establishing the position to be taken on behalf of the European Union within the World Trade Organization on the modification of the frequency of WTO Trade Policy Reviews in paragraph C(ii) of Annex 3 of the WTO Agreement and the rules of procedure of the Trade Policy Review Body

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The objective of this proposal is to establish the position to be taken on behalf of the European Union within the World Trade Organization (WTO) to adjust the frequency of the Trade Policy Reviews of the WTO Members set out in paragraph C (ii) ("Procedures for review") of Annex 3 to the WTO Agreement and the rules of procedure of the Trade Policy Review Body.

The expansion of the membership of the WTO since 1995 has also increased the number of reviews necessary to comply with paragraph C (ii) of Annex 3. This has increased the burden on the Members and the WTO Secretariat and the current cycle of Trade Policy Reviews has become thus unsustainable.

Discussions among WTO Members in the context of the Sixth Appraisal of the Trade Policy Review Mechanism have led in particular the Trade Policy Body to suggest:

adjusting the frequency of the Trade Policy Reviews (TPRs) extending by one year the cycles currently set out in paragraph C (ii) of Annex 3, and

changing slightly the rules of procedure of the Trade Policy Review Body to facilitate the review process.

Frequency of TPRs (Annex 3, paragraph C(ii) to the WTO Agreement)

The frequency according to which Members' trade policies are currently reviewed depends on their relative share of the world trade. The four Members having the largest shares of world trade are currently reviewed every two years (EU, US, China and Japan). The next sixteen Members (ex. Federation of Russia, Australia, Canada, and Switzerland) are reviewed every four years and the rest of the membership is reviewed in practice every six years to seven years. The Trade Policy Review Body takes the view that the frequency of reviews should be changed starting as of 2019 to three, five and seven years, respectively.

The decision on the adjustment of the review cycles will be taken by the Ministerial Conference of the WTO, pursuant to Article X:8 of the WTO Agreement, or by the General Council (in the intervals between meetings of the Ministerial Conference pursuant to Article IV:2 of the WTO Agreement), and will take effect for all Members upon its approval.

The Commission should be authorised to take a position on behalf of the European Union to join the consensus with a view to supporting the adoption of the decisions taken by the Ministerial Conference (or the General Council, in the interval between Ministerial Conference meetings), regarding the extension by one year of the current review cycles in paragraph C(ii) of Annex 3 to the WTO Agreement.

Modification of the Rules of Procedure of the TPRB

As a result of the Sixth Appraisal of the Trade Policy Review Mechanism, the Trade Policy Body (TPRB) also recommends modifying its rules of procedure. The modifications include slight changes to facilitate the conduct of the reviews, such as for example granting four weeks instead of currently three to the Member reviewed so as to reply to advance questions when it uses the alternative timeline. Other changes in the rules of procedure involve for example the possibility for a WTO Member to present significant changes to its trade policy at a meeting of the TPRB in between two Trade Policy Reviews or the possibility, on request of a Member, to make the second day of the review more interactive, using panels or the issuance by the WTO Secretariat of a list of speakers for the interventions of the WTO Members on the first day of the review.

The Commission should also be authorised to take a position on behalf of the European Union in the TPRB to join the consensus with a view to supporting the modification of the rules of procedure of the Trade Policy Review Body.

The decision to update the TPRB's rules of procedure will be taken by the TPRB.

•Consistency with existing policy provisions in the policy area

The initiative is fully consistent with existing Union policies.

•Consistency with other Union policies