RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG59/3
1 February 1999
(99-0363)
Committee on Regional Trade Agreements Original: English
FREE TRADE AGREEMENT BETWEEN TURKEY AND ROMANIA
Communication from the Parties
The following communication has been received from the Permanent Missions of Turkey and
Romania with the request that it be distributed to WTO Members.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Parties to the Agreement are the Republic of Turkey and Romania.  The Agreement
applies in respect of the territory to which the customs laws of Turkey and Romania are applicablerespectively.
The free trade area Agreement between Turkey and Romania was signed on 29 April 1997 in
Ankara and entered into force on 1 February 1998 after the completion of the legal internal
ratification procedures of the two Parties.
2. Type of Agreement
The Agreement establishes a free-trade area in  conformity with the definition set out in
Article XXIV:8 (b) of GATT  1994.
3. Scope
The free-trade area established by this Agreement provides the framework for future trade
relations between Turkey and Romania.
The free-trade area Agreement covers all trade in industrial products (HS Chapters 25-97) and
a number of agricultural, processed agricultural and fishery products.  For further developing the
relations established by this Agreement, by extending them to fields not covered thereby, and in
accordance with the evolutionary clause contained in  the Agreement, Parties will discuss in the Joint
Committee the issue of reciprocal investment facilities and trade in services with a view of the gradual
liberalization and mutual opening of the market for investment and trade in services, taking intoaccount the relevant WTO provisions.
With the entry into force of the Agreement, customs duties and other restrictive regulations of
commerce on industrial and certain agricultural products were abolished, thus meeting the
requirement of Article XXIV in respect of the principle of covering "substantially all trade".WT/REG59/3
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In order to ensure the proper functioning of the free-trade area, the Agreement contains
provisions, inter alia , on state aid, state monopolies, competition, government procurement and
intellectual property rights.
4. Trade Data
The trade coverage of the Agreement in tota l trade between the Parties is as follows:
Imports of Turkey from Romania (1000 US $)
Year Total Trade Trade Covered % of trade covered
1995 367,870 329,679 89
1996 441,289 352,519 80
1997 394,086 353,163 90
Data relating to imports of Romania from Turkey will be submitted later.
II. TRADE PROVISIONS
1. Import Restrictions
All customs duties and charges having equivalent effect on imports of industrial products,
except for those classified as sensitive, were abolished on 1 February 1998. As for the sensitive
products, customs duties and charges having equivalent effect will be gradually eliminated by theyear 2002.
The Parties will not introduce new quantitative restrictions and measures having equivalent
effect on imports.
Turkey and Romania initially granted each other preferential market access for a  number of
agricultural, processed agricultural and certain fishery products under tariff quotas.
2. Export Restrictions
Under Article 7(1), prohibition of new customs duty or charges having equivalent effect on
exports between the Parties is envisaged.  Moreover, all existing duties and charges having equivalenteffect on exports applied to industrial products are abolished with the entry into force of the
Agreement.
The parties will not introduce new quantitative restrictions and measures having equivalent
effect on exports.
3. Rules of Origin
The rules of origin on trade between Turkey and Romania, defined in Protocol D of the
Agreement, are based on the sufficient working or processing criteria. In general, origin is conferredwhen:
- the good is wholly obtained or produced in the territory of a Party;WT/REG59/3
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- each of the non-originating materials used in the production of the good undergoes an
applicable change in tariff classification set out in the specific rule for that good, and
the good satisfies any other applicable requirement set out in that rule, as a result of
production occurring entirely in the territory of one or both of the Parties;
- the good is produced entirely in the territory of one or both of the Parties exclusively
from originating materials; or,
- other particular circumstances as set out in Protocol D.As stated in the Turkish Statement on Protocol D, the rules of origin enable extended
cumulation of products between Turkey, Romania, EU countries, EFTA countries and Central andEastern European Countries when the necessary procedures have been completed.
4. Safeguards
The Agreement permits the application of safeguard measures in the case of dumping
(Article 27), emergency action on imports of particular products (Article 28), measures relating
structural adjustment (Article 29) and re-export and serious shortage (Article 30) and provisions
concerning rules of competition (Article 24) between the Parties.
In the case of  balance-of-payments difficulties, Article 33 of the Agreement gives to the
Parties the right of adopting restrictive measures in accordance with the conditions laid down within
the framework of GATT 1994 and with Article VIII of the Articles of Agreement of the International
Monetary Fund.
The procedure for the application of these measures is laid down in Article 32 of the
Agreement.
5. Anti-Dumping and Countervailing Measures
Article 27 of the Agreement states that if a Party finds that dumping is taking place in trade
with the other Party within the meaning of Article VI of the GATT, it may take appropriate measures
against this practice in accordance with the Agreement on Implementation of Article VI of theGATT 1994 and with its relevant internal legislation, under the conditions and in accordance with the
procedures laid down in Article 32. Through this Article  the conformity with GATT 1994 rules has
been provided.
6. Subsidies and State Aid
The agreement evaluates “state aid” issue in the context of distortion of competition.According to Article 24.1 of the Agreement, any state aid which distorts or threatens to distort
competition by favouring certain undertakings or the production of certain goods will be subject torules which are going to be adopted by the Joint Committee.  Until these rules are adopted, relevant
rules of GATT 1994 shall be applied.
The Agreement also sets up appropriate means to ensure  transparency in the area of state aid.
Against the improper practices of a Party, Article 24(6) of the Agreement establishes the right
of the other Party to take appropriate measures.WT/REG59/3
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7. Sector-Specific Provisions
Agriculture
Under the Agreement, the Parties have declared their readiness to foster, in so far as their
agricultural policies allow, the harmonious development of trade in agricultural products and to
discuss this issue periodically in the Joint Committ ee.  In Protocol C to the Agreement, quantitative
restrictions on imports of processed agricultural products in trade between the Parties are abolished on
the date of entry into force of the Agreement.
Services
Turkey and Romania agreed to  cooperate with the aim of achieving gradual liberalization and
mutual opening of markets for investments and trade in services, taking into account the relevant
WTO provisions.
8. Other
Cooperation in Customs Administration
A framework was established for cooperation in customs administration, within Article 18
and Protocol D on the definition of the concept of “originating products” and methods ofadministrative cooperation between the Parties.
State Monopolies
Under Article 22 of the Agreement, the Parties agreed to adjust progressively any state
monopoly of a commercial character so as to ensure that by 1998 no discrimination regarding the
conditions under which goods are procured and marketed exists between the nationals of the parties.
Internal Taxation
Any measures or practice of an internal fiscal nature establishing discrimination between the
products originating in Turkey and Romania has been prohibited with Article 19.  This Article alsoprohibits repayment of indirect internal taxation in excess of the amount of indirect or direct taxes on
exports.
Intellectual, Industrial and Commercial Property
The protection of intellectual, industrial and commercial property is addressed in Article 26
and Annex IX of the Agreement. The Parties accepted to accede certain multilateral conventions on
intellectual and industrial property rights which are listed in Annex IX of the Agreement.
Payments
In Article 23 of the Agreement, Parties undertake  to authorize, in freely convertible currency,
any payments on the current account of balance-of-payments to the extent that the transactions
underlying  the payments concern movement of goods.
In the same Article, it is also stated that any measure concerning current account balance-of-
payments taken by either side relevant to the mo vement of goods shall be in conformity with the
conditions laid down in Article VIII of the Articles of Agreement of International Monetary Fund,WT/REG59/3
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whenever it is applicable to respective countries within the context of their current relations with the
Fund.
Public Procurement
The Parties recognize the effective liberalization of their respective public procurement
markets as an integral objective of free-trade area Agreement. The progress in this field will be
reviewed in the Joint Committee annually.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
All customs duties and charges having equivalent effect on imports applied to industrial
products, except for those classified as sensitive, are abolished with the entry into force of the
Agreement.  As for the sensitive products, customs duties and charges having equivalent effect will begradually eliminated by the year 2002.  This, however, will not preclude prohibitions or restrictions
on imports, exports or goods in transit justified  on grounds of public morality, public order or public
security; the protection of health and life of humans, animals or plants and of the environment; the
protection of national treasures possessing artistic, hi storic or archaeological value; or the protection
of intellectual, industrial and commercial property, or the rules relating gold or silver.
The Agreement allows the Parties to take measures, with concerns of security, in the cases
specified in Article 21.
2. Accession
There is no provision in the Agreement  allowing other countries to accede  to the free-trade
area.
3. Institutional Framework:
The Agreement establishes a Joint Committee which is responsible for administration of the
Agreement and shall meet once a year to monitor the implementation of it.
4. Dispute Settlement Procedures
A Joint Committee which is responsible for the administration of the Agreement and its
proper implementation has the authority to take decisions on issues mentioned in various Articles of
the Agreement. In the procedure for application of safeguard measures relating to “Dumping”,
“Emergency Action on Imports of Particular Produ cts” and “Re-export and Serious Shortage”, the
Joint Committee has also commissioned actively as a competent authority in Article 32 of the
Agreement.
5. Relation with Other Trade Agreements
Regarding “basic duties” defined in Article 4, the Agreement envisages that any tariff
reduction resulting from the tariff agreement concluded as a result of the GATT Uruguay Round andTurkey-EC Customs Union replaces the former basic duty.WT/REG59/3
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The Agreement stipulates that rights and ob ligations relating to certain matters, namely
anti-dumping measures, balance-of-payment and competition-related measures shall be governed by
the relevant WTO Agreements.
The Agreement stipulates that measures concerning current payments connected with the
movement of goods and rules on balance-of-payment difficulties shall be in conformity with the
Article VIII of the Status of the International Monetary Fund and GATT 1994 provisions.
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