WORLD TRADE  
ORGANIZATION  WT/REG240/2 
24 June 2009 
 
 (09-3126) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN TURKEY AND ALBANIA 
(GOODS) 
 
Questions and Replies
 
 
 
 The following communication, dated 22 June 2009,  is being circulated at the request of the 
delegations of Turkey and Albania.   This document reproduces the questions addressed to the Parties and the responses submitted. 
 
_______________ 
 
 
Question from the Delegation of Chinese Taipei
 
 
Trade Environment  
 
1. According to paragraphs 1 and 2 of the WTO Secretariat’s Factual Presentation, 
Turkey and Albania were similar in both economi c structure and export structure in 2006.  
Also, the two economies showed similar average trade/GDP ratios in 2004-2006 with Turkey’s 
ratio 63.0 and Albania’s 68.8.  What has been the impact of this FTA on the trade and economic 
structures of the Parties after the Agreement entered into force on 1 May 2008? 
 In addition to the alignment to the EU’s Common Commercial Policy, Turkey has a trade 
development strategy towards Balkan countries.  Tu rkey has strong historical, political and economic 
relations with the region and Albania is one of th e most important countries in the region for Turkey. 
With this perspective, on the way to enhancing the bilateral economic and commercial relations the 
Free Trade Agreement between Turkey and Alba nia was signed on 22 December 2006 and entered 
into force on 1 May 2008.  The FTA with Turkey  complements Albania’s network of free trade 
agreements with its neighboring c ountries, aiming at the fostering of trade and increasing of mutual 
benefits. 
  Regarding the bilateral trade relations, Turk ey ranks the third importer and fifth exporter 
country of Albania.  For the last five years, bilate ral trade is in increasing trend.  Accordingly, while 
in 2003 the bilateral trade volume was recorded as 119 million dollars; in 2008 this figure reached 
342 million dollars.  Trade data show a sustainable growth in our trade volume since 2003, whereas 
the Albania’s export to Turkey increased more than Albania’s import from Turkey, with an average of 
35% and 12% yearly.  Besides, for the year 2008, Turkey’s export to Albania realized as 305 million 
dollars with an increase of 4%, and Turkey’s import from Albania amounted to 37 million dollars 
with an increase of 54% compared to 2007.  With this  regard, the bilateral trade between the Parties in 
2008 increased by 8% compared to 2007.  After th e entry into force of the Agreement, Turkey 
abolished all customs duties and charges having equi valent effect to the products originating in 
Albania; therefore, Turkey’s import from Albania ha s shown an important rate of increase which is 
above the average increase rate of Turkey’s im ports from the Balkan countries which is 9%.  WT/REG240/2 
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  Although the increasing trend of bilateral trade is seen  at a modest level for now, it is mainly because 
of the global financial and economic crisis.    Moreover, due to the positive environment that  the FTA has contributed, the Parties have 
been witnessing encouraging development in trade -related relations.  With this regard, Turkish 
investment in Albania has obtained an important pla ce.  Turkish investors rank third after the Italian 
and Greek investors with their 620 million dollars am ounted investment.  Turkish investors involve in 
many sectors such as mining, banking, teleco mmunication, constructing and manufacturing. 
Regarding the contracting sector, Turkish companies has been undertaking 15 projects amounted to 
350 million dollars.  In return, 31 Albanian compan ies are operating in Turkey with 7 million dollars 
capital. 
  In this respect, we believe that the FTA be tween the Parties has been contributing to the 
integration of Albania with the world and region on the one hand, and to the development of Turkey’s 
economic and commercial relations w ith the Balkan region on the other hand.  Therefore, the Parties 
consider this FTA as a stepping stone for future on the way to bring the bilateral economic and 
commercial relations to superior levels.  
Questions from the Delegation of Oman
 
 
2. Is there an explanation for exempted produc ts listed in Annex 1 from Industrial goods 
and treated as agricultural products under the Agreement? 
 In compliance with the WTO Agreement on Ag riculture, products listed in Annex 1 and 
falling within chapters 25 to 97 of Harmonized Commodity Description and Coding System, are 
regarded as agricultural products.  Thus, the products  listed in Annex I to the Free Trade Agreement 
between Turkey and Albania are treated as agricultural products in the Agreement. 
 
3. Is there any plan to include provisions in the Agreement for diagonal cumulation with 
the other countries taking into account there is  now negotiations between Gulf Cooperation 
Countries (GCC) and Turkey to sign a Free Trad e Agreement and we believe that will increase 
the benefits to all parties? 
 According to the current Protocol on Rules of Origin of the Free Trade Agreement between 
Turkey and Albania, the Parties apply bilateral cumu lation of origin.  On the other hand, the European 
Union (EU) launched a process called “Stabilization and Association Process (SAP)” to establish a 
new cumulation zone between the Western Balkan countries (Alban ia, Bosnia-Herzegovina, Croatia, 
Macedonia, Montenegro, Serbia and Kosovo) and the EU at the first stage, and to include these 
countries into the Pan-Euro-Med Zone of diagonal cumulation at the final stage.    The Agreement between Albania and the EU providing SAP cumulation is in force as of 
1 December 2006.  On the other hand, Turkey part icipated to the SAP diagonal cumulation system, 
because Turkey applies identical ru les of origin with the EU due to the rights and obligations 
stemming from the Customs Union with the EU.  Acco rdingly, under the SAP process, the system for 
diagonal cumulation of origin is envisaged for th e Western Balkan countries, Turkey and the EU. 
  In this respect, Turkey and Albania agreed  to amend the current “Protocol on Rules of 
Origin” to provide diagonal cumulation between  Parties under the SAP system.  Parties are 
undergoing internal procedures for approval.  
  In addition, the technical meetings are still be ing held under Pan-Euro -Med Zone of diagonal 
cumulation system, whereby Turkey and Albania would be part of.   WT/REG240/2 
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   Further, Albania is also a Party to the Central European Free Trade Agreement (CEFTA)1 
providing diagonal cumulation.  This Agreement, even though Turkey and the EU are not parties to it, enables using materials originating from Turkey and the EU as originating products for diagonal 
cumulation.  
 Finally, since the Parties should have identical protocol of origin with the EU and the EU 
does not envisage any plan to include other countri es such as GCC for diagonal cumulation, they do 
not have any plan for now to incorporate GCC into diagonal cumulation.  
4. Is there a reason for the absence of a provision  in the Agreement for the elimination and 
prohibition of customs duties and quantitative rest rictions on exports of agricultural products? 
 The Parties are fully aware that any such a pplication should be in compliance with the 
disciplines defined in paragraph 2(a) of Article XI  of GATT 1994.  On the other hand, the Parties are 
also fully aware that such flexibilities are provided to member states without prejudice to Article 12 of 
the Agreement on Agriculture. 
  Albania does not have any customs duties, prohi bitions or quantitative restrictions on export, 
neither industrial nor agriculture.  
 In the framework of the Turk ey-Albania FTA, the Parties agreed to eliminate all customs 
duties and charges having equivalent effect on expor ts and imports of industr ial products.  Regarding 
agricultural products the Parties preferred to exchange concessions on selected products.    As a result, due to sensitivity and the importa nce of the agricultural sector for both countries, 
the Parties preferred to maintain this right in th e preferential regime under the conditions defined in 
GATT XI and the Agreement on Agriculture.  
5. Is there any plan to include provision in the Agreement for the accession of third 
parties? 
 The negotiations of the Free Trade Agreement between Turkey and Albania were held on the 
basis of exchange of mutual benefit and the Parties preferred to conclude separate Free Trade Agreements with different countries, rather than  establishing a single Free Trade Agreement with 
multiple countries.  Thus, the Parties do not envisa ge including any provision for the accession of 
third parties to the Agreement. 
 
Questions from the Delegation of the United States 
 
 
Tariffs  
 
6. According to Paragraphs 15 and 16 and Annex 1 of the Factual Presentation, 
Tables AI.1-AI.2:  
 Turkey  eliminates duties on 84.9% of all tariff lines, covering 92.5% of imports from 
Albania under the agreement.  However, though 97.6% of industrial tariffs are 
duty-free, only 15.9% of agricultural ta riff lines are duty-free under the agreement. 
                                                      
1 The Parties to this Agreement are Albania, Bo snia-Herzegovina, Serbia, Montenegro, Macedonia, 
Croatia, Moldova and United Nations Interim Administration on behalf of Kosovo. WT/REG240/2 
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   Albania
 eliminates duties on 82.4% of all tariff lines, covering 90.1% of imports from 
Turkey under the agreement.  However, thou gh 99.9% of industrial tariffs are duty-
free, only 14.7% of agricultural tari ff lines are duty-free under the agreement. 
(a) How do the Parties explain the highly disproportionate liberalization between 
the industrial and agricultural sectors?  
 Regarding bilateral trade between Turkey an d Albania in the year 2008, the agricultural 
products and the industrial products consist of approximately 13% and 87% of the total bilateral trade 
respectively.  Taking into account of sensitivity of the agricultural sector and its small share in total 
bilateral trade, the Parties preferred to liberalize mainly  their industrial sector.  In this respect, Turkey 
abolished the customs tariffs on all industrial products originating in Albania on the date of entry into 
force of the Agreement and Albania will abolish tho se tariffs in five years after the Agreement enter 
into force.  On the other hand, Parties exchange d concessions on selected agricultural products as an 
initial liberalization process.    Article 10 of the Agreement states that “taking into account the role of agriculture in their 
respective economies; the development of trade in ag ricultural products between the Parties; the high 
sensitivity of agricultural products;  the rules of thei r respective agricultural pol icies, the Parties will 
examine in the Association Committee the possibiliti es of granting to each other further concessions 
in trade in agricultural products”.  Moreover, it is  also possible to further concessions if the Parties 
consider that it would be useful and in the interest  of the economies of the Pa rties.  In that sense, 
progressive liberalization for the agricultural products in the future may be provided. 
 
(b) Please explain in detail the reasons why both Parties excluded the vast majority 
of their agricultural tariffs from tariff elimination under the agreement.  
 The logic follows the same as paragraph (a) above. 
  
(c) We request that the Parties please explain their understanding of the term 
“substantially all trade.”  Please al so explain how the tariff elimination 
commitments in this agreement achieve th e “substantially all trade” standard set 
out in GATT Article XXIV.  
 The expression of “substantially all trade” does not include any specific meaning peculiar to 
the Free Trade Agreement between Turkey and Al bania.  Turkey and Albania enter an exact 
obligation in order to establish a free trade area in conformity with the Article XXIV of GATT 1994.  
  This expression, clearly, envisages, according to GATT XXIV:8, the elimination of barriers which affects the substantially all trade and answer s the needs of the reciprocal implementation which 
could vary in a broad context with rega rd to the needs of the various sectors. 
 
 In this sense, the Free Trade Agreement be tween Turkey and Albania envisages a gradual 
establishment of a free trade area on substantially all their trade in a transitional period of five years 
starting from the entry into force of this Agreement in conformity with Article XXIV of the 
GATT 1994.  Taking into account that for the year 2008, the agricultural products and the industrial 
products consist of approximately 13% and 87% of the total bilateral trade respectively, the Free 
Trade Agreement covers the liberalization of approxima tely 96% of total bilateral trade.  Furthermore, 
in the Agreement, the Parties agr eed to consider the possibilities of  granting to each other further 
concessions in trade in agricultural products taking  into account the role of agriculture in their 
respective economies, the development of trade in ag ricultural products between the Parties, the high 
sensitivity of agricultural products and their respective agricultural policies. 
  WT/REG240/2 
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  (d) Please provide the average duty rate by HS Chapter  for the lines that remain 
dutiable.  
Turkey  
 
HS Chapter Average Duty Rate (%) 
1 45 
2 137 
3 28 
4 97 
5 7 
6 27 
7 19 
8 46 
9 44 
10 27 
11 39 
12 16 
13 12 
14 free 
15 23 
16 108 
17 69 
18 Whole chapter is subject to concession
19 9 
20 37 
21 14 
22 45 
23 9 
24 37 
29 0,03 
33 1,14 
35 6,33 
38 0,27 
41 0 
43 0 
50 0 
51 0 
52 0 
53 0 
   
    
 
     
 
 WT/REG240/2 
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  Albania
 
Agricultural products HS 01-24  
 
Tariff duties HS 
Chapter 0% 2% 5% 6% 8% 10% 15%Average Duty 
(%) Total tariff 
lines 
1   35       15  4 5.19  54 
2   4       217  6 9.99  227 
3  333         0.00  333 
4   8       156  2 9.67  166 
5  6        14  7.00  20 
6   24        14 6.79  38 
7   5 2     94  5 9.76  106 
8         121  1 10.04  122 
9   3       7  35 13.36  45 
10   55        2.00  55 
11  1        78  9.87  79 
12  25  25       19  3.48  69 
13   2       11  8.77  13 
14         5  10.00  5 
15  91  7       26  2.21  124 
16  47        24  18 5.73  89 
17 1  19       22  6.14  42 
18         27  10.00  27 
19   23       28  6.39  51 
20   1   3  32  275 14.39  311 
21          20 15.00  20 
22  70         107 9.07  177 
23  14  13       38  6.25  65 
24   10       5  5 7.25  20 
   588 233 3 0 3  939  492 7.65  2258 
 
 Due to differentiated tariffs within the same chapter, the table above presents the average duty 
by chapter.  The average tariff for Chapters 1 – 24 is 7.65%.  
 
Annex I  
Industrial products considered agricultural products  
 
Tariff duties HS 
Chapter 0% 2% 5% 6% 8% 10% 15%Average Duty 
(%) Total tariff 
lines 
29 5      0 0.00 5 
33  2   24    5.69 26 
35 4 4   18    4.46 26 
38  8      2.00 8 
41  11      2.00 11 
43  7      2.00 7 
50  3      2.00 3 
51  15      2.00 15 
52  6      2.00 6 
53 0 6      2.00 6 
  9 62 0  42 0 0 0 3.33 113 
  WT/REG240/2 
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   Adding to the chapters 1 – 24 the products fa lling in the Annex I, the average tariff for all 
agriculture products under th is Agreement is 7.44%. 
 
Sanitary and phytosanitary measures  
 
7. We note that the text of Article 11 on SPS measures differs depending on whether the 
Agreement is viewed on the website of the Government of Turkey 
(http://www.dtm.gov.tr/dtmweb/index.cfm?ac tion=detayrk&yayinID=386&icerikID=486&dil=
EN) or the website of the Government of Albania 
(http://www.mete.gov.al/rub.php?idr=239&l=e ).   
 
(Turkey ) 
 
ARTICLE 11 
Sanitary and Phytosanitary Measures 
 
  “The Parties shall apply their domestic regulatio ns in the fields of veterinary, sanitary and 
phytosanitary control in accordance with the WTO Agreement on Sanitary and Phytosanitary 
Measures. 
 
 The Parties shall not apply their regulations  in sanitary and phytosanitary matters as an 
arbitrary or unjustifiable discrimination or a di sguised restriction on trade between them.” 
 
(Albania ) 
 
ARTICLE 11 
Sanitary and Phytosanitary Measures 
 
 “The Parties shall apply their domestic regulatio ns in the fields of veterinary, sanitary and 
phytosanitary control in accordance with th e WTO Agreement on Sanitary and Phytosanitary 
Measures.  
 
 Measures, concerning veterinary and phytosanitary control among the Parties, shall be harmonized on the basis of the EU legislation.” 
 
(a) Could the Parties please confirm which version is the correct version?  It 
appears that paragraph 36 (page 12) of the Factual Presentation (WT/REG240/1) is based on the version available on the Government of Albania 
website. 
 Considering the text of Article 11 on SPS meas ures, the Albanian version is the correct 
version of the Agreement.  In this regard, the e rror in the English website of the Government of 
Turkey was corrected. 
 
(b) If the version on the Albanian website is  correct, then we would appreciate if the 
Parties could explain how Article 11.2, wh ich calls on the Parties to base their 
veterinary and phytosanitary measures on  EU standards, is in line with the 
WTO SPS Agreement obligation to base SPS measures on international standards?  Are the Parties going to be  undertaking their own risk assessments 
in support of a higher level standard if that is what the EU standard requires?  
 WT/REG240/2 
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   As it is known while Albania is a potential candi date country for EU accession, Turkey is a 
candidate country for EU membership and acces sion negotiations continue since October 2005. 
Taking into consideration being candidate or potential candidate, both Parties have the aim to 
harmonize their legislation concerning veterinary  and phytosanitary control on the basis of 
EU legislation. 
 
Structural Adjustment
 
 
8. What are the criteria for imposing the in creased customs duties under Article 16 of the 
Agreement?  For example, how are "infant industr ies" defined, and what is meant by "serious 
difficulties" experienced by sectors undergoi ng restructuring?  How broadly may these 
increased duties be applied? 
 The Article 16 of the Free Trade Agreement between Turkey and Albania enables both sides 
to take exceptional measures as in the form of increa sed customs duties regarding infant industries, or 
certain sectors undergoing restructuring or facing serious difficulties for a limited duration which is 
compatible with GATT Article XVIII.  Indeed, Ar ticle XVIII of the GATT 1994 also provides similar 
protection by allowing taking measures otherwise GATT-in consistent to protect their infant industries 
against import competition.    Regarding the increased duties, customs duti es on imports introduced in one of the Parties 
may not exceed 25 % ad valorem  and shall maintain an element of preference for products originating 
in the other Party.  The total value of imports of  the products which are subject to these measures may 
not exceed 15 % of total imports of industrial products.  
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