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International Trade and Finance

Notes For instance, governments are required to put in place domestic procedures by which aggrieved
private bidders can challenge procurement decisions and obtain redress in the event such decisions
were made inconsistently with the rules of the agreement. The agreement applies to contracts worth
more than specified threshold values.
The International Dairy Agreement and International Bovine Meat Agreement, the two plurilateral
agreements, were scrapped at the end of 1997. Countries that had signed the agreements decided
that the sectors were better handled under the Agriculture and Sanitary and Phytosanitary agreements.
Ensuring Transparency in Trade Policy

An international marketing firm needs to know as much as possible the conditions of trade in the
target market. The Trade Policy Review Mechanism (TPRM) aims to achieve transparency in
regulations in the following ways :
(a) Governments have to inform the WTO and fellow-members of specific measures, policies, or
laws through regular ‘notifications’.
(b) The WTO conducts regular reviews of individual countries’ trade policies, i.e., trade policy reviews.
The objectives of trade policy review are :
• To increase the transparency and understanding of countries’ trade policies and practices,
through regular monitoring
• To improve the quality of public and inter-governmental debate on the issues
• To enable a multilateral assessment of the effects of policies on the world trading system
The reviews focus on members’ own trade policies and practices. But they also take into account
countries’ wider economic and developmental needs, their policies and objectives, and the external
economic environment that they face. These ‘peer reviews’ by other WTO members encourage
governments to follow more closely the WTO rules and disciplines and to fulfil their commitments.
These reviews enable outsiders to understand a country’s policies and circumstances, and they provide
feedback to the reviewed country on its performance in the system.
Over a period of time, all WTO members were to come under scrutiny. The frequency of the reviews
depends on the country’s size.
• The four biggest traders—the European Union, the US, Japan, and Canada (the ‘Quad’)—are
examined approximately once every two years.
• The next 16 countries (in terms of their share of world trade) are reviewed every four years.
• The remaining countries are reviewed every six years, with the possibility of a longer interim
period for the least developed countries.
For each review, two documents are prepared—a policy statement by the government under review,
and a detailed report written independently by the WTO Secretariat. These two reports, together
with the proceedings of the Trade Policy Review Body’s meetings are published; these publications
which may be consulted while making strategic business decisions.
24.4 Ministerial Conferences and Emerging Issues

The highest decision-making body in the WTO is the Ministerial Conference (MC) that has to take
place once in two years. Six ministerial conferences have taken place so far and have generated a lot
of debate and controversies across the world, as discussed here.

Singapore Ministerial Conference
The first MC took place at Singapore during 9–13 December 1996 and reviewed the operations post-
WTO. Major developed countries brought in proposals to start negotiations in some new areas, such
as investment, competition policy, government procurement, trade facilitation, and labour standards.
This evoked a lot of controversy. Significant pressure was built up by the developed countries for all
members to accept their proposals; this was strongly opposed by developing nations. However, an
agreement was finally reached to set up working groups to study the process of the relationship
between investment and trade, competition and trade, and transparency in government procurement.

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