WORLD TRADE
ORGANIZATIONTN/RL/W/32
25 November 2002
(02-6502)
Negotiating Group on Rules Original:  English
SUBMISSION ON REGIONAL TRADE AGREEMENTS
Paper by Turkey
The following communication, dated 21 November 2002, has been received from the
Permanent Mission of Turkey.
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1. Introduction
Turkey welcomes the efforts within the DDA trade negotiations towards enhancing the
disciplines and procedures regarding the regional trade agreements.  In this regard, Background Note
TN/RL/W/8/Rev.1 of the WTO Secretariat and the submissions of several Member countries on thesubject are highly appreciated.
Considering the RTAs as an essential component of its liberal trade policy aiming at trade
creation, Turkey in addition to the Customs Union with the EC, has concluded 15 free trade
agreements, 13 of which are fully in force.  Therefore, Turkey strongly believes that the RTAs are a
reality authorized by the WTO, as clearly set out in Article XXIV of the GATT 1994, to contribute to
its objective of trade liberalization and they found the sound basis at their Members economic,political and legal integration interests going beyond the elimination of classical trade measures, even
to the extent of establishing common regulatory frameworks.
It is to be borne in mind that the proliferation of the RTAs depends directly on some
geographical and economic realities and in fact they serve as complementing elements for theirMembers' participation in the multilateral trading system.
However, this does not mean that the primacy of the multilateral trading system is not to be
maintained.  Just on the contrary, the unique rule-making position of the WTO in the role played by
the RTAs, in promoting trade expansion and in fostering development should be further clarified.
Taking into account the fact that the CRTA has been unable to fulfil its mandate of
overseeing the level of the RTAs to meet the WTO rules and reviewing their implementation, Turkey
believes that priority should be given to the improvement of the current RTA examination procedures.
Having said that, the following are the views of Turkey on several groups of debated issues
concerning the regional trade agreements.
2. Clarification of the legal framework applying to regional trade agreements
Firstly, Turkey reiterates its support to the inclusion in the Doha Ministerial Declaration of
paragraph 29, whereby negotiations aiming at clarifying and improving disciplines and proceduresTN/RL/W/32
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under the existing WTO provisions applying to regional trade agreements are agreed to.  This is
mainly because of the inadequacy of the existing ru les both in the procedural and systemic matters.
The clearer and objective WTO criteria applicable to the RTAs will definitely provide an opportunity
for all the Members to evaluate the RTAs' compliance with the WTO requirements.
Accordingly, the split of the sub-headings as  "procedural and systemic issues", in a way
enabling the transfers from one to another, may ease the progress to be gained in the negotiation
process.  In other words, Turkey supports the idea that the Group could start by addressing procedural
aspects, without excluding the possibility of addressing systemic issues as well.  As it is seen, trying
to reach a rigid set of definitions for the key concep ts involved in the systemic issues has become the
biggest procedural problem to be dealt with.
As to the procedural issues, basic transparency requirements such as the notification
requirements, scope of information to be submitted, periodical reporting, the examination process and
the determining of the legal status of the CRTA examination reports appear to be agreed upon more
easily.  Therefore, this group of issues would be considered as a good starting-point for the
negotiations.
3. Improving the effectiveness of the CRTA
It is getting more apparent that the need to improve the effectiveness of the CRTA is
increasingly shared by the Members.  Although many relevant issues for overcoming the blockagefaced by the CRTA have already been discussed in the Committee itself, to reach a consensus could
not be possible during these discussions.
Turkey believes that the simplification of the general rules of examination and the greater
application of the "grandfathering" of the currently existing RTAs will accelerate this process.  As aconcrete suggestion towards the improvement of the grandfathering approach, determination of an
"expiry date" which could presumably be the date of completion of the DDA negotiations, for the
retroactive application of stricter new rules to the lately notified RTAs, will increase the number of
un-notified RTAs becoming part of the multilateral system.  As to the question of RTAs to be
concluded after that date, apparently the new rules are to be applied;  however, the ultimate objective
of simplifying the overall system and the adoption of less complex rules will consequently have some
other positive effects for their examinations.
Furthermore, grouping of certain set of existing agreements could be done by the CRTA prior
to their examinations towards facilitating the process.  These groupings could be done on several basis
such as the geographical separations, RTAs forming up through the enlargement of existing ones, and
in the cases of overlapping RTAs.
During the examination process in the CRTA, it is considered more realistic to put focus on
the analysis of trade data and flows, instead of every provision included in the text of the agreement.
It should be accepted as a prerequisite that the regulatory harmonization type of provisions are within
the full mandate of the Members to the point that th ey do not violate the relevant WTO rules.  To this
end, improvement of the current level of informati on provided by the standard format regarding the
agreements could be useful to shorten the pre-examination process.  Having significant experience of
conducting the examinations and taking into account the commonly demanded information on the
specific provisions of the agreements, the CRTA could propose the additional information to be
involved in the standard format.  Consequently , in the course of the Doha Development Agenda
negotiations, the Members will have the opportunity to determine the scope of information they
attribute importance among these proposed items.TN/RL/W/32
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Recognizing the reality that large numbers of WTO Members were getting parties to a wide
diversity of agreements, Turkey is of the opinion that all RTAs should be notified to a single body,
namely the CRTA, whether they depend on Article XXIV of the GATT 1994, the Enabling Clause or
Article V of the GATS.
Since the absence of clearer guidelines has been increasing the number of disputed cases
relating to RTAs, adoption of less complex rules both on procedural and systemic issues will enhance
the transparency and the functioning of the system.
4. Basic systemic issues
The following are the initial comments of Turkey regarding the basic systemic issues.  They
could further be considered and enhanced during the course of the DDA negotiations.
• Substantially all the trade
Turkey believes that the definitions of "substantially all the trade" is a key concept in
interpreting the WTO conformity of RTAs and the lack of compromise on it was one of the mainreasons of the CRTA not being able to reach final decisions.
Turkey welcomes the two alternative approaches to the concept identified by the Secretariat
for the purpose of clarification.  All the same, the qualitative approach which does not permit the
exclusion of any sectors, or at least no major sector from the liberalization, is not considered to be inconformity with the economic realities.  The concerns  stating that the use of actual trade flows in this
assessment would ignore potential trade, might be contradictory to the commonly shared presumption
that the volume of trade created within the RTAs exceeds the possible trade diversions.
Hence, Turkey is in favour of the quantitative approach.
• Rules of Origin
Turkey believes that the harmonization of various preferential rules of origin used in different
regional agreements constitutes an important potential for the world trade.  Therefore, proposals for
the improvement of the harmonization models stated in the document are welcomed.  However, in thelong term, Turkey is in favour of adopting a uniform type of rules of origin.
Turkey also supports the idea that, harmonization of preferential rules of origin should go
along with the harmonization of the non-preferentials.  Regarding the difficulties of this time-
consuming process, in the first instance, we suggest the adoption of a single set of rules of origins
among the members of every RTA, followed by a convergence among the rules of origins of different
regional integrations.
As indicated in Turkey's assessment of th e Secretariat's Background Paper, WT/REG/W/45,
the forming of Pan-European Cumulation of Origin ty pe of structures involves an encouraging feature
for the participation of the non-member countries to the production realized inside the System.
Eventually, the expanding nature of these structures will have a positive domino effect on theadoption of the multilateral set of principles.  Furthermore, Turkey believes that this type of
arrangements having uniform rules should even be welcomed by the non-members, for their
implications of providing more transparency and predictability.TN/RL/W/32
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• Regulatory harmonization within the RTAs
The aforementioned ideas regarding the rules of origin issue is also true for the other
regulatory harmonization intentions within the RTAs.  Turkey agrees with the proposals that it would
be more appropriate to refer to regulatory convergence for bilateral relations and regulatory
harmonization at the multilateral level, with the concept of equivalence also being part of the process.
The convergence attained while preparing domestic regulations in conformity with the
requirements of a RTA results more positively on multilateral level.  Given our own experience, the
setting up of rules regarding almost every aspect of the economic activities and the creation of
national regulatory authorities for their surveillance  as a consequence of the Customs Union with the
EC provides Turkey in welcoming most of the forthcoming WTO negotiation issues.
• Other issues
Developmental aspects  are also among the topics to be considered within the mandate of the
Group.  Turkey believes that the clarification of the flexibilities provided for in the existing WTO
provisions will further suffice this need.  In this regard, Turkey confirms its support to the proposals
that such flexibilities might be provided on the length of the transitional periods, the level of finaltrade coverage and the degree of asymmetry in terms of timetables for tariff reduction and elimination
as well as the flexibilities provided for in the course of these RTA examinations and surveillances.
Turkey is of the view that efficiently functioning dispute settlement mechanisms within the
RTAs might strengthen the supervisory nature of the WTO providing that, in the event ofinconsistency, WTO rules prevail over the RTA rules.
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