Proposal for a COUNCIL DECISION 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
Date: 2017-03-24
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: World Trade Organisation, common commercial policy, economic analysis, revision of an agreement, rules of procedure, trade policy

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   EUROPEAN COMMISSION  Brussels, 24.3.2017  COM(2017) 137 final 2017/0062 (NLE)   Proposal for a COUNCIL DECISION 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  changes1  in  the  rules  of  procedure  involve  for 
example the possibility for a WTO Member to present significant changes to its trade policy 

1 

Document WT/RD/TPR/745. 

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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 

The  Trade  Policy  Review  serves  to  present  not  only  EU  Trade  policy  but  all  the  other  EU 
policies that have an impact on trade. The Trade Policy Reviews of other Members enables 
the EU to ask questions to the reviewed Member and enhance transparency. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides that 
when  a  decision  having  legal  effect  needs  to  be  taken  in  a  body  set  up  by  an  international 
agreement, the Council, on a proposal from the Commission or the High Representative of the 
Union for Foreign Affairs and Security Policy, shall adopt a decision establishing the position 
to be adopted on the European Union’s behalf.  

The envisaged decisions fall within the scope of the common commercial policy (Article 207 
of the TFEU) 

• 

Subsidiarity (for non-exclusive competence)  

The  European  Union  has  exclusive  competence  with  regard  to  the  matters  covered  by  this 
decision in accordance with Article 3 of the TFEU. Therefore, the subsidiarity principle does 
not apply.  

Proportionality 

N.a. 

• 

Choice of the instrument 

This  proposal  is  in  accordance  with  Article  218(9)  TFEU.  There  exists  no  other  legal 
instrument that could be used in order to achieve the objective expressed in this proposal. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS  

EVALUATIONS, 

EX-POST 

OF 

STAKEHOLDER 

BUDGETARY IMPLICATIONS 

3. 

N.a. 

4. 

N.a. 

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5. 

OTHER ELEMENTS 

Consistent  with  Article  218(10)  TFEU,  the  European  Parliament  will  be  immediately  and 
fully informed. 

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2017/0062 (NLE) 

Proposal for a 

COUNCIL DECISION 

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 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
first subparagraph of Article 207(4), in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission,  

Whereas: 

(1) 

(2) 

(3) 

(4) 

Annex  3,  paragraph  C(ii)  of  the Marrakesh  Agreement  establishing  the World  Trade 
Organization  ('WTO  Agreement')  sets  out  the  frequency  for  reviewing  WTO 
Member's trade policies and practices. The frequency of the reviews of each Member's 
trade policy depends on its share of world trade. The four biggest trading Members are 
currently examined every 2 years. The sixteen following Members in terms of share of 
world  trade  are  reviewed  every  4  years,  while  the  other  Members  are  currently 
reviewed every 6 years.  

The  expansion  of  WTO  Membership  since  1995  has  also  increased  the  number  of 
reviews  necessary  to  comply  with  Annex  3  of  the  WTO  Agreement,  increasing  the 
burden  on  Members  and  the  WTO  Secretariat.  To  safeguard  the  effectiveness  of  the 
review system, the Trade Policy Review Body (TPRB) of the WTO suggests to extend 
by  one  year  the  cycles  currently  in  place.  As  a  result,  WTO  Members  would  be 
reviewed every 3, 5 and 7 years, depending on their share of world trade.  

In  accordance  with  Article  X:8  of  the  WTO  Agreement,  decisions  to  approve 
amendments to Annex 3 to the WTO Agreement must be taken by consensus by the 
Ministerial  Conference  or,  pursuant  to  Article  IV:  2  of  the  WTO  Agreement,  by  the 
General Council in the intervals between meetings of the Ministerial Conference and 
shall take effect for all WTO Members upon approval.  
To  safeguard  the  effectiveness  of  the  review  system,  the  TPRB  has  recommended2 
also  to  amend  its  rules  of  procedure  to  introduce  slight  modifications  that  would 
facilitate the conduct of 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 TPRB 

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Document WT/RD/TPR/745. 

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(5) 

(6) 

can take the decision to amend its own rules of procedure pursuant to Article IV: 4 of 
the WTO Agreement. 

It  is  in  the  interest  of  the  Union  to  ensure  a  well  functioning  Trade  Policy  Review 
Mechanism so that all WTO Members continue to be reviewed regularly and that the 
meetings in the TPRB be as efficient and as well prepared as possible.  

Therefore, it is appropriate to establish the position to be taken on behalf of the Union 
in  the  WTO  to  extend  by  one  year  the  cycles  of  Trade  Policy  Reviews  of  WTO 
Members and to modify the rules of procedure of the TPRB to facilitate the conduct of 
reviews, 

HAS ADOPTED THIS DECISION:  

Article 1 

The position to be taken on behalf of the Union within the Ministerial Conference, or General 
Council of the World Trade Organization, shall be to join the consensus to amend paragraph 
C(ii)  of  Annex  3  to  the  WTO  Agreement  to  extend  by  one  year  the  cycles  of  Trade  Policy 
Reviews  of  WTO  Members.  The  review  cycles  in  paragrah  C(ii)  of  Annex  3  of  the  WTO 
Agreement depend on the share of world trade and currently stand at 2, 4 and 6 years. They 
will be replaced, respectively, by cycles of 3, 5 and 7 years. 

This  position  shall  be  expressed  by  the  Commission  at  the  upcoming  meeting  of  the 
Ministerial Conference, or of the General Council, whichever takes place ealier.  

Article 2 

The position to be taken on behalf of the Union within the Trade Policy Review Body shall be 
to  join  the  consensus  to  amend  the  TPRB's  rules  of  procedure-  as  envisaged  in  Document 
WT/RD/TPR/745.  

This position shall be expressed by the Commission at an upcoming meeting of the TPRB. 

After its adoption, the Decision on the extension of the cycles of Trade Policy Reviews shall 
be published in the Official Journal of the European Union. 

Article 3 

This Decision shall enter into force on the date of its adoption.  

Done at Brussels, 

Article 4 

For the Council 
The President 

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