WORLD TRADE  
ORGANIZATION  WT/REG261/M/1 
23 March 2010 
 (10-1570) 
Committee on Regional Trade Agreements 
Fifty-sixth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT  
BETWEEN TURKEY AND GEORGIA,  
GOODS  
 
Note on the Meeting of 15-16 March 2010  
 
Chairman:  Mr. D. Brauns (Germany) 
 
 
1. The meeting was convened in document WTO/AIR/3502/Rev.1, dated 1 March 2010. 
2. Under Agenda Item C.VI of its 56th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) considered  the Free Trade Agreement between Turkey and 
Georgia goods, (hereinafter the Agreement).  
3. The Chairman  noted that the Agreement had entered into force on 1 November 2008 and had 
been notified by the Parties to the WTO on 18 February 2009 under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Interpre tation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (documen t WT/REG261/N/1).  The text of the Agreement, 
together with its Annexes, was available on the WT O Regional Trade Agreemen ts Information System 
website.  
4. The Factual Presentation on the goods aspects (document WT/REG261/1 dated 8 December 
2009) had been prepared by the Secretariat on its  own responsibility in full consultation with the 
Parties, in accordance with paragraph 7(b) of th e Transparency Mechanism (TM) for Regional Trade 
Agreements (document WT/L/671).  In addition, wr itten questions and replies on the Agreement had 
been distributed in document WT/REG261/2, dated 26  February 2010.  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  the specifics of the Agreement using the 
Factual Presentation to guide the debate.  He  proposed that the Committee would go through the 
Factual Presentation section by section, and then look at the questions and replies document.  
5. The representative of Turkey , on behalf of the Turkish and Ge orgian delegations, thanked the 
Secretariat for the efforts and close coopera tion throughout the preparation process of the 
Factual Presentation.  He also thanked Members for their interest and questions which were aimed at a 
better understanding of the Agreement.  Sin ce the Factual Presentation already provided 
comprehensive information, he briefly underlined cer tain points of the Agreement.  Turkey was one 
of the strongest supporters of the rule-based multila teral trading system under the WTO.  As an 
original member, Turkey had been engaging in bila teral and regional arrangements for the purpose of 
further liberalization of trade.  As an outcome of those efforts, the Agreement had been signed on 
21 November 2007 and had entered into force in less  than a year later, on 1 November 2008.  The 
Agreement aimed at the es tablishment of a free-trade area in goods between the Parties as from its 
entry into force, in conformity with Article XXIV of GATT 1994 and other agreements on trade in 
goods annexed to the Agreement establishing the WT O.  Under the Agreement, all customs duties WT/REG261/M/1 
Page 2  
 
  applicable on imports of non-agri cultural goods originating in each Party had been a bolished upon the 
entry into force.  Protocol I to the Agreement pr ovided for the abolishment by Turkey of all customs 
duties on imports originating in Georgia upon the en try into force of the Agreement, with the 
exception of certain agricultural products which ha d been granted market access through tariff quotas 
with customs duty reduction or elimination.  W ith the exception of certain agricultural products, 
Georgia had also abolished all customs duties on im ports originating in Turkey.  The Parties would 
examine the possibilities of granting each other furt her concessions on agricultural products in future, 
taking into account the developments  in bilateral trade, as well as the outcome of the multilateral trade 
negotiations.  As a result of the concessions provi ded by the Agreement, 99.2% of Turkey's total 
imports from Georgia, and 99.1 % of Georgia's tota l imports from Turkey had become duty-free.  The 
definition of the concept of originating products and the methods of administrative cooperation were 
set out in Protocol II of the Agreement, whereby th e Parties agreed to apply bilateral cumulation of 
origin.  There were no regime-wide rules of origin  in the Protocol;  instead in order to obtain 
originating status, non-originating materials should meet  a list of specific criteria.   In order to ensure 
the proper functioning of the free-trade area, the Agreement also contained provisions on state 
monopolies, competition, public procurement, pr otection of intellectual property rights, and 
cooperation between customs administrations.  Am ong the regulatory provisions of the Agreement, 
standards, subsidies, safeguards, anti-dumping a nd countervailing measures were also laid down in 
conformity with the relevant WTO Agreements.  He provided Members with certain figures on 
bilateral trade.  In 2008, the volume of bilateral trade had been recorded as US$1.5 billion, with an 
increase of 63% compared to the previous year.  In 2009, however, triggered by the global crisis, the 
volume of bilateral trade had decreased by 32% to US$1 billion.  In 2008, Turkish exports to Georgia 
had been recorded as US$997 million, while imports  from Georgia had been around US$525 million.  
In 2009, Turkish exports to Georgia had been US$745 million, a decrease of 25%, while imports from 
Georgia had been around US$285 million, with a decrease of 46%.  The most recent data had shown that the downward trend in Turkey's export sales to  Georgia had continued in the first month of 2010, 
when Turkish exports to Georgia had been recorded  as US$38 million, with a decrease of 35%, while 
Turkish imports from Georgia had been recorded  as US$17 million, corresponding to an increase of 
24%.  However, he considered that the decrease in bilateral trade was temporary in nature and 
believed that the situation would be reversed s hortly in parallel with global recovery from the 
economic crisis.  In his delegation's view, FTAs were  a catalyst for investment s.  On the investment 
front, Turkey had witnessed a remarkable increase that could, to a certain extent, be attributed to the 
conclusion of the FTA.  In 2007, the total FDI stock of Turkey in Georgia had been US$402 million.  
This figure had gone up to US$536 million in 2009.  In  conclusion, he stressed that the FTA between 
Turkey and Georgia would not only serve as a mean s for the expansion of bilateral trade through 
liberalization, but would also contribute to the industrial and economic deve lopment of both Parties 
by stimulating investment activities.  He thanked the WTO Secretariat for its efforts, Georgian 
colleagues for their cooperation and valuable contributions, and Members for their interest and 
questions.  
6. The Chairman
 pointed out an error in page 8 of the Factual Presentation.  The list of products 
to which Turkey applied tariff rate quotas included t obacco, and this was incorrect.  He thus informed 
Members that the Secretariat would prepare a revision of the Factual Presentation following the meeting.  
7. The representative of the United States
 remarked that, according to paragraphs 19 and 20 and 
Tables AI.1 and 2 of Annex I of the Factual Presenta tion, Turkey had eliminated duties on 88% of all 
tariff lines, covering 99.2% of imports from Georgi a.  Although 97.7% of Turkey's non-agricultural 
tariff lines were duty-free under the Agreement, only 35. 1% of its agricultural tariff lines appeared to 
be duty-free under the Agreement.  She reminded the Parties that the obligation was to eliminate 
duties and their reduction did not account for the purpose of GATT Article XXIV requirement.  In 
contrast, Georgia had eliminated duties on 98.7% of  all tariff lines, covering 99.1% of imports from 
Turkey under the Agreement.  Moreover, Georgia ha d eliminated 100% of non-agricultural tariffs and  WT/REG261/M/1 
 Page 3 
 
 
  93.5% of agricultural tariff lines were duty-free.  Sh e was struck by the dispr oportionate liberalization 
between Turkey's industrial and agricultural sector s, an outcome seen in other Turkish FTAs, 
including with Armenia and Tunisia.  She also made reference to paragraph 4 of the Factual 
Presentation, where it was stated that, in 2008, Turkey  had been Georgia's largest export market.  Yet, 
according to Table AI.3 of Annex II of the Factual Presentation, a significant number of tariff lines 
making up Georgia's top 25 exports, had rema ined dutiable under the Agreement.  Given the 
extensive protection afforded to Turkey's agricu ltural sector, the United Stated asked Turkey to 
explain why it had chosen not to liberalize at least as much as Georgia, a country with a significantly smaller population and GDP.  Similarly, she would be interested in hearing from Georgia if Turkey's incomplete tariff elimination in the agricultural sector  was impeding the type of growth in trade that 
Georgia presumably would have liked to see as a result of the Agreement.  She asked what efforts, if 
any, had been made to redress the situation.  The representative of Turkey
 considered the intervention 
by the representative of the United States as a comme ntary rather than a set of questions.  He 
explained that agriculture in Turkey was a multid imensional sector, as in many other countries;  
despite this sensitivity, Turkey had agreed to ne gotiate and liberalize the agriculture sector under the 
Agreement to the extent possible.  Moreover, th e Parties had left the door open for further 
liberalization in agriculture, depending on future co nditions both at bilateral and multilateral level.  
With respect to the comment made about Georgia and its significantly smaller population, he responded that Turkey had obviously a significantly larger number employed in the agricultural sector 
than did Georgia.  
8. The Chairman
 noted that the consideration of the goods aspects of the Free Trade Agreement 
between Turkey and Georgia had allowed the Comm ittee to clarify a number of questions and oral 
discussion of the Agreement could be concluded in accordance with paragraph 11 of the TM.  If any 
delegations wished to ask follow-up questions they we re invited to forward submissions in writing  to 
the Secretariat by 22 March 2010 and the Parties were asked to submit replies  in writing by no later 
than 5 April 2010.  In accordance with paragraph 13 of the TM all written submissions, as well as the 
minutes of the meeting would be circulated promp tly, in all WTO official languages, and would be 
made available on the WTO website.   
9. The Committee took note  of the comments made. 
__________