. /.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG107/4/Add.1
19 December 2001
(01-6392)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN TURKEY AND POLAND
Questions and Replies
Addendum
I. BACKGROUND INFORMATION ON THE AGREEMENT
4. Trade Data
In document WT/REG107/4, the Parties state that “Turkey understands the principle of
‘Substantially all trade’ relates to ‘trade flow’ not necessarily the ‘sectors’ (goods) and also isone of the systemic issues that can not be solved in this particular FTA case”.  Can the Parties
please clarify what is meant by this statement, in particular, defining the term “trade flow”.
Above statement attempts to explain that percentages of actual trade flow between the Parties
subjected to MFN, less than MFN rates and zero duties after the completion of FTA between theParties show that Article XXIV:8 (b) of GATT 1994 related to the provision of ‘substantially all
trade’ has been respected.  Information on trade flow can be found in the annexes of Standard Format.
The principle of “substantially all trade” should not necessarily be justified by the percentage
of tariff line information.  Furthermore, regarding the product ‘coverage’ of RTA and the degree of
‘substantiality’, no explicit definition could be found in any of the WTO texts and perception of these
terms by the Parties are systematically debated in WTO platforms.
1  The term ‘trade flow’ is meant to
indicate actual import figures of the both sides af ter the entry into force of Agreement subjected to
zero, preferential or MFN rates provided according to the Agreement.
II. TRADE PROVISIONS
3. Rules of origin
We appreciate the Parties' response to question 3(a) of WT/REG/107/4.  However, we
feel that the question has been insufficiently answered.  By asking this question, we are trying to
assess the magnitude of trade diversion created by this Agreement as a result of the rules of
origin regime.  Please clarify.
The Pan-European cumulation of origin is a Eu rope-wide network of origin rules including
the EU, EFTA, CEE countries and some Free Trade Areas included in the system amounting to 30
countries in total.  In brief, any product which underwent different process of adding value in any of
these 30 countries is traded as “originating product” within the countries which are partners to the
network, subject to the tolerance limits of materials or iginated in third countries.  Inherently, in order
                                                     
1 Different views on this issue can be seen in the documents WT/REG/W/37 and JOB (01)132.WT/REG107/4/Add.1
Page 2
to assure proper functioning of the system, rules of origin in the Agreements between the partners of
the network should be identical.  Therefore, the protocol 3 of FTA Agreement between Turkey and
Poland relating to the rules of origin is identical  to those of others included in the system.
The Parties state that “[o]nly necessary amendments are made to make the [rule of
origin] protocol operative under the terms of the Pan-European Cumulation of Origin”.  What
constitutes such ‘necessary amendments’?
Necessary amendments may include, for instance, inclusion of any country in the system,
definition of the concept of ‘originating products’ or  revision of classification of goods resulting from
changes in Harmonized System.
9. Other
We thank the Parties for their response to the question regarding public procurement.
Does the “draft law” refer to Legislation in Turkey?  Could the Parties please explain the
nature of the “Draft Law” and what the prospe cts are for this to become Law? Could the
Parties also explain the “national preference prin ciple” affects the “equal rights” of “domestic
and foreign entities”?
The “Draft Law” mentioned in WT/REG107/4 re fers to Legislative preparation in Turkey
aimed at establishing a new set of rules and procedures to be applied in public procurement market.
The Draft Law that has already been passed on the agenda of Turkish Grand National Assemblyforesees, inter alia , rehabilitation of the current arrangements as well as setting forth comprehensive
provisions for ensuring sound competition in this field. It is not possible, for the moment, to give
explanation further than above on the nature and the content of the legislation before its ratification by
the National Assembly.  As soon as it is ratified, comprehensive information in this context will be
provided.
In the light of the Polish law on public procurement, the implementation of national
preferences in Poland takes place with regard to obligations resulting from international agreements
concluded by the Republic of Poland. The Polish law on public procurement allows the
implementation of national preferences in case of constructions services (this kind of services can be
realized only by using the Polish products and raw materials) or in case of order, which doesn’t
exceed 30 000 ECU (Article 18 of the law on public procurement dated 10 June 1994).  Uponaccession to the EU, Poland will accept the EU regime for public procurement.
The Parties state that “[t]he provision of the Agreement relating to state monopolies do
not address any specific sector in which monopoly dominates”. On the other hand, the Parties
state that “[n]o particular sector is excluded”. Could the Parties explain these two statements?
The first statement aims at explaining that there is no sector-specific reference in the
provisions relating to the state monopolies (Article 18 of the Agreement).  However, this question has
already been replied in document WT/REG107/4 in  terms of particular sectors in which state
monopoly used to operate in Turkey (no products are subjects to state monopoly in Poland)
The statement that “no particular sector is excluded” (under the title regarding Scope, section
I.3 of WT/REG107/4) is a straight answer to the question that reads "Are any of the particular sector
excluded?".  The whole sentence may also be formulated as “No particular sector is excluded from the
scope of the Agreement”, inferring that question itself speaks about the scope of the Agreement.
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