an information technology system to better manage this question-and-answer process. Furthermore, to enhance the transparency of trade policies, there was agreement to establish a regular practice for members to provide brief reports on significant changes in their policies during trade monitoring meetings.