FREE TRADE AGREEMENTS of TURKEY

FREE TRADE AGREEMENTS
of
TURKEY
Nail ERSOY, Foreign Trade Specialist
General Directorate of the EU
E-mail: ersoyn@economy.gov.tr
September,2013-Ankara
1
Overview
 The World Trade Organization and the
RTAs
 Turkey’s Free Trade Agreements
 Structure of Turkey’s FTAs
 Foreign Trade Exchange with FTA
Partners
I-The World Trade Organization
and
Regional Trade Agreements (RTAs)
Regional Trade Agreements
 Article XXIV of the GATT (trade in goods)
 Enabling Clause
 Article V of the GATS (trade in services)
Exceptions to MFN
Article XXIV of the General
Agreement on Tariffs and Trade
(GATT)
customs unions, free trade areas and interim agreements
leading to formation of a customs union or a free trade
area shall be consistent with the provisions of Article
XXIV of GATT
 substantially all trade,
 reasonable length of time,
 review at the Committee on Regional Trade
Agreements (CRTA)
5
Article XXIV
(Free Trade Agreements)
 Reciprocal trade liberalization to establish a free trade
area between parties
 Elimination of tariffs and quotas on substantially all
the trade
 Free movement of goods, based on rules of origin
6
Article XXIV
(Customs Unions)
 Further economic integration than establishing a free
trade area
 Free movement of goods
 Common trade policy (trade agreements with 3rd
countries, trade policy instruments, etc.)
 Common external tarrifs towards third countries
 i.e. European Union (Member States), EU-Turkey,
MERCOSUR
7
Enabling Clause
 “… contracting parties may accord differential and
more favourable treatment to developing countries,
without according such treatment to other contracting
parties.”
 Preferential treatment by developed parties to
developing countries
 Special treatment for the least developed countries
 Least-developed countries not to be expected to
make concessions or contributions inconsistent with
their level of development
8
Enabling Clause
(Preferential Trade Arrangements)
 Provides preferential access to certain products from
the participating countries
 First stage of economic integration
 Reduction or elimination of tariffs
 Unilateral (GSP), bilateral or multilateral
9
II-Turkey’s Free Trade
Agreements
10
Why Turkey Negotiates FTAs?
Legal Framework
:
Requirements of the Customs Union (Turkey-EC Association Council
Decision No. 1/95, Articles 16 and 54 thereof)
Trade Policy
:
Better market access opportunity
Raw material supply strategy
Providing businesses the same competition conditions with the EU
Complementing Economy-Trade Policy Actions:
Neighbouring Countries Strategy
Africa Strategy
Latin America Strategy
Article 16 of the Decision No. 1/95
 With a view to harmonizing its commercial policy with that of
the Community, Turkey shall align itself progressively with the
preferential customs regime of the Community within five years
as from the date of entry into force of this Decision.
 This alignment will concern both the autonomous regimes and
preferential agreements with third countries.
 To this end, Turkey will take the necessary measures and
negotiate agreements on mutually advantageous basis with the
countries concerned.
 The Association Council shall periodically review the progress
made.
Article 54 of the Decision No. 1/95
 In areas of direct relevance to the operations of the Customs
Union, and without prejudice to the other obligations deriving
from Chapters I to IV Turkish legislation shall be harmonized as
far as possible with Community legislation.
 Areas of direct relevance to the operation of the Customs
Union shall be commercial policy and agreements with third
countries comprising a commercial dimension for industrial
products, legislation on the abolition of technical barriers to
trade in industrial products, competition and industrial and
intellectual property law and customs legislation.
Turkey’s Free Trade Agreements
Country / Union
Signature
Entry into force
1
EFTA
10.12.1991
01.04.1992
2
Israel
14.03.1996
01.05.1997
3
Mecedonia
07.09.1999
01.09.2000
4
Croatia
13.03.2002
01.07.2003
5
Bosnia and Herzegovina
03.07.2002
01.07.2003
6
Palestine
20.07.2004
01.06.2005
7
Tunisia
25.11.2004
01.07.2005
8
Morocco
07.04.2004
01.01.2006
9
Syria
22.12.2004
01.01.2007
10
Egypt
27.12.2005
01.03.2007
11
Albania
22.12.2006
01.05.2008
12
Georgia
21.11.2007
01.11.2008
13
Montenegro
26.11.2008
01.03.2010
14
Serbia
01.06.2009
01.09.2010
15
Chile
14.07.2009
01.03.2011
16
Jordan
01.12.2009
01.03.2011
17
South Korea
24.11.2010
01.05.2013
18
Mauritius
09.09.2011
01.06.2013
19
Lebanon
01.08. 2012
-
14
Turkey’s FTA Agenda
Under Negotiation
Planned FTAs
1.
Kosovo (2013)
2.
Colombia
1.
USA
3.
Ecuador
2.
Canada
4.
Malaysia
3.
Japan
5.
Ukraine
4.
Thailand
6.
Moldova (2013)
5.
India
7.
Dem. Rep. of Congo
6.
Indonesia
8.
Ghana
7.
Vietnam
9.
Cameroon
8.
Peru
10.
Seychelles
9.
Central America Community
11.
Gulf Cooperation Council*
10.
Other African, Carribean and Pacific
12.
Libya
11.
Algeria
13.
MERCOSUR
12.
Mexico
14.
Faroe Islands
13.
Republic of South Africa
(*) negotiations suspended.
Turkey-EU Preferential Trade Regime
Industrial and Processed
Agricultural Products
Decision No. 1/95 of the
EC- Turkey
Association Council
(Customs Union Decision)
Based on Free Circulation
(Not based on origin)
- A.TR Movement Certificate
- Suppliers’ Declaration
Decree on Application of
Customs Union established
between Turkey and the EC
Agricultural Products
ECSC Products
Decision No. 1/98 of
EC-Turkey Association
Council
Turkey - ECSC Free
Trade Agreement
(1996)
Based on Preferential Origin
EUR.1 and EUROMED Movement Certificate
Implementing Regulation on Determination of the
Preferential Origin of the Goods
16
III-General Structure of
Turkey’s FTAs
General Structure of Turkey’s FTAs
Content of the Text: Main Body
- Preamble
- Initial Provisions
- Trade in Goods
- Rules of Origin and customs cooperation (annexed to the
Agreement)
- Sanitary and Phitosanitary Measures
- Technical Barriers to Trade
- Trade Remedies (Safeguards, Anti-Dumping)
- Cooperation (economic and technical cooperation chapter)
- Transparency
- Institutional Provisions (Joint Committee)
- Dispute Settlement
- Exceptions and Final Provisions
18
General Structure of Turkey’s FTAs-2
Content of the Text: Annexes
-
Annex I- Products falling under Chapters 25-97 of
Harmonised System treated as agricultural products
-
Annex II- Tariff concessions on industrial products
-
Annex III- Tariff concessions on agricultural products
-
Annex IV- Rules of Origin
19
On the Way Towards a New
Generation FTA:
TURKEY-KOREA FTA
New Generation FTAs
 Trade in goods
 Trade in services
 Market access
 Investment
 Technical barriers
 Competition
to trade
 SPS measures
 Trade remedies
 Trade
and
sustainable
development
 Public procurement
 Technical cooperation
 Trade facilitation
 Rules of origin
 Intellectual prop. rights
 Dispute settlement
Ekonomi Bakanlığı
21
Turkey-Korea FTA
 The FTA is composed of two agreements:
 Framework Agreement
 Trade in Goods Agreement
 The dual structure enables the flexibility to enhance
the scope of the FTA to include;
 Trade in Services
 Investments
 Any other agreement Parties may agree upon
Turkey-Korea FTA
Framework Agreement
 Framework Agreement (FA) is composed of 8
chapters, including provisions on
 IPR protection
 Competition
 Trade and Sustainable Development
 Dispute Settlement (Arbitration)
 Institutional set-up of the FTA
Turkey-Korea FTA
Trade in Goods Agreement-1
 Trade in Goods (TiG) Agreement is composed of
 6 chapters,
 Annexes on Parties’ Tariff Concessions
 Protocol on Rules of Origin
 All chapters of FA is applicable for TiG Agreement,
unless otherwise stated
Turkey-Korea FTA
Trade in Goods Agreement-2
 Tariff Concession lists were negotiated through
universal list approach
 There was no categorically sensitive or negative list,
other than 16 lines pertaining to ‘rice’ for Korea
 Each and every item on the lists are subject to
negotiations
Turkey-Korea FTA
Trade in Goods Agreement-3
 At the end of the negotiations, Parties agreed to
eliminate tariffs of;
 Around 90 % of all their tariff lines in a schedule of
maximum 10 years.
 100 % of tariff lines pertaining to industrial goods
in 7 years.
 52 % of tariff lines pertaining to agricultural goods
in 10 years (This ratio corresponds to more than
90 % of the goods actually traded among Parties).
www.economy.gov.tr
IV-Foreign Trade Exchange of
Turkey with RTA partners
Turkey benefits from the FTAs
Turkey’s 18 FTAs in force represent:
273 million population
- GDP of 3.5 trillion $
- 1.2 trillion $ market
-
Trade volume: increased by 276% with FTA partners, while
total foreign trade increased by 344% in 2002-2012.

Exports: increased by 454% with FTA partners, while total
exports increased by 323% in 2002-2012.


Share of EU (2012): 39% in exports, 37% in imports.

Share of FTA partners (2012): 10% in exports, 4,5% in imports.
Foreign Trade Exchange (2000-2012)
Billion USD
FTA Partners
16
13,61
12,29
12,70
12
11,11
9,43
10
8
6,06
6,87
4,43
5,44
7,19
5,14
6
2,93
2,81
2,24
2000-2012
Increase
10,68
Exp: % 551
Imp: % 280
6,07
3,49
2,63
2,57
14,59
8,81
8,90
6,74
4,09
4
2
13,77
13,11
14
Export
2012
Import
Exp: 14,5 billion $
Imp: 10,7 billion $
0
Milyar Dolar
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
241
250
237
202
200
100
55
28
2000
41
52
31
36
2001
98
69
47
117
73
63
140
107
132
141
102
86
114
2000-2012
Artış Oranı
Exp: % 446
185
170
150
0
2012
Total Foreign Trade
300
50
2011
153
135
Imp: % 340
2012
İhracat
İthalat
Imp: 153 billion $
Imp: 237 billion $
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
29
SHARE OF THE EU AND FTA COUNTRIES IN
TURKEY’S FOREIGN TRADE (2012)
IMPORTS
EXPORTS
EU
37%
EU
FTA
Rest of the
World
58%
Rest of the World
FTA
5%
• 48% of our exports, 42 % of our imports are covered by preferential regimes.
30
Cumulation Opportunities in FTAs of Turkey
 Diagonal cumulation: Pan Euro Mediterranean cumulation
system (MEDs, the EU, EFTA States, Balkan countries)
 Full cumulation: Tunisia, Morocco
 Bilateral cumulation: Korea, Georgia, Chile
31
Cumulation Opportunities in FTAs of Turkey
32
FREE TRADE AGREEMENTS
of
TURKEY
Nail ERSOY, Foreign Trade Specialist
General Directorate of the EU
E-mail: ersoyn@economy.gov.tr
September, 2013-Ankara
33