This report, prepared for the first Trade Policy Review of Bravado, has been drawn up by the WTO senior official on its own responsibility. He has, as required by the Agreement Establishing the Trade Policy Review Mechanism sought clarification from the Government of Bravado on its trade policies and practices. The Countries of the General Agreement on Tariffs and Trade (GATT) established the Trade Policy Review Mechanism (TPRM) on a trial basis in April 1989 as a key accomplishment of the midterm review of the Uruguay Round.
TPRM was subsequently incorporated into the Marrakesh Agreement Establishing the World Trade Organization (WTO). The principal objective of the TPRM is to contribute to improved adherence by all Members to rules, disciplines and commitments made under the Multilateral Trade Agreements. This is to be accomplished by achieving greater transparency in, and understanding of, the trade policies and practices of Members. Under TPRM, Trade Policy Reviews are carried out periodically by the WTO. The frequency of the review depends on size of the country.
For the largest four trading entities, the review is done every two years, for the next 16 trading entities, it is done every four years and for the remaining members, every six years. Longer periods can be permitted for the least developed countries. Bravado is on a six-year cycle and was first reviewed in 1990. The present Review was made at the request of the WTO Council under the Trade Policy Review Mechanism. Bravado has been party to the GATT since 1990. It is also a participant in several bodies that deal with international economic matters.
Bravado is an original Member of the WTO and grants at least Most Favorable Nation (MFN) treatment to all its trading partners. It is regarded as a developing country because most of its export income is derived from agricultural products and raw materials such as nickel and coal. It has some manufacturing industries, which export motorcycles, clothing, and sports equipment, mainly to other developing countries. It is also trying to establish a computer industry for export purposes.
Bravado is still in the process of incorporating some of the results of the Uruguay Round into domestic legislation. Bravado has notified several of its laws and other measures as required under the various WTO Agreements. At present, Bravado is struggling to develop its trading markets and the Government which has been in office for many years, is trying new ways of expanding trade. It has taken a number of measures both to develop new markets and to protect its industries from foreign competition. The most significant measures that it has taken concerns following areas.
Quotas. Bravado has imposed quotas on the importation of clothing, so that its domestic clothing manufacturers have a guaranteed market for their produce. Import having a negative impact on Bravado's textiles and clothing industry. It notes that, to some degree, the quotas have provided protection to the Bravadan industry by limiting competition from other countries. Moreover, a virtual ban on imports has given the industry a protected domestic market as well. The legal framework makes the closure of sick industries virtually impossible.
The implication seems to be that the removal of MFN quotas and import liberalization may lead to losses and adjustment problems. Consequently, in this area Bravadan policy is not in compliance with GATT. According to article XI of GATT, no prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any country on the importation of any product of the territory of any other country or on the exportation or sale for export of any product destined for the territory of any other country.
Any country applying restrictions on the importation of any product shall give public notice of the total quantity or value of the product permitted to be imported during a specified future period and of any change in such quantity or value.
Moreover, any restrictions shall not be such as will reduce the total of imports relative to the total of domestic production, as compared with the proportion, which might reasonably be expected to rule between the two in the absence of restrictions. In determining this proportion, the country shall pay due regard to the proportion prevailing during a previous representative period and to any special factors which may have affected or may be affecting the trade in the product concerned.
In this case countries affected by such Bravado’s policies, shall initiate discussions to consider whether other measures might be taken, either by those countries the balance of payments of which are under pressure or by those the balance of payments of which are tending to be exceptionally favorable, or by any appropriate intergovernmental organization, to remove the underlying causes of the disequilibrium.