WORLD TRADE  
ORGANIZATION  WT/TPR/M/192 
29 January 2008 
 (08-0424) 
Trade Policy Review Body 
10 and 12 December 2007   
 
 
TRADE POLICY REVIEW 
 
TURKEY 
 
Minutes of Meeting
 
 
Chairperson:  H.E. Mr. Vesa Himanen (Finland) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF  
TURKEY 4 
III. STATEMENT BY THE DISCUSSANT 7  
IV. STATEMENTS BY MEMBERS 9  
V. REPLIES BY THE REPRESENTATIVE OF TURKEY AND ADDITIONAL 
COMMENTS 17  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 22  
 
 
     
 
    
 
    
 
  
Note:   Advance written questions by WTO Me mbers and the replies provided by Turkey are 
reproduced in document WT/TPR/M/192/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.  WT/TPR/M/192 
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 I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fourth Trade Policy Review of Turkey was held on 10 and 12 December 2007.  The 
Chairperson H.E. Mr. Vesa Himanen (Finland) welc omed the delegation of Turkey, headed by the 
Deputy Undersecretary of Foreign Trade,  Mrs. Ülker Güzel, and the discussant, 
Ambassador Fernando de Mateo (M exico).  As usual, the discussant would speak in his personal 
capacity and not as a representative of his country.  In accordance with the established procedures, the 
discussant had made available, in advance, outlines of  the main issues he intended to raise (document 
WT/TPR/D/167). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Turkey was contained in document WT/TPR/G/192 
and that of the WTO Secretariat in WT/TPR/S/192.   As indicated in WT/TPR/6/Rev.1, the Member 
under review should provide written answers, by the beginning of the review meeting, to questions 
submitted at least two weeks before the meeting.  Questions posed subsequently should be answered, 
to the extent possible, before the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following dele gations had been submitted in writing at least two 
weeks in advance of the meeting and had been transmitted to the delegation of Turkey:  the United 
States; Switzerland; Brazil; the Republic of Korea; Hong Kong, China; Argentina; the European 
Communities; Canada; Chile; Japan; and Australia .  Copies of these questions and of the answers 
provided by the delegation of Turkey we re available in the meeting room.  The Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu; Mexico; China; and Pakistan  had submitted 
written questions after the two-week deadline.  Th ese questions had also been transmitted to the 
delegation of Turkey;  copies of these questions and of the answers provided by the delegation of 
Turkey would be available after the meeting.  All advance questions, as well as the responses received 
from the delegation of Turkey, are reproduced in WT/TPR/M/192/Add.1. 
3. The Chairperson noted that the documentation prepared for this Review emphasized 
Turkey's positive economic performance since its last TPR in 2003, with high economic growth, 
rapid disinflation, and declining public and ex ternal debt burdens. This had been the result of 
Turkey's ambitious reform programme implemented over the last few years. The programme 
included measures to improve the investment climate so as to attract larger FDI inflows. 
Nevertheless, the Secretariat report highlighted a fe w restrictions on foreign investment in certain 
activities; some of these activities were dominated by state-owned companies.  Turkey's applied MFN 
tariff went from 11.8% in 2003 to 11.6% in 2007, with relatively low tariffs on non-agricultural goods. According to the Secretariat report, the high leve l of tariff protection in agriculture had limited 
the sector's exposure to competition.  Turkey was an active participant in the WTO, including the 
DDA negotiations, and continued to build on an extens ive network of preferential trade agreements in 
line with its customs union with the EC.  WT/TPR/M/192 
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II. OPENING STATEMENT BY THE RE PRESENTATIVE OF TURKEY 
4. The representative of Turkey
 stated that the last four or five years could be considered as a 
period of stability and growth as a result of the implementation of its economic recovery programme. 
The tight fiscal discipline had brought significant reductions in net public debt and more than 
satisfactory figures for annual primary surplus.  Th e net public debt to GNP ratio had fallen from 
90.4% in 2001 to 45% in 2006 with an average 9.1%  decrease each year, and the gross external debt 
to GNP ratio had dropped from 78% to 51.9% . The tight monetary policy and the inflation-targeting 
strategy of the Central Bank of the Republic of Tu rkey (CBRT) had resulted in single-digit inflation 
rates by the end of 2004;  thus, the annual CPI (c onsumer price index) inflation had declined from 
68.5% in 2001 to 9.3%.  
5. Taking into account the favourable inflation ra tes, the CBRT had removed six zeros from the 
Turkish Lira (TL) in 2005. The current inflation targ et rate of 4% had been set and announced for two 
consecutive years, in line with th e full-fledged targeting regime of  the CBRT. It was estimated that 
end-year inflation for 2007 would be between 6.7%  and 7.9%.  Performance of the banking sector had 
been supportive of the overall macroeconomic su ccess during 2003-06. Banks had begun switching 
their asset portfolios mostly towards loans instead of holding government securities.  Between 2003 
and 2006, real GDP grew by 7% on annual average, placing Turkey in 17th place among the fastest 
growing economies in the world. The structure of  growth had also improved through increased 
private-sector investment, capital accumulation, and factor productivity.  Per capita GDP rose above 
US$5,000 in 2005, and to almost US$5,500 in 2006; the estimate for 2007 was about the same.   
6. However, some concerns remained  with regard to the level of the current account deficit. 
Booming investment, increased imports of capital a nd intermediate goods, sharp increases in energy 
prices, and the effects of the TL appreciation on im ported goods had been the main factors feeding the 
deficit.  Nevertheless, investments had offset the impact of the current account deficit.  Total FDI inflows reached US$20 billion in 2006, an increase of 104% compared with the 2005 figure of US$9.8 billion.  The rising FDI inflows, were the result of Turkey’s efforts to improve the business 
and investment climate, such as the establishment of the Turkish Investment Support and Promotion 
Agency. Turkey’s market-oriented economic polic ies had put the emphasis on competition-related 
issues during the last decade, taking into account th e close interaction among efficiency, growth, and 
prosperity. A well-enforced competition law had been successfully achie ved by the Competition 
Authority. 
7. The privatization process had gained moment um between 2003 and 2007. The net worth of 
the operations had reached almost US$30 billion in the last four years, covering a wide range of key 
sectors, such as telecommunications, petroleum, re fining, iron and steel, petrochemicals, banking, 
civil aviation, airport operations, seaports a nd seaport operations, insurance, and aluminium 
production.  The privatization pro cess would continue between 2007-09 in additional sectors, such as 
tobacco and tobacco products, lottery games, elect ricity distribution, power generation, sugar 
processing, cruise port/tourism complex, mining, to ll road construction maintenance and repair 
operations.  The main target of this privatization agenda was to add efficiency via establishing a much 
more competitive environment in those state-involved sectors.  
8. On the basis of this macroeconomic backgroun d, reaping the benefits of an open trading 
environment had become a strategic target for Tu rkey.  In this respect, since 2003, the Turkish 
Government had continued to build ambitiously on  its already extensive trade agenda.  The main 
objective was to apply the principle of  "free and fair trade" in its relations. Fulfilment of its rights and 
obligations under the WTO Agreements was the prim ary motivation behind Turkey’s efforts in the 
multilateral, regional and bilateral contexts.  Th e Customs Union established with the European 
Communities had also been a cornerstone in Turk ey’s trade policies since 1995. However, the 
determining influence of the EC in Turkey’s trade relations had intensified w ith the beginning of the 
full membership process.  Turkey had also made  great efforts to enhance its commercial and  WT/TPR/M/192 
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 economic relations in its region, with a view to support economic and political stability.  In this 
context, Turkey pursued ambitious trade agend as in the Economic Cooperation Organization (ECO), 
Black Sea Economic Cooperation (BSEC), and Or ganization of Islamic Conference (OIC). 
9. Despite intensive preferential engagements and programmes, Turkey’s tariff structure was not 
complex but transparent and simple. The current level of market access was remarkable: market 
access conditions were more alluring for partie s to signed FTAs, the Generalized System of 
Preferences (GSP) schemes, and some regional arrangements.  Under its Common Customs Union Regime with the EC, Turkey had started to apply tariff rates for non-agricultural products that were 
far beyond its Uruguay Round commitments.  Turk ey had also met its commitment for phasing out 
customs duties on information technology products on 1 January 1998 well ahead of schedule.   
10. Regarding agricultural market access, Turkey  had cut 10% minimum per product and 24% on 
average for all agricultural products between 1995 and 2004. As a result, Turkey had reached the final 
bound rates in 2004. The average customs duty for agricultural products was currently around 59.2%.  In addition, Turkey’s agricultural support progra mmes had been successfully transformed into less 
trade-distorting schemes, within the scope of li mited allocated resources, with emphasis on 
environmental and social concerns.  The refo rm process for an organized, competitive, and 
sustainable agriculture sector was under-way in the framework of the recent Law on Agriculture, 
through projects conducted by the Ministry of Ag riculture and Rural Affairs, such as ARIP and 
ÇATAK.      
11. As for the non-reciprocal preferential schemes, Turkey had long been aligning its GSP with 
that of the EC's. Duties on products under the Common Customs Union Regime had been entirely 
eliminated for least developed countries (LDCs) in line with the EC Everything But Arms Initiative.  
There was a solid commitment of the Turkish Gove rnment to increase assistance to the LDCs in 
parallel with the WTO Aid For Trade programme. Turkey had portrayed this commitment by hosting 
the United Nations Ministerial Conference of LDCs in Istanbul in July 2007.  
12. Turkey had taken serious steps to liberalize its  services sector, within the context of its recent 
structural reforms and regulations, together w ith its ambitious privatization programme. New 
opportunities had emerged in a wide range of ar eas, such as banking and financial services, 
telecommunications, tourism, seaport, and airport operations and services. This process was also supported by Turkey’s stance on the ongoing GATS ne gotiations.  As for the non-tariff side of its 
trade regime, Turkey had been developing and adopt ing a wide range of technical regulations on the 
basis of consumer welfare considerations. Within  the framework of these re gulations, trade-friendly 
tools such as producer’s or importer’s declarati on of conformity and market surveillance activities 
constituted the basic means of enforcement, instead of "at the border measures". This process had also 
been carried out in line with related EC directives. 
13. Turkey had concentrated efforts in the area of trade-related intellectual property rights 
(TRIPs) on strengthening its framework of legislati on and enforcement capabilities.  Turkey had taken 
concrete steps in the fight against piracy, protection of copyright, and industrial property rights, and in 
strengthening the judiciary system in terms of its specialized IPR courts. 
14. Export promotion remained a key issue in Turk ey’s trade regime.  The success of Turkish 
exports was due not only to the transformation of se ctoral composition but also to the diversification 
of destinations.   New promotional strategies had been devised for improved access to a wider range 
of markets by fully exploiting the advantages of location and logistics.  Between 2002 and 2006, 
exports had grown by 20.6% on average per year, making Turkey the 22
nd largest exporter in the 
world as of 2006. Exports were expected to reach US $104 billion at the end of 2007.  In addition to 
the quantitative increases, the sectoral compos ition of exports had s hown qualitative changes 
underscoring a structural transformation.  Imports increased significantly in 2003-06 to reach WT/TPR/M/192 
Page 6  
 
US$139 billion, contributing to Turkey’s rapidl y expanding trade volume under its open trading 
regime.  While the appreciation of the new TL created a cost advantage for imports, postponed 
purchases had caused a boom in domestic demand in th e aftermath of the financial crisis of 2001. 
Dramatically rising energy prices had pushed up the cost of energy imports in the world.  These figures would had been impossible to attain without a liberalized market. 
15. Turkey’s expectations for the Doha Round negotia tions were high.  Turkey wished to see a 
successful and balanced outcome, which could effect ively respond not only to the new market access 
needs of Members, but also to development concerns .  In Turkey's view, negotiations  were not close 
enough to end the process, although the latest te xt-based initiatives were highly encouraging.   WT/TPR/M/192 
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 III. STATEMENT BY THE DISCUSSANT 
16. The discussant  (H.E. Mr. Fernando de Mateo) had f ound great similarities between Turkey 
and Mexico, which had helped him to unders tand the major challenges facing Turkey.   
17. The macroeconomic reform undertaken by Turkey  had generated very impressive results. The 
structural reforms that had tended to change its economy into a free market economy had been 
accelerated. The success of the fourth stabilizati on programme, initiated in  2002, had resulted in 
average real GDP growth rate of 7%  per year dur ing the review period. The inflation rate had fallen 
from 30% in 2002 to 10% in recent years, while th e reduction of the fiscal deficit had also been 
impressive. Nonetheless, Turkey had to continue lowe ring inflation so as to achieve the predictions by 
the Central Bank. The exchange rate reforms ha d produced prices stability, and fiscal discipline had 
resulted in a more stable and predictable exchange  rate regime, providing more security for domestic 
and foreign investors. 
18. The discussant highlighted the impressive growth  in Turkey's GDP per capita in U.S. dollar 
terms. However, the Secretariat report showed the vulnerability of the economy to external crisis, 
despite these achievements. Four warning signs had been identified, which, if dealt with 
appropriately, could protect and consolidate the long-term growth of the economy: the growing 
current account deficit; continuing high unemploym ent; the fact that fundamental basic industries 
were still dominated by public companies; and a se rious duality in the economy, with very few highly 
productive companies and a large number of low pr oductivity companies that were standing in the 
way of long-term growth. He was interested to hear  how Turkey intended to deal with these structural 
difficulties in its future economic policies with a view to achieving its Vision 2023. 
19. Turkey had achieved good results in foreign dir ect investment. However, in recent years some 
restrictions had been introduced in some areas, and a number of sectors continued facing restrictions.  
In addition to its economic integr ation programme with the EC, whic h was a keystone of its trade 
policy, Turkey had a number of free-trade agreements  and participated in various regional initiatives. 
Turkey's policy on regional trade agreements w as complementary to the priority of achieving a 
successful conclusion to the Doha Round negotiations. He encouraged Tu rkey to continue its efforts 
to achieve this objective. 
20. One of Turkey's main trade policy objectives w as to provide greater clarity in its highly 
complex tariff system.  The number of non- ad valorem  tariff lines had increased, and the average 
tariff for agricultural goods was mu ch higher than that for non-agricultural goods. The level of tariff 
bindings was low, and less than half of the tariffs lines were bound in the WTO, leaving a 
considerable margin betwee n applied and bound rates.  
21. The imposition of non- ad valorem  tariff rates did not ensure compliance by Turkey with its 
WTO binding commitments, and the statutory tariff fu rther complicated the tariff regime and made it 
less predictable. This concern had led to many ques tions from delegations, in particular, with respect 
to the statutory tariff, which allowed the Govern ment to replace the applied MFN tariff by 150% of 
the corresponding rates of the statutory tariff, in  order to provide greater protection to national 
production.  
22. Another subject of interest was Turkey's trad e integration with the EC, in particular the 
harmonization of its tariffs. 
23. Turkey had been providing subsidies to th e manufacturing sector through credits, export 
guarantees, insurance, and tax incentives; there we re currently 20 programm es. This review would 
help to better understand the way the system functi oned and the impact of such programmes. This 
type of analysis would be facilitated by up-to-date notifications from Turkey on export subsidies and WT/TPR/M/192 
Page 8  
 
domestic supports;  according to the Secretariat,  these had not been submitted since 2001 and 2002, 
respectively. 
24. On government procurement, domestic supplies were given a price preference of up to 15%;  
the discussant was interested to hear  from Turkey the reasons for a high preference.  Turkey had made 
progress in bringing its intellectual property legisl ation into line with TRIPs during recent years. 
25. On sectoral policies, the participation of the State in the economy had been reduced 
considerably, thanks to an ambitious privatizati on programme. However, State participation continued 
to be quite high in important sectors such as financ ial services and energy. He was interested to hear 
about Turkey's plans in this regard, and the ro le of state-owned enterprises in these sectors.  
26. In the agriculture sector, in add ition to the high average tariff, there was a broad restructuring 
programme under way, designed to reduce the weig ht of subsidies on the economy, and to bring 
policies into line with those of the EC.  
27. In the energy sector, there was concern with th e constant increase in demand and increasing 
dependency on imports as a result of inadequate investment. Turkey was modernizing its legal 
framework in order to open up the sector to greater private investment. He was interested to know in 
greater detail Turkey's plans in this area.  
28. The manufacturing sector received considerable state support:  it was a main beneficiary of 
incentive regimes such as trade and tax concessions , in addition to export credits and credit 
guarantees. One possible future task would be to  rationalize these incentive programmes in order to 
eliminate pressure on public finances. The average applied MFN tariff on manufactured products was 10.9%, although tariffs on some food products were  as high as 225%. Moreover, the structure of the 
tariff did not provide incentives for investment in certain activities, such as chemicals and plastics, 
where there was a negative progressive tariff and high protection in industries such as textiles and 
clothing, beverages, and tobacco, which limited their competitiveness. 
29. The Government had taken measures to solv e structural problems in some services 
subsectors. Nonetheless, a number of state-owned en terprises continued to dominate many activities, 
and in some cases functioned as a monopoly or had ex clusive rights in certain areas of the sector. In 
the framework of GATS, Turkey had made commitments in its schedule in a number of services areas and still had MFN exemptions. It had submitted an initial and revised conditional offer, and a very 
ambitious final offer. 
30. A number of questions from Members had refe rred to sanitary measures applied to live 
animals as well as the increasing use of anti-dumping and safeguard measures.  On maritime services 
and tourism there had been some interesting questi ons, and he looked forward to receiving the replies. 
He invited Turkey to continue to participate actively in the Doha Round negotiations and come 
forward with substantial improvements and commit ments on market access fo r goods and services.  
The discussant noted Turkey's major macroeconom ic achievements during the period under review, 
and its relationship with the EC; he wished Turk ey success in its continuing trade liberalization, 
including its agricultural restructuring.  WT/TPR/M/192 
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 IV. STATEMENTS BY MEMBERS 
31. The representative of the United States  noted that economic growth in Turkey had been 
impressive since 2003, providing evidence of the G overnment’s successful reform efforts.  These 
reforms had stimulated investment and job creation by companies in Turkey and had contributed to a 
near doubling of GNP per capita since 2002.  Large inflows of foreign investment helped drive the 
average annual real GNP growth rate to 7.4%  for the period 2002-06.  Bilateral trade data 
demonstrated how important mutual trade and invest ment were to the United States and Turkey.  The 
United States had supported Turkey’s efforts to in crease and diversify goods  exports to support its 
economic growth, by providing duty free treatment fo r Turkish exports to the United States under the 
U.S. Generalized System of Preferences.  The Un ited States was a significant investor in Turkey and 
bilateral trade and investment had generated in creased employment opportunities in both countries.  
Nevertheless, there were areas where Turkey could make further improvements.  Eliminating trade 
restrictions and increasing transparency would bene fit Turkey’s economy by increasing efficiency and 
raising productivity to support sustained economi c growth.  The United States urged Turkey to 
redouble its efforts to open its markets, particularly  in agriculture.  Turkey clearly recognized the 
benefits of global trade to its economy but and it n eeded to improve the transparency of its complex 
tariff schedule and take steps to clarify the relati onship between its tariff bi ndings and its applied 
MFN rates. 
32. The United States was concerned with aspects of Turkey’s customs regime, particularly 
certain customs regulations, procedures, and valua tion methods and urged Turkey to examine closely 
its measures and practices to ensure that they we re in line with its WTO commitments, including the 
Customs Valuation and Import Licens ing Agreements.  In addition, the United States urged Turkey to 
fully and promptly notify WTO Members of measures that the government was considering, in accordance with the TBT and SPS Agre ements.  Turkey's continued efforts to strengthen intellectual 
property protection were appreciated.  Nonethel ess, significant problems remained and further 
comprehensive, coordinated, and sustained efforts were necessary to ensure adequate intellectual 
property protection in Turkey.  The United States w as interested in an update on any legislative, 
judicial or enforcement steps anticipated in this area, in particular, on Turkey’s efforts to improve 
protection for pharmaceutical patents and undisclo sed test and other data, as well as further 
information on trade mark protection in Turkey. 
33. The large share of foreign direct investment in Turkey’s services sectors demonstrated the 
growing importance of services to its economy.  The United States urged Turkey to reduce 
substantially the remaining barriers including in fi nancial services, telecommunications, and energy. 
The United States welcomed Turkey's continued su pport and commitment to the WTO’s work and to 
trade liberalization through the rules-based multilateral trading system, and strongly encouraged it to begin the process of accession to the Government  Procurement Agreement.  The United States 
appreciated Turkey’s continued engagement in th e Doha Development Agenda;  Turkey had a major 
stake in achieving an ambitious result.  The Unite d States recognized Turkey’s active participation in 
the agricultural and non-agricultural market access ne gotiations of the Doha Round, and urged Turkey 
to contribute its energy and creativity to the equally important services market access talks.   
34. The representative of Switzerland
 underlined Turkey's impressive results. Turkey had 
attracted large FDI inflows thanks to the ambitious  programme of stabilization and privatization.  
Turkey was an important partner for Swiss companies. Major areas of investments were 
pharmaceuticals and chemicals, machinery, and ag ri-processing, as well as banking, insurance, and 
tourism services.  Switzerland commended Turkey fo r its strategy of continued trade liberalization 
through multilateral, regional, and bilateral negotiations, leading to a multifaceted transformation in 
all sectors. This policy would enhance Turkey's integration to the multilateral trading system. WT/TPR/M/192 
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35. The representative of Brazil 
noted that Turkey's trade polic y reflected its very unique 
situation, located between Europe  and Asia, being a de veloping country but also sharing a customs 
union with the EC. Turkey was well positioned to be an active trader. Trade had been a major element 
in Turkey's impressive economic performance. Its improved trade performance coincided with the 
strengthening of its economy in general. Neverthe less, many problems remained: the current account 
deficit was widening, unemployment rate was still at  10% despite economic growth, productivity was 
relatively low, and the trade regime  needed adjustments.  As a country still vulnerable to external 
shocks, Turkey would benefit from diversifying its trading partners, in order to avoid excessive 
reliance the European demand.  Turkey's tariff prof ile had become more complex and less transparent 
since 2003.  The imposition of some tariffs di d not ensure compliance with its WTO binding 
commitments made at ad valorem  rates. There was high dispersion of tariff rates, from duty-free lines 
to 225% tariffs on some meat products. Goods importe d into Turkey could be subject to other levies, 
such as the mass housing fund levy, the special consumption tax, and the stamp duty.  Turkey was actively using anti-dumping measures;  the majority were specific duties on textiles and clothing. Turkey was also increasingly reliant on safegua rds, on products such as salt, footwear, and 
motorcycles. 
36. Turkey relied increasingly on distortive policies and protectionist measures in the agriculture 
sector. Law No. 5488 made Turkey's agricultural po licy more distortive through emphasis on support 
linked to production. Many state-owned enterprises increased prices for purchases from farmers well above the inflation rate. Turkey's share in world agricultural trade of about 1% was well below its 
potential, since it had more arable land than any West  European country and a more suitable climate.  
In order to realize its agricultural potential, Turkey needed to invest in more  marked-oriented reforms 
as well as measures to improve rural livelihoods and infrastructure, to enable Turkish farmers to 
increase productivity and trade more effectively.  Br azil continued to follow with interest internal 
developments in Turkey with regard to trade policy and trusted that Turkey would retain its 
commitment to the multilateral trading system and continue its engagement in the Doha Round. 
37. The representative of Korea
 stated that bilateral trade and investment relations had expanded 
and deepened. Korea hoped that both countries would continue to strengthen the partnership, and welcomed Turkey's strong economic growth, which had largely resulted from the Government's active 
reform programme. Turkey was taking steps to move to a competitive market economy by accelerating structural reforms, including the comple tion of the privatization agenda and sectoral 
reforms.  Turkey had improved its investment clim ate through several legislative measures, which had 
resulted in the increased inflows of FDI. Korea w ould welcome further efforts by Turkey to lift 
restrictions in a number of sectors,  which would a ttract FDI.  Turkey had improved its trade regime 
by enacting and amending its laws a nd regulations to be more in li ne with its WTO obligations, and 
moving closer to its goal of acceding to the EC. Korea wished to see a more transparent and consistent 
implementation of these laws and regulations. Turk ey's tariff structure was complex, and bound rates 
provided a high degree of unpredictability to its tari ff regime. Korea encouraged Turkey to simplify 
its tariff structure, extend the scope of tariff bindings , and reduce the gap to further facilitate trade and 
enhance the predictability of its trade regime. Korea urged Turkey to be prudent in initiating 
anti-dumping investigations and not to use them as a systematic trade barrier. 
38. The representative of Hong Kong, China
 noted the harmonious and progressive bilateral trade 
relations between Turkey and Hong K ong, China.  Turkey had maintained ad valorem  rates for nearly 
98% of its tariff lines, had bound 46.3% of the tari ff lines, and the overall average applied tariff rate 
had declined slightly. However, for some products, for example meat products, the applied rate was as 
high as 225%. In addition, there was a substantial ga p between Turkey's applied rates and bound rates, 
which imparted a considerable of unpredictability  to the tariff regime. Hong Kong, China looked 
forward to seeing improvements in these respects.  Hong Kong, China commended Turkey’s effort in 
adopting new measures to improve its investment clim ate since 2003. In particular, the Foreign Direct 
Investment Law (FDI) No. 4875 had introduced many fundamental rights and protection for foreign  WT/TPR/M/192 
 Page 11 
 
 
 investors. Nevertheless, a number of sectors, such as broadcasting, aviation and maritime transport, 
were still subject to FDI restrictions and Turkey was encouraged to continue its  efforts in these areas. 
39. Turkey had launched a website in 2006 to facilita te access to TBT notifications and to obtain 
views from different stakeholders. Turkey was enco uraged to enhance the English interface of the 
website to broaden the accessibility of the inform ation to foreign trade and business operators. In 
addition, Turkey was encouraged  to accept international standards where possible, which would 
facilitate the flow of international trade. Servi ces accounted for a dominant share of Turkey’s GDP 
and Hong Kong, China encouraged Turkey in its stru ctural and liberalization reform efforts to open 
up the relevant markets to private services suppliers  in order to enjoy the economic benefits of 
lowered costs, enhanced operational efficiency, and better quality services.  Turkey maintained quite a 
number of MFN exemptions reserving the right to offer more favourable treatment to some WTO 
Members in specific areas of business, communication, financial, and transport services. While Turkey had proposed to delete some of these in  its initial offer, the remainder were largely 
conditioned on reciprocity and had an indefinite intended duration.  Hong Kong, China urged Turkey 
to remove the remaining MFN exemptions in its next services offer . 
40. The representative of Argentina
 emphasized the significant progress of the Turkish economy 
and its sustained growth over the last few year s.  Macroeconomic stabilization was a necessary 
condition for a robust economy, and e xogenous factors had made it difficult for Turkey to achieve its 
inflationary objectives.  Argentina underscored the good bilateral relations th at had prevailed; there 
had been bilateral agreements since 1910 and the cu ltural relationship was extr emely broad. Bilateral 
trade had reached US$308 million for January-Septe mber 2007. Argentina hoped that these bilateral 
relations would continue to progress and, in particular, that soja a nd corn would not be affected by 
restrictive measures, as was the case with certain imports. 
41. The representative of the European Communities  noted that the EC and Turkey enjoyed a 
strong and deep trade relationship. The EC-Turke y Customs Union had entered into effect on 
31 December 1995, successfully consolidating more  than 40 years of commercial association. The 
substantial benefits of the Customs Union for Tu rkey, alongside the steady economic reform process, 
had clearly contributed to its recent economic progress.   The EC aimed to strengthen this relationship, 
and encouraged Turkey to further align its regime to EC's trade policy and ensure full implementation 
of the Customs Union.  Their close trade relationship lay also in the strong and growing cooperation between their business networks.  The EC believe d that economic development should go hand in 
hand with social development: striking the right  balance between further economic and social 
development, as well as environmental protecti on, was a great challenge. Trade policy should 
contribute to more sustainable production patterns rather  than to lower standards. In this context, EC 
encouraged Turkey to reflect on how trade policy could best contribute to sustainable development 
and successful labour market reform, and how some of  the social and environmental effects of trade 
liberalization could best be addressed. The EC was in terested to hear more about Turkey's plans and 
projects to reflect this link in its multilateral trade policy and its bilateral trade agreements. 
42. The EC had strong concerns about the discriminat ory effect of the special consumption tax on 
alcoholic beverages: categories of alcoholic bevera ges produced mainly in the domestic market were 
subject to significantly lower rates of excise tax than categories generally imported. This system 
appeared to discriminate indirectly against importe d products, and appeared not to be in compliance 
with GATT Article III(2). The EC was interested to learn about Turkey's plans to reform the excise 
tax system.  Import licences were required for several categories of products on the grounds of 
tariff-quota administration, health, sanitary, phyto sanitary, and environmental reasons. This licensing 
regime was opaque, and entailed enduring import rest rictions on several products. The EC encouraged 
Turkey to enhance the transparency of its import licensing regime and to fully comply with its WTO 
obligations under the Agreement on Import Licensi ng Procedures.  Turkey had made efforts to 
enforce its IPRs commitments over the last few years and to amend its legislation accordingly. WT/TPR/M/192 
Page 12  
 
Nevertheless, piracy and counterfe iting of copyrights and trade marks were still of concern in Turkey. 
The EC encouraged Turkey to step  up efforts to ensure IPRs enforc ement and to share the steps and 
actions it would take towa rd this goal.  Turkey and the EC we re strongly committed to the multilateral 
trading system, and their joint priority remained the successful completion of the Doha Development 
Agenda. At this stage of the negotiations, further jo int efforts and greater flexibility were needed by 
all WTO Members, including Turkey, to achieve  the satisfactory conclusion of the DDA.   
43. The representative of Chile
 noted that trade relations between Turkey and Chile had shown a 
significant increase in the last decade.  A feasibility  study to establish a free-trade agreement had been 
concluded in October 2007:  it was hoped that a FTA would have a very positive impact, mainly 
through the elimination of tariff duties and increased bilateral trade. The negotiations for a free-trade 
agreement were motivated by the close relationshi p between Turkey and the EC, and between Chile 
and the EC. The two countries had been invited by  the EC to initiate negotiations for a free-trade 
agreement.  Turkey's economic reforms as well as  its new openness in trade, had enabled it to double 
its per capita income and increase its tr ade four fold in the last decade. 
44. Just like Turkey, Chile had made internati onal openness a tool for development and it had 
been able to improve the living conditions of its  population and apply policies with a high social 
content.  In spite of the positive changes introduced  by Turkey, some aspects were still of concern and 
could be corrected: restrictions on foreign investme nt with regard to access to property continued to 
be maintained in a number of sectors; Turkey had developed its industrial sector and liberalized trade 
in non-agricultural products, but ke pt high rates of protection for its agriculture and textile sectors; the 
ongoing use of anti-dumping measures;  and the impor tant role of state-owned enterprises in the 
services, as a monopoly. Chile, like Turkey, had a lot of expectations vis-à-vis  the WTO, in particular 
in the Doha Round. The closeness between the two countries would increase with a free-trade 
agreement and through the full accession of Chile to the OECD, of which Turkey was an active member. 
45. The representative of Canada
 stated that Turkey and Canada had a strong and growing 
commercial relationship. Turkey was Canada's sec ond largest trading partner in Central and Eastern 
Europe.  Total bilateral trade had more than doubled in the last decade, to over US$1 billion, 
reflecting the continued improvement of Turkey's  economic conditions. Turkey offered important 
potential business opportunities for Canadian trade and investment. Canada expected foreign direct 
investment to grow, particularly if a double ta xation agreement could be finalized. Canada was 
encouraged by Turkey's continued commitment to fiscal reforms, the sustained implementation of the 
IMF and World Bank supported structural reform programme, and ongoing efforts to liberalize and 
increase transparency in the economy. Canada was en couraged by the sustained economic growth and 
an increase in trade and investment, and welcomed upcoming investment-friendly legislation, such as 
the energy bill and the anticipated New Turkish Co mmercial Code.  These would help streamline the 
investment process and improve investor  confidence in the Turkish market. 
46. The representative of Japan  congratulated Turkey for its ambitious reform programme, its 
success in stabilizing the economy, the increase in FDI inflows, th e wide range of programmes to 
restructure agriculture, and the move towards competition-based and consumer-welfare-oriented 
economy. Nonetheless, investment restrictions had b een introduced over the last few years;  the so-
called statutory tariff remained;  and some SOEs con tinued to dominate.  Turkey had also stated its 
intention to continue the privatization process  on the basis of its Three Year (2007-09) Export 
Strategy Plan.  
47. Japan appreciated the management of Turkey 's macro-economy. Turkey’s close cooperation 
with international organization, such as the IMF, an d its political will for structural reform was a role 
model. Japan also appreciated the enactment of th e Decree on Improving the Investment Environment 
and the Establishment of Investment Support a nd Promotion Agency. Japan hoped that further 
liberalization on FDI would be implemented withou t delay. Japan wanted to see a more open and  WT/TPR/M/192 
 Page 13 
 
 
 transparent trade regime in Turkey; it was concerned about the so-called statutory tariff, and asked 
why it was as high as 150%. Concerning implementati on, further transparency and impartiality was 
needed. The procedure to accord CE marks, which were needed to import certain types of goods into 
Turkey should be further harmonized with EC countries. Stamp duties were exempted only for 
domestic companies earning foreign currency for Turk ey not for foreign comp anies.  Japan thought 
there should be more transparency and predictability so as to give more assurance to Turkey's trade 
partners. Turkey was an important player, with huge potential based on high manufacturing capabilities, a sizable and skilled labour force, a large population, and a strategic geographical 
location. Japan believed that Turkey’s economic polic y was on the right track led by its principles of 
"free and fair trade".  
48. The representative of Australia
 noted Turkey's progress in implementing an ambitious reform 
programme.  The Turkish economy was one of the fastest growing economies in the world and the 
reform programme had contributed to the signifi cant reduction of inflation and the overall fiscal 
deficit. Australia and Turkey were important tr ading partners: between 2002- 03 and 2006-07 two-way 
trade had grown by more than 86% , and Turkish exports to Australia had almost doubled.  There were 
continuing strong prospects for further growth in b ilateral trade, in line with Turkey’s efforts to 
implement economic reforms and modernize its ec onomy. Australia and Turkey had established a 
Joint Economic Committee to promote bilateral trad e and investment.  Nonetheless, Australia was 
concerned with the high tariff protection Turkey ma intained for many agricultural products.  Turkey’s 
simple average applied duty on agricultural products among the highest of any WTO Member, and had increased over the last few years.  These trade barriers were a major impediment to improving 
trade relationships, and could have longer-ter m implications for Turkey’s international 
competitiveness. Australia appreciated Turkey’s co mmitment to maintaining momentum in the Doha 
Round.  An ambitious Doha outcome – including, in particular, in the market acces s areas of 
agriculture, NAMA, and services – remained Austra lia’s highest trade policy priority.  Australia 
continued to believe that a successful conclusion to these negotiations remained the best way to 
advance Members' economic objectives, and to support growth and development. 
49. The representative of the Separate Customs Territory of Taiwan, Kinmen, Penghu and Matsu
 
(Chinese Taipei ) noted that Turkey had been implementing an ambitious and successful reform 
programme after the economic crisis in 2001.  The sustained recovery of Turkey’s economy had 
greatly enhanced its external trade. Two-way trade during the first nine months of 2007 amounted to US$1.2 billion, a 28.2% increase from the same peri od in 2006.  Chinese Taipei recognized Turkey’s 
active role in the WTO and looked forward to work ing closely towards a successful outcome of the 
Doha Round negotiations.   
50. The representative of Mexico
 noted that Turkey's macroeconomic indicators showed its road 
to growth with stability of prices following the ec onomic crisis of 2001. The dynamism of Turkey's 
mining and energy sectors had made it one of the countr ies with the highest energy growth rates in the 
world; but greater investment was required because  of increasing demand. Turkey had taken measures 
to deal with the structural problems in some se rvices subsectors, in particular telecommunications. 
Turkey's long-term strategy was to promote a te chnology-intensive production structure, encourage 
exports, and promote manufacturing of high valu e added goods and services. The competitiveness of 
any country could be improved by changing its tariff structure and Mexico encouraged Turkey to reduce protection in areas such as textiles, apparel, beverages, and tobacco.  Faster structural reforms, 
including finalizing the privatization programme, se ctoral reforms, expanding Turkey's commitments 
in the area of tariff bindings, and reducing bound tariffs would also contribute to better use of 
resources, attract higher FDI, and would avoid th e cycle of expansion and recession of the past. 
Turkey was becoming one of the main targets for fo reign investors. This wa s important not just for 
Europe but also for the world.  Turkey's networ k of trade agreements, together with its possible 
accession to the EC, meant that it would have a strong future.  WT/TPR/M/192 
Page 14  
 
51. The representative of China
 noted that Turkey had been implementing an ambitious reform 
programme, which had been successful in stabilizi ng and developing its economy in many aspects: 
annual average GDP growth had reached 7%; th e foreign trade volume between 2002 and 2006 had 
doubled; and with the improvement of its investme nt climate, annual FDI inflows had increased 
rapidly. China and Turkey were important trading pa rtners;  trade relations had been developing fast 
bilateral cooperation had been deve loped in many fields, including tourism, aviation, and construction 
services. Various initiatives, including the China- Turkey Business Forum, would enhance their 
bilateral trade and economic relations. China had con cerns relating to the transparency of Turkey’s 
trade contingency remedies, particularly on the tim ely and full disclosure of information to related 
enterprises, and explanations on the extent of in jury determined. China appreciated Turkey's strong 
commitment to the Doha Round and to the multilate ral trading system. It commended Turkey for its 
active participation in the negotia tions and looked forward to working closely with Turkey on all 
subjects with a view to promoting trade and development.  
52. The representative of Pakistan  noted the extensive reforms in all areas of the Turkish 
economy. The reform process was based on e nhancing openness, competitiveness, and fiscal 
discipline. Other significant reforms included exte nsive privatization in almost all sectors, tax 
reforms, social security reforms, and effective impl ementation of the IP regime.  The reform process 
had been fruitful for Turkey, which had become one of the fastest growing economies. Exports had doubled and FDI had grown. Despite high GDP grow th, inflation had been brought down to a 
manageable, single-digit level. Pakistan and Tu rkey had a strong relationship with their common 
participation in the ECO Trade Agreement, OIC Trade Preferential System and D-8 PTA. Bilateral 
trade volume had nearly tripled during the past four  years, and was based primarily on manufactured 
goods. Government-to-government coordination, bu siness-to-business understanding, and people-to-
people cooperation were the hallmarks of their rela tionship. A framework agreement had been signed 
in 2004, and negotiations for a scheme of exchanging  preferential concessions were in process. Some 
non-tariff barriers, like reference pricing remained , especially on rice and textile products, and this 
tended to hurt Pakistan's businesses. In the multila teral negotiations, Turkey was playing a very 
constructive role in line with its overall export-le d, outward-oriented, economic growth policies. 
Pakistan shared Turkey’s high expectations from th is Round and its assessment of the current state of 
play in the negotiations.  
53. The representative of Honduras
 appreciated Turkey's active participation in all WTO spheres, 
and its commitment to the multilateral system.  Measures adopted to improve its investment 
environment, through the investment encouragem ent programme set up in June 2006 had led to 
increased average FDI during 2003-06. Honduras emph asized Turkey's good work in implementing 
important fiscal, privatization, and social secu rity reform programme, which had stabilized its 
economy and contributed to increasing the annual average growth of GDP. Honduras, like Turkey, 
gave importance to the Doha Development R ound, and agriculture was an essential element. 
Honduras hoped to create trade flows betwee n the two countries. Honduras reiterated its 
congratulations to Turkey for its tremendous effo rts in the WTO and within the Doha Development 
Round. 
54. The representative of Nigeria  commended Turkey for its ambitious reform programme, 
notably on the fiscal, privatization, and social security fronts. Turkey had adopted measures to 
improve its investment climate. Nigeria encouraged  Turkey's steps to stabilize its economy and to 
continue its structural reform programmes.  Turk ey had liberalized the electricity and natural gas 
subsectors and addressed some structural problems in services subsectors (e.g. banking and telecommunications).  In spite of these positive e fforts, Turkey still faced challenges, and its 
vulnerability to external shocks could inhibit th e long-term growth of the economy. Nigeria and 
Turkey maintained cordial political and economic re lations, being both members of the D-8; they had 
signed an onmibus Economic, Scientific and Tec hnological Cooperation Agreement in 1986.  The 
present level of trade was far from reflecting the real potential of both countries, although there had been a considerable increase in the volume of trad e.  Nigeria acknowledged Turkey's leading role and  WT/TPR/M/192 
 Page 15 
 
 
 active contributions to the DDA negotiations and its commitments to an ambitious and balanced 
outcome in agriculture and its support for a pro- development outcome.  Turkey's economic situation 
had improved while its trade polic y regime had remained unchanged. Nigeria shared Turkey's 
optimism for sustaining the current recovery, a lthough this depended on a number of factors, 
including the pace of growth in the world economy.  Growth prospects would equally be determined 
by Turkey's ability to continue implementing appr opriate monetary and fiscal policies within the 
context of its structural reforms. 
55. The representative of Singapore  noted that bilateral trade was quite modest but that there was 
scope for growth.  The Singapore companies that were  established in Turkey were looking at ways to 
expand their operations. Singapore co ngratulated Turkey for the ambitious fiscal, privatization, and 
social security reform programme following its econom ic crisis in 2001.  This had been successful in 
stabilizing the economy and had contributed to high  annual average GNP growth.  However, Turkey 
still faced a number of challenges, such as its curre nt account deficit and unemployment.  Turkey had 
adopted measures to improve its economy, including  in investment and services.  While these were 
laudable, there was still some room for improvement.  For example, there were FDI restrictions in a 
number of services subsectors, such as financial ser vices.  Turkey’s bound rates were still relatively 
high and the ceiling bound rates left ample margins fo r tariff increases.  High effective protection of 
industries such as textiles and apparel, bevera ges, and tobacco products hampered their 
competitiveness. In addition, Turkey was an active user of anti-dumping measures and should consider undertaking measures to address these and other shortcomings in an otherwise progressive 
economy.  Singapore was committed to working with Turkey and the WTO memb ership in bringing 
the DDA towards this conclusion.   
56. The representative of India
 noted that Turkey's ambitious reform programme,  which had 
been successful in stabilizing the economy, had contributed to an annual average real GNP growth 
rate of 7.4% during 2002-06, and brought inflatio n down to a single digit. Disciplined fiscal and 
monetary policies had produced a stable macroec onomic environment, incl uding sharp reductions in 
inflation and the government debt ratio, which in turn had facilitated grow th, stronger bank balance 
sheets, and large FDI inflows.  However, this success had brought  new challenges: as economic 
confidence had improved, capital inflows had surged while private saving had fallen. Together, these 
developments had produced current account deficits and a strong Turk ish lira, raising concerns that 
Turkey could be exposed to sudden reversals in investor sentiment.  Continued reform would pay 
significant dividends in terms of bolstering Turkey ’s resilience to shocks, deepening macroeconomic 
stabilization, and raising living standards. 
57. The relations between India and Turkey were friendly and cooperative. The two countries 
shared common values including commitment to seculari sm and democratic principles. Bilateral trade 
was around US$1.6 billion, and growth was bi-directi onal.  The first Session of the Joint Bilateral 
Working Group on Trade and Economic Issues and India-Turkey CEOs Forum had met in New Delhi 
in 2004; an MOU for Cooperation in the Field of Oil and Natural Gas was signed in 2005; and the 
Second Session of India-Turkey Joint Committee on Tourism was held In November 2006. India had 
committed over US$10 billion to investment in Turk ey, while the investments from Turkey were 
projected to be around US$100 million. Indian compan ies were active in Turkey in diverse fields: a 
TATA trucks assembly unit had commenced in Ad ana; and Turkish companies were engaged in 
construction of highways segments and manufacturing in India. There was still considerable scope for 
expansion of investment and trade relations.  In  the area of capacity building, India offered 
scholarships for 50 Turkish professionals each year , under India's technical and economic cooperation 
programme, and there had been 100% utilization of these training slots. 
58. The representative of Norway  noted that since the economic crisis in 2001, Turkey had 
implemented an ambitious fiscal, privatization, and social security reform programme, which had 
been successful in stabilizing the economy. Real GNP had grown at an  impressive annual average of WT/TPR/M/192 
Page 16  
 
7.4% in 2002, inflation had fallen from nearly 30% to just under 10%, and th e overall fiscal deficit 
had fallen from 12.5% of GNP to below 1%. Unfo rtunately, unemployment remained at around 10%. 
Turkey's foreign trade had developed rapidly;  merchandise exports and imports had more than 
doubled, increasing GNP from 60.5 to 64.1. In services, Turkey continued to be a net exporter, with a 
solid surplus of US$13.4 billion in 2006. The difference between bound and applied rates left 
considerable margin for tariff increases. Three diffe rent categories of tariff further complicated the 
regime, making it more unpredictable. This was an area where improvements seemed feasible. Turkey 
was a considerable user of anti-dumping measures, and had increasingly made use of safeguards. A reverse of this apparently increasing use of trade defence instruments would be welcome. Turkey was 
an active and constructive participant in the DDA negotiations. Turkey pursued  a parallel course of 
negotiating free-trade agreements, as a complement  to the multilateral track. Norway had an FTA 
with Turkey, which, in the context of EFTA, had served the parties well, and looked forward to 
continuing this close cooperation.  WT/TPR/M/192 
 Page 17 
 
 
 V. REPLIES BY THE REPRESENTATIVE  OF TURKEY AND ADDITIONAL 
COMMENTS 
59. The representative of Turkey  stated that her country was well aware of its economic and 
trade-related responsibilities, arisi ng from its strategic geographical position abridging two continents. 
The Government was determined to spend extra po litical currency to attain the objectives of its multi-
faceted reform agenda.  Turkey was making every possible effort to designate economic development 
strategies with the aim of increasing its share in wo rld trade, within the boundaries of its international 
commitments. The Government's goal for the 100th anniversary of the Turkish Republic in 2023 was 
to achieve a foreign trade volume of US$ 1 trillion.  
(i) Economic environment 
60. What Turkey had achieved in recent years was named as renaissance by the IMF. Prudent 
monetary policy and fiscal discipline had resulted in steady growth, declining public debt, and low 
inflation. Turkey's primary objective was to sustai n this trend, while tackling issues of concern in 
certain areas of the economy.  In this context,  Turkey would maintain its fiscal and monetary 
discipline to secure low inflation and carry on w ith the structural reforms to bolster labour 
productivity and increase employment. Improving labour market flexibility while ensuring job 
security was the centrepiece of the envisaged labour reform.  In the framework of this strategy, 
Turkey aimed to reduce the tax burden on the wag es, ease access to unemployment insurance, and 
improve active employment policies and vocational training. The successful implementation of these policies, when combined with micro policies a nd targeting increased productivity, would lead to 
stronger growth and improve the economy’s ability to  tolerate current account deficits. Turkey 
expected the current account deficit to reverse in 2008, helped by softer domestic demand, lower oil 
prices, and robust growth in its main trading part ners. Vulnerability to external shocks would be 
reduced.  
61. Foreign investors were treated equally in pe troleum, mining, port and financial services. 
Naturally, there were some permission requirements to invest in these sectors, which were applied 
equally on domestic and foreign investors.  US $30 billion worth of public enterprises had been 
privatized between 2003 and 2007.  The public sector’s participati on in air and sea transportation, 
production of railway cars and engines, processing of  sugar, tobacco, tea, petrochemicals industry, 
material purchase, electricity distribution, and w holesale trade would be terminated, and the public 
share in electricity production, natural gas ma rket, coal, and other mine processing would be 
decreased. The Government had undertaken to withdraw from production of commercial goods and 
services and to strengthen its policy making, regulatin g, and supervising functions, as stipulated in the 
Ninth Development Plan. Taking into account the share of services in economic productivity, and 
revenue and labour generation impacts, the services sector was, of course, a vital subject matter. 
Turkey’s objective in the DDA negotiations was to  improve the number and quality of commitments. 
To this end, its initial and revised conditional offe rs had been submitted in a timely manner. The four 
exemptions on financial, postal, and telecommuni cation services had been proposed to be removed: 
final removal depended on the overall results of DDA negotiations. The remaining MFN exemptions 
resulted from Turkey's international agre ements and relevant legislation.  
(ii) Trade policies 
62. The Ninth Development Plan of Turkey, in essence, was the concrete reflection of the 
importance Turkey attached in projecting social dimension into its economic development strategy. 
The Plan foresees an integrated approach for econom ic, social and cultural areas, with full awareness 
of the potential social implications that could arise from a rapid transformation process due to globalization.  Turkey was taking steps towards the implementation and enforcement of the EC environmental acquis , ranging from waste management to nature  protection. Substantial progress had WT/TPR/M/192 
Page 18  
 
been made in some areas; the overall objective was to minimize the environmental effects of trade liberalization.    
Tariffs 
 
63. The list of statutory tariffs annexed to Custom s Law No. 474, in practice, did not demonstrate 
applicable rates. Instead, in terms of tariff increases, it showed the extent of authority of the Council 
of Ministers.  If a tariff increase was proposed for a product, it was checked whether this increase was 
less than or equal to 50% of the statutory tariff for that product, and the Council of Ministers decided accordingly. Turkey was well aware of its WTO ob ligations and committed to the principle of free 
and fair trade. The applied tariffs  were applied at or below bound rates. During the adjustment of its 
tariff rates, Turkey took into account commit ments stemming from its WTO membership and the 
Customs Union Decision (CUD) with the EC. Turkey ’s tariff system was transparent, simple, and 
easy to understand. It was applied on an MFN b asis without discrimination among source countries. 
Turkey had adopted the EC’s tariff nomenclature as pa rt of the CUD. As for the number of tariff lines, 
Turkey’s eight-digit Harmonized System was the same as the EC’s.  As a result of the Uruguay 
Round, Turkey bound all tariff lines for agricultural products. For non-agricultural products (36% 
were bound), due to the Customs Union commitment s, Turkey applied the EC CET, which was 
already far below Turkey's WTO commitments. Turkey did not apply non- ad valorem  customs duties 
for basic agricultural products that were not covere d by the CUD. As part of the CUD, for certain 
processed agricultural products and industrial goods, Turkey applied non- ad valorem  customs duties 
as common external tariffs within th e boundaries of its commitments.  
Other duties and taxes  
 
64. On the Special Consumption Tax for alcoholic  beverages, Turkey had provided written 
replies to the questions and the subject was under cons ideration by the relevant Turkish authorities.   
Import licensing  
 65. Turkey's application of licensing was in c onformity with the provisions of the WTO 
Agreement on Import Licensing.  The system was au tomatic in the sense that once an applicant met 
established conditions the licence was issued.    
Customs procedures 
 66. Turkey's procedure for customs valuation w as consistent with Article 6.1 of the WTO 
Agreement on Customs Valuation. 
Contingency trade remedies 
 
67. Turkey had acted within the scope of its le gitimate rights stemming from the relevant WTO 
Agreements, while strictly complying with its oblig ations. In relation to anti-dumping measures, there 
had been an increase in the number of compla ints from the domestic producers about the dumped 
imports. Nevertheless, a significant portion of these complaints did not result in an investigation. Moreover, not all of the initiated investigations were finalized with the imposition of anti-dumping 
measures. Turkish exports had been facing measure s from several Members. Turkey expected the 
same level of sensitivity from the other Members with respect to anti-dumping proceedings against 
Turkish export products. All safeguard investigations  were rules-based and under legally determined 
proceedings. Necessary conditions to initiate a safeg uard investigation and to introduce a safeguard 
measure were clearly stated in the relevant Turkish legislation, which was in full conformity with the 
WTO Safeguards Agreement.  WT/TPR/M/192 
 Page 19 
 
 
 Government procurement 
 
68. Turkey maintained observer status in the WTO Committee on Government Procurement and 
joining the Agreement was under consideration.  On the other hand, Article 63 of the current Public 
Procurement Law allowed the contracting authoritie s, for the contracts above a certain threshold 
value, to apply a price advantage to domestic  tenderers of up to 15%, announced on the tender 
document. No differentiation was ma de among tenderers in goods procurement. Simple rules of origin 
applied to goods procurement. For services as well as  works procurement, the only criterion used was 
the definition of "domestic te nderer". Moreover, state economic enterprises were subject to 
government procurement regulations with a limited number of exceptions. Utmost care was taken to 
avoid unfair trade practices and conflict of inter ests that could occur in the procurement process. 
Technical regulations 
 
69. The Turkey-EC CUD stipulated the elimination of barriers arising from different regulatory 
practices. Turkey had undergone a structural cha nge in its regulatory practices as a result of its 
obligation to approximate its technical legislation w ith that of the EC.  According to this decision, 
which established the principle of free movement of  goods, products that we re certified according to 
EC Directives and were circulated in the EC , should enter freely into the Turkish market. 
Furthermore, significant progress had been made in adapting a new approach product legislation, and 
Turkey would continue its harmonizing activities in  this field.  The technical regulations and 
conformity assessment procedures that had been harmonized in order to transpose the EC’s acquis 
communautaire were applied by the EC itself. Turkey publis hed all technical regulations including the 
transposed ones in the Official Gazette  and made them available on the website of the relevant 
ministries.  Regarding harmonization with interna tional standards, the Turkish Standards Institute 
(TSE) continued to adopt EN sta ndards of the European Committee for Standardization, the European 
Committee for Electro-technical Standardization, and the European Telecommunications Institute. 
Accordingly, more than 90% of EN standards we re now adopted. The suggestion of providing foreign 
traders with access to Turkish technical regulations through Internet encouraged Turkey to think about 
a successful outcome in the trade facilitation negotia tions with regard to the Internet publication and 
making relevant legislation available.  
Incentives schemes 
 
70. Turkey provided certain incentives to its manuf acturing industries in compliance with the 
WTO Subsidies and Countervailing Measures Agreement.  Turkey made its periodic notifications to 
the relevant Committee and those notifications we re reviewed by the Members in terms of WTO 
consistency, such as specificity and export performance contingency.  
IPR 
 71. There were still certain steps to be taken rega rding trade related intellectual property rights. 
However, the steps already taken had been appreciat ed by some Members.  Turkey was aware that 
improvement of institutional capacities was a prerequis ite in order to reinforce the legal framework.  
In this context, Turkey had filled the gap between legal framework and enforcement to a large extent. 
The end-results of the fight against piracy had been  demonstrated by figures on the decisions taken by 
IPR criminal courts.  WT/TPR/M/192 
Page 20  
 
(iii) Sectoral policies 
Agriculture  
 
72. There were some structural problems in the ag riculture sector. Turkey had launched a wide-
ranging reform and transformation process. The overa ll objective of the reform process was to reduce 
the burden of this sector on the economy, as well as a ligning legislation with that of the EC and the 
multilateral trading system.  This reform process,  which had been guided by ARIP, the Agricultural 
Strategy Paper, and the Agricultural Law, ai med to phase out production distorting supports and 
replace them with less distortive ones; it  had alr eady made remarkable progress. Tariffs were the only 
instruments to sustain agricultural production in Turk ey and, in this regard, the applied rates were 
determined taking into account th e domestic production level and market conditions. As a country 
committed to free and fair trade with few exceptions, Turkey’s applied tariff rates were well below its 
WTO bound rates.  On the notification of domestic  support and export subsidies, although there had 
been some delays, Turkey was in the process of pr eparing the notifications, which would be submitted 
soon. Regarding notifications of SPS measures, a scr utinized study was under way, so as to fulfil the 
notification requirement.  Turkey's applied tariff rates on livestock and meat were the same as bound 
rates. Turkey needed to apply tariffs at the bound rate limits because the livestock sector was the 
mainstream of food security and livelihood security of  small and subsistence farmers. Turkey might 
take decisions on the importation of live animals a nd meat on the basis of qualitative risk assessments; 
the followed OIE information and guidance on the hea lth status of the countries concerned, and its 
animal health code. The nature of the disease, risk  assessment tools used in Turkey, and experience 
gained over the years were also considered. 
Mining and energy 
 
73. Turkey attached great importance to a more e fficient and rational functioning of the energy 
sector to promote the competitiveness of the national economy. Harmonizing the legal and regulatory 
framework with that of the EC was a priority. In this respect, laws had been enacted on electricity, 
natural gas, petroleum, and LPG markets to enfo rce private sector involvement under independent 
regulation and supervision of the Energy Market Regulatory Authority. Security of electricity supply was a priority area, stemming from the significant growth in electricity demand and the substantial need for capacity additions. The limited producti on capacity of domestic energy sources compared 
with the growing demand resulted in high dependen ce on energy imports, primarily oil and gas. This 
required the formulation of concrete policies in the co ntext of security of supply. The priority areas of 
Turkey’s energy policies were: diversifying resources to minimize the negative effects of energy supply concentration; reforming a nd liberalizing the energy sector to support targeted growth; to 
enhance productivity and efficiency and to ensure transparency; and sustainable exploitation of energy sources and efficient use of energy by invest ing in all stages of the energy chain, taking into 
account environmental concerns, while in tensifying R&D on energy technologies. 
Services  
 
74. Turkey had taken serious steps to liberalize its  services sector, within the context of its recent 
structural reforms and regulati ons, and its ambitious privatiza tion programme. New opportunities had 
emerged in a wide range of areas, notably the telecommunications sector. The telecoms market had 
been liberalized on 1 January 2004 and ther e was no limitation on foreign ownership.   
75. The discussant
 stated that Turkey was doing a good job restructuring its economy. The 
spectacular growth of its GNP in recent years, and shown that the programmes established were working. There were red lights,  but there was no doubt  that lowering the rate of inflation from 10% to 
9%  was as difficult as lowering it from 20% to 10% and was one of the biggest problems for 
countries embarking on economic reform. There had b een substantial foreign investment in Turkey 
and the Central Bank had to apply strengthened me asures to reduce inflation. The only way to succeed  WT/TPR/M/192 
 Page 21 
 
 
 and reduce the current account deficit was through a broad and more ambitious fiscal and monetary 
policy. Import licences were granted automatically, but  there were certain stringent conditions. In the 
agriculture sector, there were considerable problem s; particularly, large dependence on the sector for 
total employment (more than 25%). However, this could be settled not necess arily with high tariffs 
rates, and Turkey should try to reduce its tariffs to come closer to the EC tariffs.  The discussant 
encouraged Turkey to present to the WTO new no tifications on the level of domestic support, 
subsidies, and export support. In the area of trad e remedies, the application of safeguards and anti-
dumping duties had been growing very rapidly. Turk ey had done considerable work in the area of 
services since its last TPR; this work needed to cont inue in order to implement the structural reforms 
that would maintain Turkey's growth rate in the long term.  
76. The representative of the European Communities  thanked Turkey for the explanation on its 
excise tax system and expressed the continued concern of its stakeholders on this regard. The special consumption tax on alcoholic beverages had de facto  discriminatory effects on imported alcoholic 
beverages. EC thanked Turkey for sharing the step s and actions taken towards further improving the 
enforcement of its commitments and fighting its piracy and counterfeiting problems. The Customs 
Union Agreement was the result of a longstanding  relationship, which ha d brought substantial 
benefits to both parties and had contributed to the economic progress of Turkey. The EC aimed to further strengthening this close relationship and hope d to see further progress in Turkey's alignment to 
EC trade policy and to ensure full implementation of the customs union. WT/TPR/M/192 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
77. This fourth Trade Policy Review of the Republic  of Turkey has allowed us to improve our 
understanding of its trade and rela ted policies, and the developments since its previous Review in 
2003. Our discussions have benefited greatly from the participation of Mrs. Ülker Güzel, Deputy 
Undersecretary of Foreign Trade, and her delegati on. Our thanks are also due to our discussant, 
Ambassador Fernando de Mateo, for his insi ghtful contribution to our discussions, and the 
engagement of many delegations. 
78. Members commended Turkey on its impressive  economic performance over the past few 
years, with high real GDP growth, lower inflation,  and declining public and external debt burdens. 
This reflects the steps taken to continue improvi ng the competitiveness of its non-agricultural sector, 
already quite open, and the implementation of an ambitious reform programme, notably on the fiscal, 
privatization, and social security fronts. Recent measures to further liberalize Turkey's investment 
regime were also welcomed, althoug h delegations noted that the invest ment regime remains restricted 
or limited in certain activities, some of which con tinue to be dominated by state-owned companies. 
79. Members appreciated Turkey's commitment to  the WTO, including the DDA negotiations, but 
indicated that accession to the EU  remains Turkey's ultimate objec tive. Indeed, in line with its 
customs union with the EC, Turkey has been increa singly implementing its trade policies through an 
extensive network of preferential trade agreements. Concerns were raised on Turkey's complex tariff 
regime, with applied, statutory, and bound tariffs , as well as on the application by Turkey of non- ad 
valorem  tariffs to products bound at ad valorem  rates. Members indicated that extension of the scope 
of tariff binding commitments, reduction of bound ra tes, and further simplification and rationalization 
of Turkey's tariff regime would contribute to better resource allocation. Concerns were also expressed 
about Turkey's internal taxation system, and its  relatively large use of anti-dumping measures. 
80. Members welcomed Turkey's relatively liberal trade regime for non-agricultural products, and 
its wide-ranging programme to restructure its agricult ure. Nevertheless, some Members stated that the 
high level of tariff protection and the limited liber alization of agricultural products under Turkey's 
preferential trade arrangements are impeding the expo sure of the sector to greater competition. While 
noting that up to 15% price preferences are grante d by Turkey to local products, some delegations 
encouraged it to become a member of the plur ilateral Agreement on Government Procurement. 
Members commended Turkey on the liberalization of  its fixed telephony services. Other issues of 
interest to Members included customs proce dures and valuation; TBT and SPS measures; export 
promotion and subsidies; other incentive schemes, including for the mining, energy, and 
manufacturing sectors; protection of intellectual property rights; and services, including GATS 
commitments, financial services, telecoms, transport, and tourism. 
81. Members appreciated the responses provided by the Turkish delegation, and look forward to 
receiving written answers to any outstanding questions. 
82. In conclusion, Members congratulate Turkey on the positive economic results it has achieved 
during the last few years. They encourage Turkey to  pursue its reforms, including of its trade regime, 
and to improve its multilateral commitments on goods  and services, with a view to enhancing the 
transparency and predictability of the regime, and adherence to WTO principles.  Members could help 
by keeping their markets open for products and services of interest to Turkey.  
 
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