RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG116/M/1
18 December 2001
(01-6374)
Committee on Regional Trade Agreements
Thirtieth Session
EXAMINATION OF THE FREE TRADE AGREEMENT
BETWEEN TURKEY AND LATVIA
Note on the Meeting of 26 September 2001
Chairman:  Mr. A.J. Dumont (Argentina)
1. The meeting was convened in document WTO/AIR/1618.
2. Under Agenda Item B.V of its Thirtieth Session, the Committee on Regional Trade
Agreements (CRTA) took up the examination of the Free Trade Agreement (FTA) between Turkey
and Latvia.  The following topics were discussed:
A. General Remarks
B. Section I – Background Information on the Agreement
C. Section II – Trade Provisions
3. The Chairman noted that this was the first round of examination of the Free Trade Agreement
between Turkey and Latvia.  The notification of the Agreement had been distributed in
document WT/REG116/N/1, and the text of th e Agreement in document WT/REG116/1.  He
proposed to organize the examination by first asking the Parties and other Members for general
comments and then turn to the specifics of  the Agreement, using the Standard Format
(WT/REG116/3) with its Addendum and Corrigendum, to guide the debate.  He recalled the terms ofreference for the examination, adopted on 14 March 2001 by the Council for Trade in Goods as
contained in document WT/REG116/2 and its Corrig endum: "to examine, in light of the relevant
provisions of the GATT 1994, the Free Trade Agreement between Turkey and Latvia and to submit a
report to the Council for Trade in Goods.  These terms of reference applied in conjunction with the
following Understanding:  "It is understood that th e Understanding read out by the Chairman of the
Council for Trade in Goods under item 7 of the Ag enda of the meeting of the Council for Trade in
Goods on 20 February 1995, as contained in document WT/REG3/1, will apply mutatis mutandis to
the examination of the agreements.  It was also understood that, during the examination, due account
would be taken of the intrinsic differences between customs unions and free-trade areas."
A. G
ENERAL REMARKS
4. The representative of Turkey said that Turk ey was committed to an open and liberal trading
system and had concluded FTAs with 13 countries (EFTA, Central and Eastern European countries,
Baltic countries and Israel).  In addition, negotiations with some Mediterranean countries, South
Africa, and the Faroe Islands were ongoing.  Some of the FTAs had already been examined by the
Committee.  The FTAs already concluded had proven to stimulate trade between the Parties.  TheAgreement had been signed on 16 June 1998 and entered into force on 1 July 2000.  It was notified to
the WTO on 22 January 2001 and the text of the Agreement had been circulated as
document WT/REG116/1.  The Standard Format ha d been published as WT/REG116/3.   The TurkishWT/REG116/M/1
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delegation was of the view that the Turkey-Latvia FTA was in compliance with the requirements of
GATT 1994, in particular with Article XXIV.  More specifically, the provisions of Article XXIV:5(b)
had been respected since "… the duties and other re gulations of commerce applicable at the formation
of the free-trade area… to the trade of Parties not included in such area were not higher or more
restrictive than corresponding duties and other regulations of commerce prior to the formation of theFTA…".  The Agreement did not introduce any barriers for third countries.  The Agreement provided
for the elimination of duties and other restrictive regulations of commerce covering all industrial
products (HS Chapters 25-97), with the exception of a few sensitive items for which a transitional
period was set forth, as well as a number of agricultural, processed agricultural and fishery products.
To this end, the provisions of the Agreement were  in line with Article XXIV:8(b), which stipulated
the elimination of duties and other restrictive regulations of commerce on "substantially all the trade."
He stressed that the share of industrial products imported by Turkey from Latvia in the years 1998 and1999, before the Agreement entered into force, was 95 per cent of all imports, which represented quite
a high degree of "substantiality".  In the first implementation year – 2000/2001 - industrial products
constituted almost 100 per cent of all imports from Latvia.  As with other FTAs examined in the
Committee, the Agreement included transitional periods for certain groups of products.  The
transitional period for sensitive products laid down in the FTA between Turkey and Latvia ended inearly 2000 and customs duties and charges having equivalent effect were eliminated by this date.  On
the other hand, within the context of the Agreement, Parties had granted each other preferential
market access opportunities for a number of agricultural and processed agricultural goods under
positive lists.  An Evolutionary Clause (Article 33) provided Parties with the legal basis to expand the
product coverage of the Agreement and to exchange further concessions within the Joint Committeethat would meet whenever necessary, but at least once every year (Article 30).  The import figures of
the year 2000 indicated that the Agreement covered almost 100 per cent of the trade between Parties.
Turkey's import from Latvia in the year 2000 was US$11.9 million, which represented an almost ten
fold increase from 1999 (US$1.6 million).  The Protoc ol relating to rules of origin annexed to the
Agreement was similar to those of all other FTAs that Turkey had signed with countries part of thepan-European Cumulation System.  The System, based on the principle of diagonal cumulation of
origin between its member countries, had been notified to WTO Members.  He stressed that the FTA
between Turkey and Latvia was in full compliance with the principles of the WTO, as it provided
greater trade possibilities between the Parties and did not raise any barriers to trade from third
countries.
5. The representative of Hungary welcomed the Agreement and considered it as an important
step in strengthening the process of European integration.  He considered that the provisions of the
Agreement complied with those of GATT Article XXIV.
6. The representative of the European Comm unities noted the complementarity of the
agreements between partners of Central and Eastern Europe and Turkey with those concluded by the
EC with the same partners and stressed the dire ct link to the EC-Turkey Customs Union.  He also
welcomed the positive contribution of the Agreement to the process of European integration and wasconfident that it would meet the test of GATT Article XXIV.
B. S
ECTION I - B ACKGROUND INFORMATION ON THE AGREEMENT
7. The representative of Australia said that the Agreement did not provide details on
liberalization in the agriculture sector.  He remark ed that the separate chapter on agriculture in the
Agreement and its Protocol B seemed to refer to facilitation rather than liberalization measures.  Healso noted that 94 per cent of Latvia agricultural imports from Turkey continued to face MFN rates
in 2000, that was after entry into force of the Agr eement, compared to 95 and 85 per cent for the two
years prior to its entry into force.  He added that agriculture represented over 20 per cent of Latvia's
imports from Turkey and therefore questioned whether an agreement that excluded such as sector
could be said to cover substantially all the trade.  He asked the Parties to the Agreement whether thereWT/REG116/M/1
Page 3
was a schedule of tariff reductions for agricultural products and, if not, whether there was a
mechanism to extend the coverage of agriculture under the Agreement.
8. The representative of the United States shared similar concerns with respect to the trade data
provided by Latvia concerning its agricultural imports.  He said that, given that the MFN-based share
of agricultural imports was greater now than prior to the Agreement he was interested in knowingwhether there was anything in the Agreement that ac tually raised agricultural duties in Latvia with
respect to Turkey's exports.  He also asked whether the Agreement covered forest products.
9. The representative of Turkey said that there wa s no explicit timing for the total liberalization
of duties on agricultural products, but that there was an evolutionary clause providing the legal basis
under which the Parties could discuss the extension of scope of the agricultural sector.
10. The representative of Latvia confirmed the existence of the evolutionary clause.  In response
to the question posed by the United States delegation, she said that no new duties had been introduced
and that the statistical changes were perhaps just tr ade fluctuations.  She pointed to the value of total
trade between the two countries and indicated that the trade coverage at duty free level was about
80 per cent, which she considered as providing a very good coverage.
11. The representative of Australia noted that the Annex to the Standard Format with trade
information included 2000 data for imports from Turkey into Latvia, but no 2000 figures for imports
of Turkey from Latvia.  He wondered whether the Parties were planning to provide the equivalent
2000 figures.  The representative of Turkey  said that those figures were now available and that they
would be submitted very soon.
C. SECTION II - T RADE PROVISIONS
12. Citing Article 6 in Chapter I of the Agreement, the representative of Australia remarked that
the date indicated for the abolition by Latvia of export customs duties and charges having equivalent
effect on the products listed in Annex III was 1998, even though the Agreement itself only entered
into force in 2000.  He asked for clarification on whether duties on those industrial products had been
eliminated and, if not, whether there was a new schedule for their elimination.  The representative of
Latvia confirmed that all the duties had been abolished.
13. The representative of Turkey noticed that Paragraph 4, Section II of the Standard Format was
missing.  He acknowledged that to be a mistake and said that he would come up with an explanation
in the shortest possible delay.
14. The representative of the United States, referring to safeguard provisions, asked whether the
Agreement provided for the exclusion of imports from either Party in the case of the application of a
global safeguard.  The representative of Latvia said that there was nothing in the Agreement
concerning the application of safeguards between Latvia and Turkey which would oblige them to
exclude the Parties from a global safeguard in the case it was applied.
15. With respect to sector specific provisions, the representative of the United States, citing
Section II:8(b), asked the Parties if there had been an y agreement in any services sector relating to the
establishment of firms and liberalisation of services.  The representative of Latvia said that there had
been none.
16. The representative of Korea expressed interest in knowing why "anti-dumping" was
mentioned both in Paragraph 5 (safeguards) and Paragraph 6 (anti-dumping) of the Standard Format.
The representative of Turkey said he would answer in writing.WT/REG116/M/1
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17. The Chairman noted that this first round of examination of the FTA between Turkey and the
Latvia had allowed the Committee to clarify a number of questions, although others were still pending.
He invited those delegations wishing to ask additiona l questions to forward them to the Secretariat by
12 October, at the latest, and the Parties to submit their replies in writing as soon as possible and no later
than 30 November.
18. The Committee took note of the comments made.
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