WORLD TRADE
ORGANIZATIONWT/WGTCP/W/243
28 July 2003
(03-4002)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE OECD
The following is the final text of a paper received from the OECD Secretariat, which was
circulated as a room document for the Working Group's meeting of 26-27 May 2003, and is now
made available as a "W" document with the consent of the Group (WT/WGTCP/M/22,
paragraph 104).
_______________
Practical Modalities of Peer Review in a Multilateral
Framework on Competition
EXECUTIVE SUMMARY
This paper considers practical options for implementing a peer review mechanism in any
future multilateral agreement on trade and competit ion.  Multilateral peer review mechanisms have
three common characteristics: they involve a committee of experts, they represent a collegial form of
monitoring compliance and progress, and they entail  interactive investigation.  Objectives of such
mechanisms may include providing policy advice, encouraging policy co-ordination and co-operation,
gathering and disseminating information and best practice models, and providing technical assistanceand aid.
Several existing and proposed multilateral peer review mechanisms provide guidance on
possible approaches to a competition policy review  mechanism (CPRM).  In particular, this paper
identifies and considers the following relevant mechanisms: the peer review of Individual Action
Plans in the APEC System, the OECD Country Reviews of Regulatory Reform (specifically theCompetition Policy Reviews), the WTO Trade Policy Review Mechanism (TPRM), the OECD
Economic and Development Review Committee Economic Surveys, the IMF Country Surveillance
Mechanism (Article IV Reports), the IMF-World Ba nk Financial Sector Assessment Program (FSAP),
the OECD Bribery Convention monitoring pr ogramme, and the Competition Policy Review
Mechanism in the proposed Free Trade Area of the Americas.
For convenience, and to facilitate a comparison between different mechanisms, this paper
describes particular peer review mechanisms usin g a generic framework and terminology as follows:
− participants – the participants in peer review typically include the Member under review ,
the peer group , the examiners , and the secretariat ;
− process – peer review normally involves the assessment of a member against specified
review criteria , beginning with an investigation stage , followed by an examination stage ,
and finally ending with a dissemination stage ; andWT/WGTCP/W/243
Page 2
− products – peer review normally includes the production of an investigation report  and a
final report .
A CPRM would have to resolve certain key issues, specifically in relation to:
− size, scope and coverage — for example: How often should reviews be conducted (eg
yearly)? Should a CPRM focus on particular members (such as developing country
members)? What should be the review criteria (eg consistency of national competition
laws with core WTO principles or with stated policy objectives)?;
− definition of peers — for example: Who should compose the peer group (eg national
delegates, or officials from national competition or trade authorities)? Should non-
governmental organizations be permitted to be involved? Should examiners be
appointed to lead the discussion?;
− participation — would voluntary or compulsory participation best suit a CPRM?;
− costs and resource implications — what are the likely costs to the secretariat? (in the
mechanisms examined in this paper they range from 3 person months to 2.75 person
years per final report), should developing countries be given technical assistance?;  and
− other issues – What roles should the secretariat and members play? Should final reports
be subject to an approval process?  Should they be publicised?  How could the level of
peer pressure involved in a CPRM be increased?  What relationship should a CPRM
have with the existing TPRM?
The existing and proposed peer review mechanisms mentioned above respond to these issues
in different ways, and reveal the likely advantages and disadvantages of different responses in a tradeand competition context.  The Table of Select Peer Review Mechanisms on page 15 provides a
summary of these peer review mechanisms including their definition of peers, whether they are
compulsory or voluntary, and an estimate of secretariat costs.WT/WGTCP/W/243
Page 3
INTRODUCTION
1. This paper is intended to provide a structured framework for discussion by members of how
peer review might be implemented in a multilateral competition system.  It represents the second
phase of an ongoing work programme in the OECD Joint Group on Trade and Competition (Joint
Group) on peer review.  It responds to requests by OECD member countries at the Joint Group
meeting on 3 June 2002 for further consideration of:
− the size, scope and coverage of the peer review process;
− the various possible definitions of "peers", and the challenges this poses given the
heterogeneity in the levels of development of WTO member countries and themultidisciplinary nature of trade and competition policy;
− how compulsory and voluntary peer review processes compare; and
− the costs and resource implications (human, financial and temporal) of peer review for
both secretariats and delegations, as well as options to address these.
In addition, this paper considers a number of issues that were shown to be important in the
course of research on the above matters.
2. This paper builds on a previous OECD paper en titled "Peer Review: Merits and Approaches
in a Trade and Competition Context",
1 which considered the merits of peer reviews and possible
approaches to peer review, primarily focusing on the WTO Trade Policy Review Mechanism (TPRM)
and the OECD Country Review s of Regulatory Reform.
3. This paper considers practical options for im plementing peer review in a possible future
multilateral framework on competition.  The first section provides some background about the notion
of peer review, setting out the typical features and objectives of peer review.  The second section
establishes a generic framework to describe the different stages, bodies and products of the peer
review process.  This framework is designed to facilitate a comparison between different peer reviewmechanisms.  The third section examines the key issues that would have to be resolved in a
competition policy review mechanism (CPRM),
2 noting how certain existing peer review mechanisms
have responded to those issues as well as the costs and benefits of different responses in the context of
trade and competition.  The fourth section of the paper considers in further detail a number of existing
(or proposed) peer review mechanisms that address trade, competition, or macroeconomic andstructural policies of national governments.
I. CHARACTERISTICS AND OBJECTIVES OF PEER REVIEW
4. Peer review is used in a wide range of fields and takes a number of different forms.
3
However, all forms of peer review share three ch aracteristics.  First, they involve a committee of
experts examining and assessing proposals, projects, regulatory regimes or other endeavours.  Second,
                                                     
1COM/TD/DAFFE/COMP(2002)4/FINAL.
2'CPRM' is simply shorthand for a peer review system in a multilateral framework on competition and is
not intended to imply a particular model.
3For example, peer review systems are used in the health care profession, experimental sciences,
academic journals, and international nuclear safety regimes.WT/WGTCP/W/243
Page 4
they represent a collegial form of monitoring compliance and progress, involving peer pressure and
group scrutiny rather than legal sanctions.4  Third, they involve dialogue and interactive investigation.
5. The objectives of peer review vary between schemes but can include:
− Policy advice. Peer review may offer advice and proposals on the relevant policy
dilemmas of the country under review.  The reactions of the group engaging in peer
review may provide a measure of the effectiveness or acceptability of a particular idea,opinion, or point of view.  Peer review al so aims to improve policy-making through
heightened transparency and sharing of information and experience.
− Policy co-ordination and co-operation. Although peer review cannot force countries to
co-operate, if it provides neutral and reliable analysis it may encourage policy co-
operation and convergence.
− Information gathering and dissemination. Peer review may entail the collection of
information about policy so that participants do not have to maintain their own
information-gathering networks.  If this information is made public, it also benefits
private markets and the general public.
− Technical assistance and aid. Peer review may supply expertise in policy-making that is
scarce in certain countries.  For example, training of government officials can occur
informally through the interaction of secretariat staff and government officials during the
peer review process.5  Although this is most often the case for small and poor countries,
it may also be the case for medium and large countries.
− Compliance monitoring. Peer review may be used to detect possible breaches of
international agreements and obligations.
− "Delivering the message."  This is an extension of the policy advice role.  By providing
countries with policy prescriptions on certain topics, peer review may disseminate the
prevailing consensus and best practice to government and policymakers worldwide.6
6. In the trade and competition context, the most relevant peer review models are those
involving international peer review of regulatory regimes.  This paper considers the peer review of
Individual Action Plans (IAPs) in the APEC Sy stem, the OECD Country Reviews of Regulatory
Reform (specifically the Competition Policy Reviews), the WTO's TPRM, the OECD Economic and
Development Review Committee Economic Survey s, the IMF Country Surveillance Mechanism
(Article IV Reports), the IMF-World Bank Financial Sector Assessment Program, the OECD Bribery
Convention monitoring programme, and the Competition Policy Review Mechanism in the proposed
Free Trade Area of the Americas.  However, even within models involving international peer reviewof regulatory regimes, significant differences exist between peer review programmes.  For example,
differences exist in relation to: review frequency,  cost and comprehensiveness; levels of economic
development and substantive policy between reviewed countries; and the peer selection process.
                                                     
4 A peer review system neither precludes nor requires a separate enforcement system with legal sanctions
(for example as exists in connection with the TPRM in the WTO).
5 Chayes, A., and A. Chayes (1995), The New Sovereignty: Compliance with International Regulatory
Agreements, Harvard University Press, Cambridge, MA, p. 198.
6 These points are based on: International Monetary Fund (1999), External Evaluation of IMF
Surveillance: Report by a Group of Independent Experts , IMF, Washington, DC, p. 17. See also, Joint Group on
Trade and Competition, Peer Review: Merits and Approaches in a Trade and Competition Context , 6 June 2002,
COM/TD/DAFFE/COMP(2002)4/FINAL  'Part I. Merits of Peer Review', Paras 6-23.WT/WGTCP/W/243
Page 5
II. GENERIC PEER REVIEW FRAMEWORK
7. This section of the paper applies generic terms to the different stages, bodies and products of
the peer review process under the auspices of an international organization, using accepted terms
where they exist.  These terms aid the description and comparison of different peer review
mechanisms in subsequent sections of the paper.
8. All peer review programs utilise a secretariat .  The secretariat is the office or group of people
responsible for the management of the international organization under whose auspices the peer
review takes place.  The role of the secretariat varies in different peer review processes, but at a
minimum it involves organising meetings and providing continuity between individual reviews.  The
secretariat may also organise missions to the country under review and produce documentation and
analysis.
9. The members  are the countries that belong to the international organization.  The review
criteria  are the standards used to measure the performance of the member under review.  These may
include policy recommendations and guidelines, specific indicators and benchmarks, and legal norms.
10. The first possible phase of a peer review mechanism is the investigation stage .  This stage
involves the collection of information to produce an investigation report , which is a document
synthesising the information collected with reference to the review criteria.  The investigation reportis used as a basis for discussion and examination in the following stage.
11. In the examination stage , the member under review is assessed against the review criteria by
a peer group , which is a committee of experts representing the members.  The examination stage
typically occurs in a plenary meeting of the body of the international organization responsible for the
peer review. If an investigation report exists, it will be used at this stage as the basis for discussion. Itis also possible for certain examiners to be appointed to lead the examination during this stage, with
or instead of the secretariat.  The examiners' role  may also include examining the investigation report
and holding discussions with the member under review and the secretariat where necessary. In some
peer review systems, examiners may also visit the country under review and assist in the collection of
information during the investigation stage. Member s typically take turns in appointing examiners.
The examiners may act as representatives of the appointing member or in a personal capacity, but in
either case they have a duty to be objective, fair and reasonable.
12. In the dissemination stage , the secretariat and/or the examiners write a final report  and the
secretariat provides it to the members.  The final report is based on the investigation report as well as
discussion during the examination stage.  The final report or a modified final report  may be
disseminated beyond the members.
III. KEY ISSUES
13. This section examines the key issues that would have to be resolved in a CPRM, noting how
other models have addressed these issues as well as the costs and benefits of different responses in the
context of trade and competition.  Specifically, this section covers the issues identified in paragraph 1
above.
A. S
IZE, SCOPE AND COVERAGE
1. Frequency of Reviews
How often should reviews be conducted?WT/WGTCP/W/243
Page 6
14. Review cycles of members in the peer review mechanisms examined vary from yearly (the
IMF Country Surveillance Mechanism) to every six years (in the case of certain countries under the
WTO TPRM).  An advantage of frequent reviews under a CPRM would be that it would help keep
competition policy high on the national regulatory agenda and encourage continuous improvement.
The disadvantage would be the cost implications and possibly lower participation in peer reviews if
the peer group's workload is too high.  As discussed below, the cost of a thorough review is
sufficiently high that relatively few reviews are likely to occur each year, making a review cycle of
even six years seem optimistic.
2. Equal Treatment or Focus
Should all members be treated equally or should a CPRM focus on particular members?
15. A CPRM could review each member to the same extend extent and with the same frequency,
or it could focus on certain members.  For example, the IMF Country Surveillance Mechanismreviews each member every year, whereas the frequency of member reviews under the WTO TPRM
depends upon the member's share of world trade and the member's development status.  The argument
for equal treatment of all members recognises the so vereign equality of members.  The argument for
focusing on particular members recognises that the anti-competitive practices of some members are
likely to have a greater impact on international trade and that some members are likely to be lessexperienced in formulating and implementing competition policies.  Due to resource limitations, it
could be argued that a CPRM should focus on members falling into one or both of these categories.
3. Review Criteria
What should be the review criteria for a CPRM?
16. Several different (and sometimes overlapping) review criteria could be included:
− Substantive issues - the content of the competition law.  This could include whether the
country has adopted basic elements of competition law such as provisions controlling
horizontal and vertical agreements, abuse of dominance and mergers.
− Institutional issues - enforcement structures and practices.  This could include review of
the independence of the authority; its enforcement powers, processes and activities; the
reviewing courts; human and financial resources.
− Consistency of national competition laws with core WTO principles.  These principles
would probably include transparency, proc edural fairness and non-discrimination
(national treatment and most-favoured-nation treatment).7
− Exclusions from competition laws - Including exclusions as a review criterion would
increase their transparency, facilitate discussion of their impact on international trade,
and encourage appropriate narrowing in their focus and reduction in their incidence.8
− Co-operation arrangements between the national competition authority and foreign
competition authorities.  This could include examining co-operation through bilateral and
multilateral agreements as well as case-specific co-operation.  Specifically, notificationand consultation procedures and the application of comity principles could be examined.
                                                     
7For a general discussion of the issues see: OECD (2002), "Core Principles in a Trade and Competition
Context" COM/DAFFE/TD(2000)49/REV1 (7 August 2002).
8Bercero, I. & Amarasinha, S. (2001), "Movin g the Trade and Competition Debate Forward", Journal of
International Economic Law , p. 493.WT/WGTCP/W/243
Page 7
This would include considering how merger reviews involving more than one
jurisdiction are handled.
− Anti-competitive business practices that reduce both consumer welfare and market
access.9
− Advocacy for pro-competitive reform.  This includes non-enforcement activities by the
competition authority that advance competition objectives, such as speeches, public
education and testimony before legislative committees.10  These activities may play an
important role in reducing anti-competitive actions by government. Including them as a
review criterion might provide a useful learning tool for competition authorities on the
most effective forms of advocacy.11
− Consistency and coherence of competition measures with the member's stated policy
objectives.  This is a neutral criterion permitting members to choose their own
competition strategies.
− For developing countries, technical assistance needs and priorities, and co-ordination of
competition assistance with development co-operation by donors and international
organizations.  This could encourage and improve technical assistance efforts.  For
example, the investigation report produced during the WTO Trade Policy Review for a
LDC includes a section on technical assistance needs and priorities, identified in co-
operation with the member under review.
17. In applying the review criteria it would be important to recognise the economic circumstances
and institutional capacities of individual members.12  For example, some of these criteria might be
inappropriate where a country has only just introduced a competition law.
18. It might also be useful to place national competition policy challenges in their international
context. For example, this could be done by:
− comparing the member's position with competition policy best practice; and
− analysing the experiences of other members confronting similar competition policy
problems.13
4. Reviewing Previous Recommendations
Should recommendations from previous reports be reviewed?
                                                     
9Holmes, P. (2002), "Trade Competition and the WTO", in B. Hoekman, A. Mattoo and P. English
(eds.), Development, Trade, and the WTO: A Handbook , The World Bank, Washington, DC, p. 450.
10Anderson, R. & Holmes, P. (2002) "Competition Policy and the Future of the Multilateral Trading
System", Journal of International Economic Law , p. 541.
11Ibid p. 545.
12See for example Annex 3:A(ii) of the Marrakesh Agreement Establishing the World Trade
Organization: "The assessment carried out under the review mechanism takes place, to the extent relevant,against the background of the wider economic and deve lopmental needs, policies and objectives of the Member
concerned, as well as of its external environment. Howe ver, the function of the review mechanism is to examine
the impact of a Member's trade policies and practices on the multilateral trading system."
13Providing the international implications of policy was considered important in the context of IMF
Article IV Reports: International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a
Group of Independent Experts , IMF, Washington, DC, p. 14.WT/WGTCP/W/243
Page 8
19. Once a CPRM has reached the second round of reviews, it would seem useful to refer to the
recommendations from previous reports and assess their implementation.  This follow-up process is
quite common in peer review systems and increase s the peer pressure on members, who know that
outstanding issues will be identified in the next report and form part of the basis for measuring their
progress.
5. Confidential Information
How should confidential information be treated?
20. Competition authorities obviously work with a great deal of sensitive confidential
information.  It would be important to protect this information during the investigation stage and to
declare that any CPRM would not require the disclosure of confidential information or other
information the disclosure of which was prohibited by national law.
B. DEFINITION OF PEERS
1. The Peer Group
Who should compose the peer group?
21. The peer group could comprise representatives from one, some or all of the following groups:
− National delegates:  These would be the general diplomatic delegates of members to the
relevant international organization. Their presence could be useful in expressing the
official positions of the members, including the views of both competition and tradeauthorities.  However, these delegates are unlikely to be competition policy experts.
− Officials from national competition authorities:  A definition of peer review would
necessarily involve these officials, si nce they come from the same "occupation,
profession, or industry".  These officials would be well-informed about competition
issues and would understand the language of competition.  Involvement of national
competition authorities could help allay fears about trade officials interfering in thecompetition field.
− Officials from national trade authorities:  Officials from national trade authorities could
help identify anti-competitive conduct limiting the contestability of national markets or
more generally creating trade distortions.  They could also help to assess the
compatibility of national competition laws with core WTO principles.
− Civil society. It would also be possible to permit consumer groups, academics and other
relevant elements of civil society to participate in the examination stage of a CPRM.
However, none of the peer review mechanisms  examined in this paper permit this, and
the WTO has traditionally permitted only limited non-government involvement in
relation to amicus submissions.
22. For a CPRM within a trade organization, should competition officials, trade officials, or both
be involved?  Competition officials would undoubtedly want to provide their expertise in a peerreview process under a CPRM focussing on the competition regime including the reviewed country's
competition institutions.  At the same time, re views under a CPRM housed in a trade organization
would likely study the interaction of national competition law and policy with trade law and policy
and this would need to involve trade officials.  A joint arrangement would ensure that each review
covered both perspectives, for example addressing both efficiency considerations and market-accessconsiderations.  Trade and competition experts could provide complementary skills and contrastingWT/WGTCP/W/243
Page 9
views during the examination stage.  The final decision on this issue may require a compromise
between scope and economy.  It would be desirable to recommend (rather than mandate) attendance
by certain officials or representatives, since otherwise members, particularly developing country
members, might not have the resources to comply.
Should non-governmental organizations (NGOs) be pe rmitted to submit papers and documents, make
presentations to the peer group and ask questions in the examination stage?
23. One argument for allowing NGOs to make submissions to the peer group is that this would
help build and maintain a competition culture.  However, NGO involvement in the examination stage,
runs the risk of reducing the effectiveness of the process, by inhibiting free and frank discussion.  On
the other hand, in the investigation stage, NGOs may play a vital role in informing the report-writer
about issues in the country under review, and adding a perspective that the investigator is unlikely to
find in interviews with the national competition au thority or other government agencies.  Arguably,
they might also contribute written submissions, pe rhaps at the risk of overburdening members with
documents.  Acceptance of submissions could be allowed at the discretion of the peer group, just as
WTO Panels and the Appellate Body have limited discretion to accept amicus curiae briefs within the
WTO dispute resolution process.14
2. Examiners
Should lead examiners be appointed to the peer group? If so, on what basis?
24. Most peer review mechanisms examined in th is paper include lead examiners (for example,
the OECD Bribery Convention monitoring pr ogramme, the OECD Economic and Development
Review Committee (EDRC) Economic Surveys, the OECD Competition Policy Reviews and the
WTO TPRM).  One potential drawback of the appointment of lead examiners is that this mightdiscourage other members from participating fully in the examination stage.
25. However, in the peer review mechanisms reviewed below that include examiners, the use of
lead examiners has not impeded lively questioning by  other members.  In fact, opening the floor to
additional questions following the lead examiners' examination helps to ensure a thorough
examination, generate additional insights, and maintain the spontaneity of the examination and theinterest of all members.  Further, lead examiners can  work together to ensure that the major topics will
be taken up, and in an orderly fashion; without this process, the entire examination would be left to
chance.
26. If lead examiners were to be appointed, certain conditions of expertise could be imposed.  For
example, a lead examiner with trade expertise and another with competition expertise could be
chosen. It might be appropriate to select lead examiners from those members with reasonable
experience operating a competition system.  As more members developed their laws and gainedexperience, the pool of members from whom lead examiners were drawn could be broadened.
27. Lead examiners could be selected by the: (a) member under review; (b) secretariat from a list
of possible lead examiners nominated by members; or (c) secretariat. Options (a) and (c) would have
the advantage of simplicity, but option (a) could reduce the independence of the lead examiner.
Option (b) could increase the confidence of members in the lead examiners and options (a) and (b)could encourage diversity in the identity of lead examiners.
                                                     
14Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products,
WTO Doc WT/DS58/AB/R (12 October 1998); Appellate Body Report, European Communities - MeasuresAffecting Asbestos and Asbestos-Containing Products, WTO Doc WT/DS135/AB/R (12 March 2001).WT/WGTCP/W/243
Page 10
C. VOLUNTARY OR COMPULSORY PARTICIPATION
Should participation in a CPRM be voluntary or compulsory?
28. One argument for compulsory participation in a CPRM is that this would ensure that all
members participate in the peer review process.  Compulsory participation would also signal how
important members consider trade and competition issues.
29. One argument for voluntary participation in a CPRM is that peer review depends on mutual
trust between members and shared confidence in the process.  Where these elements exist the parties
would be likely to volunteer for peer review, but where they do not there would be no point
attempting to force the process.  This is because  it is important that the member under review co-
operates and provides information during the peer review process, including in relation to areas of
weakness or difficulty.  For example, in reviews conducted by the OECD Competition Committee,
countries have openly commented and asked for advice on difficult issues.
D. COSTS AND RESOURCE IMPLICATIONS
1. Likely Costs
What are the likely costs to the secretariat of a given peer review process?
30. Costs and resource demands increase as the size, scope and coverage of the peer review
process expands in any stage of the process. The number of members participating in particular peerreview mechanisms ranges from 21 members (APE C Individual action plan (IAP) Reviews) to 184
members (IMF Country Surveillance Mechanism). Review frequency varies between yearly (IMF
Country Surveillance Mechanism) and no set review  frequency (APEC IAP Reviews).  The average
number of secretariat person hours required for a final report therefore varies substantially.  The
OECD Competition Reviews are prepared with three months of senior professional staff time, whilesenior professional staff time required for other mechanisms, ranges from 6 months (OECD Bribery
Convention Monitoring Program) to 2.75 years (OEC D EDRC Reviews).  The costs of a final report
in some of these peer review mechanisms are substantial, and perhaps too high for a CPRM intended
to examine numerous countries each year.  At the same time, it might be useful to consider these costs
as an investment in economic progress.  A sound and constructive final report could help to strengthena national authority and to assist it in its advocacy and enforcement missions, with potentially
significant economic gains to the member under review.
2. Technical Assistance
Should technical assistance be provided to developing countries for the investigation stage?
31. Even if the secretariat conducts many of the tasks required for the review, the member under
review will still incur financial and other costs.  A rigorous review is demanding on the member under
review, both in terms of time to respond to information requests and to organise and receive the visitof the review team.  Technical assistance funding for reviews might therefore be considered desirable
for developing countries, and particularly LDCs.
15
                                                     
15For example, in 2000, the Federal Republic of Germany made DM1 million available over a four-year
period to undertake WTO Trade Policy Reviews of developing countries and to improve the TPRM to betteradapt it to the requirements of developing countries.WT/WGTCP/W/243
Page 11
E. OTHER ISSUES
1. Roles and Duties of the Secretariat and Members
What roles should the member under review and the secretariat play during the investigation stage?
32. Peer review systems may assign different tasks to the member under review and the
secretariat. At least three options are possible:
(a) the member under review conducts its own investigation and presents its investigation
report to the peer group at the examination stage, without secretariat involvement;
(b) the secretariat conducts an investigation and prepares an investigation report, while the
member under review simply responds to information requests from the secretariat (for
example, as occurs under the WTO TPRM, the IMF Country Surveillance Mechanism
and the current OECD Competition Policy Reviews).  The depth of secretariat
involvement would vary, for example depending on whether the secretariat conductson-site visits and who it consults (government officials, interest groups, civil society,
academics); or
(c) the member under review and the secretariat conduct separate investigations and
prepare separate investigation reports, which are then sent to the peer group either
separately or as a consolidated document prepared by the secretariat.
33. Option (a) would ensure acceptance by the memb er under review of the investigation report
and would minimise the costs of the investigation stage for the secretariat. However, it could also
result in investigation reports that do not follow a uniform structure and that are less critical than if
prepared by the secretariat.  Members would clearly have an incentive not to be pessimistic or harsh
in reviewing themselves, for both political and economic reasons.
16  In addition, in some cases
members might be unaware of or unable to recognise problems in their own systems. Experience in
the OECD Competition Committee bears this out. Prior to the current round of peer reviews, countries
submitted their own reports, which served as the sole basis for the review.  These reports were
invariably less informative and critical than the reports currently prepared by the secretariat.
34. Option (b) would have the advantage of maintaining continuity within a CPRM and
increasing consistency and comparability of different reports (i.e. reports on different countries or
reports on the same country at different times).  As noted above, OECD experience with its
Competition Policy Reviews has seen both advantages realised in practice.  The secretariat might be
better suited to producing "objective" reports, as a disinterested third party. Developing countries
might also support secretariat involvement given their limited resources and the potential support with
capacity building and technical assistance that the secretariat could offer.  For example, under the
WTO TPRM when a LDC is reviewed, the WTO secretariat provides a three- to four-day seminar forits officials on the WTO, the trade policy review exercise, and the role of trade in government policy.
However, this option would involve higher costs for the secretariat, and the member under review
might not feel in control of the process.
35. Option (c) would encourage acceptance of the investigation report by the member under
review and could minimise errors and omissions.  However, it could also entail inefficient duplicationof work and delays in the process.
                                                     
16International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a Group of
Independent Experts, IMF, Washington, DC, p. 18.WT/WGTCP/W/243
Page 12
36. Each of these options could be varied slightly by including a period of consultation on a draft
investigation report (involving consultation with the member under review, the secretariat and,
potentially, other interested parties) before the investigation report is finalised and the process moves
to the examination stage.  For example, for the TPRM exercise the WTO Secretariat progressively
submits its draft report to the member under review for verification of factual content.  In the OECDCompetition Policy Reviews, a draft is submitted to the country under review for fact verification
prior to circulation to the Competition Committee.  This process is useful in identifying errors, but can
also extend the review process.  Another variable is whether the secretariat investigation includes a
mission to the country under review (for example, as under the current OECD Competition Policy
Reviews and Phase 2 of the OECD Bribery Conv ention Monitoring Programme) or is conducted
entirely from the secretariat headquarters relying on questionnaires (as in Phase 1 of the OECD
Bribery Convention Monitoring Programme).
What should be the duties of members under review in a CPRM?
37. Members under review in a CPRM should have a duty to co-operate with the secretariat, for
example by making documents and data available, responding to questions and requests for self-
assessment, facilitating contacts, and hosting on-site visits.  This would require time and effort from
members' civil servants.  The question of whether to include an obligation to use 'best endeavours' (orsimilar) to co-operate with the secretariat raises issues similar to those discussed above in relation to
whether a CPRM should be voluntary or compulsory.
17
2. Dissemination
Should final reports be subject to an approval process? If so, what type?
38. Whether final reports should be subject to approval largely depends upon the political
sensitivities of a CPRM review and members' confidence in a CPRM process up to that point. The
advantage of an approval process is that members would retain complete control of the main product
of a CPRM.  The disadvantage is that it would add another stage to the process and could mean that
final reports are not always produced, or are significantly watered down.  This would reduce the
comprehensiveness and utility of a CPRM. In addition, if members do not have confidence in aCPRM it would be preferable to address their concerns rather than simply adopting an approval
process.
39. Approval of a final report could be granted by consensus of all members or by majority,
perhaps stating any differences of opinion among the members.  Alternatively, approval could be
automatic in the absence of a consensus against it.  If no approval process were used, the peer review
report would be left under the responsibility of the secretariat.  Final reports in OECD peer review
processes are sometimes but not always subject to approval.  EDRC reviews of OECD membercountries are formally approved by the peer gr oup.  EDRC reviews of non-OECD countries are
published under the responsibility of the OECD Secretary-General, as are the Competition Policy
reviews.
How should final reports be publicised? Should they be published?
40. Under some peer review mechanisms the final report is followed by a press release by the
secretariat, summarising the main features of the final report for the media.  The secretariat may also
organise press events or seminars to publicise the findings of the final report.  Publication of the
OECD EDRC reviews and the regulatory reform reviews are typically accompanied by a press
conference, often in the country under review.  Other methods may also be used, such as in the case of
the Anti-Bribery Convention the country implemen tation reports are published on the OECD internet
                                                     
17See paragraph 28 ff.WT/WGTCP/W/243
Page 13
site.  A combination of two levels of transparency - towards peer countries and towards public opinion
- contributes to the effectiveness of peer review and peer pressure.  Publicity could assist countries to
make reforms, which might otherwise be blocked by interest groups.
How should the level of peer pressure be increased?
41. The effectiveness of peer review relies on influence and persuasion.  Obviously, a negative
finding against a member would only result in reform if the relevant government agreed with the
finding or was concerned about the repercussions of ignoring it. One way of increasing the level of
peer pressure would be to publicise final reports as discussed above.
42. Another technique to increase the amount of peer pressure on members would be for the
secretariat to publish quantitative assessments of performance against the review criteria.  This could
include ranking members according to their perform ance.  For example, the European Commission's
Internal Market Scoreboard ranks EU Member States according to their performance in moving
towards an internal market.  This encourages  competitiveness between members to improve
competition policy.  This issue is separate from that of whether a CPRM should attempt to measure
the quantitative impact of restrictive measures.  However, quantitative assessments and rankings
could oversimplify issues and generate false distinctions between members.
43. The peer review process must be thorough and credible if it is to impose peer pressure. For
example, one impression of certain OECD peer review mechanisms is that the final report exerts
much less peer pressure than that exerted during the investigation and examination stages.18  On the
other hand, the OECD EDRC reviews and OECD competition reviews probably have the greatest
impact on final publication. Indeed, the potential effect on public opinion of these reviews is reflectedin the sensitivity of governments as to their subject matter and the timing of their release.
3. Relationship with the Trad e Policy Review Mechanism
What relationship should a CPRM have with the WTO's TPRM? Specifically, should a CPRM be
integrated into the TPRM, exist as a separate  mechanism, or temporarily exist as a separate
mechanism?
44. Several arguments exist against a CPRM being integrated into the TPRM.  For example,
separation would allow the mechanisms to operate with different processes and methods, catering for
the different needs of the two subject areas. In addi tion, diversity in policy review approaches in the
WTO might encourage innovation.  Also, an expansion in the scope of coverage might detract from
the effectiveness of surveillance overall.
19  Finally, the TPRM has a number of limitations that would
affect a CPRM if integrated within it.  For example, it might be argued that the long periods between
reviews of certain members under the TPRM are undesirable or that the Trade Policy ReviewDivision has insufficient resources to expand its scope.
45. Competition policy affects trade and therefore, to the extent that a CPRM were focused on the
trade effects of members' competition policies, it could be integrated within the TPRM framework.
This would create a coherent and unified system of policy review, increase the visibility of links
between members' trade and competition policies, and facilitate discussion of these policies as apackage.  It would also enable an interdisciplinary approach, drawing on the experience and
knowledge of trade and competition experts.  As a practical matter, a unified system might also
                                                     
18 OECD Development Centre Seminar, (2002), "Peer Pressure as Part of Surveillance by International
Institutions: Discussion led by Mr. Niels Thygesen", OECD, Paris, 4 June 2002, p 12.
19This is a concern with IMF Article IV Reviews, which have expanded their scope into structural issues
of a non-financial nature: International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report
by a Group of Independent Experts , IMF, Washington, DC, p. 13.WT/WGTCP/W/243
Page 14
prevent duplication of tasks and limit resource demands on members.  This could be particularly
important for some developing countries that already have difficulty attending TPRM meetings.
Integrating a CPRM into the TPRM would not requ ire a CPRM to be 'shoe-horned' into the TPRM.
Trade-related competition issues are already being included in WTO Trade Policy Reviews.  The
TPRM framework itself could be reformed, both to accommodate a CPRM and to improve itgenerally.  However, such reform would require additional resources to be directed to the Trade
Policy Review Division of the WTO.
46. Another option would be to create a CPRM separately from the TPRM but eventually to
integrate it into the TPRM.  This option would be appropriate if members considered that a CPRM
and the TPRM have distinct short-term needs but similar long-term needs.  For example, as some
countries are still establishing their competition regimes and gaining experience, it might be important
initially to have more frequent CPRM than TPRM reviews.WT/WGTCP/W/243
Page 15Name Members Review Frequency Peer Group Review Criteria ParticipationSecretariat Cost 
(hours) Strengt hs Weaknesses
APEC IAP Reviews 21Flexible, only 2 country 
reviews conducted to dateThe members of the 
APEC Senior 
Officials MeetingThe completeness, comprehensiveness and 
clarity of the IAP; and the efficacy of the IAP 
with respect to the Osaka Action AgendaVoluntary N/AInvolves the business sector; records 
liberalisation and reforms; inhibits policy 
backsliding  IAPs could be more comprehensive, 
more transparent and more user-
friendly
OECD Competition 
Policy Reviews30Flexible, approximately 2-
4 country reviews 
conducted each yearThe Competition 
Committee and an 
Ad hoc 
Multidisciplinary 
Group of ExpertsAuthority/effectiveness of the competition 
institution(s) including the adequacy of basic 
legislation, enforcement structures and 
practices, human and financial resources, 
legislative and regulatory exclusions and 
advocacy functions. See OECD (1997).Voluntary3 months of senior 
staff timeUse of policy options and 
recommendations; strong participation 
of non-reviewed countries; specialist 
knowledgeNo review to see whether 
recommendations were implemented
WTO - Trade Policy 
Review Mechanism1444 members with largest 
share of world trade every 
2 years; 16 members with 
the next largest share of 
world trade every 4 years; 
other members every six yearsWTO General 
Council meeting as 
the Trade Policy 
Review BodyMembers' trade policies and practices and 
their impact on the functioning of the 
multilateral trading systemCompulsory1.87 person years 
(1.25 years by 
economists)Provides technical assistance and 
capacity building for developing 
countries; uses standard structure for 
reports; produces detailed and 
analytical reportsLimited secretariat resources; limited 
participation by other members at 
meetings; lack of recommendations or 
prescriptive elements
IMF-World Bank 
Financial Sector 
Assessment Program 
(FSAP)184Flexible, approximately 2-
4 country reviews 
conducted each yearN/ACompliance with international standards and 
codes relevant to the financial sectorVoluntary7 person weeks (for 
the assessment of 
standards and codes 
only)Use of external experts is efficient and 
enhances legitimacySurveillance may be uneven across 
members
IMF Country 
Surveillance 
Mechanism184 Generally yearlyIMF 24-member 
Executive BoardMacroeconomic and financial sector policies and structural policies and governance issues 
where relevantCompulsory 2.25 person years Provides high quality analysis of the 
economic situation of a large number of 
members with quite different policies 
and at quite different levels of 
developmentExecutive Board lacks the resources 
to deal adequately with all reports; 
limited interaction; not always effective 
in preventing members following 
unsustainable policies
OECD Bribery 
Convention Monitoring 
Programme - Phase 235 VariesThe Working Group 
on BriberyThe structures put in place to enforce the laws 
and rules implementing the Convention and 
their application in practiceCompulsory 4-8 person monthsIncreases pressure on countries to 
implement the Bribery Convention; 
perceived as fair and thoroughThird parties such as Transparency 
International do not have a formal role 
in the process
OECD EDRC 
Economic Surveys30Each member every 12-18 
monthsThe permanent 
delegates of OECD 
member countriesMacroeconomic and structural issues, such as 
how labour, product and financial markets 
operate as well as the role and functions of 
the public sectorCompulsory2.75 person years 
(1.75 years by 
economists)Well-regarded by OECD member 
countries for depth, rigour of analysis 
and regular review of past 
recommendations; complements IMF 
Article IV ReportsDifficult to ensure that all EDRC 
members have appropriate expertise 
and sufficient time to prepare for 
reviews; a few small countries are 
hardly represented at all
FTAA - CPRM 34 Still being negotiatedWT/WGTCP/W/243
Page 16
IV. SELECT PEER REVIEW MECHANISMS CURRENTLY IN USE
47. This section considers a number of existing peer review mechanisms, describing them
according to the generic framework developed in the second section.  It examines the definition of
peers and the size, scope and coverage of each mechanism.  It also endeavours to comment on the
strengths and weaknesses of each mechanism, note the differences between members in terms ofeconomic development and policy, and estimate the cost of the investigation and examination stages.
The Table of Select Peer Review Mechanisms on page 15 summarises these details.
48. Unfortunately, inadequate data exists on the costs of the investigation stage of peer review
mechanisms.  Further, these costs may vary cons iderably between individual reviews depending on
the degree of difficulty of obtaining information in each case.  Nevertheless, a cost estimate is
included in this section based on an estimate of average secretariat hours required per member review.
The costs to the member under review during the inve stigation stage may also be significant.  It is
beyond the scope of this paper to examine these costs.   However, some idea of the relevant costs can
be gauged from the scope of the different peer review mechanisms and the precise division of labour
between the secretariat and the Member under review.  The costs of the examination stage are
comparatively minor, but an estimate of the length of the peer group meeting is also included where
available.
A. APEC IAP R
EVIEWS
1. Description of the Process
49. Asia-Pacific Economic Cooperation (APEC) currently comprises 21 members in the Asia-
Pacific region.  Individual action plans (IAPs) were introduced in 1996 to demonstrate APEC
members' commitment to the 1994 Bogor Goals of achieving free and open trade by 2010 forindustrialised economies and by 2020 for developing economies. IAPs are annual reports by each
APEC member setting out the steps that that member has taken to liberalise and facilitate trade and
investment.
20  The steps taken are categorised according to 14 issue areas contained in APEC's Osaka
Action Agenda.21  These areas are tariffs, non-tariff measures, services, investment, standards and
conformance, customs procedures, intellectual property rights, competition policy, governmentprocurement, deregulation, dispute mediation, mobility of business people, implementation of the
Uruguay Round outcomes (including rules of origin), and information gathering and analysis. IAPs
are published on the internet.
22
50. Peer reviews based on IAPs are undertaken on a voluntary and non-binding basis.  The review
criteria are: the completeness, comprehensiveness and clarity of the IAP; and the efficacy of the IAP
with respect to the Osaka Action Agenda.  APEC fi rst established a peer review mechanism in 1998.
However, not all APEC members subjected themselves to review. At the 11th APEC MinisterialMeeting in Auckland in 1999, APEC Ministers noted the value of the IAP peer review process and
stated that APEC should seek to raise the profile and increase the rigour of the process.  As part of the
2000 work programme, Ministers directed officials to consider conducting regular peer reviews of
members. In 2001, the 13
th APEC Ministerial meeting in Shanghai adopted a proposal by Japan to
increase the objectivity and transparency of the IAP peer review process.  The changes included theappointment of an IAP review team, the commissi oning of an expert to conduct independent in-
country research and analysis and prepare an analytical report, and the publication of peer review
reports on the APEC Secretariat website.
                                                     
20http://www.apec-iap.org/help/UserGuide/understanding_IAPs.htm#_ftn1
21http://www.apecsec.org.sg/virtualib/history/osaka/agenda.html
22http://www.apec-iap.org/                            WT/WGTCP/W/243
Page 17
51. The investigation stage of the revised process begins with all members reviewing the IAP of
the member under review and providing factual comme nts and questions to the APEC Secretariat.  A
Review Team is formed comprising a Moderator and Discussant (both officials from two different
APEC members), an independent expert (selected by the APEC Secretariat from a list of experts),23
and a member of the APEC Secretariat.  The name s of the proposed members of the Review Team are
submitted to the Senior Officials Meeting (SOM) for approval.  The Review Team compiles a
questionnaire based on the comments and questions submitted by APEC members, the APEC
Business Advisory Committee (ABAC), and other APEC fora.  The Review Team sends the
questionnaire to the member under review for response. Relevant agencies within the member provide
written answers, and the member sends a consolid ated response to the questionnaire to the Review
Team approximately one month later.
52. Subsequently, members of the Review Team (t ypically the independent expert and the APEC
Secretariat member) conduct an on-site visit to th e country under review.  The Review Team arranges
meetings with the key agencies that contribute to  the IAP to gather further information and discuss
any outstanding issues.  The independent expert compiles a draft investigation report (called the IAP
Study Report) on the IAP of the member under review and indicates its progress towards the Bogor
Goals.  The APEC Secretariat sends the draft in vestigation report to the member under review, the
Moderator, and the Discussant, requesting their comments within a week.  The Review Team then
finalises the investigation report.
53. The examination stage (called the IAP Peer Review Session) is held during a SOM.  The
Senior Officials are typically high level bureaucrats from the trade or foreign affairs portfolio.  The
Moderator chairs the IAP Peer Review Session and formal presentations are given by the independentexpert, the member under review and the Discussant. Questions about the IAP can then be posed by
the Review Team, other APEC member countries, and ABAC.  The member under review responds to
the questions and is encouraged to invite experts from relevant agencies to assist.  The member under
review may take questions on notice and prepare written responses to these questions at a later date.
The IAP Peer Review Session lasts approximately three hours. Comments made during the IAP PeerReview Session are placed on the record in a document called the Summary of the Peer Review
Session.
54. In the dissemination stage, the Report of the IAP Peer Review session is published on the
internet.  This report includes: the Summary of the Peer Review Session; the IAP Study Report;
Discussant remarks (the comments and questions submitted by APEC members after reviewing the
IAP of the member under review); the presentation by the member under review; questions and
answers; and written questions received at the session.
55. Japan and Mexico were the first APEC members to undergo the revised peer review process,
with their IAP Peer Review Sessions held in Acapulco, Mexico on 18 August 2002.  The APEC
Secretariat has published Reports of these IAP Peer Reviews on its website.
24 Thailand, Canada and
Australia have volunteered for peer review under th e revised process at the first SOM in Thailand in
February 2003, and several countries including Korea, New Zealand and Hong Kong, China havevolunteered for August 2003.
56. The APEC Secretariat is in the process of finalising guidelines for the IAP peer review
process, a process which should be completed by October 2002.  Given that the revised process was
used for the first time for the reviews of Mexico and Japan, some revisions to the process may be
                                                     
23The country under review is given the opportunity to exclude certain experts from the list of experts
from which the APEC Secretariat chooses.
24http://www.apecsec.org.sg (see news and events, media announcements, "APEC Strengthens Peer
Review Process").WT/WGTCP/W/243
Page 18
required. For example, the final report for Japan included suggestions for improving IAPs by
simplifying them.25
2. Discussion of the Process
57. The strengths of APEC's IAP peer reviews are that they: are entirely voluntary; involve the
business sector through ABAC; record liberalisa tion and reforms achieved by APEC members since
the 1980s and encourage the process to continue; inhibit policy backsliding; and provide a focal point
for encouraging reform within domestic agencies.  However, some APEC members and the ABAC
have suggested that IAPs need to be more comprehensive, more transparent and more user-friendly.
An Australian DFA 1999 Background note on reviews of IAPs suggested that the way in which
materials are presented in IAPs tends to diminish user-friendliness.26  Due to the focus of the IAPs on
trade and investment liberalisation, there is potential overlap between the IAP peer review process and
other processes such as the WTO TPRM.
B. OECD C OUNTRY REVIEWS OF REGULATORY REFORM — C OMPETITION POLICY REVIEWS
1. Description of the Process
58. In 1998, the OECD began producing reviews of national competition policies as part of a
larger project on regulatory reform. Participation in these regulatory reform reviews is entirely
voluntary.  At the date of writing, reviews of 16 OECD member countries have been completed and
two more are in progress.27  Each review has the same format and is based on background reports
prepared by experts from five different OECD directorates.  One chapter assesses the macroeconomic
context for regulatory reform, the strengths and challenges of regulatory reform, and the challenges
confronting future regulatory performance.  Three thematic chapters examine the quality of regulatory
institutions and government processes, competition policy and enforcement, and the enhancement ofmarket openness through regulatory reform.  Each review also contains chapters on particular sectors
such as electricity and telecommunications.  The following analysis focuses on the review process
conducted for the chapter on competition policy and enforcement (here described as the Competition
Policy Review).
59. The investigation stage of the Competition Policy Review begins with the secretariat sending
a detailed questionnaire to the country under review .  The basic framework for the review and the
questionnaire were established in the OECD's 1997 report on Regulatory Reform. Next, the secretariat
expert who will draft the chapter visits the country under review to meet competition authorities, other
government officials, trade unions, businesses, academics and public interest groups.  These visits
typically last one week.  The expert then prepares a draft "Report on the Role of Competition Policy
in Regulatory Reform".  This Report covers: (i) the competition policy's historical foundations; (ii)
substantive issues including content of the comp etition law; (iii) institutional issues such as
enforcement structures and practices; (iv) limits of competition policy including exemptions and
special regulatory regimes; (v) competition advocacy for regulatory reform; and (vi) conclusions and
policy options.  The draft Report is then sent to the country under review for factual verification.  The
country under review is asked to verify the body of the report; draft policy recommendations are
supplied later.  The draft Report serves two purposes: it is the investigation report on which the peerreview is based and a revised version of it is ultimately published, integrated with other chapters, in an
overall review of the country.
                                                     
25IAP Study Report — Japan 2001, page 16.
26http://www.dfat.gov.au/apec/meetings/apec1999/1999_reviews.html
27Canada, the Czech Republic, Denmark, Greece, Hungary, Ireland, Italy, Japan, Korea, Mexico, the
Netherlands, Poland, Spain, Turkey, the United Kingdom and the United States. Competition Policy Reviews of
Finland and Norway are currently underway.                            WT/WGTCP/W/243
Page 19
60. In the examination stage, the OECD Competition Committee reviews the draft Report and
examines officials from the competition authority of the member under review.  The peer group
comprises senior officials from national competition authorities.  The examination itself takes
between two and three hours, with the major elemen ts being a vigorous question and answer session
run by two lead examiners, followed by additiona l questioning from other members of the Committee.
Each question period runs for about one hour.  This question period is sandwiched between a series of
opening and closing statements involving the country under review, the report drafter and the
Committee's Chairman.  To the extent that additi onal information is adduced during the examination
or it appears that revisions to the recommendations are in order, a revised report is prepared following
the examination.
61. While the examination by the Competition Committee forms the "heart" of the review
process, the draft Report does go through further processing.  In particular, the secretariat integratesan abbreviated version of the revised Report as one chapter in an overall report on the country, which
is then reviewed by another group of OECD delegate s.  That subsequent review is of less importance
to this paper than the initial, in-depth review by  the Competition Committee; the subsequent review is
completed in about two hours and the review ers' time is spread across six chapters.
62. In the dissemination stage, the final country review is published, with the full-length chapter
on competition policy annexed as a "background report".  This overall Report is published under the
responsibility of the OECD Secretary General.  Th e country under review has no right of veto over its
contents.  The Report is also typically publicised by a press conference in the country under review.
2. Discussion of the Process
63. OECD member countries particularly value the section on policy options and
recommendations in each Competition Policy Review .  This section sets out a number of forward-
thinking policy options following a frank and critical assessment of current strengths and weaknesses
of the country's competition policies and an analysis of the potential benefits and costs of competition
policy regulatory reform.
64. OECD member countries that are not under re view typically show a strong interest and
participate fully in the Competition Policy Review process, particularly through the Competition
Committee. This may be because such reviews are only one part of the Competition Committee's
broader agenda, so members of the Competition Committee are used to meeting to work together and
know each other well:  "[t]he … frequent personal contacts also give rise to substantial trust and peer
identification among the national regulators".  This may be an important feature in peer review
processes generally, which are premised on open dialogue.
65. A weakness of Competition Policy Reviews is the lack of review of past recommendations
and the country's implementation of an reaction to these recommendations.  This limits the potential
for improvement of the process and also reduces the potential peer pressure exerted by the process.
However, formal reviews of past recommendations would require additional time and financial
resources.
3. Costs and staffing
66. Preparation of a Competition Policy review typically takes three months of senior staff time,
including investigation, the fact-finding mission, drafting, the review meeting, and completion of the
final report.  The reports are prepared by a single person, not an investigative team, and this has
worked well.  Note, however, that to be effective, the drafter must have considerable hands-on
experience in a competition authority. This gives the report authority and promotes its acceptance bythe country under review.WT/WGTCP/W/243
Page 20
C. WTO T RADE POLICY REVIEW MECHANISM
1. Description of the Process
67. The WTO periodically reviews the trade policy of WTO members through the TPRM, which
was established provisionally in 1989 and later confirmed by Annex 3 of the Marrakesh Agreement.28
Paragraph A(i) states that the purpose of the TPRM is "to improve adherence by all Members to the
rules, disciplines and commitments" made und er the WTO Agreements "by achieving greater
transparency in, and understanding of, the trade policies and practices of Members."
68. The WTO Trade Policy Review Division (TPRD) conducts member-specific reviews on a
rotational basis, with a higher level of frequency for countries with a higher 'share of world trade'.29
The TPRD reviews the trade policy of the four members with the highest share of world trade(currently the United States, Canada, Japan and the European Union, with the European Union
countries counted as one) every two years.  It revi ews the sixteen members with the next highest share
of world trade every four years. It reviews all ot her members every six years, although a longer period
may be set for LDCs.  At the end of 2001, the TPRM had conducted 150 trade policy reviews,
covering 84 out of 128 members (counting the European Union as one member).  The reviewed
members represented around 83% of world trade in 2000.
30
69. In the investigation stage, two investigation reports are produced.  The first is supplied by the
member under review and describes their trade policies and practices (called the Government Report).
The second and generally more substantial report is prepared by the TPRD on the basis of its own
information and information provided by the member under review in response to a questionnaire
from the secretariat (the Secretariat Report).  Part of the secretariat's information is obtained from a
visit to the country under review to consult government officials, private enterprises and researchinstitutes. The secretariat has sometimes tried to work largely from published sources, official reports
and the internet.  This approach can reduce the overall time for preparation of a review by about one
to two months, but it requires substantial research by the secretariat and only works effectively where
adequate published material exists.  The secretariat periodically submits its draft Secretariat Report to
the Member under review for verification and factual input.  The secretariat revises the SecretariatReport accordingly and finalises it on its own authority.  To preserve the independence of its
evaluation, the summary observations are not subject to the same verification process.
70. Secretariat Reports normally contain a "Summary of Observations" and four chapters.
Chapter I covers the major features of the economy, recent economic developments, trade patterns in
goods and services, evolution of foreign investment, and trade-related aspects of the foreign exchange
regime.  Chapter II covers institutional aspects of trade and investment policy making, including
participation in multilateral and regional arrangements, as well as trade disputes and consultations.Chapter III deals with measures directly affecting imports, exports and production, while Chapter IV
looks at measures by sector (agriculture/forestry/fisheries, mining, industry and services). This
standardised form helps to ensure consistency of treatment, and delegates often value the ability to
find given topics in the same places across reports.
31 While competition issues are not formally part of
the TPRM mandate, increasingly the secretariat and countries under review choose to report on these
                                                     
28For more information on the historical origins of the TPRM see: Kessing, D. (1988), Improving Trade
Policy Reviews in the World Trade Organization  pp. 4–5.
29On the advantages of using "share of world trade" see: Mavroidis, P. (1992), "Surveillance Schemes:
The GATT's New Trade Policy Review Mechanism", Michigan Journal of International Law , Vol. 13, Ann
Arbor, p. 379. Petros C. Mavroidis, 'Surveillance Schemes: The GATT's New Trade Policy Review Mechanism'(1992) 13 Michigan Journal of International Law 374, 379.
30Trade Policy Review Body, Report of the Trade Policy Review Body for 2001 , WTO Doc WT/TPR/101
(18 September 2001) para 4.
31Laird (1999), p. 751.                            WT/WGTCP/W/243
Page 21
issues to the extent that they relate to trade in goods and services and regulatory reform.  The Chair of
the WTO General Council meeting as the Trade Policy Review Body (TPRB) has therefore identified
trade-related competition issues as one of the "common themes" to emerge during the course of
reviews conducted in 2001.32
71. In the examination stage, the TPRB (which is open to all members) discusses the Secretariat
Report and the Government Report.  The meeting begins with the member under review making an
introductory statement followed by comments by two examiners (called discussants) who are chosen
from the WTO membership to stimulate debate. Discussants speak in their personal capacity.
Typically, in advance of the meeting they circulate an outline of the main issues they intend to raise.
This gives "smaller member countries a rare opportunity to question the country under review directly
about its policies and practices that affect them adversely." 33  Questions from other participants at the
meeting are also permitted.  At the end of the meeting the Chair presents concluding remarks.
72. In the dissemination stage the following documents are published and made available on the
WTO website: the two reports, the minutes of the TPRB meeting, a first press release based on the
Secretariat Report including a summary of the Secretariat Report and parts of the Government Report,
and a second press release containing the conclusions of the TPRB Chair.
2. Discussion of the Process
73. WTO secretariat estimates secretariat costs for the average report to be 1.87 person years, of
which 1.25 years is by economists.
74. Since 2000, TPRM reviews of LDCs have provided a systematic response to their technical
assistance needs.  For example, the review process for a LDC now includes a three-to four-day
seminar for its officials about the WTO and, in particular, the TPRM and the role of trade in economicpolicy.
34  In addition, the Secretariat Report for a LDC review includes a section on technical
assistance needs and priorities, as identified in co-operation with the member under review, with a
view to feeding this into the WTO's Integrated Framework process.  Finally, work on the seminars
and the technical assistance section in the Secretariat Reports now involves close co-operation with
the WTO's Technical Co-operation Division. Concerns about time and resource costs for developingand least-developed country members to undertake reviews have also begun to be addressed, although
in a more ad hoc manner. First, by developed country technical-assistance funding for reviews; 
35 and
second, by support from the WTO Secretariat.36  However, the lack of recommendations and
prescriptive elements in the TPRM reports reduces their technical assistance role.
75. Following some early criticism that the Secretariat Reports were insufficiently analytical, over
the last five years the Secretariat Reports have become increasingly analytical and critical.  Thus one
commentator, in a comprehensive analysis of the TPRM, notes that the Secretariat Reports haveevolved from "largely descriptive catalogues of countries' protectionist measures into more thorough,
                                                     
32WT/TPR/101, para. 12.
33Kessing, D. (1988), Improving Trade Policy Reviews in the World Trade Organization p. 11.
34Such seminars have been held in 2001 in the context of the review of Uganda, and during the 2002
reviews of Haiti, Malawi and Mauritania.
35For example, a trust fund was established in 2000 by the Federal Republic of Germany making
DM1 million available over a four-year period to undertake reviews of developing countries and to improve themechanism to better adapt it to the requirements of developing countries. So far, it has provided funding for thereports on Madagascar and Uganda and for related expenses in the preparation of the Mozambique review, seeWT/TPR/101, para. 5.
36Such Secretariat assistance has been provided on re quest but to date has not been used extensively,
perhaps simply because countries are unaware that such help is available.WT/WGTCP/W/243
Page 22
incisive and analytical surveys of trade policies and practices".37  This has generally been seen as one
of the major improvements in the TPRM, with the associated point often being made that the level of
detail is one of the positive features of the Secretariat Reports.38
76. One former member of the WTO Secretariat has suggested that "the most acute" challenge
faced by the secretariat is simply carrying out the existing programme of reviews with the currentlevel of resources in light of the increasing membership of the WTO and the expansion of work for
each review.
39  However, the current level of resource use for the TPRM is already a matter of
concern for some WTO members.  According to certain observers, "the impression is that they would
be reluctant to see any substantial increase in staff".40
77. Another difficulty the TPRM faces is in encouraging attendance and participation by
members that are not under review. For example, in its report to the Singapore Ministerial Meeting in
December 1996, the TPRB noted that the level of representation and participation by the countryunder review had not always been matched by that of other TPRB members.
41  This remains a
concern, with the 1999 WTO appraisal concluding that "steps should be taken to make review
meetings more interactive, with greater participation by Members".42  In general, the attendance level
at meetings tends to correlate with the number of trading partners with close trade ties.  As a result,
the review of smaller and developing members tend s to produce lower attendance levels, undermining
the potential benefits of peer review for those members.
78. Finally, some commentators have noted a certain "resistance factor" to the review process by
members under review.43  This resistance is reflected in members' authorities expressing caution and
sometimes delaying in the provision of materials.  Increasingly, the secretariat is confronted with
questions such as "(w)hy do you need this information?" or "(w)hat has this to do with the WTO?".44
This resistance may be partially due to the increasingly analytical and detailed nature of Secretariat
Reports, although this is also an advantage of the TPRM as noted above.
D. OECD EDRC E CONOMIC SURVEYS
1. Description of the Process
79. The OECD EDRC conducts an Economic Survey (Survey) of each of the 30 OECD member
countries every 12 to 18 months.  The Surveys cover both macroeconomic and structural issues, such
as how labour, product and financial markets operate, and the role and functions of the public sector.
Each Survey has three main objectives:
− promoting better understanding of the country's situation and key challenges;
− enriching the policy debate, domestically and internationally; and
− issuing policy recommendations to improve the country's performance.45
                                                     
37Keesing (1998).
38Laird (1999), p. 762
39Ibid p. 761.
40Ibid p. 762.
41WT/TPR/27.
42WT/MIN(99)/2, p. 4.
43Laird (1999), pp. 761-2.
44Ibid p. 752.
45OECD (2002), Economic and Development Review Committee: Agreed Principles and Practices,
OECD, Paris, (ECO/EDR/DIV(2002)5) para. 3.4.                            WT/WGTCP/W/243
Page 23
80. In the investigation stage, the OECD Secretariat prepares a written questionnaire, which is
sent to the senior officials, experts and key economic players of the member under review.  The
recipients of the questionnaire are encouraged to provide written responses and relevant background
material promptly to the OECD Secretariat.  Next , the OECD Secretariat conducts an on-site visit to
the member.  During the visit, the OECD Secretariat holds discussions with each recipient of thequestionnaire.  The Secretariat then prepares a draft investigation report (draft Survey), which is
issued to all members of the EDRC three weeks before the review meeting.
81. The draft Survey aims to be "forward-looking" and to focus on what the authorities can do to
improve economic performance.  It endeavours to provide sharply-focused, clearly-articulated and
constructive policy recommendations and to address all key policy challenges. It also reviews
recommendations made by the EDRC in previous years (especially on structural matters) and outlines
any responses taken by the member under review.
82. The draft Survey typically comprises the following:
1. assessment and recommendations;
2. recent trends and prospects, and macroeconomic policy requirements;
3. overview of: structural policy developments; key challenges and priorities; and
implementation of structural reforms; and
4. in-depth structural chapter.
The topic of the in-depth structural chapter is  selected by the member under review from a
limited list of three or four topics identified as important by the OECD Secretariat based on completed
research.  After a sufficient number of Surveys - usually 10 or so - have covered a particular structural
topic, the OECD Secretariat synthesises the experiences of members concerning that topic and sets
out lessons for future policy in a separate report.
46 In some cases, the nature of the member under
review makes a slightly different review stru cture appropriate.  However, the EDRC adopts an
approach to economic analysis that is consistent across Surveys and consistent with relevant work
done by other parts of the OECD.
83. The EDRC appoints examiners for each Survey based on the following principles:
− there should be no reciprocal relationship between examiners and members under
review;
− two G7 countries should not examine the same member (G7 members are examined by
one G7 country and one non-G7 country); and
− for G7 member examinations, and as far as possible in other cases, one examiner should
be from an EU country and one from a non-EU country.
Examiners typically conduct several reviews of a particular member over time, enabling them
to develop an expertise in that country's economic situation and major policy issues.47
                                                     
46OECD (2002), OECD Annual Report , OECD, Paris, p 17.
47OECD (2002), Economic and Development Review Committee: Agreed Principles and Practices,
OECD, Paris, (ECO/EDR/DIV(2002)5) para. 1.9.WT/WGTCP/W/243
Page 24
84. The OECD Secretariat, the Chair of the EDRC and the examiners prepare a "Questions for
Discussion Note" (Note).  The Note identifies the key themes around which the discussion of each
draft Survey is organised.  It generally comprises policy questions grouped under two to four main
headings and is not more than two pages long.  It is closely related to the "Assessment and
Recommendations" section of the draft Survey.48  The draft Surveys and the Note are made available
to the member under review at the same time as all other members.
85. The objectives of the examination stage are:
− to assess the economic situation and policies, along with the principal objectives and the
means to achieve them, of the member under review;
− to formulate recommendations on the relevant policies and review recommendations
made in previous Surveys;
− to provide guidance to the OECD Secretariat for revising the draft Survey conclusions of
the peer group; and
− to identify any recommendations relevant to other members or bodies of the OECD.
86. The peer group in the examination stage is composed of the examiners and the EDRC, which
comprises representatives of the permanent delegations of all OECD member countries.  Typically,
the representatives of the delegations are economic or financial counsellors, sometimes assisted by
experts from those countries.  It is not unusual for the member under review to bring a reasonably
large delegation (as many as nine delegates) to respond to questions from the peer group.  The
examiners base their questions on the Note, which focuses the examination on the main policy issues.
The peer group examination takes place over one day, in two sessions of approximately three hourseach.  After an opening statement from the member under review of not more than 20 minutes, the
examination is broken down into macroeconomic poli cy matters, structural surveillance, and the in-
depth structural topic.  At the end of the discussion, the OECD Secretariat has an opportunity to
respond to points raised during the discussion and to propose changes to the "Assessment and
Recommendations" section of the draft Survey based on the discussion.  Finally, the EDRC Chairorally presents the conclusions to the major policy issues and the most important changes to the draft
Survey.
87. In the dissemination stage, the member under revi ew and the OECD Secretariat meet to agree
on changes to the draft Survey to respond to the discussion in the examination stage.  This meeting
typically occurs on the day after the peer group's examination.  Once the member under review hasagreed on the changes to the draft Survey, the OECD Secretariat provides all parts of the Survey that
have been substantially revised to the EDRC for approval.  It is possible for further changes to be
made to the draft Survey if members of the EDRC consider that it does not reflect their discussions.
88. The final report (being the Survey as approved by the EDRC) is published in English and
French. The release date is decided by the OECD Secretariat and the member under review.
2. Discussion of the Process
89. The Country Studies Branch of the OECD Eco nomics Department undertakes approximately
20 member reviews per year. It has five member country studies divisions, each comprising a head of
division, two secretaries, two statistical assist ants and six economists.  Each division completes
approximately four reviews each year.  Therefore, a very approximate guide to OECD Secretariat
                                                     
48Ibid paras 3.22–3.25.                            WT/WGTCP/W/243
Page 25
costs is 2.75 person years (1.75 years by economists) for each Survey.  However, the economists and
other staff contribute to other activities in additi on to their main task of preparing Surveys, so the
resource inputs per Survey may be closer to 2 person years.  Although each member is typically
reviewed every 12 to 18 months, the timing of reviews may be altered to accommodate special
circumstances, such as an electora l cycle or serious emerging problems.
90. In common with other peer review mechanisms, the direct impact of the EDRC Surveys on
OECD member countries and programmes over time is difficult to measure.  However, generally the
media and governments of countries under review do pay significant attention to EDRC Surveys.  It is
difficult to ensure that all EDRC members have appropriate expertise and sufficient time to prepare
for reviews.  Some major countries are less interested in and committed to the process than others, and
a few small countries are hardly represented at all apart from at their own reviews.  A number of
intergovernmental observers are invited to the examination stage, such as the IMF, WTO and WorldBank. However, engagement of and consultation with civil society is fairly low, being restricted to
discussions during the on-site visit.
91. EDRC Surveys are well-regarded by OECD memb er countries for their depth and rigour of
analysis and for their regular review of past recommendations.  In particular, the development of in-
depth structural chapters drawing on work by the OECD Policy Studies Branch has improved
technical analysis and understanding by OECD member countries of structural policy issues.  EDRC
Surveys, which have broad coverage but have focused increasingly on structural issues, complement
IMF Article IV Reports, which tend to focus more on macroeconomic and financial sector issues.
E. IMF C
OUNTRY SURVEILLANCE MECHANISM (ARTICLE IV R EPORTS )49
1. Description of the Process
92. The International Monetary Fund (IMF) contin uously monitors the economic and financial
policies of its 184 members. Part of this monitoring process is conducted pursuant to Article IV of the
IMF's Articles of Agreement (Article IV consulta tions).  The main objective of the Article IV
consultations is to prevent financial crises.  To this end the IMF holds consultations with each of its
members, normally every year.50  The review criterion is whether a member's economic developments
and policies are consistent with the achievement of sustainable growth and domestic and external
stability.  The Article IV consultations focus on: the member's exchange rate, fiscal and monetary
policies; its balance of payments and external debt developments; the influence of its policies on
external accounts; international and regional developments; and identification of potential
vulnerabilities.  The consultations thus primarily concern macroeconomic and financial sector
policies, but they also coverstructural policies and governance issues to the extent that they are
relevant to macroeconomic stability.  Another integral part of Article IV consultations involvesmonitoring the member's compliance with international standards and codes, such as those concerning
the transparency of central banks and financial institutions.  Members may seek to supplement Article
IV consultations with more intensive dialogue with IMF staff.  In addition, IMF surveillance of its
members extends to regional and multilateral surveillance and a Financial Sector Assessment Program
(see next section).
93. A typical Article IV consultation begins (in the investigation stage) with the relevant area
department drafting a "mission brief". This brief describes the economic situation in the country under
review and the staff's view of current policies and desirable changes.  The mission brief serves as an
agenda for the mission to the country and for the major issues to be discussed in the investigation
                                                     
49International Monetary Fund, Annual Report 2001  (IMF, Washington D.C., 2001), 7.
50In 2001, there were 130 reviews out of 184 countries.WT/WGTCP/W/243
Page 26
report.51  Next an IMF staff team visits the country. The team collects economic and financial
information and discusses with national authorities recent developments in the member's monetary
and fiscal policies. The staff team prepares a Concluding Statement , which summarises the
discussions with national authorities.  The member retains discretion whether to publish the
Concluding Statement.  After returning to headqua rters, the staff team prepares the investigation
report, which is called the Staff Report .  The Staff Report describes the member's economic situation
and discussions with national authorities, and evaluates the member's policies.
94. In the examination stage, the peer group is the 24-member Executive Board (the IMF's
permanent decision-making organ).  The Executive Board discusses the Staff Report, with the
appropriate Executive Director representing the Member under review.  The Managing Director or
Acting Chairman produces a Summary Text summarising this discussion.
95. In the dissemination stage, the Executive Director representing the Member under review
determines whether Staff Reports and the final report - called a Public Information Notice  (PIN)
(which contains background material and a version of the Summary Text) - are released to the public.
Most countries consent to the public release of both the PIN and the Staff Report.  The PINs and Staff
Reports (where they have been released) are published on the IMF website.52
2. Discussion of the Process
96. The Executive Board discusses a large number of Staff Reports (130 in 2001)53 as part of its
overall heavy agenda (which, apart from the Staff Reports, includes: approvals of IMF arrangements,
multilateral surveillance and policy issues, and administrative and other matters).54  The Executive
Board therefore has limited time and other resources in dealing with the Staff Reports.  It typically
spends 1.5-2 hours on each Staff Report. According to an external report evaluating IMF surveillance,
the examination stage tends to lack interaction between Executive Directors, who may need to rely on
prior comments received from the members they represent.55  This may partly reflect a fundamental
compromise between the depth of discussion in the examination stage and the number of reviews
undertaken.
97. IMF staff visiting a country are seen by IMF members to have a clear and comprehensive
understanding of the principal economic problems facing a country.  However, amongst some
members there is a perception that the IMF's analysis is not sufficiently flexible and does not fully
appreciate the political environment in which decisions are taken.56
98. The Article IV consultations provide an example of a peer review system dealing with
members with quite different policies and quite different levels of development.  For developing
countries, the Article IV consultations have played an important role in assisting in the training of
finance bureaucrats, both through informal interaction between IMF officials and governmentofficials and through scholarships and employment at the IMF.
57  Even in developed countries, the
                                                     
51International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a Group of
Independent Experts, IMF, Washington, DC, pp. 24–25.
52'Public Information Notice Index', http://www.imf.org/cgi-shl/create_x.pl?pn
53International Monetary Fund, Annual Report 2001  (IMF, Washington D.C., 2001), p. 7.
54Ibid p. 81.
55International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a Group of
Independent Experts, IMF, Washington, DC, p. 34.
56Ibid p. 35.
57Chayes, A., and A. Chayes (1995), The New Sovereignty: Compliance with International Regulatory
Agreements, Harvard University Press, Cambridge, MA, p. 198.                            WT/WGTCP/W/243
Page 27
Article IV consultations play an important role in training, educating and stimulating the civil service
and improving their understanding of processes affecting their economy.58
99. The estimated cost of surveillance for the 2001 Financial Year was 25.5% of the IMF
Administrative Budget of approximately $638 million.59 IMF teams for on-site visits to the country
under review typically comprise between four to six economists.  For each final report, they typically
spend two months preparing for a mission, a bout two weeks on mission, and two months post-
mission. A relatively senior staff member from the area department heads the mission.60  Therefore, a
very approximate guide to costs is 2.25 person years for each final report.
F. IMF–W ORLD BANK FINANCIAL SECTOR ASSESSMENT PROGRAM (FSAP)
1. Description of the Process
100. The Financial Sector Assessment Program (FSAP) was introduced by the IMF and the World
Bank in May 1999.  Its objective is to help member countries strengthen their financial systems,including financial institutions (eg banks, mutual  funds and insurance companies), financial markets
(e.g. securities, foreign exchange and money markets), the payments system, and the legal framework
governing financial institutions and markets.  The emphasis of the FSAP is on prevention and
mitigation rather than crisis resolution. Specifically, the FSAP seeks to:
− identify the strengths and vulnerabilities of a country's financial system;
− determine how key sources of risk are being managed;
− ascertain the sector's developmental and technical assistance needs; and
− help prioritise policy responses.
101. Participation in the FSAP is voluntary and the review frequency is flexible.  A total of 55
members received FSAP missions between May 1999 and June 2002. From 1 July 2001 to 30 June
2002, 21 countries participated in the FSAP. 24 countries are expected to participate in the FSAP
from 1 July 2002 to 30 June 2003. It is anticipated that this will be the approximate annual number of
the reviews conducted in the future.  The review  criteria are the extent of compliance with
international standards and codes relevant to the financial sector, such as the Basel Core Principles forEffective Banking Supervision, and the Code of Good Practices on Transparency in Monetary and
Financial Policies.
102. In the investigation stage, the team leader and deputy team leader first prepare terms of
reference (TOR) for the FSAP.  The TOR maps out the scope and timing of the work and prioritises
the issues to be addressed. It also includes a timetable for the completion of reports and notes thespecific responsibilities of mission members.  The team leader and deputy then choose their team
members.  These are drawn from the staff of the IMF and the World Bank and may also include
external experts from Cooperating Official Institutions (COI).
61  The COIs are central banks and other
financial supervisory organizations that assist in the execution of the FSAP. Experts are selected in
                                                     
58International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a Group of
Independent Experts, IMF, Washington, DC, p. 35.
59International Monetary Fund, Annual Report 2001  (IMF, Washington D.C., 2001), 89.
60International Monetary Fund (1999), External Evaluation of IMF Surveillance: Report by a Group of
Independent Experts, IMF, Washington, DC, p. 25.
61The Cooperating Official Institutions are listed in the Financial Sector Assessment Program – A
Review – Lessons from the Pilot and Issues Going Forward  (IMF SM/00/263 and World Bank R200-216).WT/WGTCP/W/243
Page 28
one of two ways.  The first involves requesting names of qualified experts at the COI from standard
setting bodies such as the Basel Committee on Banking Supervision (BCBS), International
Association of Insurance Supervisors (IAIS), and International Organization of Securities
Commissions (IOSCO).  The second involves a re quest to the COI itself.  Experts are selected
according to criteria such as diversity, frequency of use, area of expertise, demonstrated quality of theexpert in previous missions and language skills.
103. Next, the FSAP team may forward to the releva nt agencies (such as banking commissions,
finance ministries, and national banks) questionnaires, templates for assessing compliance with
international standards and codes, and other appropriate background material.  This is typically
followed by a preliminary mission to the country  under review to sharpen the TOR, begin the
information-gathering process, and assess compliance with selected financial sector standards.  Next,
a full IMF delegation (and, in the case of developing countries, a World Bank delegation) and externalexperts visit the country under review for appr oximately two weeks.  The FSAP team conducts
discussions with relevant agencies (such as ba nking commissions, finance ministries, and national
banks) and representatives from the private sector.
104. The FSAP team presents its preliminary findings to  the relevant agencies of the member in the
form of a confidential aide-mémoire.  This is completed during the main mission and discussed withthe agencies prior to the team's departure.  On re turn to headquarters, the aide-mémoire is circulated
to relevant staff at the IMF and the World Bank.
105. Team leaders incorporate any useful comments received from the member under review or
World Bank or IMF staff into a draft FSAP report, divided into several parts:
− FSAP Main Report  - comprises an overall assessment covering short-term vulnerabilities,
medium-term risks, and reform needs.  It contains a prioritised list of recommendation
policy actions and may include a summary of the assessments of compliance with
relevant financial sector standards.  The FSAP Main Report is sent to senior officials in
the member under review.
− FSAP Selected Financial Sector Issues - comprises background material gathered or
analysed by the mission.  This part is only sent to the member under review when
relevant and useful.
− FSAP Assessment of Observance of International Standards and Codes  - comprises a
detailed assessment of financial sector standards.
106. The FSAP team discusses the draft FSAP report with the ministry of finance and the central
bank of the member under review, and such other government agencies as those authorities may
request. These discussions take place in the context of Article IV consultations.  A final FSAP report
is prepared following these discussions. Normally, the final report is sent to the member under reviewwithin a few months of the end of the main FSAP mission.  The FSAP Main Report is not released to
the public or circulated to other multilateral agencies or official agencies outside the relevant country.
Normally, the FSAP mission precedes the Article IV mission by about three months, to enable the
draft FSAP report to be available for discussion during the Article IV mission.
107. FSAP final reports are not distributed to the Bo ards of the IMF or the World Bank.  Instead,
summary reports focusing on the findings of the FSAP team (Financial System Stability Assessment
Reports and Financial Sector Assessment Reports) are prepared and discussed at Board meetings.                            WT/WGTCP/W/243
Page 29
2. Discussion of the Process
108. The joint nature of the FSAP and the inclusion of external experts ensure consistency of
policy advice by the IMF and the World Bank, economise on scarce expert resources, and enhance the
legitimacy of the FSAP.  At an outreach meeting in October 2000, members reported that the FSAP:
helped them identify areas in need of strengthening; guided the adoption and sequencing of necessaryreforms; provided a stimulus for officials to focus on significant financial system issues; and allowed
many parts of their government to partake in discussions.
109. However, the voluntary nature of the FSAP means that financial sector surveillance may be
uneven across members.
62  Also, like many other peer review programmes, the FSAP is resource-
intensive and the scheduling of missions is complicated by the need for coordination between multiple
national agencies as well as the World Bank and the IMF.  It is important for FSAP reviews not to
focus only on assessments of compliance with standards since FSAP missions have not found suchassessments to be particularly helpful in isolation in identifying short-term risks, vulnerabilities or
developmental weaknesses.  These assessments are also particularly resource-intensive for the
IMF/World Bank missions and the member agencies.
110. It has not been possible to obtain data on the overall resource requirements for the FSAP
program, but since the FSAP involves only a very  limited peer review component, this data is not
relevant.  Time spent assessing and reporting on compliance with financial sector standards and codes
ranges from 3-8 weeks per assessment, with a review time of around one week per assessment.
G. OECD B
RIBERY CONVENTION MONITORING PROGRAMME63
1. Description of the Process
111. The OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions (Bribery Convention) requires each party to the Bribery Convention to
criminalise the act of bribing a foreign official.  It uses a functional equivalence standard in this
regard, acknowledging that a party "may use various approaches to fulfil its obligations".64  While this
gives the parties to the Bribery Convention flexib ility in implementing it, it also hampers the
monitoring of implementation and enforcement.65  Article 12 of the Bribery Convention requires the
parties to establish "a programme of systematic follow-up to monitor and promote the full
implementation of this Convention."  The OECD Wo rking Group on Bribery in International Business
Transactions (Working Group on Bribery) undertakes the monitoring programme under this Article
and has broken the programme into two phases.  Phase 1 is designed to determine whether laws
implementing the Bribery Convention have been put into place, and the Phase 2 is designed to
determine the more difficult question of whether the structures enforcing those laws are effective.
                                                     
62International Monetary Fund, Annual Report 2001  (IMF, Washington D.C., 2002), 9.
63Another similar peer review process is that of the Group of States Against Corruption at the Council of
Europe.
64Commentaries on the Convention on Combating Br ibery of Officials in International Business
Transactions. Adopted by the Negotiating Conference on 21 November 1997.
65Tronnes, R. (2000), "Ensuring Uniformity in the Implementation of the 1997 OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions", George Washington
International Law Review , Vol. 33, Washington, DC, p. 118.WT/WGTCP/W/243
Page 30
Phase 1 (1999–2003)
112. In the investigation stage, parties to the Bribery Convention complete a detailed questionnaire
on their compliance with the Bribery Convention.  The OECD Secretariat circulates the completed
questionnaires to all participants in the Working Group on Bribery and requests further informationfrom the party if necessary.  It then prepares an investigation report of 20 pages (at this stage called a
preliminary report ) and submits it to two lead examiners.  These examiners are chosen from experts
volunteered by the parties to the Bribery Convention.  Preferably, one examiner is familiar with the
legal system and speaks the language of the country under review.  The lead examiners can make
significant revisions to the preliminary report.  After the preliminary report is complete, the country
under review has an opportunity to examine and comment on it.
66
113. In the examination stage, the peer group (the Working Group on Bribery) holds a plenary
discussion on the preliminary report. The meeting aims to clarify questions and formulate conclusions
and recommendations.  The country under review is invited to describe its approach.  It can also bring
a number of experts to the meeting  to assist it in responding to questions.  The lead examiners play a
key role in the meeting, making preliminary commen ts and suggesting what the key issues are. At the
end of the meeting, the Working Group on Bribery adopts by consensus a written assessment of thecountry under review ( country evaluation ).  The country under review cannot block the decision to
adopt the country evaluation, but it does have the right to have its comments reflected in that
document.
114. The dissemination stage involves public release of country evaluations and (following
approval by the OECD Council at Ministerial level) final reports on the compliance of all parties.  The
final reports contain updated country assessments and also catalogue the difficulties experienced by
parties to the Bribery Convention and solutions to these difficulties.
Phase 2 (2001–2005)
115. The format of Phase 2 is very similar to Phase 1, so only the differences between the two
phases are discussed here.
116. In Phase 2, supplementary questions are includ ed in the questionnaire in the examination
stage. These questions revisit issues identified in Phase 1, for example examining how courts have
interpreted provisions defining "foreign public official" and "bribery through intermediaries" to
ensure that the legislation is adequate.  Phase 2 also involves a new step in the examination stage after
the questionnaire has been returned: a 3–4 day on-s ite visit by the OECD Secretariat and the lead
examiners to obtain information on enforcement and prosecution practice and to hold discussions with
a wide range of authorities responsible for applying the law.  The OECD Secretariat and leadexaminers also hold discussions with key representatives of the private sector and civil society.
117. The Working Group on Bribery is to provide a fi nal report annually to the OECD Council at
Ministerial level summarising country evaluations adopted in Phase 2.  These Phase 2 final reports are
made public.
                                                     
66 IMF, Policy Development and Review Department (2001), OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions, IMF, Washington, DC, para 17.                            WT/WGTCP/W/243
Page 31
2. Discussion of the Process
Phase 1
118. Each Phase 1 review involves approximately 3–4 weeks of work for two OECD Secretariat
staff. This includes sending out the questionnaire, obtaining feedback, and analysis and writing.
119. One strength of the Phase 1 process is that it provides concrete examples for parties
proceeding more slowly to develop their own legislation and increases pressure on countries to
implement the Bribery Convention.  The Phase 1 process is perceived as fair (in permitting parties to
participate in their own revi ew and reviews of other countries) and thorough (through the
questionnaire and mutual evaluation).67  The concept of functional equivalence may appear to
complicate the task of the Working Group on Bribery, but it allows countries to adopt a diversity of
approaches that fit with their judicial traditions in stead of importing a model that could be difficult to
implement in practice.  Phase 1 counterbalances this  diversity by ensuring that the objectives of the
Bribery Convention are fulfilled by all signatories.
120. A potential weakness of Phase 1 is that third parties such as Transparency International have
no formal role in the process.  As confidentiality is  seen as facilitating free exchange of information
between governmental representatives, civil society groups are not invited to participate in the peer
review meeting, and all material generated during the peer review process is confidential.68  On the
other hand, civil society, trade unions and busin ess associations participate informally in the
monitoring mechanism.  The Working Group on Bribery regularly invites key representatives of the
private sector and civil society to exchange views on enforcement structures established by
governments. In addition, members of civil soci ety may make submissions to the Working Group on
Bribery and, if received prior to the meeting in the examination stage, they are distributed asdocuments for information to the Working Group on Bribery.
Phase 2
121. The amount of OECD Secretariat time required  for Phase 2 reviews varies substantially
between countries.  For a large country, a review in volves approximately four months of work by two
staff members, compared with one staff member for a smaller country. (However, as Phase 2 startedrecently, it is difficult to give an average estimate).
122. The strengths and weaknesses of Phase 2 are essentially the same as for Phase 1.  In relation
to civil society, the Phase 2 Procedure of Evaluation states "[o]nly full participants [can] … take part
in the adoption of the report, including the evaluation of whether the examined country [has] fulfilled
the obligations of the Convention."  It also states that "civil society does not take part in the formal
evaluation exercise" but notes that "there should be an opportunity for their views to be expressed and
reflected".  As in Phase 1, civil society does not participate in the peer review meeting, but in contrastwith Phase 1, civil society is formally invited to participate in the on-site visits.  Contributions from
civil society have been important in the framework of Phase 2, notably by drawing attention to issues
such as whistleblowers, witness protection, the need for raising awareness among corporations, etc.
                                                     
67Tronnes, R. (2000), "Ensuring Uniformity in the Implementation of the 1997 OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions", George Washington
International Law Review , Vol. 33, Washington, DC, p. 122.
68Ibid pp. 123–124.WT/WGTCP/W/243
Page 32
123. Due to resource constraints on members and the OECD Secretariat, it is likely that increasing
the number of countries subject to review would le ad to a corresponding decrease in the depth of
analysis of each review.69
H. FREE TRADE AREA OF THE AMERICAS — C OMPETITION POLICY REVIEW MECHANISM70
1. Description of the Process
124. Thirty-four countries in the Americas are currently negotiating the Free Trade Area of the
Americas (FTAA), with a deadline of January 2005 for the conclusion of negotiations.  The draft text
of the FTAA Agreement dated 3 July 200171 contains a chapter on competition policy and a provision
providing for a Competition Policy Review Mechanism.  The FTAA-CPRM is currently envisaged to
be a non-binding process for peer review of an FTAA country's competition legislation, policies and
enforcement actions.  It would combine aspects of the WTO's TPRM and the competition aspects of
OECD Country Reviews of Regulatory Reform.  A Canadian government report stated that a FTAA-
CPRM is viewed as a less intrusive compliance mechanism than, for example, allowing foreign
governments to challenge the decisions of a national competition authority.72
125. Draft Article 3.7 of the FTAA Agreement reads:
[3.7 Competition Policy Review Mechanism
3.7.1 The Parties recognize the value of transparency in government competition policies.3.7.2 The Competition Policy Review Mechanism shall include periodic reviews of the
competition legislation, policies and enforcement activities [and regulatory policies and
practices] of the Parties, [and the activities of [legal][official] monopolies and state enterprises].The recommendations or results of such reviews will be non-binding.
3.7.3 [The Committee] shall establish a basic plan for the conduct of the reviews and their
frequency. These reviews will be based on a detailed report supplied by the Party under review.
3.7.4 Reviews will be subject to appropriate safeguards for the protection of confidential
investigatory and business information.
3.7.5 [Nothing in the chapter on competition policy shall require the provision of information by
a Party or its competition authority contrary to its laws, including those regarding disclosure ofinformation, confidentiality or business secrecy.]]
73
126. Currently, this is the only information publicly available about this draft Article.
                                                     
69Report by the Committee on International Investment and Multinational Enterprises: Implementation of
the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the
1997 Recommendation (Unclassified 7 May 2002) 11.
70http://www.ftaa-alca.org/
71FTAA.TNC/w/133/Rev.1.
72First Report of the Standing Committee on Foreign Affairs and International Trade, The Free Trade
Area of the Americas: Towards a Hemispheric Agreement in The Canadian Interest  (October 1999) Chapter 15,
http://www.parl.gc.ca/infocomdoc/36/2/fait/studies/reports/faitrp01/30-ch15-e.htm
73The square brackets indicate that different points of view exist on the text that appears between them.                            WT/WGTCP/W/243
Page 33
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