As a result of the Montreal Mid-term Ministerial Meeting in December 1988, a Trade Policy Review Mechanism (TPRM) was established by the GATT to review periodically the trade policies of contracting parties. The experience has been positive, and Annex 3 of the WTO Agreement makes the TPRM a permanent feature of the new WTO. Furthermore, it extends the TPRM's application to all areas covered by the WTO agreements. Previously, the scope of the TPRM extended only to reviewing policies relating to trade in goods.
The purpose of the TPRM is to encourage greater adherence to WTO obligations and rules by providing a means for maximum transparency and disclosure of the trade policies and practices of member governments.
Annex 3 of the WTO Agreement sets out the objectives of improved adherence to obligations as well as greater transparency and understanding of members' trade policies and practices. It also recognizes the inherent value of domestic transparency and encourages governments to promote greater transparency of their domestic policies affecting trade within their own systems.
Annex 3 provides for the establishment of a Trade Policy Review Body (TPRB), which is the General Council acting in another capacity, to conduct periodic reviews of each member government's trade policies and practices. Canada, the United States, the European Union and Japan are subject to review every two years. Other countries are subject to review every four years or every six years, depending on their share of world trade.
The TPRB is required to base its work on a comprehensive report supplied by the member under review on its policies and practices affecting trade as well as an extensive analysis prepared by the WTO Secretariat. These reports are published after the review is complete. Between reviews, members are required to report on significant changes in their trade policies and practices.
The TPRB is also to produce an annual overview of developments in the international trading environment which are affecting the multilateral trading system.
The four plurilateral trade agreements set out in Annex 4 are
related to the Agreement Establishing the World Trade
Organization but are not an integral part of it. Unlike the
various multilateral agreements that form an integral part of the
WTO, participation in the four plurilateral trade agreements is
optional. The plurilateral agreements will be serviced by the WTO
secretariat and its meetings will generally take place at WTO
headquarters. Participants in the agreements will determine the
extent to which they will avail themselves of other aspects of
the WTO, including its dispute settlement provisions.
The civil aircraft negotiations were launched in July 1992 with the aim of improving and extending the existing GATT Agreement on Trade in Civil Aircraft. That Agreement was established in 1979 as part of the Tokyo Round negotiations and currently has twenty-three members. The impetus for the negotiations was the conclusion of a bilateral agreement between the EU and the USA on large aircraft which committed both parties to try to multilateralize its provisions.
The civil aircraft negotiations were not formally part of the Uruguay Round negotiations. However, the parties agreed to try to complete negotiations within the time frame of the Uruguay Round since similar issues were under discussion in each forum. In the end participating countries were unable to resolve their differences. A compromise solution was worked out which essentially preserves the status quo: no changes were made to the aircraft agreement but a number of provisions in the Agreement on Subsidies and Countervailing Measures reflects on discussions on trade in civil aircraft.
Changes to the Aircraft Agreement include three sector-specific exclusions from the provisions of the WTO Agreement on Subsidies and Countervailing Measures. The exclusions are the addition of two footnotes to Article 6.1 indicating that:
In addition a footnote to Article 8 of the Subsidies and Countervailing Measures Agreement indicates that research subsidies related to civil aircraft are not eligible for status as non-actionable subsidies.
With these sector-specific exclusions, the WTO Agreement on Subsidies and Countervailing Measures should provide a reasonable and effective set of rules to discipline subsidy practices in the civil aircraft sector.
The revised WTO Agreement on Government Procurement further opens markets and strengthens competitive bidding practices for the supply of goods, services and construction services to governments. Canada, the United States, the European Union, Japan and seven other countries are signatories to the Agreement. The procedures laid down in the Agreement will also bring further transparency and predictability to the procurement process.
The WTO Agreement on Government Procurement is included in the Uruguay Round as an Annex to the Final Act. The implementation date for the procurement agreement will be January 1, 1996. The Agreement builds on the current agreement (the Code) by increasing access to government markets for goods and equipment and extends coverage for the first time to include services and construction services contracts.
Scope and Coverage-The annexes identify the thresholds applicable to contracts for products, services and construction services: purchases of goods and services over SDR 130,000 ($223,000) by federal departments and agencies and purchases of construction services over SDR 5 million ($8.5 million). While coverage for federal government state enterprises has yet to be concluded, it is envisaged that coverage could include purchases of goods and services over SDR 355,000 ($604,000) and purchases of construction services over SDR 5 million ($8.5 million). Thresholds for sub-central entities remain to be established.
General Disciplines-The underlying principle of the Agreement, as set out in Article III, is that the signatory governments must treat products and services from other parties, and suppliers of such products and services, no less favourably than they treat their own domestic products, services and suppliers and that it accords to products, services and suppliers of any other party for contracts covered by the Agreement. Article VI requires each party to ensure that the purpose and effect of technical specifications should not be to impose unnecessary obstacles to trade.
Tendering and Bid Challenge Procedures-The principle of non-discrimination in procurement practices is established in Article III and referenced throughout Articles VII through Article XVI. These articles institute rules to ensure that covered procurement practices in all signatory countries are fair, transparent and predictable. Procedures for the qualification of suppliers, invitations to participate in a tender, time requirements and limits, documentation, contract award procedures are all specified in the Agreement.
Article XIII deals with the 'Submission, Receipt and Opening of Tenders and Awarding of Contracts.' It specifies that contract awards must be made in accordance with criteria set out in advance. The Agreement also makes provision for limited tendering in Article XV that allows the parties to deviate from the rule of open competition. But it requires that this tendering be as competitive as possible and used only in very limited circumstances.
In the event that individual suppliers request that the bidding process be reviewed, the Agreement requires that each government maintain an independent 'bid-challenge' mechanism. This provision (Article XX) promotes open and fair procurement practices and allows potential suppliers from signatory countries to challenge bid procedures and contract awards.
The International Dairy Agreement carries forward, without substantive modification, the International Dairy Arrangement which was concluded in the Tokyo Round of multilateral trade negotiations in 1979. The Agreement covers trade in dairy products and casein and includes protocols specifying minimum export prices for milk powders, butter and butterfat and certain cheeses. The Agreement has been accepted by nine countries, but not by Canada or the United States.
The objectives of the Agreement are to expand and liberalize world trade in dairy products. The Agreement covers fresh and preserved milk and cream, butter, cheese and curd and casein. An International Dairy Products Council is established which includes both participant and observer members. It will review the situation and outlook for world dairy product markets and the functioning of the Agreement based on information provided by participants, observers and the WTO Secretariat. A participant may withdraw from the Agreement after a sixty-day notice period.
The Agreement includes an Annex on Certain Milk Products which provides minimum export prices for pilot products of defined quality and packaging standards sold under specified terms of sale. Participants agree to observe these minimum prices and equivalent prices for products of other qualities, packaging and terms of sale. A Committee on Certain Milk Products is to be established to monitor the market situation and it may alter the minimum export prices or grant derogations from these prices. This Committee will report regularly to the International Dairy Products Council.
The International Bovine Meat Agreement is a successor agreement, without substantive modification, to the Arrangement Regarding Bovine Meat which was concluded in the Tokyo Round of multilateral trade negotiations in 1979. To date, the Agreement has been accepted by 15 countries, including both Canada and the United States.
The provisions of the Agreement cover a product range including live bovine animals, as well as meat and edible offals of bovine animals. Under the Agreement, an International Meat Council will be established, to succeed the GATT International Meat Council in operation since 1980. The Council will continue to be a forum for the exchange and evaluation of information on supply and demand in world meat markets. The Council meets at least twice a year to evaluate the world supply and demand situation for beef, including the current situation and outlook for production, consumption, exports and imports, to examine the operation of the Agreement and to provide an opportunity for regular consultation on all matters affecting the international trade of bovine meat. There is nothing in the Agreement which affects the rights and obligations of members in the World Trade Organization.
If the Council determines that there is evidence of a serious imbalance or threat of imbalance in world bovine markets, then it may make recommendations for possible solutions to remedy the situation consistent with the principles and rules of the WTO.
Participants in the Agreement regularly provide information to the Secretariat on production, consumption, prices, stocks and trade, as well as on domestic policies and trade measures, including bilateral and plurilateral commitments in the bovine sector.