WT/TPR/S/192 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW  
1. Turkey is implementing a wide-ranging programme to restructure its agriculture, so as to 
reduce the burden of support on its economy and move its policies closer to those of the EC's. Some 
of the potentially most production-distorting measures in the sector (e.g. administered output prices) 
are being phased out and replaced by a less dist ortionary direct support system. Nonetheless, the 
simple average applied MFN tariff in agriculture (Maj or Division 1 of ISIC Revision 2) is 28.3%, up 
from 25% in 2003. This relatively high tariff prot ection and the limited coverage of agricultural 
products in Turkey's preferential trade arrangements, with products generally subject to preferential 
tariff quotas, impede the exposure of the sector to greater competition. 
2. In mining and quarrying, customs tariffs average 0.3% (0.2% in 2003); imports of electricity 
are duty free. Several new energy-related laws have  been enacted over the last few years aiming to 
further liberalize the subsector. The lack of adequa te investment, together with high energy wastage, 
still causes power shortages in some areas. Increasi ng the country's electricity generation capacity 
continues to be a top priority for the Government, which has open all segments of the electricity 
subsector (except transmission) to private participation. 
3. Manufacturing is the major beneficiary of state aid.   It is also the main beneficiary of various 
incentive schemes (duty and tax concessions in par ticular), as well as export credits and guarantees. 
MFN customs tariffs on manufactured goods average 10.9% (down from 11.1% in 2003); relatively high rates (to 225%) continue to apply to some processed food products. The tariff structure does not 
encourage investment in certain manufacturing activities, for example, chemical and plastic 
industries, where the tariff displays negative escalation.  Furthermore, high effective protection of industries such as textiles and apparel, beve rages, and tobacco products hampers their 
competitiveness. 
4. Since its previous TPR, Turkey has taken measu res to tackle structural problems in some 
services subsectors, notably the monopoly of Turk  Telekom over fixed line, domestic long-distance 
and international telephony services ended in on 31 December 2003. Nevertheless, some state-owned 
enterprises (SOEs) continue to dominate services activ ities, for example, postal services, and air, rail, 
and maritime transport. Under the GATS, Turkey scheduled commi tments in several categories 
(AIV.2), and maintains some MFN exemptions (Table AIV.3). It has also tabled its initial and revised 
conditional offers in the on going services negotiations. 
(2) A
GRICULTURE AND RELATED ACTIVITIES  
(i) Main features 
5. Agriculture remains a key sector in the Turkis h economy (Chapter I(1)).  The average farm 
has around 6 ha, and arable land in each farm is ge nerally divided into a large number of parcels. 
Despite the recent emergence of more commercial fa rms, the bulk of farming has remained small and 
family-owned, highly fragmented, and capital-low;  it continues to use only elementary technologies. 
The majority of the sector is informal.1 
6. Turkey is self-sufficient in food, and has incr eased its exports of some agricultural products. 
It is a key player in its traditional specialities (ha zelnuts, oriental tobacco, dried fruit), and in some 
                                                      
1 Although participation in the self-employed social  security scheme is mandatory, 91% of farmers do 
not participate, and only a small minority pay income taxes (OECD, 2006b). Turkey WT/TPR/S/192 
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new areas (tomatoes, potatoes, watermelons). Noneth eless, its share in world agricultural markets is 
only about 1%, well below potential, given that it has more arable land than any West European 
country and a temperate climate. Crops contribute about 65% of total agricultural production;  the main crops are cereals (wheat, barley, and maize); cash crops (sugar beet, cotton); and fruit and 
vegetables (grapes, citrus fruit, apples, watermelon,  tomatoes, potatoes, dry onion). Agriculture has 
the lowest productivity among Turkey's economic sectors.
2 
7. The livestock sub-sector, consisting mainly of  cattle, buffalo, sheep, and goats, includes 
traditional and commercial activities.  Turkey is implementing an animal identification system;  
10 million bovines have been registered. The main  objective is to increase livestock production in 
order to provide adequate and bala nced nutrition for the population.  Total meat production averaged 
some 430,000 tonnes during 2000-063, while milk production remained constant at around 10 million 
tonnes. 
8. Despite the great potential of fishing activities in  Turkey, their contribution to the economy is 
low mainly because of lack of modern vessels, and inefficient catching and processing methods.  
Fisheries production, including aquaculture4, averaged 640,000 tonnes over 2000-06;  it is composed 
largely of marine fish (about 70% of the total in 2006), aquaculture (15%), freshwater fish (8%), and 
other sea products (7%).  Some of the main species caught are anchovy, mackarel mullet, hake, sardine, crustaceans, grey mullet, pilchard, and co mmon carp.  The Black Sea is the main production 
area, followed by the Mediterranean Sea.  High- seas fishing has diminished considerably due to 
pollution, ecological changes, and unsustainable use of resources. 
9. Forests cover 20.7 million hectares or 26.9% of the total area of Turkey.  Timber is the main 
forest product. Coniferous trees represent 54.4% of  the forests, the remainder being broad-leaved 
trees.  Forests in Turkey are classified in terms of quality and purpose: protection forests, national 
parks, and production forests.  Biological diversity is high with 9,000 plant species, 3,000 of which 
are endemic. About 99.9% of forest lands and re sources belong to the State;  the area of private 
forests is only about 20,000 ha. Some 9% of the afforested areas were destroyed by fires during  
2001-05. The main problems in the subsector include  incomplete cadastral works, deficiency in 
specialized technical staff and workers, limited num ber of national parks and similar protected areas, 
low levels of annual reaforestation to avoid erosi on and ensure long-term balance in wood supply and 
demand, uncertainties in management targets, de lays in regeneration works, and inadequate 
financing.
5 
(ii) Policy developments 
10. The Ministry of Agriculture and Rural Affair s (MARA) is responsible for the overall running 
of the sector, including coordinating and carryin g out research and extension services, assisting 
agricultural cooperatives, and providing infrastructure.   Turkey's key policy objectives for agriculture 
are, inter alia : increasing producers' welfare; promoting rural development; ensuring food security 
and safety; and improving efficiency, productivity, quality, and competitiveness. Some of Turkey's 
main targets for improving efficiency in agri culture under its Ninth Development Plan 2007-13 are 
shown in Table IV.1. 
                                                      
2 Labour productivity in agriculture is about one third of the average for the whole economy (OECD, 
2003). 
3 This figure excludes the meat consumed in rural areas. 
4 Rainbow trout, sea bass, sea bream, and bluefin tune are the main species cultured. Small numbers of 
carp, mussels and shrimp are also farmed. 
5 State Planning Organization (2006). WT/TPR/S/192 Trade Policy Review 
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Table IV.1 
Agricultural structure, 2006 and 2013 
 2006 2013 
 Per cent 
The share of animal production in total agricultural production 28.0 37.0 
Percentage of certified cereal (w heat-barley) seed usage 30.0 50.0 
Proportion of cultured and cross bred  to total cattle stock 67.0 77.0 
Proportion of organic agricultural to total agricultural land  1.0 3.0 
 Million hectares 
Irrigation area (net cumulative) 2.55 3.00 
Land consolidation activities (cumulative)  0.60 1.27 
Industrial and soil protection plantation (cumulative)  2.60 3.30 
Source: State Planning Organization (2006), Ninth Development Plan 2007-13, Ankara. 
11. The main policy developments since the last TPR have been the extension of the 2001-05 
Agricultural Reform Implementation Project (ARIP) to  the end of 2008, with the addition of the Rural 
Development Investment Supporting Programme and Village-based Participatory Investment 
Programme6, Land Consolidation, Conservation Reserv e Payment (CATAK), the launching of the 
Agricultural Strategy Paper 2006-10 (ASP), and the adoption, in 2006, of a new Agricultural Law 
(No. 5488) to implement the ASP and move Turkey's  agricultural policies closer to those of the EC. 
12. Under the ARIP, measures are being taken in four main areas7: (i) phasing out price support 
and credit subsidies, and replacing them with a less  distortionary direct income support (DIS) system 
to farmers, based on a uniform per-hectare paymen t (about US$90/ha) rather than on inputs or output, 
and on the National Farmer Registrati on System (NFRS) initiated in 20018; (ii) withdrawing the State 
from direct involvement in crops production, pr ocessing, and marketing; (iii) reducing output 
intervention purchases financed from the budget leading to price cuts9; and (iv) one-time grants made 
available to farmers switching out of crops sufferi ng excess supply, such as hazelnuts and tobacco, to 
help cover their transitional costs, and facilita te the transition to efficient production patterns.10 
13. With CATAK, Turkey aims, inter alia , to ensure proper agricultural policies in vulnerable 
areas (i.e. areas subject to toxic residuals and/or er osion, and with water a nd environmental pollution); 
and increase farmers' income levels. The total cost of CATAK is US$9 million (fully financed by 
                                                      
6 Under the Rural Development Investment Supporting Programme and Village-based Participatory 
Investments Programme, producers are supported for certain investment projects (e.g. irrigation and infrastructure facilities). The Rural De velopment Investment Supporting Pr ogramme is financed through the 
general budget and is implemented in 65 provinces, while the Village-based Participatory Investments 
Programme is supported by the World Bank and implemented in 16 provinces. 
7 These measures were introduced in 2002 and accelerat ed in 2003, the first y ear of full implementation 
of ARIP.  For a full description of ARIP, see WTO (2003), Trade Policy Review of Turkey , Geneva. 
8 More than 2.75 million farmers (89% of the total), and 17 million hectares (80% of total agricultural 
land) have been registered by the NFRS for receiving  DIS payments. About 10 million people benefit from 
NFRS. DIS has become the major support instrument in  Turkey's agriculture, account ing for about 80% of the 
total support provided to agricultural producers in monetary terms (OECD, 2006a). 
9 Targeted price cuts were as large as 20-30% for mo st products. Intervention prices were to be reduced 
by 45% for wheat, the main commodity, within two years (WTO, 2003). 
10 The cultivated areas for hazelnuts and tobacco are to decrease by about 16 ,000 ha and 9,000 ha, 
respectively. The hazelnut and tobacco  programmes are to be discontinue d by the end of 2007. Funding for 
transition payments to help farmers switch from some commodities was fixed at YTL 298 million for 2001-05 (OECD, 2005a). Turkey WT/TPR/S/192 
 Page 79 
 
 
World Bank funds) for 2005-08;  this is being used in  four different regions with a total land area of 
5,000 ha.11  In 2004, Turkey adopted its ASP, which fixe d the budgetary funds available for the sector 
to around 1% of GNP, and targeted the allocati on of these funds in 2010 as follows: 45% for DIS 
payments; 13% for deficiency payments; 12% for livestock support; 10% for rural development 
support; 5% for compensatory payments; 5% for ÇAT AK; 5% for crop insurance support; and 5% for 
other supports.12 
14. Agricultural Law No. 5488 puts emphasis on increasing productivity and ensuring food 
supply, and makes the competitiveness and moderniza tion of the sector a priority. It also creates the 
legal basis for certain management systems (Integrated Administrative Control System, Farm 
Accountancy Data Network) necessary for implementation of the acquis communautaire ; nonetheless, 
the Law moves Turkey further away from the prin ciples of the EC's reformed Common Agricultural 
Policy (CAP) by defining support linked to produc tion as a key instrument of agricultural policy.13  
For a more market-based agricultura l sector in Turkey, particular attention is needed in technology 
transfer, irrigation, land consolidation, compe tition, financing, and easing the social costs of 
adjustment.14 
15. In 2004, the Agricultural Producer Unions Law (N o. 5200) came into effect with the objective 
of improving farmers organizati ons. The Agricultural Insurances Law (No. 5363) was enacted, in 
2005, to protect farmers and their production levels  against risks. The closing of the General 
Directorate of Rural Services, in 2005, brought  about the need for additional measures to, inter alia , 
implement land consolidation, dr ainage, soil protection, and ground water irrigation investment.15 
16. The largest purchasing agencies, e.g. the Turk ish Grain Board (TMO), the Turkish Sugar 
Factories Corporation (TSFAS), the Directorate-General for Tea Enterprises (CAYKUR), and the tobacco company TEKEL, are still state-owned.   TEKEL is in the privatization portfolio 
(Chapter III(4)(ii)). In 2002, most administered prices were abolished. However, these agencies 
continue to set prices before the purchasing campaign
16; during 2003-04, purchase prices increased by 
around 23% for white barley, and 14% for wheat (wh ite and red Anatolian), well above the inflation 
rate. According to the authorities, in the following years the purchase prices increased in line with the 
inflation rate. 
17. Farmers still benefit from loans extended at con cessional rates.  A credit arrangement in the 
form of a revolving fund at an interest rate of 13.125% can be used by the Agricultural Sales 
Co-operatives (ASC) and their Unions (ASCU)  to purchase selected crops and cereals from 
producers. The overall amount of the fund is around YTL 640 million (including the extended 
credits). The loans are channelled through the st ate-owned Ziraat Bank (for hazelnuts, cotton, 
sunflower seeds, figs, raisins, olives, and olive oil,  etc.).  In addition, Ziraat Bank extends credit 
facilities for fisheries and forestry activities. 
18. In 2004, 26,168 ha of the area covered by i rrigation schemes operated by the State Hydraulic 
Works (DSI) was transferred to farmers' coope ratives and water users' associations, which now 
                                                      
11 The regions are: Seyfe Lake; Kovada Lake Canal Area; Sultan Marshes; and Eregli Marshes.  
CATAK started in 2006 as a pilot study. As of Decem ber 2006, about US$540,000 had been disbursed on 
CATAK of ARIP loan funds. 
12 MARA Agriculture Strategy Paper 2006-10 (No. 2004/92 of 2004). 
13 European Commission (2006). 
14 OECD (2006b), p. 189. 
15 State Planning Organization (2006). 
16 TMO, for example, is responsible for intervention purchases, and sets minimum purchase prices for 
cereals. WT/TPR/S/192 Trade Policy Review 
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manage over 40% of the total irrigated area.17 Farmers on the DIS payment register also receive a 
"diesel payment" per ha (to a maximum of 50 ha) to cover 35% of the country average farmers' 
consumption of fuel (80 litres/ha).18 Farmers also receive an area-based payment for fertilizer. 
Electrical power used in agriculture (including by poultry producers and for aquaculture) is no longer 
subsidized.  Overall, input subsidies fell from 30% of  total agricultural subsidies in 1986-88 to less 
than 2% in 2003-05.19 
19. Pruning and premium payments (per kg) to tea growers were introduced in 2005.20 The a tea 
leaf price premium is paid to tea producers whose fields are licensed;  the pruning payment based on the average yield, is to compensate for 70% of the loss of farmers' income due to to trimming 
(pruning) of tea fields. In 2006, pruning and premium payments amounted to YTL 39 million and 
YTL 82  million, respectively. In 2004, a total of YTL 4 million of compensatory payments were granted for the first time to sugar beet growers for losses associated with the production quota, which 
has been at 2.2 million tonnes since 2002.
21 A price premium for meat producers was granted for the 
first time in 2004. 
20. Livestock incentive payments, such as the artif icial insemination premium and milk incentive 
premium, are paid to farmers to, inter alia , support livestock production, raise product quality, 
upgrade technology, improve food safety conditions, and offer consumers better quality products. On 
artificial insemination, YTL 15.8 million in 2005 and YTL 25.4 milli on in 2006 were paid. The milk 
incentive premium reached YTL 115.7 million in 2005 and YTL 161.7 million in 2006. 
21. Deficiency payments (i.e. a price support) ar e granted for several agricultural products, for 
example, olive oil, cotton, oilseeds, wheat, and canola.22 In addition, direct payments are given to 
producers of, inter alia , silk cocoon and mohair. 
22. Turkey’s WTO commitments on export subsid ies include 44 agricultural product groups.23 
Export subsidies are set at 10% to 20% of the expor t values, on 14% and 100% of exports of eligible 
products (Table IV.2). Since Turkey's last TPR, e xport subsidies have been eliminated for potatoes 
and onions (dried), and introduced for honey and edible offal of poultry (Chapter III(3)(iv)). 
According to the authorities, the main policy objec tive regarding export subsidies is to develop 
Turkey’s export potential in processed agricultural products. 
                                                      
17 Users pay an annual lump sum (negligible fee) for the operation and maintenance of irrigation 
schemes by the DSI. 
18 During 2003-05, farmers received YTL 39/ha as di esel payment. In 2006, no diesel payment was 
made, while in 2007 payments varied according to products. YTL 54/ha was paid for oily and seedy plants; YTL 28.8/ha for cereals, feeding plants, leguminous an d lumpy plants; and YTL 18/ha for vegetables, fruits, 
special forests, fields, and meadows.   
19 OECD (2006b). 
20 Pruning payments are made under Decision of the Council of Ministers No. 5096, published in the 
Official Gazette  of 27 December 1993, amended by Decree Law No. 7758 of 23 August 2004. According to 
Articles 2 and 3 of the Decree Law, licensed tea gardens are subject to pruning for 7 years (in ratio of 1/7 of the 
tea garden each year), to produce qualified tea leaves  in compliance with maintenance and leaf production 
techniques. The premium payment is decided each year  through decisions of the Council of Ministers. 
21 To receive this payment, sugar beet grow ers must grow certain crops (OECD, 2005a).  
22 Deficiency payments are the difference be tween production costs and market price. 
23 Due to budgetary restraints, Turkey generally gives export refunds only to 16 products/ product 
groups: cut flowers, frozen vegetables, dehydrated vege tables, frozen fruit, preserved vegetables and fruit, 
tomato paste, honey, homogenized fruit preparations, fruit juice, olives and olive oil, prepared or preserved fish, 
poultry meat, eggs, preserved poultry meat products, chocolate and other food preparations containing chocolate, biscuits, waffles, pasta. Turkey WT/TPR/S/192 
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Table IV.2 
Export subsidies by agricultural product, 2007 
Product Rate 
(US$/tonne) Share of exported quantity eligible 
for the subsidy (%) 
Cut flowers (fresh) 205 37 
Vegetables, frozen (exc. potatoes) 79 27 
Vegetables (dehydrated) 370 20 
Fruits (frozen) 78 41 
Preserves, pastes 75 51 
Honey 65 32 
Homogenized fruit preparations 63 35 
Fruit juices (concentrated) 150 15 
Olive oil 125 100 
Prepared or preserved fish 200 100 
Meat of poultry (excl. edible offals)  186 14 
Preserved poultry meat products 250 40 
Eggs US$15/1,000 pieces 78 
Chocolate and  other food prepar ations containing chocolate 119 48 
Biscuits, waffles 119 18 
Macaroni vermicelli 66 32 
Source:  WTO document G/SCM/N/123/TU R/Add.1, 26 January 2006, and Decree No. 1/2007. 
23. Exporters must present relevant documents to the Exporters Associations authorized by the 
Undersecretariat of Foreign Trade (UFT) for refund application (e.g. customs declaration, invoice). 
Products must leave the customs territory of Turkey  within the implementation period of the Decree, 
which is published annually or for a specific time period. Products must be of Turkish origin. Export 
refunds are not differentiated on the basis of destinations. The products  must have sound and 
marketable quality to be eligible for the export ref und:  if the exported products are returned to Turkey 
or rejected by importing countries for any reason the refunds are taken back.24 
24. According to the OECD, producer subsidy e quivalents (PSEs), which capture the annual 
value of transfers under agricultural policies, as pe rcentages of total value of production, rose from 
16% in 1986-88 to 26% in 2003-05; the implicit tax on  consumers, as measured by consumer subsidy 
equivalents (CSEs), which indicate the annual valu e of transfers to consumers under agricultural 
policies, also increased (in absolu te value), from -16% in 1986-88 to -23% in 2003-05; while the 
general services subsidy equivalent (GSE), which estimates the annual monetary value of gross 
transfers to general services provided to agricultu re (e.g. research, infrastructure, inspection, and 
marketing and promotion), decreased to 9% in 2003-05 from 10% in 1986-88.25 The total support to 
                                                      
24 Decree No. 2007/1 (Export Subsidy Programme for Agricultural Products), published in the Official 
Gazette  of 22 March 2007, applies throughout 2007.  
 25 The PSE estimate includes both transfers from consumers of agricultural products (through domestic 
market price support) and transfers from taxpayers (thr ough budgetary or tax expenditures).  The CSE, when 
negative, measures the implicit tax imposed on consum ers by agricultural policy.  The major component is 
market transfers due to market price support to production; it also includes other transfers such as subsidies to 
consumers from government budgets. Unlike the PSE and CSE, the GSE tran sfers are not received by producers 
or consumers individually, and do no t directly affect farm receipts (re venue) or consumption expenditure, 
although they affect the production and consumption of agricultural products (OECD, undated). WT/TPR/S/192 Trade Policy Review 
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agriculture (TSE), as a percentage of GDP, increa sed from 4% during 1986-88 to 4.2% in 2003-05; 
after peaking at 5.1% in 2003, it decreased to 3.8% in 2005 (Table IV.3).26 
Table IV.3 
Transfers associated with agricultural policies, 1986-88, and 2003-05 
  1986-88 2003-05 2003 2004 2005a 
PSE € million 
US$ million 
(%)b 2,873 
3,169 
16 9,593 
11,550 
26 9,862 
11,142 
28 9,055 
11,250 
25 9,862 
12,257 
25 
CSE € million 
US$ million (%)
c -2,224 
-2,446 
-16 -7,152 
-8,593 
-23 -7,825 
-8,840 
-26 -6,395 
-7,946 
-21 -7,237 
-8,994 
-21 
GSE € million 
US$ million (%)
d 277            
309            
10 916            
1,105            
9 871            
984            
8 534            
664            
6 1,341           
1,667           
12 
Total transfers e € million 
US$ million (% of GDP) 3,149 
3,478 
4.0 10,509 
12,655 
4.2 10,734 
12,126 
5.1 9,589 
11,914 
3.9 11,203 
13,924 
3.8 
Memo item :  Total transfers 
for all OECD countries € million 
US$ million (% of GDP) 276,039 
303,771 
2.3 308,139 
371,243 
1.1 309,969 
350,183 
1.1 304,464 
378,281 
1.1 309,983 
385,264 
1.1 
a Provisional. b PSE as a percentage of total value of production (valued at dome stic producer prices), adjusted to include direct payments an d to 
exclude levies on production. 
c CSE as a percentage of total value of cons umption (valued at domestic producer prices). 
d GSE as a percentage of total transfer s (valued at domestic producer prices). 
e Total transfers are not the sum of PSE, CSE, and GSE; they cover the total value of production and include not only transfers  to 
agriculture, as measured by the PSE, CSE, and GSE, but al so other transfers associated  with agricultural policies. 
Source : OECD (2006), Agricultural Policies in OECD Countries: At a Glance,  Paris.  
25. Almost 100% of Turkey's producer support up to 2000 was aid that potentially has the most 
production distorting effects (market price support, payments based on output, and input subsidies), 
benefited mainly larger farms, and increased the pressure on the use of natural resources (such as 
water).  This share fell to 83% in 2003-05 thus increasing the exposure of farmers to world market 
signals.27  
26. All farmers are subject to the withholding tax at 2% on the sale value of livestock products, 
and 4% on the sale value of other agricultural produc ts. When the agricultural product is sold through 
trading stocks, the withholding rates are halved. Expo rt taxes still apply at the rate of US$0.04 per kg 
on unshelled hazelnuts and US$0.08 per kg on shelled hazelnuts. 
27. Tariff protection for agriculture remains relativel y high.  The simple average MFN tariff in 
agriculture (Major Division 1 of ISIC Revision 2) is 28.3% (up from 25% in 2003, partly due to the 
increase in the tariffs on grains and vegetable oils ). Imports of agricultural products, such as live 
animals for breeding purposes are duty free.  Tariff rates on some processed meat products range up 
to 225%, while some dairy products (e.g. butterm ilk, and cream) carry duties up to 170% (Table 
AIV.1).  Moreover, the specific, compound, and vari able duties apply mainly to agricultural products 
(Chapter III(2)(iii)(b)). 
                                                      
26 TSE is an indicator of the monetary value of all gross transfers from taxpayers and consumers arising 
from policy measures that support ag riculture, net of the associated budget ary receipts. When expressed as a 
percentage of GDP, it gives an indication of the burden this overall support represents for the economy. 
27 Prices received by farmers in 2003-05 were ab out 32% higher than thos e in the world market 
(OECD, 2006a). Turkey WT/TPR/S/192 
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28. In the Uruguay Round, Turkey undertook to reduce its budgetary outlays for export subsidies 
for 44 products (at the HS four-digit level) by 24%, and the volume of subsidized exports by 14% in 
equal instalments over a ten-year period starting in 1995.  Turkey did not make any commitments to cut financial support to agricultural producers becau se the authorities estimated  that support – as 
measured by the Aggregate Measurement of Suppo rt (AMS) - was below the  de minimis level 
of 10%, for which no reduction commitments were required.
28 
29. Some Members have raised concerns in th e WTO Committee on Agriculture about Turkey's 
new import regime for rice29; and issues related to the 2005 and 20 06 tariff rate schedules published in 
the Turkish Official Gazette .30 Turkey has been increasingly challenged on animal disease control 
measures over the last few years (Chapter III(2)(vi)(d)). 
30. At the regional level, in addition to non-agricu ltural products, Turkey and the EC have agreed 
to work towards bilateral free-trad e in agricultural goods (Chapter II(3)(ii)(a)). In line with the CUD, 
processed agricultural products imported into Turk ey from the EC are subject to customs duties 
comprising an industrial and an agricultural co mponent: all industrial components enjoy duty-free 
treatment and customs duties applicable to agricultural components are below MFN rates31; a group of 
processed agricultural products are subject to zero duty but under quota.  The limited coverage of 
agricultural products under the preferential regime with the EC and under Turkey's other bilateral 
agreements delays their exposure to greater co mpetition: the products are generally subject to 
preferential tariff quotas (Chapter III(2)(iii)(e)). 
(3) MINING AND ENERGY  
(i) Overview 
31. The mining and quarrying sector contributed 1. 1% to real GNP in 2006 (1.2% in 2002). 
Turkey has limited reserves of oil and natural gas, but significant proven reserves of lignite, as well as 
borax, boron, chromite, magnesite, and marble.  Rene wable combustibles, particularly wood, and the 
country's water courses are also important indigenous energy resources. The public sector accounts for almost 70% of value added in the mining subsect or, while the private sector has increased its role 
in energy asset management and operations, especial ly in the generation segment of the electricity 
market. Local production of energy in Turkey meets approximately 29% of demand.
32 
32. There have been no major changes to the ins titutional framework in the mining subsector.  
Policy issues related to energy and mining are the re sponsibility of the Ministry of Energy and Natural 
Resources (MENR), whereas matters related to quarry ing are under the Ministry of Interior. The 
General Directorate of Mining Affairs (GDMA) is responsible for administering the Mining Law on 
behalf of the MENR, while the Energy Market Re gulatory Authority (EMRA) has been the energy 
                                                      
 28 The main difference between the AMS and the PSE is  that price differences in the AMS calculations 
are estimated by reference to domestic administered pri ces and not actual producer prices.  Moreover, the AMS 
fixes the external reference prices at the average leve ls of the 1986-88 base period, and certain budgetary 
transfers are included in th e PSE but not in the AMS. 
29 WTO documents G/AG/R/39 of 16 July 2004; G/AG/R/41 of 17 February 2005; G/AG/R/42 of 
25 May 2005; and G/AG/R/44 of 25 November 2005. 
 30 WTO document G/AG/R/46, 11 July 2006. 
 31 The agricultural component of each good is cal culated by multiplying the quantity of primary 
agriculture products used in processi ng, according to an agreed set of ratio s, by a specific rate charge (basic 
amount). 
32 Ministry of Energy and Natural Resources online information. Viewed at: 
http://www.enerji.gov.tr/belge/butce.doc [14 August 2007]. WT/TPR/S/192 Trade Policy Review 
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market regulator since 2001.33 The Undersecretariat of State Planning Organization (SPO) evaluates 
Turkey's general energy needs.  Several public  institutions are engaged in mining and energy 
activities, which causes inefficient coordination with in the sector, and sometimes makes it difficult to 
solve problems.34 However, agencies with responsibility fo r the sector are liaising, with a view to 
improving coordination and efficiency. 
33. Customs tariffs average 0.3% in mining and quarrying (Major Division 2 of ISIC Revision 2), 
and range from zero on, inter alia , sulphur, ores and concentrates, coal, lignite, crude petroleum, 
natural diamonds and precious stones, to 20% on sa lt and pure sodium chloride (HS 250100).  Imports 
of electricity are duty free. However, 18% VAT is charged on electricity.  
34. A 0.05% service commission is paid to the Exporters Union for electricity exports realized by 
TETAS. 
(ii) Mining 
35. Turkey has a diverse and dynamic mining sub sector. Excluding petroleum and coal, it is 
estimated that there are over 4,400 mineral deposits in Turkey35, and approximately 77 economically 
exploitable minerals.36 In 2005, 53 different minerals were produced.37 Turkey possesses two thirds of 
the world's boron reserves, and is the largest producer of boron ore38;  6% of the world's chromite 
reserves; and 40% of world's marble reserves. K nown mineral reserves in Turkey are valued at 
approximately US$2 trillion.39 During 2003-2004, 1,136 new mining and quarrying companies were 
established.40  Mining exports grew by an average of 31% during 2002-06, and constituted 2.4% of 
Turkey's total merchandise exports in 2006.41 
36. Turkey's main objectives in mining are to produ ce competitive and safe raw materials, and to 
increase value added by processing. Under Turkish law, "underground resources" are subject to the 
exclusive ownership and disposition of the State and are not considered as a part of the land where 
they are located. The State may issue licences to private entities for exploration and operation of 
mines for specific periods and purposes; royalties must be paid to the State. 
                                                      
33 EMRA is in charge of preparing and implementing secondary legislation (e.g. regulations);  
authorizing market participants by granting licences; approving and publishing tariffs; monitoring and 
supervising market participants; conducting technical, legal, and financial audits; settling disputes; approving, amending, and enforcing performance standards; and applying sanctions where necessary. 
34 WTO (2003). 
35 Undersecretariat for the Prime Ministry for Fore ign Trade. Viewed at: http://www.igeme.org.tr/eng/ 
turkey/industry.pdf [13 June 2007]. 
36 Istanbul Technical University. Viewed at: http://www.humboldt-
foundation.de/de/netzwerk/veranstalt/hoersaal/ 2006_istanbul/oenal.pdf  [15 June 2007]. 
37 Undersecretariat for the Prime Ministry for Fore ign Trade. Viewed at: http://www.igeme.org.tr/eng/ 
turkey/industry.pdf [14 June 2007]. 
38 United States Geological Survey report on boron production in the United States. Viewed at: 
http://minerals.usgs.gov/minerals/pubs/commodity/boron/boronmcs07.pdf [13 June 2007]. 
39 Undersecretariat for the Prime Mini stry for Foreign Tr ade. Viewed at: 
http://www.igeme.org.tr/eng/turkey/industry.pdf [15 June 2007]. 
40 Report on the mineral industry of Turkey by th e United States Geological Survey for 2003-05. 
Viewed at: http://minerals.usgs.gov/minerals/pubs/c ountry/2003/tumyb03.pdf ;  http://minerals.usgs.gov/ 
minerals/pubs/country/2004/tumyb04.pdf;  and h ttp://minerals.usgs.gov/mine rals/pubs/country/2005/ 
tumyb05.pdf. 
41 Undersecretariat for the Prime Ministry for Fo reign Trade. Viewed at: http://www.igeme.org.tr/ 
introeng.htm. Turkey WT/TPR/S/192 
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37. Turkey has undertaken a series of reforms in the mining subsector. In 2003, the Parliament 
enacted a new foreign investment law to encourag e both local and foreign investment, including in 
mining.42 Foreigners may invest in the mining subsect or only through locally incorporated companies 
(Chapter II(4)). However, explorati on and exploitation of baron, uran ium and thorium are reserved for 
the Government. 
38. Turkey made several changes to its mining regime, through Mining Law No. 5177 of 2004, 
which amended Mining Law No. 3213 of 1985. Law No. 5177 categorizes minerals into five groups: 
(i) sand and gravel; (ii) marble and other similar deco rative stones; (iii) salts in solution form that can 
be obtained from sea, lake, and spring waters; (iv)  energy, metal, and industrial minerals; and (v) 
semi-precious stones and gemstones.  
39. Mining activities are regulated by the GDMA, which also issues mining licences. There are 
three types of licence: exploration licence/certificate; operation licence; and operation permit. Exploration licences are valid for three years.  Mining Licences (or "certificates" for V minerals) may 
be granted to Turkish nationals or to any fore ign company established in Turkey, as they are 
considered Turkish companies. Prior to the expiry  of the exploration licence, the holder must obtain 
an operation licence: this licence may be granted for periods of five years for certain categories of 
minerals, and no less than ten years in the case of others, although these te rms may be extended. 
Holders of exploration licences are also obliged to  obtain operation permits from the GDMA. Once 
granted, companies have up to one year to commence mining operations, failing which they are 
subject to payment of a royalty of 10% of th e annual production amount declared in the initial 
application, for each year of non-operation. Op eration licences confer the legal right to use the 
licensed area, whereas operation permits are evidence of permission to operate a mine. Permits are valid for the same period as licences.
43 
40. All activities in the subsector are subject to environmental control by the Ministry of 
Environment and Forestry.  Depending on the locati on of the activities, permission may be required 
from the Ministries of Health, of Agriculture and Rural Affairs, of Culture and Tourism.  Law 
No. 5177 establishes different royalties for di fferent categories of mineral exploitation.44 The State's 
rights over produced minerals are: 4% of the ex-m ine sales amount for mineral groups (i) and (v), and 
for any kind of materials used in construction (s uch as cover stone), rough construction work, dams, 
ponds, seaports and roads;  and 2% for other groups  of minerals. For mining companies that use the 
ore they produce in their processing activities, the royalty calculation takes into account the amount of 
ore processed (through a flat 50% royalty reduction). Where mining activities are within state-owned 
land, licence holders must pay an a dditional 30% royalty since they w ill not have to pay to lease state-
owned property for mining activities.  
41. In 1985, a Mining Fund was established (Article  34 of Law No. 3213) under the supervision 
of the MENR to provide financial credits for expl oration, technical research, development, project 
preparation, installation, constr uction, production, and export activiti es. The Mining Fund is still in 
operation, but no new resources are allocated to it; the Fund is only financed under the general budget.
45 Five schemes currently provide credits at well below market rates (Table IV.4).  
                                                      
42 Undersecretariat of State Planning Organization (2006) . 
43 A mining licence may be transferred to those qualified under Law No. 5177 of 2004, and the transfer 
must be registered at the GDMA (Onder, 2006). 
44 In general, the rate is 4% for the first and fifth groups of minerals, and 2% for the remaining groups 
(Onder, 2006). 
45 Law No. 5177, and Communiqué of 14 June 2002 published in the Official Gazette  No. 24785. WT/TPR/S/192 Trade Policy Review 
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Table IV.4  
Credit schemes, 2007  
Scheme General features Nominal interest 
rate 
Mine research and development Maximum three-year credit;  no repayment on principal for the first year; 
amounts cannot exceed 50% of expenditure  on exploration and definition of  
mineral reserves and other propertie s in the permitted area.  If the 
exploration is done by the General Di rectorate of Mineral Research and 
Exploration the amount of the cred it can cover 75% of expenditure 11% 
Installations, enlargement, and 
development Maximum five-year credit; no repayment on principal for the first two 
years; amount is proportional to self -source rate; and cannot exceed 50% in 
normal circumstances.  If an incentive certificate is granted it cannot exceed 
60%.  Credit covers expenditure on expa nsion of facility, enlargement and 
renovation investment, and infrastructure in the permitted area 13% 
Management (operating) credit Maximum three-year credit; cannot  exceed the working capital; no 
repayment on principal for the first year 15% 
Exports   20% 
(i) Export credit One-year credit; 50% of total expenditure to meet the needs of production 
and exports (excluding the costs of  transportation) of the mineral 13% 
(ii) Letter of credit or export 
certificate credit Six-month credit period; maximum 50% of  the letter of credit; the credit is 
to supply the finance until the export of the mineral  13% 
Stock credit Maximum 20-40% of the stock cost  for minerals produced and prepared 25% 
(i) Export stock credit Maximum 40% of the stock cost for minerals produced and prepared 13% 
(ii) Domestic stock credit Maximum 20% of the st ock cost for minerals produced and prepared for 
domestic consumption 15% 
Note: All credits require a bank guarantee le tter covering 1.3 times the credit amount.   
Source : WTO Secretariat, based on informati on provided by the Turkish authorities.  
(iii) Energy 
(a) Overview 
42. Turkey's energy market is among the fastest growing in the world:  total primary energy 
consumption reached 92.6 million tonnes of oil equivalent  (toe) at the end of 2006, and is expected to 
rise to 126 million toe in 2010, and 222 million toe in  2020. According to the authorities, Turkey's 
energy import dependency is around 71%, with o il representing 46% of total net energy imports, 
followed by gas (37%), and coal (16%). Domestic production meets 29% of demand.  FDI needs in the subsector are estimated at about US$4.5 billion per year until 2010.
46 Electricity demand in 
Turkey amounted to 174.6 GWH in 2006, and is expe cted by the authorities to reach between 406 and 
499 GWH by 2020. 
43. The main objective of Turkey's energy policy is to ensure supply security. In addition, the 
authorities aim to, inter alia , reform and liberalize the subsector to  make it more productive, efficient, 
and transparent; exploit local energy resources in  a sustainable and environment-friendly manner 
(including from new and renewable sources); reduce public transfers to the SOEs operating in the 
subsector; and take advantage of the country's geopoliti cal location to make it a pivotal transit area for 
international oil and gas trade (East-West energy corridor).47  
44. Various SOEs continue to dominate the sub sector, including Electricity Generation Company 
(EUAS), local distribution companies owned by Tu rkish Electricity Distribution Company (TEDAS), 
Turkish Electricity Transmission Corporation (TEIAS).   Turkish  Electricity Trading and Contracting 
Company (TETAS), Turkish Petroleum Company (TPAO), and Petroleum Pipeline Corporation 
                                                      
46 WTO (2003). 
47 Turkey has given priority mainly to two pipe line projects: the Baku-Tbilisi-Ceyhan Crude Oil 
Pipeline (involving Azerbaijan and Georgia), which was finished in 2006 and can transport 50 million tonnes of oil annually (its first tanker was loaded on 4 June 200 6); and the Baku-Tbilisi-Erzurum Natural Gas Pipeline, for 
regional cooperation in the supply of fuel, which will have  capacity to transport 20 billion cubic meters per year. 
In addition, Turkey has projects under way with other countries, such as the Turkey-Bulgaria-Romania-Hungary-Austria Natural Gas Pipeline (Nabuco); and the South Caucasus Pipeline. Turkey WT/TPR/S/192 
 Page 87 
 
 
(BOTAS) (Table IV.5). Some of these companies ar e in the privatization portfolio, and others have 
been privatized during the last few years, such as Petrol Ofisi (POAS), Turkey's major petroleum 
retailer, and the Turkish Petroleum Refinery Corporation (TÜPRA Ş), a monopoly in the petroleum 
refinery subsector (Chapter III(4)(ii)). 
Table IV.5 
Selected state intervention in the energy sector, 2007 
State-economic enterprise Market share Price regulation Other 
Oil & Gas    
Turkish Petroleum  Corporation 
(TPAO): production, exploration, drilling, natural gas 
storage, pipelines, oil trade and 
transportation (TPIC-TPAO subsidiary) Produces  70 % of Turkish 
oil; owns and operates  18  out of 36 gas fields Price of crude oil is set in 
accordance with Article 3/25(a) of Petroleum 
Law No. 6326 and Petroleum 
Market Law No. 5015 Oil producers may only export up to 
35% of crude oil production onshore and 45% off-shore 
Petroleum Pipeline Corporation 
(BOTAS): natural gas import, 
transportation, sale and crude oil transportation 
According to the Natural Gas 
Market Law, private sector has the right to be involved in the 
natural gas market activities, and  
unbundling of BOTA Ş for the 
above-mentioned activities is 
foreseen The monopoly of BOTAS 
was abolished by the  
Natural Gas Market Law Article 11 of Law No. 4646 
the types of tariff are: 
connection; transmission and supervision of conveyance; 
storage; wholesale; and retail 
sale to be determined by EMRA.  Currently all tariffs 
(except the CNG sale tariffs) 
are approved by EMRA until sufficient competition is in 
place.  All tariffs are in the 
form of price ceilings  
Coal    
Turkish Hardcoal Enterprises 
(TTK):  hard coal Sole producer of hard coal Prices  set by TTK  Heavily subsidized 
Electricity Generating 
Corporation  (EUAS)a Produces 26% of  Turkish 
lignite Prices set by EUAS  
Turkish  Coal Enterprises (TKI): 
lignite Produces 45.8% of Turkish 
lignite Prices set by TKI   
Electricity    
Electricity Generating 
Corporation  (EUAS) Owns  58.5 % of installed 
electricity capacity Prices set by EUAS  Private sector may participate in all 
segments of the market, except for transmission, by obtaining licences 
from EMRA. Privatization of 
generation is also on the agenda 
Turkish Electricity Transmission 
Corporation (TEIAS) Owns and operates the 
transmission system and also 
acts as market operator Methodologies are derived 
and tariffs are calculated 
according to the Electricity Market Tariffs Regulation and 
the related communiqués, and 
are submitted to EMRA for approval  TEIAS will remain as the sole 
transmission system operator and 
asset owner in the long-run 
Turkish Electricity Trading and 
Contracting Corporation 
(TETAS) In charge of trading and 
wholesale of less than 50% 
of total generation  TETAS submits tariff 
wholesale price proposals to 
EMRA for approval TETAS took over all the public 
sector purchasing obligations of the 
previous regime. TETAS may neither sell to new consumers nor 
sign any new PPAs except for 
obligations as stated in the EML;  its role is intended to diminish over 
time, once the cost burden is 
mitigated 
20 state-owned, regional distribution companies formed by the restructuring of Turkish 
Electricity Distribution 
Corporation (TEDAS), and one private regional distribution 
company  TEDAS owns the 
distribution system but distribution and retail sales 
are undertaken by regional 
distribution companies  Regional distribution 
companies submit distribution and retail tariff proposals and 
the methodologies to EMRA 
for approval  Privatization of distribution is also 
on the agenda 
a Excluding private companies' production in EUAS's mining field.  
Source:  WTO Secretariat, based on informati on provided by the Turkish authorities.  WT/TPR/S/192 Trade Policy Review 
Page 88 
 
 
45. Five new laws have been enacted in the subsector during the review period: (i) Petroleum 
Market Law (No. 5015), passed by Parliament in Dece mber 2003, aims to remove state controls in the 
subsector, liberalize prices (and domestic content pur chase requirements) of oil and oil products, end 
restrictions on vertical integration, and integr ate pipeline, refining, and distribution functions; 
(ii) Liquefied Petroleum Gas (LPG) Market Law (No. 5307), adopted on 2 March 2005, arranges the 
supply, distribution, transportation, storage a nd trade of LPG; (iii) Law on the Utilization of 
Renewable Energy Sources for the Purpose of Gene rating Electrical Energy (No. 5346), which came 
into force on 18 May 2005, promotes and provides for generation of electricity from renewable 
sources48; (iv) Energy Efficiency Law (No. 5627), wh ich came into force on 2 May 2007, aims to 
encourage the efficient use of energy49; and (v) the Law on Geothermal Resources and Natural 
Mineral Waters (No. 5686), adopted  on 13 June 2007, aims to enc ourage exploration, research, 
development, and production of geot hermal and natural mineral wate r resources in an environment-
friendly manner. 
46. Licences related to exports and imports of el ectricity, LPG, and natural gas are regulated 
under Laws Nos. 4628, 5307, and 4 646, respectively, and secondary legislation enacted by the 
EMRA. A licence is also required under Law No. 5015 in order to import petroleum, solvent, and 
some petroleum products. In the electricity market , licences are issued for up to 49 years, with a 
minimum term of 10 years, for generation, transmissi on, and distribution;  natural gas market licences 
are for a minimum of 10 and a maximum of 30 years.50 Exports of electricity to countries that fulfil 
the international interconnection requirement are conducted by wholesale licensees, provided it is so 
stated in their licence. The w holesale licence fees are announced by the EMRA Board annually. For 
2007, they are: the electricity market one-time wholesale licence fee of YTL 250,000, plus an annual licence fee of YKr 0.003 per kWh sold
51; the natural gas wholesale licence fee of YTL 50,000, plus 
annual licence fee of YKr 0.0005 per kWh sold; th e natural gas import licence fee of YTL 75,000, 
plus annual licence fee of YKr 0.0005 per kWh impor ted; the natural gas export licence fee of YTL 
10,000, and the annual licence fee per kWh exported which is currently zero. 
47. High electricity losses, including theft, have c ontinued over the last few years despite some 
reductions.52 The lack of adequate investment, together w ith large energy wastage, is also becoming a 
serious problem, and may cause power shortages. Increasing the country's electricity generating 
capacity continues to be a top priority for the Gove rnment, which is turning to the private sector for 
new investment and restructuring of the subsect or. Twelve combined-cycle natural gas power 
projects, with a total capacity of almost 14,000 MW, are in operation. The operating rights of one 
thermal power plant and one hydro-power plant have  been transferred to the private sector for 
20 years and 26 years, respectively. Turkey h as announced plans to construct a nuclear power 
generation plant with a capacity of 5,000 MW by 2015.53 
                                                      
48 Under Law No. 5346, EMRA grants a renewable en ergy resource certificate (RER Certificate), 
which entitles certain facilities to benefit from the incen tives provided by the Law. Wind, solar, geothermal, 
biomass, biogas, wave, current, and tidal energy resources, together with hydraulic generation plants with a 
reservoir area of less than 15 square kilometres, are defined as renewable energy resources. Large hydro power 
plants are also considered as renewable source, but are not included in the support mechanism of the Law. 
49 The other laws pertaining to the energy market ar e: Electricity Market Law (No. 4628), published in 
the Official Gazette of 3 March 2001; and Natural Gas Market Law (No. 4646), published in the Official Gazette  
of 2 May 2001 (see WTO, 2003). 
50 The licences may be renewed provided that the licen sees meet the requirements set out in the laws 
and secondary legislation. 
51 YKr = 0.01 YTL. 
52 According to the authorities, electricity losses decreased by 17.8% in 2005 and by 15.1% in 2006. 
53 European Commission (2006). Turkey WT/TPR/S/192 
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(b) Policy by type of product 
Oil and natural gas 
48. There are two major SOEs in the oil and natural gas subsector:  BOTAS and TPAO.  BOTAS 
is to be split into three SOEs after the year 2009:  the one responsible for trading, and the one for 
storage will be privatized;  the one for transmis sion will not. The two local distributors (ESGAZ and 
BURSAGAZ), owned by BOTAS, were first corpor atized and then privatized in 2004. Under Law 
No. 4646, and as from 2003, BOTAS has been required to commence tenders to transfer its existing 
natural gas purchase and sales contracts until its imports fall to 20% of total annual consumption.54 
TÜPRAŞ, privatized on 26 January 2006, remains the only petroleum refining company, with four 
refineries and a total annual capacity of 27.6 million tonnes. There are 49 distribution companies. 
49. Oil resources are owned by the State, which grants licences for exploration and production.55  
As of July 2007, there were 39 companies in the upstream oil subsector56, and 107 petroleum and 36 
gas fields:  67 of the petroleum fields and 18 of the gas fields are owned and operated by TPAO (responsible for 70% of domestic  oil production). Recently, TPAO has also been involved in the 
storage of natural gas.
57 TPAO's offshore oil and natural gas expl orations have increased over the last 
few years, especially in the Black Sea, including  with foreign shareholders (e.g. Petrobras and 
Chevron). 
50. As in some other members of the International En ergy Agency, a stock agency is to be set up 
to maintain sufficient emergency supply of oil.58 Under Article 16 of Law No. 5015, the petroleum 
stock must be equivalent to 90 days of the previous year's net average imports. Distribution and 
refinery companies are also obliged to hold stocks equivalent to at least 20 days' supply, while big 
eligible consumers that consume 20,000 tonnes or more of liquid fuel each year, must keep a stock 
equivalent to 15 days of their c onsumption (considered as a part of the national petroleum stock).59 
The remainder of the national petr oleum stock must be retained by refining undertakings. According 
to the authorities, price caps are set by EMRA for a ll products in the subsector and retailers are free to 
set their prices accordingly. In the natural gas ma rket, all tariffs, except compressed natural gas sale 
tariffs, are approved by EMRA until there is sufficient competition.  
51. Foreign enterprises may invest in marketing and sales activities without restriction in the oil 
and natural gas subsector. Companies controlled or owned by foreign States may invest in upstream 
activities only with the permission of the Council of Ministers.60 Approval by the EMRA Board is 
required for investment in refining, tran sportation through pipelines, and storage.61 Licences on all 
                                                      
54 The first contract release tender was launched on 30 November 2005 and was approved by BOTAS 
on 30 November 2006; 4 billion cubic meters (bcm) were tendered to four different companies. One of these 
four companies obtained an import licence from EMRA in July 2007. 
55 To accelerate oil and gas exploration activities,  a draft Petroleum Law has been submitted to 
Parliament. 
56 Oil reserves are located mainly in the south-east of Turkey and Thrace. 
57 Turkey's first underground natural gas facility with a capacity of 2 bcm began operations in July 
2007. 
58 For this purpose, a draft National Petroleum Stock Agency Law is being prepared (State Planning 
Organization, 2006). 
59 An eligible consumer is a licensed consumer whose annual petroleum consumption is more than a 
threshold set by EMRA, and not less than 5,000 tonnes of fuel oil, heating fuel and diesel per year. 
60 Article 12 of Law No. 6326. 
61 Some of the main private companies operating in the subsector are TUPRAS, Petrol Ofisi, BP, Shell, 
Total, Opet, and Aygaz. WT/TPR/S/192 Trade Policy Review 
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petroleum activities are issued by EMRA.62 Currently, EMRA is processing some private refinery 
licence applications; however, the places of the refineries have not yet been determined.  
52. EMRA conducts tendering for natural gas distribu tion. A separate licence is required for each 
market activity (e.g. wholesale, distribution, import, export, storage), and, where the activity is 
conducted in more than one facility, for each facility .  Since licensing application began in November 
2002, 155 licences have been granted for natural gas activities (to August 2007). 
Coal 
53. Two main SOEs, the Turkish Lignite Enterpri ses (TKI), and Turkish Hardcoal Enterprises 
(TTK), continue to dominate the coal subsector.63 In the brown coal industry, TKI produces around  
46% of all lignite in Turkey, while TTK has a de facto  monopoly in hard coal production, processing, 
and distribution. These SOEs set the domestic pric es of hard coal and lignite, taking into account 
world prices. The Government may influence the pr ices for social and economic reasons. The prices 
do not allow TTK to recover its costs; it has been  operating at a steady loss, whereas TKI became 
profitable in 1995.  
54. Total financial transfers from the Turkish Treasury to TTK amounted to YTL 571 million in 
2006;  TKI has not received any direct subsidies since 1995.  Since 1993, the Government has aimed 
to increase productivity and reduce overstaffing in the coal subsector.  TTK and TKI are not in the 
privatization portfolio, but the Government is cons idering privatization in the medium to long term. 
So far, only the Cayirhan power plant has been privatized, through a transfer of operating rights 
(TOOR) procedure. Nonetheless, steps ha ve been taken towards privatization.64  
Electricity 
55. In 2001, TEAS, a vertically integrated, state-owned undertaking, was unbundled into three 
companies responsible for different segments of  the business: EUAS for generation, TEIAS for 
transmission, and TETAS for wholesale trade. Regi onal distribution companies, formed by the 
restructuring of the Turkish Electricity Distributi on Company (TEDAS), are in charge of distribution 
and retail sales to customers. TEDAS owns distri bution assets, while the operating rights for these 
assets were transferred to regional distribution companies.65 TEIAS is the sole transmission system 
operator and is responsible for ma rket operations. Since the mid 1990s, direct private participation has 
been allowed in all segments (ex cept transmission). With the adop tion of Law No. 4628, the regime 
for private participation shifted from a based co ncessions-system to bilateral contracts between 
parties, with a dispute settlement mechanism. 
56. Contracts remaining from the previous regime are of build-operate-transfer, transfers-of-
operating-rights, and build-operate-own types. Th ey are for 15-20 years and are subject to power 
purchase agreements on predetermined quantities and price formula, with the Treasury's guarantee.66 
The system has led to the accumulation of significan t contingent liabilities, and implicit subsidization 
of an already inefficient subsector. TETAS has ta ken over all purchasing obl igations arising from 
these contracts;  benefits from low cost generation by EUAS were used to offset the cost burden. 
                                                      
62 In 2006, EMRA issued a licence to a private comp any through a Decree of the Council of Ministers 
of 10 April 2006. 
63  Turkish brown coal has a low calorific value and a high sulphur, dust, and ash content. 
64 For example, more than 65% of the surface mining preparations in TKI are done by private firms. 
65 TEDAS supplied 73.1% of Turkey's total elect ricity consumption in 2006, and 78.2% during 
January-July 2007 (TEDAS, 2005). 
66 Installed capacity under these contracts amounts to 9,200 MW. Turkey WT/TPR/S/192 
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57. Network tariffs and tariffs for "non-eligible customers", as well as TETAS's wholesale prices 
are regulated.67  Under the Electricity Market Tariffs Re gulation and the related communiqués, tariffs 
must be cost-reflective and calculated on the basis of predetermined methodologies;  costs not directly 
related to market operations must  not be taken into account. According to the authorities, cross-
subsidies in electricity are allowed until 2010. In general, industrial consum ers subsidize households, 
and Turkey's eastern regions are subsidized by other regions. Once determined by companies, 
regulated tariffs are subject to review and appr oval by the EMRA. All tariffs are published in the 
Official Gazette  and on the EMRA's website to ensure transparency.  
58. Electricity sale prices have not increased since October 200268, despite rising import prices 
for oil and gas. The consumer price of electricity is  subject to four different levies:  (i) 1% for the 
Energy Fund Share;  (ii) 2% for Turkish Radio and Television Corporation surcharge; (iii) the 
aggregated amount of the two preceding levies is th en subject to the Municipality Consumption Tax 
(5% for households and 1% for industrial users);  and (iv) 18% VAT. 
(4) MANUFACTURING  
(i) Main features 
59. Value added Turkey's manufacturing sector in creased from US$15 billion in 1980 to around 
US$45 billion in 2004:  the sector grew at an a nnual average rate of 7.9% during 2001-04 (up from 
4.2% over 1990-00).  The capacity utilization rate in manufacturing was 80.3% on average in 2005, 
the highest over the past ten years.69 As a result, the sector accounted for 25.3% of real GNP in 2006 
(24.7% in 2002), and employs about one fifth of formal labour. Private investors have gradually 
moved into more sophisticated areas, such as cons umer electronics and the automotive industry. Some 
of the main problems facing the sector are: la ck of qualified labour a nd technology; limited 
production capability in high value- added products; and insufficien t investment in emerging 
subsectors.70 
60. Over the last few years, the export structure of the Turkish manufacturing sector has changed 
somewhat (Table IV.6). Almost one third of Turkey 's manufacturing value added is in the textiles and 
clothing, leather, food and beverages, and tob acco industries.  Manufacturing exports account for 
about 80% of total merchandise exports;  the EC and the Middle East are the main markets. Imports of 
manufactured products represent over 60% of total merchandise imports, and are concentrated in 
capital-intensive industries, such as machin ery and transport equipment and chemicals 
(Chapter I(3)(i)). 
61. Over the last few years, various state-owned manufacturing companies have been privatized 
or liquidated, including in some heavy industries (e .g. petroleum refineries, non-ferrous basic metals, 
chemicals, and iron and steel), while others are sche duled to be privatized soon, such as the tobacco 
company TEKEL (Chapter III(4)(ii)). Although FDI inflows in the manufacturing sector jumped from US$110 millions in 2002 to US$1,867 millions in 2006, the share of manufacturing in total FDI 
inflows went from 29% to 10.4% over the same period (Chapter I(3)). FDI inflows in the sector have 
                                                     
 
67 Consumers with annual consumption above a threshold set by the Board, consumers purchasing 
natural gas for power generation, and local natural gas pr oducers are considered as "e ligible customers":  they 
acquired the right to choose their suppliers.  In 2007, the threshold for eligible elelctricity consumers was reduced to 3 GWh. 
68 TEDAS (2005). 
69 Ministry of Industry and Commerce (2006). 
70 State Planning Organization (2006). WT/TPR/S/192 Trade Policy Review 
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been mostly allocated to the chemical, beverages and tobacco, electrical machinery, automotive, and 
textile industries. 
Table IV.6 
Structure of the manufacturing sector, 2002 and 2005  
(% share) 
 Production Exports 
Technology intensity a 2002 2005b 2002 2005 
High 5.1 6.3 6.2 6.0 
Mid-high 18.2 25.3 24.3 28.5 
Mid-low 26.7 27.0 22.8 26.9 
Low 50.0 41.4 46.8 38.7 
Total 100.0 100.0 100.0 100.0 
a OECD science, technology and industry score board classification is taken as reference. 
b Forecasts at 2002 prices. 
Source: State Planning Organization (2006), Ninth Development Plan 2007-13, Ankara. 
(ii) Policy developments 
62. Turkey's main long-term objective in the manufacturing sector is to boost its competitiveness 
and productivity by, inter alia , reducing direct state intervention and privatizing SEEs; investing in 
technological development and innovation71; and supporting small and medium-sized enterprises 
(SMEs).72 The Ministry of Industry and Trade (MIT), through the Public Agency for the Development 
of SMEs (KOSGEB), provides various services and support programmes (Chapter III(3)(iv)).  
Investment incentives are also granted under th e Investment Encouragement Programme (IEP) 
(Chapter III(4)(i)). 
63. The manufacturing sector is the main beneficiary of state aid to domestic producers.  In 2006, 
the sector was granted 52% of total investment incentive certificates (against 65% in 2002):  the 
majority were for textiles and clot hing, followed by food and beverages.73 The sector also receives a 
large part of duty concessions for exports as well as  export credits and guarantees (Chapter III(3)(iv)). 
64. MFN customs tariffs on manufactured goods (Major Division 3 of ISIC Revision 2) average 
10.9%;  the most tariff protected industry is food manufacturing (Chart IV.1).  Specific tariffs are 
levied on alcoholic beverages; mixed duties apply to, inter alia , carpets, glass and glassware products, 
and watches; and variable duties to certain manufactured goods, including sugar confectionary, 
chocolate, malt, and prepared potatoes (Chapter III(2)(iii)(b)). Subject to various incentive schemes 
(duty and tax concessions in particul ar), the tariff structure, with mixed escalation, does not encourage 
investment in certain industries for semi-finished goods, such as in chemical and plastic industries 
where there is negative escalation (Chapter III(2)(iii)(b)). 
65. MFN tariff quotas for television tubes were opene d in January 2007, but were eliminated on 
30 June 2007 (Chapter III(2)(iv)).  Import licensi ng applies to some manufactured products, such as 
motor vehicles, transmission apparatus, and chem icals. Under the CUD, Turkey has introduced quotas 
on certain textiles and clothing products (section (iii)(a) below).  Turkey's anti-dumping measures 
                                                      
71 Technological development and innovation are among the most important components of the Turkish 
manufacturing policy. A strategic action plan has been set up to promote outward-oriented, technology-
intensive, and high-value-added production (Ministry of Industry and Trade, 2006). 
72 SEEs account for around 5% of Turkey's GDP, and about 15% of the value added in the 
manufacturing sector (European Commission, 2006). 
73 Textiles and clothing, and food and beverages industries are dominated by SMEs:  as a result, a 
relatively high number of incentive cer tificates are granted to these two su bsectors despite their low investment 
costs. Turkey WT/TPR/S/192 
 Page 93 
 
 
have mostly affected textile and clothing, base metals, plastics and rubber, and other manufactures 
such as lighters and pencils (Chapter III(2)(v)(a)).  
0102030405060708090100110
311
312313314321322
323
324331332
341
342351
352
353354355356361362
369
371
372381382383384
385
390410Chart IV.1
Tariff protection in the industrial sector, 2007
Percent
WTO Secretariat calculations, based on data provided by the Turkish authorities.AverageMaximu m
Minimu m
International Standard Industrial Classification, Revision 2
Source :311
312313
314
321
322
323
324
331332
341
342
351352
353Description
Food production
Other food products and animal feeds
Beverages
Tobacco manufacturing
TextilesManufacture of wearing apparel, except footwear
Leather products, except footwear and wearing 
apparel
Footwear, except vulcanized rubber or plastic footwear
Wood and wood products, except furnitureManufacture of furniture and fixtures, except primarily of 
metal
Paper and paper productsPrinting, publishing and allied industries
Industrial chemicals
Other chemicals, including pharmaceutical
Petroleum refineriesDescription
Manufacture of miscellaneous petroleum and coalproducts
Manufacture of rubber products n.e.s.
Manufacture of plastic products n.e.s.
Pottery, china and earthenware
Manufacture of glass and glass productsOther non-metallic mineral products
Iron and steel basic industries
Non-ferrous metal basic industries
Fabricated metal products, except machinery and 
equipmentNon-electrical machinery including computers
Electrical machinery apparatus, appliances and 
suppliesTransport equipment
Professional and scientific equipment
Other manufacturing industries
Electrical energy354
355
356
361
362369
371
372
381
382
383
384
385
390
410225%300
200
100
 
 WT/TPR/S/192 Trade Policy Review 
Page 94 
 
 
(iii) Selected industries 
(a) Textiles and apparel 
66. Although annual average growth in the textil es and apparel subsector during 2000-05 (1%) 
was significantly lower than the 5.4% register ed by the manufacturing sector over the same period, 
the subsector still constitutes Turkey's largest i ndustry. It accounts for 4.2% of GDP, 13.3% of 
manufacturing output, and employs about 22% of workers in manufacturing.  A key factor behind the 
industry's successful performance is Turkey's ampl e supply of home-grown cotton: Turkey is the 
world's sixth largest producer of raw cotton.  Other factors are the top quality of the raw cotton crops, low wage costs, skilled labour force, and the stro ng integration between the textiles and apparel 
industries. The subsector is dominated by the private sector, particularly SMEs. The MFN tariffs on textiles, wearing apparel, and leather produc ts average 7.8%, with rates ranging up to 17%. 
67. Textiles and clothing products contributed 22.7%  to Turkey's total merchandise exports in 
2006 (against 34.4% in 2002), and the composition of exports has continued to shift towards higher-
value-added finished products and ready-ma de clothing.  In 2004, Turkey ranked 4
th among the 
largest apparel exporters in the world with a share of 4.3%, and 9th among textile exporters with a 
world share of 3.3%.74 The EC has traditionally been Turkey's largest foreign market for both textiles 
and apparel, followed by the United States.75  Over the last five years, about 56% of new spinning 
investments in the Turkish textile and apparel indus try went to the Southeast Anatolia Project (GAP) 
Region. GAP is the most comprehensive regional de velopment project ever attempted in Turkey; it 
aims, inter alia , to more than double raw cotton production once the project becomes operational.76 
68. The textiles, clothing, and leather industries do not receive any specific incentives. However, 
these industries are the second most important bene ficiaries of the incentives provided under IEP, 
such as exemption from customs duties and fund levies on imported machinery and equipment; VAT 
exemption on imported and locally purchased machin ery and equipment; and interest rate support in 
favour of investment projects (Chapter III(2)(iii)(c)).77 In 2006,  investment in the textiles and 
clothing industries accounted for 11.6% of the inv estment incentive certifi cates, down from 26.1% in 
2002. Credit and guarantee programmes by Turk Eximbank are also among the more important 
incentives provided to textile and a pparel investors (Chapter III(4)(i)). 
69. The performance of the textiles and clothing industries has suffered from volatile domestic 
prices of raw cotton in the past few years.78 To counter this problem, th e private sector is working 
with the Government to establish a futures market  in an attempt to stabilize these prices.  Another 
                                                      
74 Ministry of Industry and Commerce (2006). 
75 In 2005, Turkey was the EC's second largest supplier of textile and apparel products, with shares of 
13.1% and 15.4%, respectively. Turkey was also the 11th and 19th supplier of textiles and apparel to the 
United States the same year.  
76 GAP covers the provinces of Adiyaman, Batman , Diyarbakir, Gaziantep, Kilis, Mardin, Siirt, 
Sanliurfa, and Sirnak. The cost of GAP is estimated at about US$32 billion and consists of developing and 
managing land and water resources for irrigation and for industrial and urban use; improving land use through 
crop design and agricultural practices; further developing agri-industries and other industries, mainly by relying on locally available resources; and improving social, education, and employment conditions to attract qualified 
manpower to the region. 
77 The compensation on the interest rate is 5 percenta ge points for YTL credits, and 2 percentage points 
for foreign currency credits. 
78 Turkey is a net importer of raw cotton, with annual imports of about 50,000 tonnes and local 
production of 90,000 tonnes. During the last few years,  world raw cotton prices have been very volatile, which 
has affected domestic cotton prices, and consequently th e production cost of the textiles and clothing industry. Turkey WT/TPR/S/192 
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problem for these industries, and many others in Tu rkey, is the frequent power cuts, as well as high 
prices for electricity by international comparison (section 3(iii)(b) above). 
70. Under the WTO Agreement on Textiles and Clothing (ATC), Turkey notified that, as from 
1 January 2005, it would have integrated all pr oducts not previously integrated into GATT 1994.79  
Turkey had retained its right to use the transiti onal safeguard mechanism under the provisions of the 
ATC (Article 6), but did not make use of it.80 Turkey has been involved in the WTO dispute 
settlement mechanism regarding its restrictions on imports of textile and clothing products from 
Hong, Kong, China; India; and Thailand (Chapter II(3)(i)). 
71. Turkey introduced import quotas on certain textil es and clothing products under the CUD.  It 
applies quotas under the double checking system on 34 categories of product from Belarus with which 
an agreement has been reached; and under the single checking system on goods from countries with 
which an agreement has not been reached, i.e. the Democratic People's Republic of Korea (48 
categories of products), Montenegro (12 categories), and Uzbekistan (2 categories). Moreover, Turkey 
has quotas on 44 categories of textiles and apparel produc ts from China , for example, shirts, jerseys, 
T-shirts, and gloves.81 Turkey does not auction its quotas; aucti ons would have transferred part of the 
economic "rent" gained by the quota holders to the Government as public revenues.  Instead, the 
largest parts of the quotas are distributed among firms that exported the same category in the previous year;  the remainder is allocated to new exporters of the category of goods.
82 
(b) Iron and steel 
72. The iron and steel industry has been the backbone of industrialization in Turkey, which is the 
world's 11th largest crude steel producer (about 2% of world production in 2006).83 The industry 
produced 23.3 million tonnes of crude steel in 2006 (up from 16.5 million tonnes in 2002); its estimated capacity is about 27.7 million tonnes (22 million tonnes in 2002). Crude steel production is 
divided into long steel (84.5% of total production in 2006), flat steel (13.5%), and special steel 
products (2%). The industry is now operated entirely by the private sector.
84  Tariff rates on iron and 
steel products average 4.6%, with maximum rates of 23.4%. 
73. Exports of iron and steel accounted for 8.5% of Turkey's total merchandise exports in 2006;  
the EC and Middle East are the main markets.  Turkey's finished steel consumption rose from 
8.7 million tonnes in 2001 to 20.8 million tonnes in 2006, mainly due to a construction boom during 
the period. Turkey imports flat steel products  (about US$4 billion in 2006), and special steel 
(US$1.3 billion), and is one of the biggest scrap iron importers (US$3.8 billio n in 2006). Turkey is 
                                                      
79 WTO document G/TMB/N/480 of 5 July 2004. The subsector was integrated into GATT 1994 in 
four stages, on 1 January 1995, 1 January 1998, 1 January 2002, and 1 January 2005. In the WTO Council for 
Trade in Goods, Turkey has requeste d a work programme to examine the effects of the quota phase-out on 
production, investment, and trade in the textiles and clothing subsector, arguing that the programme should 
provide policy options, technical advice, and practical  assistance to small-scale producers in need of 
readjustment strategies. 
80 WTO document G/TMB/N/18 of 6 March 1995. 
81 Communiqué No. 2006/6, published in the Official Gazette  No. 26386 of 24 December 2006. These 
quotas are applied under paragraph 242 of the Report of the Working Party on the Accession of China to the WTO, which sets a safeguard mechanism for imports of textiles and apparel products originating in China. 
WTO document WT/ACC/CHN/49, 1 October 2001. 
82 Turkey's quota distribution system is described in detail in WTO (1998). 
83 Ministry of Industry and Commerce (2006). 
84 In 2005, Oyak acquired 49.29% of Erdemir's shares through its subsidiary Ataer Holding, for 
US$2.96 billion. In 2002, Erdemir had bought Isdemir, one of Turkey's long-iron producers, on the condition that Isdemir would start producing flat products within five years.   WT/TPR/S/192 Trade Policy Review 
Page 96 
 
 
trying to balance the long/flat ratio by restructuring existing plants to produce more flat steel products.  
It is estimated that about US$4 billion of investme nt is necessary for the restructuring of the iron and 
steel industry. 
74. With the expiry of the European Coal and Steel Communities (ECSC) agreement85, the five-
year period to grant subsidies for the restructuring or conversion of the Turkish steel subsector ended 
in July 2001.86 However, Turkey asked the EC for a five y ear extension to allow its steel companies to 
benefit from state aid for restructuring purpo ses (investments related to the conversion and 
modernization of existing facilities, which will not result in capacity increase). On 31 August 2006, Turkey sent its National Restructuring Programme for the steel industry to the EC;  the Programme is 
being analysed by the EC Commission. Nonetheless, some Turkish companies are already 
modernizing their facilities according to th e framework defined in the Programme.
87 
75. The iron and steel industries do not enjoy any specific incentives. Also, under the ECSC 
agreement, investment incentives are not availabl e for the production of iron and steel products. 
However, the subsector accounts for a small shar e of investment incentives issued under the IEP 
(Chapter III(4)(i)). Iron and steel manufactures account ed for 9% of Türk Eximbank's credits in 2006 
(against 10% in 2002). 
(c) Automotive 
76. The motor vehicle industry in Turkey consists  of 15 assemblers and manufactures (some are 
foreign owned or joint ventures) , generally operating under licences,  and employing more than 40,000 
people directly.  In addition, there are about 700 automotive suppliers, employing around 150,000 
workers.88  In the commercial vehicles industry, 12 co mpanies operate under foreign licence, with a 
production capacity of over 400,000 units (2006);  the passenger car industry is much larger and 
expanding, with a current production capacity of 7 96,000 units.  Renault (in a joint-venture with 
Oyak), Toyota, and Fiat (in a joint-venture with Koc Com) accounted for about 89% of car output in 
2006 (down from 93% in 2002), and dominated the market for imported licensed parts.89  Relatively 
low labour costs and duty-free access to the EC automotive market are some of the main advantages 
for foreign firms investing in Turkey's automotiv e component subsector.  Nevertheless, as with the 
rest of the economy, FDI in the indu stry remains low, albeit increasing. 
77. Automotive (motor vehicles) production in Turkey increased from 347,000 units in 2002 to 
around 988,000 in 20 06.  Total automotive exports have also been rising steadily; they reached 
US$11.7 billion in 2005 (from US$4.3 billion in  2002), to become Turkey's second largest 
manufacturing export.  The share of components in total automotive exports was 31.6% in 2005 (47.8% in 2002). Over 70% of automotive exports go to the EC market, mainly Germany, Italy, and the United Kingdom. 
78. Tariffs on motor vehicles average 6.4%, with a maximum rate of 22%.  Other border 
measures include an import licensing system (Chapter  III(2)(iv)).  As at the time of the previous 
Review of Turkey, most motor vehicles (six items  at the four-digit level) may only be imported 
                                                     
 
85 The Treaty establishing the ECSC entered into force on 23 July 1952 and expired on 23 July 2002.  
86 Articles 7 and 8 of the Agreement between Turkey and the ECSC. 
87 For example, Erdemir has already started the conversion programme from long to flat products at its 
Isdemir plant (Ministry of Industry and Commerce, 2006). 
88 The Association of Automotive Parts and Components Manufacturers (TAYSAD), established in 
1978, is the representative of such industries;  it has 189 members, mostly large size companies. 
89 Ministry of Industry and Commerce (2006). Turkey WT/TPR/S/192 
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against a pro forma invoice certified by the MIT.90  According to the authorities, pro forma invoice 
controls aim to assure the conformity of imported vehicles with EC Directives. 
79. In addition to customs duties, vehicles sold on the domestic market, either through importers 
or domestic producers, are subject to the highest VAT rate of 18%. The motor vehicle purchasing tax 
(MVPT) was abolishedon 1 August 2002, together  with the environmental fund tax (25% of the 
MVPT).91 
80. Passenger car manufacturers are not granted an y specific incentives; however, as for all 
investors, they have access to incentives under th e GIEP (Chapter III(4)(i)), and the export incentive 
programme (Chapter III(3)(v)). 
(5) SERVICES  
(i) Main features 
81. Services is a key sector of Turkey's economy,  in terms of contribution to both GNP and 
foreign exchange earning (Chapter I(3)(i)).  Since its  previous Review, Turkey has taken measures to 
tackle some of the structural problems in some  services subsectors: the monopoly of Turk Telekom 
(TT) over fixed line, domestic long-distance and in ternational telephony ended in 2004, and the scope 
of the liberalization and privatization pr ocess has been extended in some subsectors 
(Chapter III(4)(ii)). Nevertheless, various SOEs con tinue to dominate services activities, and in some 
cases still operate under monopoly, or hold exclusive rights in certain branches of the services sector, 
for example, Turkish Postal Administration, and Turkish State Railways.  
82. Under the General Agreement on Trade in Serv ices (GATS), Turkey scheduled commitments 
in several service categories, and accepted the GATS Fourth and Fifth Protocols on basic 
telecommunications and financial services, respectively (Table AIV.2).92 Turkey maintains MFN 
exemptions under Article II of the GATS, reserving th e right to offer more favourable treatment to 
some WTO Members in some specific areas of business, communication, financial, and transport services (Table AIV.3).  Turkey has also tabled  its initial conditional offer in the ongoing services 
negotiations.
93 
83. Services are not covered by the customs uni on agreement between Turkey and the EC. 
Nonetheless, under the pre-accession framework for Turkey, negotiations have started on 
liberalization of services and openi ng up public procurement markets, in line with the Turkey-EC 
Association Council Decision of 11 April 2000. 
(ii) Financial services 
(a) Banking 
84. The banking subsector employs 150,793 worker s, and has total assets of US$353.6 billion 
(December 2006), up from US$303 billion at end 2005.   At end 2006, there were 50 banks operating 
in Turkey: 33  commercial, 13 development and inv estment banks, and four pa rticipation banks. The 
number has decreased over the last few years mainly due to mergers, and revoked banking licences. In 
terms of ownership, 21 were private, 21 foreign, and the remainder either state-owned or under the 
                                                      
90 See WTO (1998), Table IV.14. 
91 See WTO (2003). 
92 WTO documents WT/LET/199 of 19 November 1997, and WT/LET/288 of 18 February 1999. 
93 WTO document TN/S/O/TUR/Rev.1 of 29 September 2005. WT/TPR/S/192 Trade Policy Review 
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Savings Deposit Insurance Fund (SDIF). Halk Bank and Ziraat are the two largest state banks; 
privatization of Halk Bank has started94, while the strategy for Ziraat Bank is to be prepared drawing 
on the experience with Halk Bank (Chapter III(4)(ii)). 
85. All banks operating in Turkey are universal banks, allowed to carry out almost all types of 
financial activities.  However, only investment and development banks can provide underwriting 
services.  Banks are allowed to engage in equity intermediation activities through their subsidiaries.  
They do not face any effective competition from ot her financial institutions; most insurance and 
leasing companies are affiliated to and/or owned by  banks.  Foreign and domestic banks are subject to 
the same rules in terms of establishment, operation, and supervision. 
86. Following its 2000-01 financial crisis, Turkey put into effect the Banking Sector 
Restructuring Programme (BSRP) to promote an e fficient, globally compe titive, and sound banking 
sector, free of distortions.95 The BSRP is based on four pillars: (i) restructuring of state banks; (ii) 
prompt restructuring of the SDIF banks; (iii) stre ngthening of private banks; and (iv) strengthening of 
the regulatory and supervisory framework by, inter alia , creating the Banking Regulation and 
Supervision Authority (BRSA). The BRSA is the so le authority regulating banking and supervising 
all banks (as well as the SDIF) in Turkey. To build on progress in bank supervision, the BRSA has 
recently introduced secondary legislation on system s audit principles; made some organizational 
changes, including the merger of onsite and offsite  supervision; and published its Strategic Plan  
2006-09 setting out broad strategic goals. Nonetheless, further improvements seem necessary. For example, the exclusion of non-financial group companies from the banks' consolidated accounts 
undermines the effective supervision of banks that form part of mixed-holding groups.
96 
87. In 1999, the SDIF was given the authority and responsibility to restructure banks in financial 
difficulties, to facilitate their sale, in full or in part, or to liquidate them.  The administration and the representation of SDIF were first enforced by the CBRT and then by the BRSA.  By end 2007, no banks will remain under the administration of the SDIF.
97 The BSRP also aims to promote a healthier 
financial situation among private banks through minimum capital requirements. 
88. A new Banking Law (No. 5411) entered into fo rce on 1 November 2005, with the aim of 
harmonizing Turkish legislation with EC directiv es and international standards. It reduced the 
maximum credit limit for parent undertakings to EC standards; introduced risk-based supervision; put 
an end to the sworn bank auditors' monopoly in onsite supervision; and established a financial 
services commission to improve cooperation among supervisory authorities.98 
89. Under the Law, any bank in Turkey must be in corporated as a joint-stock company and have a 
minimum capital, paid in cash and fr ee of any collusion, of YTL 30 million.99  Foreign banks can 
operate in Turkey by establishing branches, subsidia ries or joint-ventures with banks established or 
about to be established.  The establishment of the first branch of a foreign bank requires BRSA 
                                                      
94 Treasury shares at Halk Bank were transferred to  the privatization portfo lio, and an initial public 
offering has been held for 24.98% of the shares. 
95 According to some estimates, the total cost to the Government of restructuring the banking system 
since the 2000-01 crisis was about US$47 billion (32% of GDP), of which US$6 billion was the cost of 
compensating depositors after the 2003 failure of Imar Bank, and an estimated US$2 billion for the 
recapitalization of Pamukbank (OECD, 2006). 
96 European Commission (2006). 
97 IMF (2006). 
98 European Commission (2006). 
99 Principles and procedures for the establishment of banks in Turkey are set out in the Banks Act 
No. 4389 and relevant regulations issued by the BRSA. Turkey WT/TPR/S/192 
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approval. Under Law No. 5411, establishment of a bank to be engaged exclusively in offshore 
banking, is allowed by Board decision.100 Cross-border supply of banking services is not legally 
restricted.  According to the authorities, regulati ons on surveillance of on- and off-balance-sheet risks 
(including credit risk of banks, measurement of ca pital adequacy, and internal control) and risk 
management systems are, to a great extent , in compliance with the Basel principles. 
(b) Securities 90. Inaugurated in 1986, the Istanbul Stock Exchange  (ISE) is Turkey's sole securities market, it 
was established to provide trading in equities, bonds and bills, revenue-sha ring certificates, private-
sector bonds, real-estate certificates, and foreign secur ities. The ISE, a public entity, consists of 104 
brokerage houses and 40 banks.
101 Margin trading, short-selling, securities lending and borrowing 
have been regulated by the Capita l Market Board (CMB).  At the end of July 2007, the ISE comprised 
322 companies (286 at end August of 2003), 100 of  which are included in the ISE National-100 
Index.102 Total trading in the ISE equities market rose to US$229.6 billion in 2006, up from 
US$70.8 billion in 2002. The bonds and bills market  provides a trading environment for government 
bonds, treasury bills, bonds issued by the Privatiza tion Administration, private sector bonds, and repo 
transactions. The "International Bonds Market", with in the "ISE Foreign Securities Market", aims to 
provide a transparent and secure trading environmen t for listed Turkish Sovereign Eurobonds;  it has 
been active since 16 April 2007. 
91. The legal framework for the capital markets is  laid out in the Capital Market Law of 
1981 (amended in December 1999).  The CMB, established in 1982, has the authority to regulate 
primary and secondary markets in securities, su pervise securities intermediaries and collective 
investment institutions, and register all public o fferings of securities (except government securities).  
In addition, it has authority to regulate the issuing process of private-sector capital-market 
instruments.  The Turkish stock and bond markets ar e open to foreign investors without restriction on 
the repatriation of capital and profits. 
92. The ISE Settlement and Custody Bank (Takasba nk), an investment bank owned by the ISE 
and its members, handles the settlement of equities,  bonds, and overnight transactions carried out in 
the ISE, as well as other related services. The Central Registry Agency (CRA), established as a private entity in 2001 under the Capital Market La w, is the only central depository for all capital 
market instruments in Turkey. CRA took over the custody function for stocks, on 28 November 2005, from Takasbank. 
93. In February 2005, the Turkish Derivatives Exchange (Turkdex) started operations in İzmir. 
Turkdex is the sole exchange in Turkey for trading in derivatives instruments. The first private sector 
corporate bond, since 1999, was issued in July 2006. 
                                                     
 
100 This also applies to the opening of a branch in Turkey by offshore banks established abroad, and 
their fields of activity and financial reporting and aud it procedures, as well as details regarding the temporary 
suspension or revocation of their activities. 
101 Banks cannot operate in the equities market. 
102 In addition, second national markets (with a lo wer listing requirement), the new economy market 
(for new technology companies), and the watch-list compan ies market are available to trading companies that do 
not fulfil the listing requirements and lack the necessary  qualifications for trading in the national market. 
Moreover, since 2002, in addition to the listed companies, temporarily de-listed companies can be traded off (exchanged in a separate market). WT/TPR/S/192 Trade Policy Review 
Page 100 
 
 
(c) Insurance 
94. The Turkish insurance market consists of re-i nsurance companies, insurance companies, and 
insurance intermediaries (such as brokers and agen cies).  At end 2006, there were 46 insurance 
companies (55 in 2002);  35 operate in non-life, ten in life and pension, and and one in pension only 
There is also one re-insurance company, Milli Reasurans T.A.S. (commonly referred to as Milli-Re), 
which is a private company owned by Turkiye Is Bank A.S.103 The State does not have majority 
shares in any insurance or reinsu rance company. At the end of 2006, 29 insurance companies had 
foreign capital, either directly or indirectly; foreign companies accounted for 32.3% of total premiums. Total assets of insurance and re-insurance companies were US$12.898 million. 
95. The insurance subsector in Turkey is supervi sed and regulated by the Undersecretariat of 
Treasury, which reports to the Ministry of State in charge of economic policies.  The General 
Directorate of Insurance is empowered to issue re gulations regarding the insurance subsector, and to 
take measures to protect the insured.  The Insuran ce Supervisory Board is entr usted with supervising, 
examining, and investigating the subsector.  The Insurance Law No. 5684 governs the supervision of 
insurance and reinsurance compani es.  All insurance and reinsurance companies, whether foreign or 
Turkish, are subject to the same legislation. 
96. Insurance or reinsurance companies may be estab lished in Turkey only in the form of joint-
stock companies.  However, insurance companies may also be established as mutual companies.  
Foreign insurance and reinsuran ce companies may also operate in  Turkey by opening branches, 
provided they have not been prohibited in thei r country of operation. Following establishment, 
insurance and reinsurance companies must obtai n a licence from the Undersecretariat; a separate 
licence is issued for each branch.  Subject to specified exceptions, cross-border supply of non-life 
insurance services is prohibited.
104 
97. Insurance companies may engage only in insura nce business and must perform either life or 
non-life insurance business, but not both.105  Export credit insurance is provided by insurance 
companies and the Turk Eximbank; some private insurance companies cover both short-term export 
credit and domestic credit risk. Tontines (under which the last survivor of a group of persons acquires 
the capital invested) are prohibited in Turkey . The minimum paid-up capital requirement for 
insurance and re-insurance companies is YTL 5 millio n. The minimum solvency margin for insurance 
companies is set in terms of premium production an d claims figures; the margin varies in life and non-
life insurance branches.  Compulsory reserves must  be invested locally, except for premiums earned 
abroad in life insurance, as well as statutory and free reserves, which can be invested overseas. There 
are no restrictions on portfolio composition and risk exposure of insurance companies. 
98. Compulsory earthquake insurance was launched through Decree Law No. 587 on 
27 December 1999 and the creation of the Turkish Ca tastrophe Insurance Pool (TCIP). The TCIP is 
                                                      
103 Milli-Re was set up in 1929 to ensure that local  companies could obtain reinsurance on reasonable 
terms, and to retain reinsurance premiums in the coun try. The requirement for mandatory cession of domestic 
insurance business to Milli-Re was terminated on 1 Janu ary 2002, although Milli-Re retained a right of refusal 
on any business to be offered to foreign insurers  (about US$40 million annually) until the end of 2006. 
104 The exceptions are hull in surance of aircraft, helicopters, and ships purchased through a foreign loan 
or leased via a financial leasing contract from abroad, provided that the insurance period is limited to the term of 
the credit or leasing contract; marine liability insurance; transportation insurance for goods imports and exports; 
and individual accident, sickness, and motor ve hicle insurance during any travel abroad. 
 105 Companies previously licensed to operate both in life and non-life branches were required to 
transfer their life insurance portfolio  no later than 31 December 1997, failing which they would not be permitted 
to issue life insurance policies.  Turkey WT/TPR/S/192 
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the only line of insurance business carried out by the public sector and its main aim is to mitigate the 
risk being borne by public funds.106 The programme is an example of  public-private partnership as the 
insurance coverage is provided by the TCIP (a pu blic legal entity), wher eas insurance policies are 
distributed through participating insurance compani es. The TCIP has the capacity to support insured 
losses of up to €1 billion:  if aggregate losses exceed that level, the excess could fall on the 
Government and policyholders. 
99. Premiums for compulsory insurance (e.g. third- party motor liability insurance, and earthquake 
insurance), are set by the Ministry of State. However, for third-party motor insurance, the 
Undersecretariat sets a band in which companies ar e free to establish their own premiums (since 
August 2007). Moreover, for some  compulsory insurances, there are minimum premiums, also 
determined by the Ministry of State. Premiums fo r the other branches of insurance are set by the 
insurance companies. 
(iii) Telecommunications and postal services 
100. Since the last TPR of Turkey, its telecommunica tions network has conti nued to grow, notably 
the mobile market where the number of cellu lar mobile subscribers has more than doubled 
(Table IV.7).  Similarly, the number of intern et users increased from 4.3 million in 2002 to 12.3 
million in 2006. All Turkey's villages are connected to  the telephone network; at end 2006, there were 
18.8 million fixed lines in service, i.e. a teledensity  of 25.39 (down from 26.88 in 2002). According to 
the authorities, the number of fixed telephone  subscribers has reached saturation point.107 Penetration 
of telephone lines remains below the EC av erage for both fixed and mobile telephony.108  
Table IV.7 
Selected telecommunica tion indicators, 2002-06 
 2002 2003 2004 2005 2006 
Main telephone lines ('000) 18,890 18,917 19,125 18,978 18,832 
Main lines per 100 inhabitants 26.88 26.55 26.48 25.93 25.39 
Cellular mobile subscribers ('000) 23,323 27,888 34,708 43,609 52,663 
Cellular subscribers per 100 inhabitants 33.19 39.14 48.06 59.58 71.00 
Internet users ('000) 4,300 6,000 10,220 11,204 12,283 
Internet users per 100 inhabitants 6.12 8.42 14.15 15.31 16.56 
Internet hosts 154,585 359,188 474,129 474,129 .. 
Internet hosts per 10,000 inhabitants 22.00 50.41 65.65 65.65 .. 
ADSL subscribers ('000) 2.9 56.6 452.4 1,539.5 .. 
Personal computers ('000) 3,000 3,333 3,703 3,703 .. 
Personal computers per 100 inhabitants 4.27 4.68 5.13 5.13 .. 
.. Not available. 
Source:  ITU (2007), Telecommunication Indicators , Geneva, and information provided by the Turkish authorities.  
101. The creation of the Telecommunication Authorit y (TA) in August 2000 put an end to the 
fragmented regulatory structure.109  Through Laws Nos. 4502 and 4673, the TA has the power to grant 
licences and to regulate prices for all telecommunicati ons services.  Any company planning to provide 
telecommunications services or to build telecommuni cations infrastructure in Turkey has to obtain a 
                                                      
106 It was launched after the 1999 earthquake in Ma rmara, after which it was found that only a small 
fraction of the economic loss was insured, and hence the repair burden fell mainly on the Government. 
107 Undersecretariat of State Planning Organization (2006). 
108 European Commission (2006). 
109 WTO (2003). WT/TPR/S/192 Trade Policy Review 
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licence or authorization from the TA (Table IV.8).110 Minimum licensing fees for telecommunication 
services (including GMPCS, internet service provision, premium rate services, satellite platform services, satellite telecommunication services) are set by the TA, subject to approval by the Council of Ministers.
111  
Table IV.8 
Licences granted, 2004-06 
 2004 2005 2006 
Authorization agreements 1 2 2 
Concession agreements 3 4 4 
Satellite platform operators 3 1 2 
Satellite telecommunications services operators 23 24 20 
Operators providing mobile telephony  services by satellite 5 5 4 
Operators performing data transmi ssion over terrestrial lines 14 20 20 
Internet service providers 91 74 72 
Operators providing long distan ce telephony services 43 40 35 
Operators providing common usage radio services 9 48 48 
Infrastructure service operators 0 0 7 
Cable platform service operators 0 0 5 
Total 192 218 219 
Source:  Telecommunications Authority (undated), 2005 Annual Activity Report , Ankara, and information provided by the 
 Turkish authorities. 
102. Since its last TPR, has continued the liber alization process of its telecommunications 
subsector. The monopoly of TT over fixed line112, domestic long-distance, and international telephony 
ended on 31 December 2003.113 In November 2005, the government sold 55% of its TT's shares to 
Ojer Telekomünikasyon AS, a consortium consisting of Saudi Oger and Telecom Italia (Chapter 
III(4)(ii)).114 As of 1 July 2005, when new regulations on local network sharing came into effect, TT 
ceased to be the only supplier of ADSL services.  
103. Law No. 5369 on universal services in electronic communication, which became effective in 
2005, defines the scope of universal services for: (i) fixed telephone services; (ii) public payphones; 
(iii) directory enquiry services, printed or electronics; (iv) emergency call services; (v) basic internet services; (vi) transportation services to regions wh ere they can only be made by navigation, and 
communication services related to emergency and safety in the sea; (vii) service targeting promotion of information technologies, including computer training; and (viii) digital broadcasting services 
(DVB-T, DVB-S, DVB-C), using different broadcast environments, over terrestrial digital 
transmitters covering all residential areas in Tu rkey. Universal service providers are designated 
                                                     
 
110 Previously, licences were issued by the Ministry of Transportation. 
111 For details on licensing and the related fees, see the Telecommunication Authority online 
information.  Viewed at: http://www.tk.gov.tr. 
112 TT operates the world's 13th largest installed fixed-line in frastructure. The average daily 
malfunctions reported in 2005 was 1.15 per thousand (0.5 per thousand in urban areas and 1.15 per thousand in rural areas) (Türk Telekom, 2006). 
113 According to its commitments under the WTO 19 97 Agreement on Teleco mmunications Services, 
Turkey was due to abolish Turk Telekom's m onopoly on basic services by 31 December 2005. 
114 Council of Ministers Resolution No. 2005/9146 (Türk Telekom, 2006). Turkey WT/TPR/S/192 
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among the operators via a tendering method.115 Turksat and TT are the current universal service 
providers. The Ministry of Transport is res ponsible for the application of this law. 
104. In accordance with Directives Nos. 97/33/EC an d 2002/21/EC, an "Ordinance regarding the 
Designation of Operators with significant Market Po wer" was issued on 7 January 2007, to ensure the 
application of the Tariff Ordinance, and of th e Access and Interconnection Ordinance, published in 
the Official Gazette  of 14 June 2007.116  The Ordinance provides for the sharing, by all operators, of 
infrastructure owned by operators having significant market power (SMP), on a cost, non-discriminatory, and transparent basis.  TA set up a detailed dispute settlement  procedure and is to 
publish standard interconnection charges based on log -run incremental costs.  If parties fail to reach 
an agreement, even with the TA's mediation, the TA sets terms, conditions, and prices for access, 
including interconnection.  All SMP operators are re quired to prepare and send their reference offers 
on access to the TA for approval. Access (includi ng interconnection) agreements must be made 
available to the public. In 2002, the TA introduced  price-cap mechanisms in the determination of 
charges for services provided by TT.
117 The TA is required to ensure that cross-subsidization between 
different services are avoided. It signed a Protocol with the Co mpetition Authority on 
16 September 2002 as a further step towa rds an improved regulatory framework.118 The TA is also 
enhancing public participation in the regul atory process through the establishment of a 
Telecommunication Policy Council comprising operators, consumers, and experts. 
105. A revenue sharing arrangement between tw o GSM services operators, Turkcell and Telsim119, 
and TT, was converted into a 25-year licence in April 1998;  both companies paid US$500 million.  In 
2001, two new GSM operators were licensed: Aria, partly owned by Telecom Italia Mobile, and TT's 
Aycell. In 2004, these two operators merged into Avea.120 In addition to GSM services, the TA has 
been authorizing capital firms to provide some te lecommunication services, such as internet service, 
satellite platform services, and sat ellite telecommunication services.  
106. Turkcell, the leader of the Turkish GSM market, lowered its intra-network call rates by a third 
after the creation of Aria, and all its call rates by half since Avea entered the market. Currently, 
customers in Turkey pay relatively low tariffs, by international standards.121 
107. According to the Board of the TA, Turkcell, Telsim, and Avea have significant market power 
in the mobile call termination market;  Turkcell al so has it in the mobile access and call origination 
markets.122 As a result, an Ordinance on Quality of Se rvice in Telecommunications was published in 
                                                      
115Any operator may be designated to provide univer sal services, within th e electronic communication 
sector, at the regional or national  levels. 
116 Only tariffs set by legal or physical monopolies, or operators in a dominant position or having 
significant market power in a relevant product or geographical market are regulated. 
117 Decision No. 246 of 11 May 2005. 
118 The Protocol is currently not in force. Nevertheless, under Article 7 of Law No. 2813, the 
Competition Authority has to seek the views of the TA in its investigations concerning the subsector, although 
these views are not binding.  
119 In 2005,Telsim was sold to Vodafone for US$4.5 billion. 
120 AVEA is a GSM service provider currently owned by TT (81%), and Türkiye I ş Bankasi (19%).  At 
end 2005, AVEA controlled about 14% of the mobile  market, with 6.2 million subscribers (AVEA online 
information. Viewed at: www.avea.com.tr). 
121 In May 2007, AVEA's prices were: up to YTL 0.35 (about €0.2) per minute for national calls, and 
between YTL 0.32 and YTL 2.1 (about €0.19 and €1.1) per minute for international calls. National SMS messages cost up to YTL 0.06 (about €0.03), while the price of international SMS messages were YTL 21 
(about €0.12) (AVEA online informati on. Viewed at: www.avea.com.tr). 
122 The following criteria are used by  the Board of the TA to establish if an operator has significant 
market power: market share; power to influence market  conditions; relationship between sales and market share; WT/TPR/S/192 Trade Policy Review 
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the Official Gazette  in March 2005, with the aim of improvi ng various services (e.g. fault repair time, 
response time for operator services, and bill complaints). 
108. In 2007, the TA prepared a Project for Eurasian Cooperation in the field of 
Telecommunications Regulations in order to, inter alia , establish permanent and effective cooperation 
on telecommunications regulations between count ries in the region, and harmonize regulatory 
activities. With this aim, a coordinatio n study group was created in March 2005.123  T u r k e y  h a s  
signed:  the ITU Constitution and Convention;  ITU Radio Regulations;  ITU International 
Telecommunications Regulations; Agreement, and Operating Agreement of INTELSAT;  
Convention, and Operating Agreement of INMARSAT ; and Convention, and Operating Agreement of 
EUTELSAT.  Turkey has not signed any bilatera l agreements on telecommunications. The ITU 
Plenipotentiary Conference took place in Antalya in November 2006. 
109. The Turkish Postal Administration, under the Ministry of Transport (MT), is the regulatory 
and operational body for postal services.  According to the postal law124, its monopoly covers open 
and closed letters, postcards, and te legraphs for domestic or foreign destinations. The Turkish Postal 
Administration is carrying out reorganization work  and automation of counter services to align the 
quality of its services on the Universal Postal Uni on (UPU) standards. In 2004, under the PTT-Bank 
logo, Turkish Post started offering postal financial services on behalf of banks (e.g. collection of bills 
and credit card payments), with the aim of making such services available in remote areas.125 
(iv) Transport 
110. In 2005, under the coordination of the MT, Turkey launched its Transport Master Plan 
Strategy with the aim of increasing coordination among the various institutions involved in the 
subsector, and formulating policies in a "balanced and holistic way".126 One of the key targets of the 
Plan is to increase, by 2020, the share of railways in total transport to 20% of freight (up from 5% 
now), and 10% of passengers (up from 2%).127 Under its Ninth Development Plan 2007-13, Turkey 
also aims, inter alia , to create an efficient transport subsector, giving priority to environmental 
aspects, and to increase traffic safety in all modes of transport, particular highways (Table IV.9).128 
111. Turkey is part of the Euro-Mediterranean Re gional Transport Project (EuroMed Transport 
Project), implemented since 2003, with the aim of contributing to both the development of the Euro-Mediterranean Free Trade Area, and economic inte gration among the countries in the region. It 
provides assistance in improving the functioning and the efficiency of the Mediterranean transport 
system; promotes the harmonization of operati onal norms and regulations; encourages the 
coordination of transport policies; and promotes  the modernization of the regional transport 
                                                                                                                                                                    
 
power to control access devices to last consumer; power  to access financial resources; and experience on its 
products and services in the market (Telecommunications Authority of Turkey, 2006). 
123 Telecommunications Authority online information. Viewed at: http://www.tk.gov.tr/eng/pdf/eng-
2005.pdf. 
124 Law No. 5584. 
125 This is under the condition of not offering traditio nal banking services, such as granting loans and 
opening saving accounts. 
126 In the absence of a master plan, problems regarding all transport activities were being tackled on an 
ad hoc , short-term basis, and without the necessary cooperation and coordination among the different transport 
authorities that participate in the subsector (WTO, 2003). 
127 To alleviate bottlenecks for national and international railway transport through Turkey, major high-
speed railways lines and a new Bosphorus underwater railway tunnel are being constructed (UNECE, 2006). 
128 State Planning Organization (2006). Turkey WT/TPR/S/192 
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infrastructure taking into consideration the trans-European networks.129 In addition, a TINA 
(Transport Infrastructure Needs Assessment) st udy has been completed to develop a multimodal 
transport network within Turkey, and to extend th e EC's TEN-T (trans-European transport network) 
into Turkey.130 
Table IV.9 
Freight transport, 2006 and 2013  
(Million tonnes-km) 
 2006 2013 2007-13 
Percentage change 
Domestic     
Highwaya 169,500 248,000 5.6 
Railway 8,358 25,400 17.0 
Maritime 5,400 8,400 6.5 
Airlineb 468 659 5.0 
Pipeline    
Crude oil (million tonnes) 6.1 9.0 47.5 
Natural gas (billion m3)c 30.8 37.4 21.4 
International     
Railway 1,318 8,248 31.0 
Maritime 749,000 1,740,000 12.8 
Airlinec 2,613 4,777 9.0 
Pipeline    
Crude oil (transit) (million tonnes) 9.6d 120.0 1,150 
Natural gas (transit) (billion m3) 0 14e n.a 
n.a Not applicable. 
a Transport on the 117 km of motorways and connection roads that  were transferred to the Istanbul Metropolitan  Municipality is  
 excluded from the beginning of 2005. 
b Turkish Airlines' value. 
c Not included in total. d Includes amount transported via Iraq-Turkey cr ude oil pipeline, and BTC crude oil pipeline. 
e Includes amount of gas transported to Europe by Turkey-Greece-Italy and Nabucco natural gas pipeline. 
Source: State Planning Organization (2006), Ninth Development Plan 2007-13, Ankara, and information provided by the 
 Turkish authorities. 
(a) Maritime transport 
112. Turkey's maritime fleet ranking went from 18th in  the world in 2000 to 24th in 2005, largely 
due to problems of financing and flag avoidance.131 In 2006, Turkey had 61 shipyards (37 in 2002), 
employing 28,580 persons, and with  a capacity of 1.8 million deadwe ight tonnage (dwt) (550,000 dwt 
in 2002); the authorities expect total capacity to reach 6 million dwt in 2010.132 Maritime transport is 
important for domestic and international trade, si nce four of Turkey's main industrial centres 
(Istanbul-Izmit, Izmir, Bursa, and Adana) are on or near the sea.  Total loading and unloading in the 
maritime subsector rose from about 206 milli on tonnes in 2004 to over 232 million tonnes in 2006 
(Table IV.10). In 2006, container handling reached  3.9 million TEU (twenty-foot equivalent unit), 
against 2.9 million in 2004. Port facilities are increa singly overcrowded and inadequate to deal with 
the rise in ship traffic, partly because of delays in  some projects (e.g. the North Marmara Port and the 
                                                      
129 The other members of the EuroMe d transport project are: Algeria,  Cyprus, Egypt, Israel, Jordan, 
Lebanon, Malta, Morocco, the Palestinian Authority, Syria, and Tunisia (EC, 2004). 
130 The project consists of defining and assessing a multimodal transport network in Turkey, 
comprising roads, railway lines, seaports, and airports. The fi nal report is yet to be approved by the sponsors, i.e. 
Ministry of Transport, State Planning Organization, and the European Commission. The ultimate decision-maker of the study, on behalf of Turkey, is the High Planning Council. 
131 State Planning Organization (2006). 
132 Ministry of Transport online information. Vi ewed at: http://www.ubak.gov.tr/ubak/en/index.php 
[21 May 2007]. WT/TPR/S/192 Trade Policy Review 
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Izmir Port dredging and extension projects, as well as in the construction of the Derince Container 
Port).133 Some port services in Turkey are also relatively expensive.134 
113. Maritime activities are administered mainly by the Undersecretariat of Maritime Affairs, and 
subject to Turkish Commercial Law No. 6762, Cabotage Law No. 815, Ports Law No. 618, and the 
International Convention on Standa rds of Training, Certification and Watchkeeping for Seafarers 
of 1978 (STCW78).  
Table IV.10  
Maritime transport , 2004-06 
 2004 2005 2006 
Loading (tonnes) 70,041,134 68,639,896 77,908,825 
 Exports 55,118,561 54,494,224 63,311,978 
 Domestic 14,922,573 14,145,672 14,596,847 
    
Unloading (tonnes) 136,002,156 140,091,972 154,539,643 
 Imports 121,043,378 126,169,107 139,406,306 
 Domestic 14,958,778 13,922,865 15,133,337 
 Transit 5,491,810 5,261,659 11,144,059 
    
Total 206,043,290 208,731,868 232,448,846 
Source:  Information provided by the Turkish authorities.  
114. In the last few years, several public ports, opera ted by the General Directorate of the Turkish 
Maritime Organization (TDI), have been concessioned135, and the tendering processes, for the 
concession of the ports of Bandirma, Derince, İzmir, Samsun, and İskenderun, have been launched 
(Chapter III(4)(ii)). However, the six largest ports  are still operated by a state-owned enterprise, the 
Turkish State Railways (TCDD).136 Some of the main problems facing TCDD are insufficiency of 
port equipment and infrastructure; lack of computerization, causing delays in tracing cargo, and sometimes their loss; and under-investment with cross-subsidization of railways from port proceeds.
137  
115. Under Cabotage Law No. 815, merchant maritime  transport and passenger services, pilotage, 
and all other port services can be provided only by Tu rkish flag ships. Turkey has two ship-register 
systems, the National Ship Registry and the Interna tional Ship Registry. In order to fly the Turkish 
flag, on the National Ship Registry, shipping comp anies must be 51% owned by Turkish nationals 
                                                      
133 State Planning Organization (2006). 
134 In 2004, the cost for a twenty-foot container unit in Turkey was, on average, about €330, compared 
with €70 in Alexandria (Egypt), €210 in Radès (Tunisia), and €370 in Casablanca (Morocco) ( EuroMed 
Transport Project , 2004). 
 135 The port of Antalya was later returned to the public  sector. Ownership of the ports' infrastructure is 
retained by the State, but the operational rights (i ncluding management, facilities, and equipment) are 
transferred to a private investor fo r 30 years; TDI remains in charge of supervision and monitoring ( EuroMed 
Transport Project , 2004). 
136 All these ports are accessible by railways. 
137 Concerns have been expressed about cross-subsidization of the railways by the port's excess profits 
within TCCD. The cross-subidization suggests overchargi ng by the port authorities, or inadequate depreciation 
and maintenance schedules, or both. This is likely to result in inefficiency in the delivery of port services, 
affecting Turkey's external trade competitiveness through high import costs;  it is a strong barrier to new entrants.  See also EuroMed Transport Project , 2004). Turkey WT/TPR/S/192 
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(Commercial Law No. 6762).  First mates and master s of ships must be of Turkish nationality, while 
up to 40% of the officers of ships engaged in in ternational seaborne transportation (i.e. excluding 
cabotage) can be foreign nationals.138  Ships and yachts owned by Turkish and/or foreign persons 
resident in Turkey and companies incorporated under  Turkish legislation, can be registered with the 
Turkish International Ship Registry in Istanbul, and fly the Turkish flag. National vessels can be 
authorized to change flag for a period of be tween one and two years when they are bareboat 
"chartered out", while foreign vessels can be authorized  to fly the national flag for a period of one to 
two years when they are bareboat "chartered in". 
116. Vessels flying the Turkish flag benefit from a price preference:  when bidding for public 
cargoes to be shipped overseas or carrying strategic ra w materials, they are awarded the bids if their 
quotation is up to 10% higher than the lowest fore ign flag vessel quotation. Authorization by the 
Undersecretariat of Foreign Trade is required for pu blic entities to ship imports under a foreign flag.  
Foreign flag vessels are used if: (i) Turkish flag vessels' quotations are more than 10% higher than 
quotations by foreign flag vessels;  (ii)  loading is at  ports not used by Turkish flag vessels; or (iii) the 
capacity and/or technology used by the Turkish fl ag vessel is insufficient for the cargo and route.139 
117. The tariff system for Turkish ports is based on the principle of non-discrimination between 
Turkish and foreign flags. According to the author ities, operators freely set their tariffs, and discounts 
on port dues and charges are linked to the frequency of calls at the port. On 1 August 2003, port fees 
were reduced by 50%, cabotage carriage fees by 75%, and flashlight fees by 30%. The special consumption tax for fuel used in naval vessels was recently lowered.
140 
118. Special tax incentives are provided to Turkish inv estors in the maritime subsector.  The wages 
of seafarers working on ships registered under Turk ey's International Ship Registry are exempted 
from income tax and funds;  and revenues from op erating and "alienating" ships registered under 
Turkish International Ship Registry are exempted from personal income and corporate income tax.  
Profits from non-operation activities are not covered by the exemption.  Book profits resulting from 
sales of vessels can be deducted from the purchase price of the same kind of replacement vessels 
within three years and after deducti ng the realized depreciation amount.141 
119. Access to ports, pilotage, towing, tug assist ance, provisioning, fuelling and watering, and 
navigation aids are available to all users of por t services. Turkey has no laws and regulations 
governing the operation of liner conferences.  In 2006,  the Turkish flag was moved from the Black to 
the Gray List of the Secretariat of the Paris Memorandum of Understanding on Port State Control.142  
According to the authorities, Turkey has signed all maritime safety international conventions, and is a 
                                                      
 138 The following ships are considered as Turkish: (i) ships that belong to legal persons, such as bodies, 
institutions, associations, and foundations set up in accor dance with Turkish law, the majority of whose Board 
of Directors are of Turkish nationality;  and (ii) ships th at belong to trading compan ies, the majority of whose 
managerial staff and representatives are of Turkish nati onality and are registered on the Turkish Trade Register 
(WTO document S/NGMTS/W/2/Add.23/Rev.1, 25 September 1995). 
139 Private importers are free to use foreign or national vessels. 
140 A 20% additional reduction is in place for passengers ships promoting tourism. 
141 Turkish Interna tional Ship Registry Law No. 4490  of 16 December 1999, Article 12. 
142 The Black List is composed of flags considered  as "very high risk", while the Grey List has 
"medium to high" risk flags.  The White List represents quality flags with a consistently low detention record. 
Paris MoU, Secretariat report, June 2007.  Viewed at: http://www.parismou. org/ParisMOU/Whats+New/News/ 
News+Detail/xp/selectedcontentitem.2868/default.asp. WT/TPR/S/192 Trade Policy Review 
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member of the Regional Marine Pollution Emerge ncy Response Centre for the Mediterranean Sea 
(REMPEC).143 
(b) Air transport 120. In general, Turkey's air transport is still dominated by the state-owned Turkish 
Airlines (THY) (Chapter III(4)(ii)). In addition to T HY, there are 19 air carrier companies. In 2006, 
810 aircraft were registered as Turkish. Turkey has 62 airports operated by the General Directorate of 
the State Airports Enterprise (DHMI)
144, 37 of which are operated by the State Airports Authority; 21  
airports are open to  international traffic. As of  2007, the operational rights of the main terminals of 
certain airports (i.e. Atatürk (Istanbul)145, Antalya, Esenbo ğa (Ankara), İzmir Adnan Menderes and 
Dalaman) were concessioned to private enterprises.146 
121. Private air carriers have been allowed to establish since the enactment of Public Law 
No. 2920 on Turkish Civil Aviation in 1983.  The MT  is responsible for approval of new carriers 
(pursuant to Law No. 2920 and the Regulation on Co mmercial Air Transport Operations issued under 
the law).  Air carriers are authorized to schedule domes tic services if they are registered in Turkey and 
operate a minimum of five registered aircraft of at least 100 seats147; where there are no company-
owned aircraft, a bank letter of gua rantee for up to US$3 million is re quired. However, for regional air 
transport, a carrier should own or lease at least two aircraft registered in th e Turkish Civil Aircraft 
Registry, with a capacity of between 20 and 99 seats.  
122. The majority of a company's executive and au thorized representatives must be of Turkish 
nationality (Article 49 of Law No. 292 0) and Turkish shareholders must  have voting majority.  Hence, 
the equity participation ratio of foreign shareholders  is restricted to 49%.  There are no plans to ease 
the restriction on foreign direct investment.  Airlines with a majority of shares controlled by foreigners are not permitted to carry passengers from one national point to another. Technical and 
financial supervision of existing carri ers is carried out by the Directorate General of Civil Aviation. In 
2005, Law No. 5431 restructured the Civil Aviatio n General Management, as a public legal entity 
with its own budget. 
123. Access to the main national airports is allocat ed following application to the Turkish Civil 
Aviation Authority under the rules prescribed in the General and Aerodrome s ections of the Turkish 
Aeronautical Information Publication (AIP), and signature of a contract with a ground-handling 
company for the provision of services.  Landing and ta ke-off rights are allocated on slot time basis.  
Slot allocation is applied at Atatürk, Antalya,  Adnan Menderes, Dalaman, Bodrum, and Esenboga 
                                                     
 
143 REMPEC is a UN body established in the context of the Mediterranean Action Plan. Its main 
objective is to assist Mediterranean coastal states in the implementation of the Emergency Protocol and 
Barcelona Convention (REMPEC online informati on. Viewed at: www.re mpec.org/about.asp). 
144 In 2005, all DHMI services (air traffic ma nagement, air traffic services, aeronautical 
communications management, aeronautical information management, and flight inspection services) and DHMI 
operational services were awarded ISO 9001:2000 in 2005 and 2007, respectively. 
145 The operational rights of the main terminals of the Atatürk Airport were transferred to TAV 
Airports Holding for 15.5 years (US$3 billion) (General  Directorate of the State Airports Authority, 2005). 
146 In April 2005, a new runway and a US$85.5 million terminal, with an annual capacity of 20 million 
passengers, were open at Antalya International Airport. The new terminal will be managed by a private 
company, ÇELEBI-IC Antalya Airp ort Terminal Investment and Ma nagement, until 28 September 2009. 
Antalya Airport International Management is responsible for the operation of the old terminals until 15 September 2007 (General Direct orate of the State Airports Authority, 2005). After these dates, the 
operational rights of domestic and international terminals will be concessioned to the İçtaş-Fraport consortium. 
147 At least three registered aircraft are required in the case of scheduled and non-scheduled domestic 
flights; the aircraft must have  at least 100-seat capacity each. Turkey WT/TPR/S/192 
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airports, and Kayseri (in the summer).  Air carriers operating scheduled services to Turkey are 
authorized on the basis of reciprocity within the framework of bilateral agreements.  Charter services 
are authorized on the basis of reciprocity under th e rules of the European Civil Aviation Commission 
(ECAC), of which Turkey is a member.  Cargo tr ansport is under the provisions of Law No. 2920 and 
relevant articles of the Regulation on Commercial Air Transport Operations, as well as the applicable 
provisions of bilateral air transport agreements signed by Turkey.148  An open skies agreement has 
been concluded between Turkey and the United Stat es, and a de facto open skies agreement exists 
between Turkey and Germany.149 According to the authorities, cabotag e in air transport is not to be 
opened to competition from foreign companies. 
124. Public Law No. 4054 on the Protection of Competition does not grant any special exemptions 
to the national air transport services industry.  No special privileges are granted to state-owned air 
companies, except, where possible, Turkish civil ser vants must use the national airline for official 
travel. 
125. Two private-sector ground-handling companies provide services at all airports open to 
international civil air traffic.  Catering services at  the international airports are provided by four 
catering firms, of which two are entirely owned by Turkish companies, and two are a mixed 
foreign-Turkish partnership.  Airlines may also provide groundhandling servi ces for their own use at 
all airports (self-handling). The prices for these services are market-determined. 
126. The prices set air carriers operating scheduled ser vices must be formally approved by the MT 
(Article 25 of Law No. 2920). The government does not  intervene in the pricing of non-scheduled or 
air taxi services.  Since 1 January 2004, air tickets have not been subject to the special transaction tax 
or education contribution payment. 
127. Imports of a wide range of aircraft-related items  (78 items at the four-digit level) are only 
permitted upon approval by the General Directorate of  Civil Aviation in the MT.  This restriction, 
according to the authorities, is to ensure that these im ports are used only in the civil aircraft industry. 
(c) Railway and road transport 
128. Turkey's railway system consists of 10,984 km  of track, of which 8,697 km are main lines.150  
The most important infrastructure problem is that  the lines between highly populated cities are not 
appropriate for high speed travel.151 As a result, several projects are being developed to improve the 
infrastructure, including: the Ankara-Istanbul hi gh speed project (€1,955 million); Ankara-Konya 
high speed project (€377 million); procurement of, inter alia , high-speed trains (€253.2 million), 
locomotives (€374.5 million), and suburban trai ns (€102.4 million); rehabilitation of existing 
suburban trains (€44.1 million); and moderni zation of stations and station buildings.152 
                                                      
 148 Turkey has signed bilateral air transport agreements with 88 partners. Under these 
agreements, 63 (may change seasonally ) foreign airlines are operating scheduled services to Turkey;  THY is 
operating scheduled services to 77 cities abroad.  
149 Since the Turkish-German market is crucial due to a large Turkish population living in Germany, 
the air transport agreement between the two countries is an open skies agreement, though it is not named so. 
150 State Planning Organization (2006). 
151 Other problems include: about 95% of the railway network is single track; 3,080 km of rails are old 
(20 years or more); 2,756 km have steel and wooden sleepers; 2,602 km have non-standard curves; 5,586 km of 
main lines are without signal; and there is insufficient staff (UNECE, 2006). 
152 Information provided by the authorities. WT/TPR/S/192 Trade Policy Review 
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129. The Turkish State Railways (TCDD), a state-ow ned enterprise affiliated to the MT, has a de 
jure monopoly in providing railway passenger and fre ight transport services. It owns and operates the 
whole railway system, together with six ports th at have rail access (i.e. Haydarpasa, Iskenderun, 
Derince, Izmir, Samsun, and Bandirma); five of are under privatization. There are no private rail 
operators. TCDD is free to introduce fares on a market basis and to increase them, after verbal 
approval by the MT.  The construction of new railwa y infrastructure and ports is the responsibility of 
the Directorate General of Ports, Railways and Airports Construction of the MT. 
130. The reorganization of TCDD is one of the key areas for reform under the Ninth Development 
Plan 2007-13.153 The main objectives include: increasing the sh are of rail in total transportation by 
implementing customer-oriented business strategies, and establishing a sustainable and effective 
transport infrastructure; enhancing the autonomy of  the TCDD; decreasing the consolidated operation 
ratio (ratio of operating expenses to operating re venues, excluding subsidies) from 4.3 to under 2; 
cancelling unprofitable local and urban lines; and ali gning the domestic railway transport legislation 
with the acquis communautaire . An action plan for the restructuring of TCDD over 2003-08 is also 
being financed by the EC.154 
131. Turkey has a total highway network of 64,195 km (2,431 km of motorway, 31,335 km of state 
roads, and 30,429 of provincial roads).155 The share of highway transport in total freight transport 
increased from 88.7% in 2002 to about 92% in 2006;  around 95% of passenger transport is by 
highway.  For the purpose of creating a sustainable tr ansport environment in Turkey, a shift from road 
traffic to rail and maritime means is to be pr omoted: bilateral combined-transport agreements are 
being signed. According to the authorities, tr ansit quota limitations applied by partner countries 
continue to prevent the efficient us e of Turkey's road transport fleet.156 Other obstacles to the 
development of the subsector include: traffic cong estion and bottlenecks; expensive charges for using 
transport infrastructure in third countries; di fficulties in obtaining long-term visas for professional 
drivers; and border-crossing problems (e.g. outdate d technology for customs transactions, different 
transit regimes, and lack of coordination between customs authorities).157 
132. The MT is responsible for regulating road transpor t to maintain order and safety of transport;  
to determine the conditions to be applied to carri ers agents, brokers, warehouses, and cargo operators; 
to establish the qualifications, rights, and duties of persons employed in the subsector; and to provide 
inter-operability of road transport with other m odes of transport and efficient use of existing 
capabilities. Road transport services in Turkey ar e provided by private companies; an operating 
licence from the MT is obligatory. The General Directorate of Highways is responsible for the 
construction, maintenance, and operatio n of roads. In practice, tariffs in the subsector are set freely by 
operators and notified to the MT. Cabotage is not pe rmitted in road transport: vehicles registered in a 
foreign country cannot transport go ods or passengers between two point s within Turkey. Transport of 
goods or passengers can be provided to, from, and through Turkey only under bilateral or multilateral 
(e.g. International Transport Forum) agreements or permits issued by the Council of Ministers. 
                                                      
153 TCDD is the largest money loser among Turkey's public enterprises. The management of ports 
provides about a third of its revenues, another third comes from rail traffic, and the rest from government subsidies and non-operating revenues (WTO, 2003). 
154 Includes a twinning project with Germ an Railways (European Commission, 2006). 
155 In 2006, approximately 4,366 km of roads (excluding village roads) were still unpaved. 
156 Turkey has the largest truck fleet in Europe, after Italy. In 2004, Turkey's international road 
transport fleet consisted of some 32,00 0 vehicles, with a carriage capacity of  1.4 million tonnes (State Planning 
Organization, 2006). 
157 UNECE (2006). Turkey WT/TPR/S/192 
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133. In February 2004, road transport for intercity  passengers and freight was liberalized under the 
Law on Road Transport.158 This law and related regulations are aimed at, inter alia, increasing 
efficiency and safety in road transport activities,  developing an insurance system for freight and 
passenger transport, promoting competition in the su bsector through more participation by the private 
sector, and improving the overall road infrastructure. 
134. In January 2006, the Road Transport Automati on (U-NET) system was put into operation. It 
is a computer-aided system that scrutinizes the road transport subsector, including monitoring and 
inspecting the market. 
(v) Tourism 
135. Turkey ranks 9th in the world as a tourism earner (against 11th in 2002), with US$18.1 billion 
of tourism receipts in 2006 (Table IV.11), up fr om US$11.9 billion in 2002; this is expected to 
increase to US$36.4 billion by 2013.159 Tourism activities have continued to expand rapidly during 
the last few years, especially in Istanbul and on th e western and southern coasts.  Large numbers of 
hotels, guest houses, and holiday apartments have been built.  There are also important historical sites, 
and eco-tourism activities are being introduced. Th e number of licensed tourist beds rose from 
619,024 in 2002 to 783,319 in 2006. In 2006, 28.3% of visitors came from Europe and 59.1% from 
OECD countries (mainly Germany, 19% of the tota l). The hotels occupancy rate was about 47.3%. 
Table IV.11 
Selected tourism indicators, 2005-07 
 2005 2006a 2007b Percentage 
change 2005-06 Percentage 
change 2006-07 
Incoming tourists ('000) 21,125 20,816 22,339 -1.5 7.3 
Turkish tourists abroad ('000) 8,246 8,180 9,000 -0.8 10.0 
Tourism receipts (US$ milli on) 18,152 18,124 19, 800 -0.2 9.2 
Tourism expenditure (US$ million) 2,872 2,863 3,200 -0.3 11.8 
a Provisional. 
b Estimates. 
Source : Information provided by the Turkish authorities.  
136. Turkey's tourism policy has three main goals : creating an efficient and internationally 
competitive subsector with a view to making it more  profitable; meeting the requirements of foreign 
and domestic tourists in terms of overall facilities; and ensuring the continuity of its natural and 
cultural assets.  The Turkish Union of Travel Agencies (TURSAB), established in 1972 under Law 
No. 1618 and the purview of the Ministry of Culture and Tourism (MCT), is responsible for 
supervising travel agencies.  Within the MCT ther e is a section responsible for inspection of hotels, 
holiday villages, yacht enterprises, travel agen cies, the professional organization, and professional 
tourist guides.  Under the Tourism Encouragemen t Law No. 2634 of 1982 (as amended), tourist 
regions, areas, and centres were designated, and in vestment in tourism facilities is encouraged. In 
general, the State is in charge of investment in tourism sites. 
137. The Government remains active in the tourism subsector.  It grants incentives for tourism 
investments in accordance with the Tourism Encouragement Law; provides infrastructure and public 
services for tourism; defines zones with high to urism potential; promulgates designated tourism 
centres or areas by decree; elaborates and approves land-use plans; conducts environmental controls; 
promotes the country abroad; carries out research and collects statistics; and provides vocational 
                                                      
158  Law No. 4925 published in Official Gazette No. 25173 on 19 July 2003. 
159 State Planning Organization (2006). WT/TPR/S/192 Trade Policy Review 
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training.  Local administrations are responsible for similar matters at the local level.  Investors in 
tourism also have access to incentives granted under the Investment Encouragement Programme (Chapter III(2)(iii)(d)). 
138. Foreign companies have increas ed their role in tourism since the mid-1980s;  there is no 
limitation on foreign investment. Foreign and dom estic companies set their own maximum prices.  
However, the prices must be cleared annually by the MCT.  Enterprises are not required to charge 
uniform prices but cannot exceed their maximum approved prices. 
139. The MCT and local administrations are in charge of classification and certification of hotels 
and restaurants. According to the authorities, th e number of beds certified by the MCT and the 
municipalities are expected to reach 550,000 and 420,000, respectively. 
 Turkey WT/TPR/S/192 
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