April 15, 1998
|Contact:||C. Fred Bergsten||(202) 328-9000|
Washington, DCTrade policy reviews (TPRs) conducted by the World Trade Organization (WTO) of its member countries should include an assessment of the long-term sustainability of their trade policy reforms and more extensive coverage of both nontariff trade barriers and regional trading arrangements, according to Donald B. Keesing in Improving Trade Policy Reviews in the World Trade Organization. The new study by the Institute for International Economics suggests that the Trade Policy Review Mechanism (TPRM) could be modified in three ways:
Keesing also proposes that an advisory committee be established to help plan and coordinate the TPRM as well as provide advice and guidance on quality control. The proposed committee, composed of 8 to 12 distinguished trade policy economists, would offer ideas on how to improve the substance, methodology, and presentation of the TPRs.
Keesing concludes that, although the TPRM has made much progress since it was established in 1989 as one of the first fruits of the Uruguay Round of multilateral trade negotiations, there is considerable room for further improvement. TPRs should avoid the temptation to focus only on developments of the past few years and instead take a longer-term perspective that puts current policy and recent changes in meaningful context. The reviews should address the credibility and sustainability of recently announced or implemented policy reforms and find a way to overcome the reviews' bias toward optimism. Keesing also calls for the TPRs to improve their coverage of nontariff barriers, including antidumping measures, export promotion, bribery and corruption as obstacles to trade, and investment. He recommends that TPRs examine the growing number of regional and bilateral arrangements, with particular attention to the North American Free Trade Agreement, the European Union, and Mercosurespecially to their consistency with, and impact on, the multilateral trading system.
More resources need to be dedicated toward conducting TPRs. Reviews are now made every two, four, or six years, depending on a country's share of world trade. That requirement, in addition to the need to review the trade practices of new members and applicants, is beginning to create a TPR backlog. Keesing proposes a 20-25 percent increase in next year's budget for TPRs and a similar increase in the following year so that this backlog can be worked down before it becomes unmanageable.
Dissemination of the TPRs should also be improved. Although the TPRM was conceived as a means of generating information for use within a narrow circle of WTO officials and representatives of member governments, there are many other potential users--including political leaders, journalists and other writers on trade and business issues, interest groups, and business managers. Getting TPRs into the hands of this wider audience would improve understanding of trade policy and the need for, and benefits from, continued liberalization. Keesing recommends the creation of national committees in key member countries to identify opinion leaders and others on whom dissemination efforts should be focused, to make the WTO's message better aimed and politically more effective.