WORLD TRADE  
ORGANIZATION   
WT/REG282/M/1 
7 July 2011  
 
(11-3353) 
Committee on Regional Trade Agreements 
Sixty-first Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT  
BETWEEN TURKEY AND MONTENEGRO,  
GOODS  
 
Note on the Meeting of 28 June 2011 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 61th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/ AIR/3754, and corrigendum 1 dated 17 May and 
21 June 2011.  
2. Under Agenda Item C.III of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Turkey and Montenegro (hereinafter the 'Agreement'), goods.   
3. The Chairman said that the Agreement had ente red into force on 1 March 2010 and had been 
notified by Turkey on 12 March 2010 to the WTO under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an Agreement establishing 
a free trade area (document WT/REG282/N/1).  The te xt of the Agreement was available, together 
with its Annexes, on the Parties' official webs ites.  The Factual Presentation on the goods aspects 
(document WT/REG282/1 dated 18 April 2011), had been prepared by the Secretariat on its own 
responsibility in full consultation with the Partie s and in accordance with paragraph 7(b) of the 
Transparency Mechanism (TM) for Regional Trade Agreements (document WT/L/671).  
Additionally, he informed Members that written questions and replies on the Agreement had been 
distributed in document WT/REG282/2, dated 17 June 2011.  He proposed to organize the 
consideration of the Agreement by first asking the Parties and then other Members for general 
comments.  The Committee would then turn to th e specifics of the Agreement using the Factual 
Presentation to guide the debate.  He proposed to go through the Factual Presentation section by 
section, and then look at the questions and replies document.  
4. The representative of Turkey spoke on behalf of  both Turkey and Mont enegro.  He thanked 
the Secretariat for its efforts and intense c ooperation during the preparation of the Factual 
Presentation.  He also thanked the United States and other Members for their questions and interest in 
the review.  He said that Turkey and Montenegro traditionally had excellent historical, political and 
economic relations and reaffirmed  their support for a strong multilateral trading system, with the 
WTO as its backbone, and strengthened rules, discip lines and mechanisms, in general and for RTAs.  
The Agreement was signed in İstanbul on 26 November 2008 and ha d entered into force on 1 March 
2010.  It aimed at establishing a free trade area for trade in goods between Turkey and Montenegro 
over a maximum transitional period of five years star ting from the date of its entry into force.  The 
Agreement was in conformity with  Article XXIV of the GATT 1994 and other agreements on trade in 
goods annexed to the Agreement establishing the WTO.   With the Agreement, Turkey had abolished 
all customs duties applicable on imports of industr ial goods originating in Montenegro.  In return, 
Montenegro would abolish customs duties on impor ts of industrial goods originating in Turkey WT/REG282/M/1 
Page 2  
 
  progressively starting upon the date of entry into for ce of the Agreement and ending in 2015.  In this 
respect, in the first four months of 2011, the trade volume between Turkey and Montenegro had increased by 117% with respect to the first four m onths in the previous year, which reflected the 
positive effects of the Agreement.  Moreover, th e Parties had also observed a rapid increase in 
Turkish FDI in Montenegro following the entry into force of the Agreement.  In their view, this 
development was also a clear sign that their Agre ement had served its purpose in a broader sense and 
had stimulated investment which was also vital in  accelerating economic relations.  Finally, he said 
that the Parties strongly believed that the deepen ing economic ties between Turkey and Montenegro 
through the Agreement and other means would not onl y contribute to bilatera l economic relations but 
also improve general stability in the Balkan region and globally.  
5.  The representative of the United States thanked the Parties and the Secretariat for the 
information provided.  He said that according to the Factual Presentation, Turkey eliminated tariffs on 
81.2% of all tariff lines covering 99.7% of its imports from Montenegro.  However although 96.3% of industrial tariffs were duty free, only 12.9% of agricultural tariff lines were duty free under the 
Agreement.  As for Montenegro, it eliminated 78. 1% of tariff lines covering 90.1% of imports from 
Turkey.  Although, 95% of industrial tariffs were duty free, only 14.8% of agricultural tariff lines 
were duty free.  While his delegation commended th e Parties for eliminating tariffs on a high 
percentage of their industrial ta riffs, his delegation was disappointed by the extremely disproportional 
liberalization between industrial and agricultural sector s.  According to pages 24 and 25, pa ragraphs 2 
and 3, Turkey only eliminated duties on 0.5% of its  agricultural tariffs that were not already duty free 
on an MFN basis.  Similarly, Montenegro only elimin ated duties on 0.8% of its agricultural tariffs that 
were not already duty free on an MFN basis.  He asked the Parties to explain how this did not 
constitute the exclusion of an entire sector from lib eralization under the Agreement.  As stated in 
previous reviews of other agreements to which Turkey was a party, he said that although a high 
percentage of the Parties' overall current trade might have been covered under the Agreement, it was 
very unclear to his delegation how such minimal coverage of agriculture qualified as meeting the 
substantially all the trade requirement.  All WTO Members had their sensitivities.  However, from the 
United States' experience and observations RTAs of limited coverage were significant carveouts, only 
solidified these sensitivities over time, complicated the effectiveness of the multilateral system and 
arguably prevented progress.  He hoped than in the fu ture the Parties would be able to undertake the 
trade liberalization that was required under GATT Article XXIV. 
6. The representative of the European Union th anked the Parties for the comprehensive 
presentation on the Agreement.  The EU could not a void noting the low coverage of the agricultural 
sector.  He encouraged the Parties to make further commitments and review the possibility to do so in 
the upcoming meetings of joint committees governing th e Agreement that the Parties had pointed to in 
their written replies.    
7. The representative of Australia echoed the concerns raised by the United States and the 
European Union.  He said it was important to be c onsistent with the concerns raised regarding the 
agreements that had been considered earlier.  In  the Parties' responses to the questions from the 
United States, they had pointed out that agricultu ral products accounted for only 8% of total trade 
between the Parties.  In his view this was not a coincidence as the level of tariff protection was 
significantly higher on those lines and Australia ther efore believed that there was definitely a link 
there. 
8. The representative of Turkey acknowledged that th e coverage of agriculture was lower than 
for industrial products in the Agreement.  Ho wever, this was an initial process and was open to 
review.  He added that this also reflected the sen sitivities and interests of his country, as was the case 
for other WTO Members.  Agriculture was not only sen sitive for Turkey but also  for Montenegro.  In 
their written responses, the Parties had mentioned that  agricultural and industria l products consisted of 
8% and 92 % of total bilateral trade, respectively.  The Parties had taken into account the sensitivities  WT/REG282/M/1 
 Page 3 
 
 
  of both sides at the time of negotiating the Agre ement and had preferred to liberalize mainly the 
industrial sector.  They were however open to  liberalize further in the future.    
9. The Chairman said that the consideration of the goods aspects of the FTA between Turkey 
and Montenegro had allowed the Committee to clar ify a number of questions and oral discussion of 
the Agreement could be concluded in accordance with  paragraph 11 of the Transparency Mechanism.  
If any delegations wished to ask follow-up questions  they were invited to forward submissions in 
writing to the Secretariat by 6 July 2011  and the Parties were asked to submit replies  in writing by no 
later than 20 July 2011.  In accordance with paragr aph 13 of the Transparen cy Mechanism all written 
submissions, as well as minutes of the meeting would be circulated promptly, in all WTO official 
languages, and would be made available on the WTO website. 
10. The Committee took note of the comments made. 
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