RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG59/4
24 June 1999
(99-2580)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN TURKEY AND ROMANIA
Questions and Replies
The document reproduces questions addressed to the Parties and the responses submitted.
The questions and replies set out below are organized in accordance with documents WT/REG59/3.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
4. Trade Data
The Parties to the Agreement have circulated  overall two-way trade data at the chapter
or section level for the last few years.  While this information is useful, unfortunately the
information does not respond to the request ma de by the Committee.  Committee members are
still unclear on the treatment of certain type s of products under the Agreement.  While the
Parties claim that all trade is covered by the Agreement, it appears that some products –
primarily agricultural – are not subject to tariff elimination and in fact may receive only tariff
preferences.  Committee members have requested, on several occasions, statistical information
that would show the amount/type of trade s ubject to varying treatment under the Agreement.
Similar data has been provided by the parties to other agreements.  We are not prepared to
complete the factual review of this Agreement – or any other agreements - until satisfactory
trade data has been provided.  We note that while the Parties to the Agreement may consider
the meaning of the term "substantially all trade" to be a topic for the discussion on systemic
issues, the information we have requested has been provided by the parties in reviews of otheragreements.  Please provide the trade data that has been requested.
We welcome the trade statistics provided by the FTA parties in the standard format
report.  We would be grateful for clarification of what percentage of FTA trade between the
parties (for each party):
For agricultural products- will have the duties/regulations eliminated?
- receives concessions (less than MFN but greater than zero duties and/or quotas) or is
excluded from FTA provisions?
For industrial products- will have the duties/regulations eliminated?WT/REG59/4
Page 2
- receives concessions (less than MFN but greater than zero duties and/or quotas) or is
excluded from FTA provisions?
See Annex.
II. TRADE PROVISIONS
4. Safeguards
Articles 28, 29, 30 and 32 (Emergency Acti on/Structural Adjust ment/Re-export and
Serious Shortage/Safeguards Procedures):  Ca n the Parties explain whether there is any
difference in practice between the obligations under these Articles and the manner in which
they will operate, and the obligations of the parties under the WTO?  Can the parties confirm
that measures applied under these Articles will  be applied in a non-discriminatory manner
without prejudice to the interests of non-parties to the FTA.
Parties are allowed to take appropriate measur es that are in full conformity with the
obligations stemming from the WTO rules where the measures are enforced on the rule of non-
discrimination between Parties and non-parties.  Of all the safeguard measures set out in the
Agreement, only a structural  adjustment measure under Article 29.2 of the Agreement, namely infant
industries, or certain sectors undergoing restructuring or facing serious difficulties, can justify a
margin of preference for Parties.  Even the possibility to use this type of measure under theAgreement is limited in duration, ending on 1 January 2002.
Article 28: (Emergency Action):  Have any safeguard measures under this Article been
taken?  If so, on what products and for what duration?
Article 29 (Structural Adjustment):  This Article makes provision for exceptional
measures to be taken concerning infant industries, or sectors undergoing restructuring or facing
serious difficulties.  Have any structural adjustment measures been taken, and if so, on what
products?  How is it decided that exceptional measures can be taken?
No emergency action or structural adjustment measure has been taken by the Parties within
the meaning of Article 28, 29, since the entry into force of the Agreement.
Article 33 (Balance-of-payments - BOP – Measures):  Will BOP measures under this
Article be applied in a non-discriminatory manner and without prejudice to the interests of
non-parties to this Agreement
BOP measures will be applied in a non-discriminatory manner to the interests of the non-
parties to this Agreement and in accordance with  the conditions laid down in the WTO rules.
6. Subsidies and State Aid
Article 24 (Competition Policy):  We acknowledge that competition policy is not covered
in explicitly by the WTO rules.  However, certain aspects of competition are captured by
various WTO rules and we therefore would be grateful for comments on the following
questions:
- What criteria are to be applied in asse ssing whether actions prevent, restrict or
distort competition, or whether actions by dominant undertakings constitute an
abuse of their position?WT/REG59/4
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- Are these considerations subject to specific legally based processes?
- State Aid:  We note that the provisions of  this Article on state aid do not apply to
agriculture products, and that therefore there is no limitation under the Agreement
on the use of state aid for agriculture.  What is the reason for agriculture being
excluded from the provision of this Article?
The criteria for evaluating whether actions prevent, distort or restrict competition are
explicitly stated in Article 24.  Moreover, any issue on competition rules are consulted and measures
are taken within the Joint Committee and parallel to th e guidelines laid down in the Parties' respective
Agreement with the EU.
Agricultural products are excluded from the scope of the Article due to the sensitive nature of
the sector in both countries.
7. Sector-Specific Provisions
Agriculture
Chapter II (Agriculture/Fisheries):  Is consideration being given to establishing free
trade in agriculture, or to extending existing pr ovisions on agriculture, or to extending existing
provisions on agriculture and fisheries to cover more products or to liberalize further(e.g., eliminating duties/quotas on products cur rently only listed for concessions or currently
exempt)?
Parties have granted each other preferential market access possibilities for a number of
agricultural and processed agricultural products under positive lists.  In accordance with Article 14,further liberalization of trade in agricultural products is an important component of the agreement.
The objective will be taken up regularly within the Joint Committee meetings.
Article 16 (Specific Agricultural Safeguards):  Have any specific safeguards actions been
taken under relevant articles on agricultural products?  If so, on which products and what was
the nature of the measures taken?
Parties have not taken any safeguard actions on agricultural products since the entry into force
of the Agreement.
8. Other
State Monopolies
Article 22 (State Monopolies):  Which products are currently subject to state
monopolies?  This Article suggests that state mo nopolies might currently discriminate in their
commercial decisions – Can the parties confirm that such monopolies operate in a mannerconsistent with GATT Article XVII in their purchases from and sales t third countries?
The importation of alcoholic beverages excluding whisky and natural sparkling wines are
under the monopoly of the Turkish Government.  In accordance with GATT Article XVII, the
monopoly operates in a non-discriminatory manner c oncerning commercial decisions without creating
any advantage for Romanian exporters against non-parties to the agreement.WT/REG59/4
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ANNEX
Imports of Turkey from Romania, 1995-1997,
by different duty levels according to the Agreement
1995
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 37,079 47 289,143 100 326,222 88.6
Less than MFN 8,822 11 131 0 8,953 2.6
MFN 32,693 42 0 0 32,693 8.8
1996
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 30,642 25 318,627 99.8 349,269 79
Less than MFN 2,986 2 558 0.2 3,544 0.8
MFN 88,477 73 0 0 88,477 20.2
1997
Agricultural products Industrial products* Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 32,534 45 321,473 99.8 354,007 89.8
Less than MFN 16 0 644 0.2 660 0.2
MFN 39,420 55 0 0 39,420 10
    *  Sensitive products are subject to two timetables which will be abolished in 2001 and 2002, respectively .
Imports of Romania from Turkey, 1997,
by different duty levels according to the Agreement
1997
Agricultural products Industrial products* Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 11,552 29 173,047 100 184,599 87
Less than MFN 9,748 25 0 0 9,748 5
MFN 18,421 46 0 0 18,421 9
All 39,721 100 173,047 100 212,768 100
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