The Trade Policy Review Mechanism (TPRM) was established in 1989 during the Uruguay Round as the outcome of the midterm conference in Montreal and was permanently anchored as part of the world trade order in April 1994.

The TPRM is another key element of the WTO and aims to make national trade policies more transparent and understandable and to ensure that our complex trading system runs more smoothly. The TPRM aims at a cyclically neutral assessment of national trade policies, not the monitoring of specific obligations.

The trade policy review is undertaken by the Trade Policy Review Body (TPRB), which is composed of all the WTO members.

Regular trade policy reviews

All the WTO members must subject themselves to a review by the TPRM at certain intervals. The frequency of the reviews depends on the WTO member’s share of world trade:

  • the four WTO members with the greatest share of world trade (EU, U.S., Japan and China) every two years,
  • the next 16 WTO members every four years, all other WTO members every six years.

Longer review intervals can be stipulated for the least developed countries.

Results

The impact of this instrument depends on the publication of key trade policy data of the reviewed WTO member – a report produced by the Trade Policy Review Division of the WTO Secretariat (the Secretariat Report) and a report by the relevant government – and on the discussion process triggered by this amongst the WTO members.

The practical benefit of the TPRM goes beyond transparency about trade policy. For example, developing countries, and LDCs in particular, can benefit not least from the fact that thanks to the TPRM

  • a process of self-evaluation of its trade policy is launched,
  • cooperation between international organisations (International Monetary Fund, World Bank, WTO) and economic policy coherence is promoted,
  • reforms are initiated and an opportunity to present them is offered,
  • trust is thus created amongst foreign investors and trading partners, andreflection on participation in the multilateral process is triggered.

The procedure and the rules of the TPRM themselves are subject to regular review by the TPRB with a view to making the trade policy reviews more standardised, more efficient and thus cheaper.